Gulf Underwriters Ins. Co. v. City of Council Bluffs

• Decision Date: 20 December 2010
• Docket Number: No. 1:07–cv–00018,No. 4:09–cv–00431,No. 4:07–cv–00135,No. 1:07–cv–00024,No. 1:07–cv–00021,4:07–cv–00135,1:07–cv–00018,1:07–cv–00021,1:07–cv–00024,4:09–cv–00431
• Parties: GULF UNDERWRITERS INSURANCE COMPANY and The Travelers Indemnity Company, Plaintiffs,v.CITY OF COUNCIL BLUFFS, Daniel Larsen, Lyle Brown, and David Dawson, Defendants.Genesis Insurance Company, Plaintiff,v.The City of Council Bluffs, Daniel Larsen and Lyle Brown, Defendants.Chicago Insurance Company, an Illinois Corporation, Plaintiff,v.The City of Council Bluffs, Iowa, Daniel C. Larsen, in his individual and official capacities, and Lyle W. Brown, in his individual and official capacities, Defendants.Columbia Casualty Company, Plaintiff,v.City of Council Bluffs, Iowa, Daniel C. Larsen, Lyle W. Brown, David Dawson, Terry Harrington, and Curtis W. McGhee, Jr., Defendants.Specialty National Insurance Company, Plaintiff,v.The City of Council Bluffs, Iowa, Daniel C. Larsen and Lyle W. Brown, Defendants.City of Council Bluffs, Daniel Larsen and Lyle Brown, Third–Party Plaintiffs,v.Admiral Insurance Company and Acceptance Insurance Company, Third–Party Defendants.
• Court: U.S. District Court — Southern District of Iowa

755 F.Supp.2d 988

GULF UNDERWRITERS INSURANCE COMPANY and The Travelers Indemnity Company, Plaintiffs,

v.CITY OF COUNCIL BLUFFS, Daniel Larsen, Lyle Brown, and David Dawson, Defendants.Genesis Insurance Company, Plaintiff,

v.The City of Council Bluffs, Daniel Larsen and Lyle Brown, Defendants.Chicago Insurance Company, an Illinois Corporation, Plaintiff,

v.The City of Council Bluffs, Iowa, Daniel C. Larsen, in his individual and official capacities, and Lyle W. Brown, in his individual and official capacities, Defendants.Columbia Casualty Company, Plaintiff,

v.City of Council Bluffs, Iowa, Daniel C. Larsen, Lyle W. Brown, David Dawson, Terry Harrington, and Curtis W. McGhee, Jr., Defendants.Specialty National Insurance Company, Plaintiff,

v.The City of Council Bluffs, Iowa, Daniel C. Larsen and Lyle W. Brown, Defendants.City of Council Bluffs, Daniel Larsen and Lyle Brown, Third–Party Plaintiffs,

v.Admiral Insurance Company and Acceptance Insurance Company, Third–Party Defendants.

Nos. 4:07–cv–00135, 1:07–cv–00018, 1:07–cv–00021, 1:07–cv–00024, 4:09–cv–00431.

United States District Court, S.D. Iowa, Central Division.

Dec. 20, 2010.

Eileen King Bower, Christopher H. White, Troutman Sanders, Chicago, IL, Jaki K. Samuelson, Whitfield & Eddy PLC, Des Moines, IA, for Plaintiffs, Gulf Underwriters Insurance Company and The Travelers Indemnity Company.Bethany K. Culp, Duana Joan Grage, Hinshaw & Culbertson LLP, Minneapolis, MN, Debra Lynne Hulett, Nyemaster Goode West Hansell & O'Brien P.C., Des Moines, IA, for Plaintiff, Chicago Insurance Company.Linda J. Carwile, Roderick T. Dunne, Karbal Cohen Economou Silk & Dunne LLC, Chicago, IL, for Plaintiff, Columbia Casualty Company.Fritz K. Huszagh, Dana Aaron Rice, Megan L. Segura, Kent J. Cummings, Hinshaw & Culbertson LLP, Chicago, IL, for Plaintiff, Genesis Insurance Company.Brent J. Graber, Meckler Bulger Tilson Marick & Pearson LLP, Chicago, IL, Stanley J. Thompson, Davis Brown Koehn Shors & Roberts PC, Des Moines, IA, for Plaintiff, Specialty National Insurance Company.Lorraine J. May, Hopkins & Huebner, Alan O. Olson, Olson Law Office PC, Des Moines, IA, Michael A. Sciortino, City of Council Bluffs Legal Dept., Council Bluffs, IA, Thomas P. Frerichs, Frerichs Law Office, Waterloo, IA, Mel C. Orchard, Spence Law Firm LLC, Jackson, WY, Stephen Dillard Davis, Steve Davis Law PC, Oak Brook, IL, William H. Jones, Canel Davis & King, Chicago, IL, for Defendants.Robert D. Houghton, Douglas R. Oelschlaeger, Shuttleworth & Ingersoll, Cedar Rapids, IA, for Third–Party Defendants.

