In the wake of last year's arrest and multicount indictment of an East Point police sergeant accused of molesting a 15-year-old girl, the city was threatened with a potential multimillion-dollar lawsuit by the teenager.

East Point, in turn, asked its insurer to defend the case and indemnify it in accordance with a $2 million law enforcement professional liability policy issued to the city's police department. 

The carrier, Kinsale Insurance Co., said no thanks, arguing that exclusions in the policy barred coverage. 

Now East Point is suing the carrier and warning that it will add a bad faith claim to its breach of contract action, if Kinsale lets a 60-day deadline run out on the demand letter the lawyer for the Jane Doe plaintiff sent last month. 

As laid out in the complaint removed to the U.S. District Court for the Northern District of Georgia last week, the dispute began last August when former Sgt. Richard Gooddine (whose name is spelled Goodine in some filings) stopped a group of youths in East Point, including "Jane Doe," the teen who leveled the accusations. 

Doe alleged that Gooddine "performed an inappropriate frisk and search … ordering her to lift up her bra and looking down her pants."

The girl's lawyer, Thomas Reynolds Jr. of the Reynolds Law Group, said last year that Gooddine had driven the girl around in his police SUV before sexually assaulting her in the Village Highlands Apartments, then taking her home. 

He was later spotted in the halls of a hospital where the girl had been taken to administer a rape kit.

Gooddine was indicted on 15 counts, including multiple instances of aggravated sexual battery, sexual battery, sexual assault by a law enforcement agent, enticing a child for indecent purposes and threatening a witness; the charges involved not only the teenager but alleged assaults on three other female victims, including another underage girl.

Richard Gooddine (Courtesy photo)

Gooddine remains behind bars at the Fulton County Jail.

According to the complaint, Jane Doe's civil claims against East Point include sexual harassment, assault, intentional and negligent infliction of emotional distress, negligent hiring, negligent retention, failure to follow procedure, use of unreasonable force, violation of human rights, stalking and harassment. 

Doe's lawyer, Reynolds, sent a statutory ante litem notice to East Point last year saying her damages exceeded $5 million, and offering to settle for the policy's $2 million limit.

Kinsale replied with a letter denying coverage and any duty to defend the case.

Reynolds sent an amended notice last fall that "greatly reduced the severity of the allegations against Officer Gooddine."

The letter was forwarded to Kinsale, but East Point said the insurer has not responded.

In a bad faith letter sent last month, East Point said none of the exceptions Kinsale cited in denying coverage applied.

The breach of contract complaint said a bad faith claim will be added if the insurer does not agree to cover its defense within the 60-day time limit.

East Point's lawyer, W. Thomas Lacy Jr. of Peachtree City's Lindsey & Lacy, said he did not have permission to discuss the case.

Kinsale is based in Arkansas; its attorney, Junaid Savani of Miami's Clyde & Co. US, did not respond to a request for comment. 

Reynolds, whose client is not a party to the insurance dispute, said he is willing to give the city and its carrier time to come to an understanding. 

"I'm going to let those two entities sort things out," he said. "I do believe the policy covers these claims."

"We have not filed suit yet, we are still in prelitigation discovery," he said. "But, the more I look, the more alarmed I am at what was going on in that department. We've determined that Gooddine in particular had a long-running litany of infractions and internal affairs investigations, and he had been accused of sexual misconduct before this case."

"We've offered them a chance to settle within policy limits; at this point they have not accepted it," Reynolds said. "I believe that creates additional liability for the carrier and for the city of East Point."