WESTERN WORLD INS. v. HARFORD MUT. INS.

• Decision Date: 19 December 1984
• Docket Number: Civ. A. No. M-83-2599.
• Citation: 600 F. Supp. 313
• Parties: WESTERN WORLD INSURANCE COMPANY, INC. v. HARFORD MUTUAL INSURANCE COMPANY.
• Court: U.S. District Court — District of Maryland

600 F. Supp. 313

WESTERN WORLD INSURANCE COMPANY, INC. v. HARFORD MUTUAL INSURANCE COMPANY.

Civ. A. No. M-83-2599.

United States District Court, D. Maryland.

October 31, 1984.

On Motion for Reconsideration December 19, 1984.

Howard J. Schulman, Baltimore, Md., for plaintiff.

Frank X. Gallagher, Baltimore, Md., for defendant.

MEMORANDUM AND ORDER

JAMES R. MILLER, Jr., District Judge.

This is a civil action brought by Western World Insurance Company, Inc. (Western World) against Harford Mutual Insurance Company (Harford). Plaintiff seeks a judicial determination of the respective rights and liabilities of the plaintiff and defendant insurers in connection with the defense and coverage of the defendants in a case filed in this court in 1982, entitled Sampson v. Mears, et al., Civil Action No. M-82-2263.

The present case was tried without a jury on October 1 and 2, 1984. This Memorandum constitutes the court's findings of fact and conclusions of law, as required by Fed.R.Civ.P. 52, whether or not specifically so denominated. Due regard has been given to the credibility of the witnesses.

I. Findings of Fact

On August 8, 1981, Officer Scott Mears was on duty as a uniformed police officer of the City of Cambridge. After observing two cars which appeared to be racing, Officer Mears and his partner gave pursuit. When one of the vehicles stopped, the officers continued to pursue the other vehicle, driven by Timothy Sampson. Following a high speed chase through residential areas, the vehicle driven by Sampson drove into the school grounds of St. Claire Elementary School. When Sampson jumped out of his car and began running, Officer Mears gave chase on foot.

Around the corner of the school building, Sampson turned toward Mears. Mears, believing that Sampson had a gun and was about to shoot, drew his service revolver and fired one bullet at Sampson. This bullet apparently ricocheted off of a wall behind Sampson, and then struck Sampson in the head. The gun that Mears believed he had seen was not found, but a rolled up cap was found in Sampson's hand.

The plaintiff asserts that Officer Mears fired by reflex action without aiming at anything. The evidence is clear, however, that Officer Mears shot at Sampson.¹

It was the policy of the Cambridge Police Department that its officers were not to fire warning shots at any time.²

Officer Mears was indicted for common law battery, assault with intent to murder, and the use of a handgun during a felony. The case was tried before a jury in the Circuit Court for Kent County on December 14-16, 1981, and Mears was acquitted on all counts.

On the date of the shooting, two insurance policies were in force which are relevant to this case. First, the City of Cambridge was covered by a general comprehensive liability policy issued by Harford,³ through Harrington Insurance Agency (Harrington). This policy required Harford to:

"... pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of

A. bodily injury, or

B. property damage

to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage." Emphasis added.

The policy defines an "occurrence" as being:

"... an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured." Emphasis added.

This policy contained an endorsement form, under which the "persons insured" provision was amended to include as additional insureds "any employee of the named insured while acting within the scope of his duties."⁴ There is no dispute that Officer Mears was acting within the scope of his duties when the incident occurred. Additionally, the policy provided that it afforded primary insurance, with a limit of liability stated as $1,000,000.

In addition, there was in force a law enforcement liability policy issued by Western World through Harrington, as procuring agent, insuring the Cambridge Police Department, the Mayor and City Council and Police Commissioners of Cambridge.⁵ The Western World policy promises to:

"... pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of negligent acts, errors or omissions of the insured as follows:

Coverage A — Personal Injury

Coverage B — Bodily Injury

to which this insurance applies, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such personal injury or bodily injury..."

The Western World policy defines "bodily injury" as:

"bodily injury, sickness or disease sustained by any person accidentally caused by any act of the insured in making or attempting to make an arrest while acting within the scope of his duties as a law enforcement officer."

The policy defines "personal injury" in pertinent part as:

"... assault and battery, if committed while making or attempting to make an arrest...."