MEMORANDUM OPINION AND ORDER

ROBERT W. PRATT, Chief Judge.

Before the Court are two motions for summary judgment. The first motion was filed by Plaintiffs Gulf Underwriters Insurance Company (“Gulf”) and Travelers Indemnity Company (“Travelers”) (collectively “Gulf”) on February 24, 2010. Clerk's No. 101. The City of Council Bluffs (the “City”), Daniel C. Larsen (“Larsen”), and Lyle W. Brown (“Brown”) (collectively “Defendants”) ¹ filed a response in opposition to Gulf's motion on April 19, 2010. Clerk's No. 112. Gulf filed a reply on May 10, 2010. Clerk's No. 117. The second motion was filed by Plaintiff Genesis Insurance Company (“Genesis”) on April 6, 2010. Clerk's No. 109. Defendants filed a response in opposition to Genesis' motion on May 12, 2010. Clerk's No. 118. Genesis filed a reply on June 11, 2010. Clerk's No. 127. The Court held a hearing on both motions on November 3, 2010. Clerk's No. 162. Genesis and Defendants also filed, with leave of Court, supplemental briefs regarding Genesis' motion.² Clerk's Nos. 160, 161. The matters are fully submitted.

I. FACTUAL & PROCEDURAL BACKGROUND

These cases arise out of two underlying actions filed against Defendants by Terry Harrington (“Harrington”) and Curtis McGhee (“McGhee”) (collectively “Claimants”): Harrington v. County of Pottawattamie, et al., Case No. 4:05–cv–00178 and McGhee v. Pottawattamie County, et al., Case No. 4:05–cv–00255 (collectively “the Underlying Actions”).³ See Pls.' Statement of Material Undisputed Facts in Supp. of Their Mot. for Summ. J. (hereinafter “Gulf Facts”) ¶¶ 11–12 (Clerk's No. 101–1); Genesis Ins. Co.'s Statement of Material Facts for its Mot. for Summ. J. as to Count III of its First Am. Compl. for Declaratory J. (hereinafter “Genesis Facts”) ¶ 24–25 (Clerk's No. 109–1). The City provided notice of the Underlying Actions to various insurers that had issued policies to the City between 1977 and 2005. See Gulf Facts ¶ 31. In 2007, Gulf and Genesis filed lawsuits against Defendants, seeking, inter alia, declaratory judgments that their respective policies do not provide coverage for the Underlying Actions. See Clerk's No. 1 at 11–12; Case No. 1:07–cv–00018, Clerk's No. 1 at 9. These cases, along with others, have been consolidated for trial. See Clerk's No. 22.

A. The Underlying Actions

Claimants were arrested in 1977 for the murder of former police officer John Schweer (“Schweer”). Gulf Facts ¶¶ 14–15; Genesis Facts ¶¶ 13–14. In 1978, both Claimants were convicted for Schweer's murder and sentenced to life imprisonment. Gulf Facts ¶¶ 16–17; Genesis Facts ¶¶ 15–16. Harrington received previously-undisclosed exculpatory police records in 1999 and filed a petition for post-conviction review on March 3, 2000. Gulf Facts ¶¶ 21–22. In February 2003, the Iowa Supreme Court reversed Harrington's conviction. Harrington v. State, 659 N.W.2d 509 (Iowa 2003); see also Genesis Facts ¶ 19; Gulf Facts ¶ 23. In April 2003, Harrington was released from jail. Genesis Facts ¶ 21. Later that year, McGhee agreed to an Alford plea and was also released from jail. Gulf Facts ¶ 24; Genesis Facts ¶¶ 22–23.

