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A federal district court in Pennsylvania has ruled that an auto exclusion in a law enforcement insurance policy issued to a city precluded coverage of a claim alleging that negligent or reckless driving by a city police officer had caused a fatal accident. The court, however, permitted the city's insurance coverage action to continue under its auto policy.

The Case

After James David Robinson was involved in a fatal automobile accident with a police officer from the city of Williamsport, Robinson's mother, Nancy Robinson Westbrooks, sued the city, alleging that the officer's negligent or reckless driving had caused the accident. She also asserted that the city's supervision and training of the officer had been negligent or reckless; that the officer's actions had constituted deliberate indifference to Robinson's safety, in violation of the U.S. Constitution; and that the city's actions had constituted deliberate indifference to Robinson's safety, also in violation of the U.S. Constitution.

After the city unsuccessfully moved to dismiss the constitutional claims, it settled with Westbrooks for $1,000,000.

CNA Insurance Cos. and the National Fire Insurance Co. of Hartford, which had issued an automobile insurance policy and a law enforcement insurance policy to the city, each of which had a $1 million limit, refused to provide more than $500,000 in total to cover for the settlement, and the city sued.

The city sought a declaration that the insurers had to cover the entire $1 million settlement under either the auto policy or the law enforcement policy and argued that the insurers' failure to cover the entire settlement breached the insurance policies and was in bad faith.

The insurers moved to dismiss.

The District Court's Decision

The court first rejected the insurers' argument that their liability under the automobile policy was limited to $500,000 because that policy only covered “sums [that the city] legally must pay as damages” and Pennsylvania law capped state law tort liability against local agencies such as the city at $500,000. The court observed that the state law tort liability cap did not apply to federal claims against the officer that had to be indemnified by the city, or to federal law claims against the city itself. It then found that because Westbrooks had raised, and eventually settled, federal claims against and with the city, the insurers' motion to dismiss the city's automobile policy claim had to be denied.

The court reached a different result with respect to the law enforcement policy, finding that coverage was precluded by its automobile exclusion, which excluded coverage for “damages arising out of the … operation, use, [or] control … of any auto[mobile] … owned or operated by … any insured; or operated by any person on behalf of, or in the course of employment by, an insured.”

The court reasoned that Westbrooks sought to hold the officer liable for his conduct while driving and the city liable for its supervision and training of the officer, and that Pennsylvania courts considered damages arising out of these types of claims as being proximately caused by an automobile. Therefore, the court concluded, these damages were not covered by the law enforcement policy, and it dismissed the city's claims seeking recovery under that policy.

The case is City of Williamsport v. CNA Insurance Cos.

Attorneys involved include: for the city of Williamsport, J. David Smith and Austin White of McCormick Law Firm in Williamsport; for National Fire Insurance Co. of Hartford, Edward M. Napierkowski of Connor, Weber & Oberlies in Paoli; Emmett E McGowan, CNA Coverage Litigation Group in Radnor.

Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. Meyerowitz is the Director of the Insurance Coverage Law Center and editor-in-chief of journals on insurance law, banking law, bankruptcy law, energy law, government contracting law, and privacy and cybersecurity law, among other subjects. He can be contacted at [email protected].