Emphasis added. The policy specified that it was:

"... excess insurance over any other valid and collectable insurance available to the insured...."

The limits of the Western World policy were $100,000 for each person and $300,000 for each incident.

Western World received notice of the shooting on September 3, 1981, by virtue of a loss notice sent from All Risks, Ltd., Western World's general agent, to which Harrington had reported the incident.⁶ Upon receipt of this notice, Western World retained Crawford & Co., an adjusting company, to investigate the shooting. Robert Purnell of Crawford & Co. handled the investigation, and on October 22, 1981, he submitted a report to Western World indicating that Mears' criminal trial was scheduled to begin on December 14, 1981, and recommending that the trial be monitored.⁷ Due to the pending criminal charges against Mears and the subsequent criminal trial, most of Mr. Purnell's investigation was not done until mid-1982. On June 11, 1982, Purnell sent a report to Western World, in which he described the shooting as follows:

"In an effort to avoid the police, Sampson drove the vehicle onto a school yard across basketball courts and tennis courts and spun around hoping to elude the police, however, Officer Mears' police cruiser was blocking the entrance and Sampson could not get off the school property. He attempted to ram the cruiser, however, stopped short of doing this, then jumped out and began running. Officer Cheeseman jumped out and yelled `police' and at that point, Sampson turned with an object in his hand. It was believed to be a gun, however, later turned out to be a hat that was rolled up. At this point, Officer Mears fired his weapon at Sampson who was approximately fifty feet away from him and running. It was later proven that the bullet from Mears' weapon struck a brick wall of the school and ricocheted back striking Sampson behind the left ear, entering his skull and lodging behind his right eye."⁸

Purnell recommended that Western World deny liability for the shooting, and Western World did deny liability.

On August 5, 1982, Timothy Sampson filed a civil complaint in this court,⁹ alleging violations of 42 U.S.C. § 1983, and naming as defendants Officer Mears, Police Chief Russell E. Wroten of the Cambridge, Maryland Police Department, and the Mayor and Commissioners of the City of Cambridge. The complaint alleged that the shooting of Sampson by Mears was wrongful, or "so wantonly or grossly negligent as to constitute willfulness."¹⁰ With respect to Chief Wroten and the City, the complaint alleged that they were vicariously liable for the acts of Mears and that they were independently liable for negligent hiring and supervision.¹¹

Upon receipt of the complaint from Harrington, Western World retained Edward Mackie, Esq. to defend all defendants in Sampson. At that time, Lynn Rupp, Western World's claims adjuster, advised the defendants in Sampson and Harrington that there were possible coverage problems. On August 18, 1982, Harrington sent notice of the suit to Harford.¹² Apparently, this is the first notice that Harford had received regarding either the incident or the suit.¹³

On August 19, 1982, Mr. Rupp sent letters of reservation to the defendants in Sampson. On September 14, 1982, Richard Matthews, the City Attorney of Cambridge, sent a letter to Western World contesting the reservation of rights, indicating that, because a conflict existed between the interests of Mears and the other defendants, the City and Chief Wroten had engaged Francis B. Burch, Esq. to represent them, and requesting that Western World agree to pay the cost of Mr. Burch's services.¹⁴ Western World agreed to this request on September 20, 1982.

On September 30, 1982, Mr. Rupp telephoned Charles Foley, the claims adjuster for Harford, and was told that Harford had made no decision as to whether it would provide a defense or indemnification. On October 25, 1982, Harford received a letter from Western World, dated October 8, 1982, formally tendering the defense in Sampson to Harford.¹⁵ Mr. Rupp subsequently called and wrote Harford on several more occasions, because he had received no response. Finally, on June 14, 1983, Mr. Foley advised Mr. Rupp that Harford would take no action in Sampson and would not contribute to a defense or provide indemnification.

Meanwhile, on December 17, 1982, this court dismissed some of the claims against Chief Wroten and the City, and on July 18, 1983, a stipulation was filed in Sampson in which all remaining claims against Chief Wroten and the City were dismissed, leaving Officer Mears as the only defendant.¹⁶ Also on July 18, 1983, Western World filed this suit against Harford. As the trial date in Sampson approached, Mr. Rupp contacted Mr. Foley and invited him to participate in settlement negotiations, but...