In 2005, Claimants filed the Underlying Actions. The Underlying Actions were consolidated in 2009 and are presently pending before this Court. See Case No. 4:03–cv–90616, Clerk's No. 104. Discovery in the Underlying Actions is closed and the cases have proceeded through summary judgment. ⁴

The following claims are currently pending in the Underlying Actions: ⁵

Harrington still has the following claims pending against Defendants: Counts 1 and 2 (claims against Defendants for violation of 42 U.S.C. § 1983) and Count 3 (claims against Defendants for conspiracy under 42 U.S.C. § 1985(3)). McGhee still has the following claims pending against Defendants: Counts 1 and 5 (claims against Larsen and Brown, in their individual capacities, for violation of 42 U.S.C. § 1983); Count 15 (a claim against Larsen and Brown for conspiracy under 42 U.S.C. § 1985(3)); Count 18 (a claim against the City for violation of § 1983); and Count 19 (a claim against the City for indemnity).See Case No. 4:03–cv–90616, Clerk's No. 224 at 3 (footnotes omitted). As the Court recently decided, Claimants' remaining “§ 1983 claims seeking damages for constitutional injuries resulting from their arrests, convictions, and incarcerations are in the nature of malicious prosecution because Plaintiffs essentially allege that their constitutional rights were violated as a result of the wrongful institution of legal process against them.” Id. at 13.

B. Additional Facts Relevant to Gulf's Motion

Gulf issued two insurance policies to the City: (1) a primary insurance policy (hereinafter the “Gulf Primary Policy”); and (2) an excess insurance policy (hereinafter the “Gulf Excess Policy”) (collectively the “Gulf Policies”). Gulf Facts ¶¶ 1, 3. Both of the Gulf Policies were effective from January 1, 2000 to January 1, 2001. Id. In November 2000, Brown and Larsen gave depositions in the case of Harrington v. State. See Defs.' Statement of Additional Facts Submitted in Resistance to Mot. for Summ. J. ¶¶ 5, 9.

C. Additional Facts Relevant to Genesis' Motion

Genesis issued two separate, consecutive indemnity insurance policies to the City. Genesis Facts ¶ 5. The first policy was effective from January 1, 2002 to January 1, 2003 and the second was effective from January 1, 2003 to January 1, 2004 (collectively the “Genesis Policies”). Id.

II. STANDARD FOR SUMMARY JUDGMENT

The term “summary judgment” is something of a misnomer.⁶ See Hornby, D. Brock, Summary Judgment Without Illusions, 13 Green Bag 2d 273 (Spring 2010). It “suggests a judicial process that is simple, abbreviated, and inexpensive,” while in reality, the process is complicated, time-consuming, and expensive. Id. at 273, 281. The complexity of the process, however, reflects the “complexity of law and life.” Id. at 281. “Since the constitutional right to jury trial is at stake,” judges must engage in a “paper-intensive and often tedious” process to “assiduously avoid deciding disputed facts or inferences” in a quest to determine whether a record contains genuine factual disputes that necessitate a trial. Id. at 281–82. Despite the seeming inaptness of the name, and the desire for some in the plaintiffs' bar to be rid of it, the summary judgment process is well-accepted and appears “here to stay.” ⁷ Id. at 281. Indeed, “judges are duty-bound to resolve legal disputes, no matter how close the call.” Id. at 287.

Federal Rule of Civil Procedure 56(b) provides that “[a] party against whom relief is sought may move at any time ... for summary judgment on all or part of the claim.” “[S]ummary judgment is an extreme remedy, and one which is not to be granted unless the movant has established his right to a judgment with such clarity as to leave no room for controversy and that the other party is not entitled to recover under any discernible circumstances.” Robert Johnson Grain Co. v. Chem. Interchange Co., 541 F.2d 207, 209 (8th Cir.1976) (citing Windsor v. Bethesda Gen. Hosp., 523 F.2d 891, 893 n. 5 (8th Cir.1975)). The purpose of summary judgment is not “to cut litigants off from their right of trial by jury if they really have issues to try.” Poller v. Columbia Broad. Sys., Inc., 368 U.S. 464, 467, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962) (quoting Sartor v. Ark. Natural Gas Corp., 321 U.S. 620, 627, 64 S.Ct. 724, 88...