Jeffrey C. Mando and Jennifer L. Langen recently won an important decision in the area of insurance coverage. The ASWD partners recently had a case in which a police constable (Smith) shot and killed a man (Stanley) while trying to take Stanley into custody for outstanding warrants. Smith was convicted of reckless homicide in connection with the shooting, and Stanley’s estate subsequently sued Smith for civil damages under 42 U.S.C. § 1983. Smith had an insurance policy with coverage forms for Law Enforcement Liability (LEL) and General Liability (GL). The LEL coverage form contained an exclusion that provided: “This insurance does not apply to … any claim arising directly or indirectly out of, or in any way related to a … criminal act, or the willful violation of any statute, ordinance or regulation committed by or with the knowledge of the insured.” And, the GL coverage form contained an exclusion that provided: “This insurance does not apply to … bodily injury … expected or intended from the standpoint of the insured. This exclusion does not apply to bodily injury … resulting from the use of reasonable force to protect persons or property.” In Atlantic Specialty Insurance Company v. Stanley, United States District Court for the Eastern District of Kentucky, Case No. 6:17-CV-00308-REW, Mando and Langen represented Smith’s insurance company, Atlantic Specialty Insurance Company, in litigation to determine whether these two exclusions applied under the facts of the case.

On February 19, 2019, the Court issued a 23-page Opinion that painstakingly analyzed the exclusionary language. Ultimately, the Court ruled that the LEL coverage form did not provide coverage because the lawsuit arose directly out of an event for which Smith had been convicted of reckless homicide. The Court rejected numerous arguments advocated by Stanley’s estate, including the estate’s argument that the term “criminal act” was ambiguous. To that point, the Court said the term “criminal act” “unquestionably applies to situations such as this one, where a jury previously convicted the … insured of a crime – indeed a homicide-related felony … .” The Court also rejected the estate’s argument that the doctrine of reasonable expectations required a ruling that coverage existed under the LEL coverage form. The Court said: “Stanley establishes, in the Court’s opinion, no reasonable expectation of coverage, in light of the record and the contract language actually agreed to.”

And, the Court ruled the GL coverage form did not provide coverage because Smith “expected or intended” bodily injury to occur under the facts of the case and because the shooting was not a “reasonable use of force.” As to the “expected or intended” piece of the exclusion, the Court said: “The only reasonable interpretation of [Smith’s testimony in his criminal trial] is that Smith expected and intended to physically harm Stanley when he shot him … .” The Court applied the “inferred intent rule,” which “recognizes that ‘in certain circumstances one may reasonably infer from the facts that the actor intended the harm, without needing to resort to proof of that intent.’ … When the facts are clear that a shooting is intentional, a court may infer intent to harm. … The record and law here, thus, compel only one reasonable inference regarding Smith’s mindset during the shooting: that he expected and intended bodily harm to Stanley.” As to the “reasonable use of force” piece of the exclusion, the Court observed: “A fact-finder could not reasonably conclude that, although Smith shooting Stanley was not necessary (as was one determination that could have required the Kentucky criminal jury to reject the self-protection defense), the shooting was, nevertheless, a ‘use of reasonable force.’ An unnecessary constabulary use of force is one inherently unreasonable. The terms are inextricably intertwined in relevant law.” Consequently, the Court ruled that the exclusion relieved Atlantic Specialty Insurance Company of any obligation to cover Smith in the civil suit.

The exclusions in the Atlantic Specialty insurance policy are typical of, or similar to, the exclusions in other insurance policies issued to law enforcement officers. Thus, this case has the potential to impact many other civil suits involving police officers who are convicted of crimes in connection with uses of force.