UNIFIED SCHOOL DIST. 501 v. Continental Cas. Co., Civ. A. No. 85-4042-S.
| Decision Date | 23 March 1989 |
| Docket Number | Civ. A. No. 85-4042-S. |
| Citation | 723 F. Supp. 564 |
| Parties | UNIFIED SCHOOL DISTRICT NO. 501, SHAWNEE COUNTY, STATE OF KANSAS, Plaintiff, v. CONTINENTAL CASUALTY COMPANY, Defendant. |
| Court | U.S. District Court — District of Kansas |
Charles N. Henson, Eidson, Lewis, Porter & Haynes, Topeka, Kan., for plaintiff.
Richard T. Merker, Wallace, Saunders, Austin, Brown, & Enochs, Chtd., Overland Park, Kan., Mike Tone, Anne Fiedler, Peterson, Ross, Schloerb & Seidel, Chicago, Ill., for defendant.
This matter is before the court on motions of both parties for summary judgment. In this action, plaintiff seeks declaratory relief. The general issue in this case is whether an exclusion provision of a liability insurance policy prevents plaintiff's recovery of expenses incurred in defending the school desegregation case of Brown v. Topeka Bd. of Educ., 671 F.Supp. 1290 (D.Kan.1987) ("Brown III"). The parties are in agreement on the underlying facts in this case. Therefore, the court is prepared to enter a declaratory judgment on this matter.
1. Defendant, Continental Casualty Company, issued an insurance policy (Policy No. BEL 318 10 47) to plaintiff, Unified School District No. 501, ("school district"), with an effective policy period from October 15, 1976 to October 15, 1979. This insurance policy was renewed and continued in effect from October 15, 1979 to October 18, 1984, when defendant canceled the policy.
2. The insurance policy is a "reimbursement policy." Continental agreed to reimburse the school district for all covered losses.
3. Pursuant to section I(a) of the policy, Continental agreed with the school district that if a claim was brought against the school district for a "wrongful act" occurring during the policy period, then Continental would pay the school district for "all loss which the school district shall become legally obligated to pay." A wrongful act is defined in section III(c) to include, among other things, any "act or omission or neglect or breach of duty." Loss is defined in section III(d) to include any amount that the school district is "legally obligated to pay", including, among other things, damages, judgments and "cost of investigation and defense of legal actions."
4. The policy at issue also contained, in all capital letters, the following Endorsement No. 3:
COVERAGE SHALL EXCLUDE ANY LOSS ARISING OUT OF PRIOR OR OUTSTANDING LITIGATION OR ACTS WHICH GIVE RISE THERETO.
5. The Brown school desegregation litigation was commenced in this court in February of 1951. The case later proceeded to the United States Supreme Court. The Supreme Court entered its first ruling in Brown on May 17, 1954, holding that the Topeka Board of Education's maintenance of racially segregated elementary schools violated the equal protection clause of the Fourteenth Amendment of the Constitution. Brown v. Board of Educ. of Topeka, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954) (Brown I).
6. In Brown II, the Supreme Court's second ruling issued May 31, 1955, the Court ordered that the Brown plaintiffs be admitted to public schools on a racially nondiscriminatory basis with "all deliberate speed." The Court remanded the case to this court, with directions to "require that the defendants make a prompt and reasonable start toward full compliance with our May 17, 1954 ruling." The Supreme Court further directed the district court to retain jurisdiction during the period of desegregation. Brown v. The Board of Educ., 349 U.S. 294, 300, 75 S.Ct. 753, 756, 99 L.Ed. 1083 (1955).
7. On August 24, 1955, a hearing was held in this court on whether the Board of Education had fully complied with the Supreme Court's Order. See Brown v. Board of Educ. of Topeka, 139 F.Supp. 468, 469 (D.Kan.1955). The court concluded that complete desegregation had not been accomplished, but that the school district was making good-faith efforts toward the accomplishment of desegregation. The court specifically stated, however, that "jurisdiction of the cause for the purpose of entering the final decree is retained until such time as the court feels there has been full compliance with the mandate of the Supreme Court .." Id. at 470.
8. On August 22, 1979, certain claims were made against the school district. These claims were made by eight black parents and their children, who requested leave to intervene as plaintiffs in the Brown v. The Board of Educ. case.
9. The insurance policy at issue was in effect at the time of the filing of the intervenors' pleadings.
10. In their pleadings, the intervening plaintiffs claimed that the school district operated racially-segregated schools, established school attendance zones that perpetrated racially-segregated schools, adopted and implemented an open enrollment policy that perpetrated racially-segregated schools, adopted and implemented facility plans that perpetrated segregated schools, provided facilities, equipment and curriculum to schools with high black enrollment that were substantially inferior to those provided to schools with a disproportionately high white enrollment, and assigned black teachers and personnel to schools with high black enrollment and assigned white teachers and personnel to schools with high white enrollment.
