Titan Indem. Co. v. Newton

• Decision Date: 11 February 1999
• Docket Number: No. Civ.A. 97-C-81-N.,Civ.A. 97-C-81-N.
• Citation: Titan Indem. Co. v. Newton, 39 F.Supp.2d 1336 (N.D. Ala. 1999)
• Parties: TITAN INDEMNITY COMPANY, Plaintiff, v. Jerry NEWTON, et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

39 F.Supp.2d 1336

TITAN INDEMNITY COMPANY, Plaintiff, v. Jerry NEWTON, et al., Defendants.

No. Civ.A. 97-C-81-N.

United States District Court, N.D. Alabama, Northern Division.

February 11, 1999.

James R. Shaw, Paul F. Malek, Huie, Fernambucq & Stewart, Birmingham, AL, for Titan Indemnity Company.

Jerry Newton, Andalusia, AL, defendant pro se.

Stanley F. Gray, Fred David Gray, Jr., Gray, Langford, Sapp, McGowan, Gray &amp Nathanson, Tuskegee, AL, Daniel M. Soloway, Daniel M. Soloway, PA, Pensacola, FL, for Robert Clyde Garland.

James A. Wardell, Suarez & Wardell, P.A., Tampa, FL, Bennie Lazzara, Jr., Wilkes & McHugh, Tampa, FL, for John Tatum.

MEMORANDUM OPINION AND ORDER¹

CARROLL, United States Magistrate Judge.

I. INTRODUCTION AND PROCEDURAL HISTORY

This is a declaratory judgment action filed by Titan Indemnity Company (Titan) against Jerry Newton, Robert Garland and John Tatum.² In this action, Titan, an insurance company, asks the court to declare that it is not required by its contract of insurance with the City of Andalusia, Alabama, to pay a $2,300,000 judgment entered in favor of Garland and Tatum and against the City of Andalusia and Newton. Garland and Tatum filed counterclaims for breach of contract, bad faith and negligence.³ The case is currently pending before the court on cross motions for summary judgment filed by Titan, Garland and Tatum.⁴

II. FACTUAL BACKGROUND

On August 16, 1995, and November 27, 1995, respectively, Garland and Tatum filed suit against the City of Andalusia and several of its police officials, including Newton, who was head of the Narcotics Unit of the Andalusia Police Department, alleging that Newton had fabricated evidence against them which ultimately led to their conviction and imprisonment on federal drug charges. The cases were consolidated. Titan defended the city and all of its police officers, except Newton, unconditionally. Titan undertook Newton's defense under a reservation of rights. The case was ultimately sent to the jury on five claims. As the court described the claims in it's charge:

Tatum and Garland have a total of five claims, consisting of three federal claims and two state claims. The three federal claims are (1) Garland's claim that Harrison failed to disclose exculpatory information to the prosecution, (2) Tatum's and Garland's claims that Newton and the City of Andalusia fabricated evidence, and (3) Tatum's and Garland's claims that Andalusia provided inadequate training and supervision to its police officers. The state law claims are (1) Tatum's and Garland's claims that Newton initiated a malicious prosecution against them, and (2) their claims that Newton falsely imprisoned them.⁵

The jury found for both plaintiffs and against the City of Andalusia on the failure to train and supervise claim, and against Newton on the fabricated evidence, malicious prosecution and false imprisonment claims. The jury charges containing the essential elements of each of the claims were as follows:

Fabricated evidence claim

Tatum and Garland claim that Newton fabricated evidence on the criminal proceedings against them. In order to prevail on this claim a plaintiff must prove by a preponderance of the evidence the following elements:

(1) That Newton fabricated evidence against the plaintiffs;

(2) That the evidence was material to bringing of criminal charge;

(3) That Newton acted intentionally; and,

(4) That Newton's conduct proximately caused injury to the plaintiff.

Failure to train and supervise

To prevail on a claim for failure to adequately train and supervise, a plaintiff must prove by a preponderance of the evidence the following elements:

(1) That Andalusia failed to adequately train and supervise its subordinate officers;

(2) That Andalusia acted with deliberate indifference to the plaintiff's constitutional rights; and

(3) That Andalusia's failure to train and supervise was causally related to Newton's fabrication of evidence.

