Titan Indem. Co. v. Riley

• Decision Date: 25 February 1994
• Citation: Titan Indem. Co. v. Riley, 641 So.2d 766 (Ala. 1994)
• Parties: TITAN INDEMNITY COMPANY and the City of Montgomery v. John Thomas RILEY, Jr., et al. 1921388.
• Court: Alabama Supreme Court

Page 766

641 So.2d 766

TITAN INDEMNITY COMPANY and the City of Montgomery v. John Thomas RILEY, Jr., et al.

1921388.

Supreme Court of Alabama.

Feb. 25, 1994.

Rehearing Denied May 6, 1994.

Robert C. Black of Hill, Hill, Carter, Franco, Cole & Black, Montgomery, and James R. Shaw of Huie, Fernambucq and Stewart, Birmingham, for appellants.

Griffin Sikes, Jr., Montgomery, for appellee John Thomas Riley, Jr.

Charles L. Anderson of Parnell, Crumm & Anderson, P.A., Montgomery, for appellee Frank Bertarelli.

STEAGALL, Justice.

The City of Montgomery (hereinafter "the City") and Titan Indemnity Company (hereinafter "Titan") brought a declaratory action seeking a determination of whether, pursuant to an insurance policy between Titan and the City, Titan was obligated to defend and indemnify Frank Bertarelli, B.H.H. Davis, Jerome M. Wooten, and Michael G. Jones, four of the City's police officers, in regard to federal charges of malicious prosecution and civil rights violations. The trial court entered a judgment holding that Titan was contractually bound to defend the police officers, but did not rule on the issue of indemnity; the court certified the judgment as final under Rule 54(b), A.R.Civ.P. Titan and the City appeal.

The dispositive issue before us is whether the trial court properly determined that Titan must defend officers Bertarelli and Wooten against the federal charges. ¹ We note these facts from the record: In 1991, a series of federal habeas corpus hearings revealed that the Narcotics Division of the Montgomery Police Department had engaged in a pattern of corrupt practices, including the misappropriation of that Division's "informant fund," i.e., money set aside to pay informants who provided the police with information regarding illegal drug activity. Police officers who withdrew cash from this fund were required to report the amount withdrawn, the informant to whom it was paid, and the information that was received in return for the payment. The hearings revealed that Bertarelli, Davis, Wooten, and Jones repeatedly withdrew money from the fund, pocketed it for themselves, and then falsified the files to show that they had paid the money to informants.

In 1989, those four police officers withdrew money from the informant fund and then falsely reported that they had spent it on "information" from "anonymous persons" regarding the alleged illegal drug activities of John Thomas Riley, Jr. Based on this fabricated "information" from these fictitious informants, the four policemen conducted an unconstitutional search of Riley's person and his automobile and filed criminal complaints against him without probable cause. They also "planted" false evidence in Riley's vehicle and supported Riley's criminal prosecution with false testimony. As a result, Riley was convicted on two counts of possession of crack cocaine with intent to distribute and on one count of carrying a firearm during a drug transaction. He served approximately three years of a 123-month sentence, first in the Montgomery County jail and then in the federal penitentiary in Oakdale, Louisiana, until his repeated habeas corpus proceedings ultimately exposed the unconstitutionality of his arrest and prosecution.

The United States District Court for the Middle District of Alabama vacated the judgments of conviction against Riley and ordered his release from prison, and the United States attorney dropped all claims against him. Riley then sued the four police officers, along with their supervisors (John Wilson, chief of the Montgomery Police Department and Dennis Bodine, commander of the Narcotics Division of the Montgomery Police Department) and the City, alleging malicious prosecution and violations of his civil rights and seeking damages under 42 U.S.C. § 1983. Riley alleged that his arrest and convictions occurred as a result of an intentional pattern of corruption within the Narcotics Division of the Montgomery Police Department, perpetuated by the four police officers and tacitly authorized by their supervisors and the City.

The City has a "Law Enforcement Officers' Liability Coverage" policy with Titan, which provides coverage for all City law enforcement officers. The policy reads, in pertinent part:

"PART 1--WORDS AND PHRASES WITH SPECIAL MEANING

"....

"E. 'Occurrence' means an event and includes continuous or repeated exposure to the same condition that results in:

"1. personal injury the insured did not expect or intend unless the personal injury resulted from the use of reasonable force to protect persons or property.

"....

"F....