11. On November 29, 1979, Judge Rogers granted the intervening plaintiffs' motion to intervene. Brown v. Board of Educ. of Topeka, 84 F.R.D. 383, 405 (D.Kan.1979).
12. The school district notified Continental of the claims made against it by the intervening plaintiffs by letter dated December 6, 1979.
13. Following this notice, Continental notified the school district on May 16, 1980, that it denied any liability in connection with these claims and denied that the policy afforded any coverage to the school district in connection with these claims. Continental based its denial on Endorsement No. 2 and Endorsement No. 3 of the policy.
14. The intervenors' claim was tried to this court in October of 1986. Post-trial briefs were filed. On April 8, 1987, this court denied the intervenors' claim for relief. The court found that the school district had eliminated all vestiges of de jure segregation. The court further found that the school district had a unitary system of education.
15. On August 16, 1979, a class action suit was filed by Carla Michelle Miller against the school district, alleging that the school district denied plaintiffs a nonsegregated public education. Miller v. Board of Educ. of Topeka, No. 79-1408, (D.Kan.).
16. On September 7, 1979, a class action suit was filed by Gregory Grant Chapman against the school district, alleging that plaintiffs were denied equal protection of the laws by virtue of the school district's conduct. Chapman v. Board of Educ. of Topeka, No. 79-1478 (D.Kan.).
17. The plaintiffs in Chapman and Miller were alleging essentially the same claims as the intervening plaintiffs in Brown III. The claims were essentially that the school district was operating a racially-segregated school system, based on the district's open enrollment policy, school-closing decisions, and school attendance zones adopted by the district. Continental reimbursed plaintiff for its defense costs in both the Miller and Chapman actions, without reference to the exclusions found in Endorsement No. 2 or Endorsement No. 3.
Under Kansas law if an insurance policy is clear and unambiguous, the words are taken and understood in their plain, ordinary and popular sense. American Media, Inc. v. Home Indemnity Co., 232 Kan. 737, 740, 658 P.2d 1015, 1018 (1983) (quoting Mah v. United States Fire Ins. Co., 218 Kan. 583, 586-87, 545 P.2d 366, 369 (1976)). Also, a court should not attempt to construe the plain language of a policy provision into distorted, ambiguous language. See Canal Ins. Co. v. Earnshaw, 629 F.Supp. 114, 118 (D.Kan.1985) ().
In the present case, the loss that the school district claims is covered by the policy is the legal expenses incurred in defending the action brought by the intervening plaintiffs in the Brown III litigation. The specific issue for resolution in this case is whether this loss is excluded from coverage by Endorsement No. 3 of the policy. This endorsement states:
COVERAGE SHALL EXCLUDE ANY LOSS ARISING OUT OF ... OUTSTANDING LITIGATION OR ACTS WHICH GAVE RISE THERETO.
The court has previously recognized that the Brown...
To continue reading
Request your trial
-
Westchester Fire Ins. Co. v. City of Pittsburg, Kan.
...it must be taken in its plain, ordinary and popular sense. Unified School Dist. No. 501, Shawnee County, Kansas v. Continental Casualty Co., 723 F.Supp. 564, 566 (D.Kan.1989); Bramlett v. State Farm Mut. Ins. Co., 205 Kan. 128, 130, 468 P.2d 157, 159 (1970); Glenn v. Fleming, 14 Kan.App.2d ......
-
HOME INS. CO. OF IL (NH) v. Spectrum Info. Tech.
...the same "Poison Pill" as had an earlier-filed "Atlantis Action." Id. at 1153. Finally, the court in Unified Sch. Dist. N. 501 v. Continental Casualty Co., 723 F.Supp. 564 (D.Kan.1989), excluded coverage for an intervenors' action brought in the ongoing school desegregation case of Brown v.......
-
Frerking v. Blue Cross-Blue Shield of Kansas
...E.g., Kansas State Bank & Trust Co. v. Old Am. Ins. Co., 491 F.2d 307, 309-10 (10th Cir.1974); Unified School Dist. No. 501 v. Continental Casualty Co., 723 F.Supp. 564, 566 (D.Kan. 1989). It is also well-established that the burden is upon the insurer to demonstrate that the insured's clai......
-
FIRST FEDERAL SAV. BANK v. Continental Cas. Co., Civ. A. No. 88-1061-T.
...E.g., Kansas State Bank & Trust Co. v. Old Am. Ins. Co., 491 F.2d 307, 309-10 (10th Cir.1974); Unified School Dist. No. 501 v. Continental Casualty Co., 723 F.Supp. 564, 566 (D.Kan.1989). The burden is upon the insured to prove that his claimed loss falls within the terms of a general cover......