Malicious prosecution

Both Tatum and Garland assert that Newton initiated a malicious prosecution against them. In order to prevail on a claim of malicious prosecution, a plaintiff must prove by a preponderance of the evidence the following elements:

(1) That Newton initiated judicial proceedings against the plaintiff;

(2) That Newton lacked probable cause for initiating the proceedings;

(3) That Newton acted with malice:

(4) That the termination of the judicial proceedings was in the plaintiff's favor; and

(5) that Newton's conduct was the proximate cause of the plaintiff's injury

False imprisonment

Tatum and Garland also claim that Newton falsely imprisoned them. In order to prevail in this claim, a plaintiff must prove by a preponderance of the evidence the following elements:

(1) that Newton unlawfully detained the plaintiff;

(2) that Newton lacked the probable cause for detention;

(3) That Newton acted intentionally; and

(4) That Newton's conduct was the proximate cause of the plaintiff's injury.

The jury awarded Garland and Tatum each $350,000.00 in compensatory damages and $800,000.00 in punitive damages. Titan argues that it is not obligated to pay the verdict because the City of Andalusia's policy does not provide coverage for the claims giving rise to the verdict.

The contract of insurance between Titan and the City of Andalusia, as contained in the policy, obligates Titan to pay:

... all sums the insured must pay as damages because of personal injury or property damage to which this insurance applies caused by an occurrence resulting from law enforcement activities ...

The policy goes on to state in the definition of "insured" that the city is insured and "all law enforcement officers of the law enforcement agency," are insured when they act within the scope of their duties for the city. Thus, under the policy, the city is insured as are its police officers for actions taken within the scope of their duties as a law enforcement officers.

The policy also defines an occurrence as follows:

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

1. Personal injury or property damage the insured did not expect or intend or 2. Personal Injury or property damage, although expected or intended by the insured, if an objectively good faith reason existed to cause such injury or damage.

"Personal injury" means:

1. Bodily injury. Any physical harm to a person's health including sickness or disease. This includes mental harm, mental anguish or mental illness whether or not there has been physical harm or illness.

2. False arrest, wrongful detention or imprisonment.

3. Unlawful prosecution ...

* * * * * *

10. Violation of civil rights ...⁶

The policy also contains other provisions relevant to the issues before the court.

PART III. WHAT THIS AGREEMENT COVERS

A. WE WILL PAY

1. We will pay all sums the insured legally must pay as damages because of personal injury or property damage to which this insurance applies caused by an occurrence resulting from law enforcement activities. This includes governmental action directed toward the prevention and control of crime in the course of public employment.

2. We have the right and duty to defend any claim, suit or action asking for these damages even if it is groundless or fraudulent. This includes but is not limited to inquests or civil and criminal suits brought under the Federal Civil Rights Act....

III. DISCUSSION

A. RILEY I AND RILEY II

Titan is in the business of insuring governmental entities. In fact, Titan and the City of Andalusia have had a long contractual relationship. The law enforcement policy at issue in this case is the offspring of a similar policy previously marketed and sold by Titan to other municipalities. In fact, the only differences between the policy at issue in this case and the policy previously marketed and sold by Titan are found in the definition of "occurrence" and in the definition of one of the categories of personal injury. In the previous policy, occurrence was defined as an event "... that results in 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." The previous policy thus excludes any coverage for intentional acts. The policy that is the subject of this litigation retains the definition of personal injury found in the previous policy and adds the following paragraph:

2. Personal injury or property damage, although expected or intended by the insured, if an objectively good faith reason existed to cause such injury or damage.

Also in the previous policy, one of the categories of "personal injury" was "malicious" prosecution. In the policy at issue in this case, "malicious" has been changed to "unlawful."

The previous Titan policy is the subject of two opinions by the Alabama Supreme Court, Titan Indem. Co. v. Riley, 641 So.2d 766 (Ala.1994) (Riley I) and Titan Indem. Co. v. Riley, 679 So.2d 701 (Ala. 1996) (Riley II). Riley I & II arose out of a lawsuit challenging the activities of the Montgomery City Police Vice and Narcotics Unit which contains claims similar to the claims pressed in the lawsuit which underlies this case. In Riley I, the Alabama Supreme Court summarized the factual background:

In 1989 ... four (Montgomery City) 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...