Incarceration Constitutes Continuous Injury Triggering Duty to Defend

The U.S. Court of Appeals for the Sixth Circuit, applying Kentucky law, has held that incarceration is a continuous injury sufficient to trigger a duty to defend in a wrongful conviction lawsuit under law enforcement liability policies in effect during the claimant’s incarceration.  St. Paul Guardian Ins. Co. v. City of Newport, 2020 WL 1514837 (6th Cir. Mar. 30, 2020).

The underlying claimant sued the insureds, a municipality and its police officers, for malicious prosecution under 42 U.S.C. § 1983.  The insureds sought coverage under law enforcement liability policies that were in effect during the claimant’s incarceration, but after the alleged wrongful conviction.  The policies provided coverage for “covered injury or damages that . . . happens while this agreement is in effect” without any temporal limitation on the timing of the wrongful act.  The insurers sought declaratory judgment that no coverage was available.  The district court granted the insurers’ motion for summary judgment, concluding that the claimant’s alleged injury occurred at the time of the arrest, which occurred prior to the policy periods.

The court of appeals reversed, holding that the insuring agreement afforded coverage for any “covered injury” that “happens” during the policy period without any requirement that the “wrongful act” from law enforcement activity also take place during the policy period.  Because “covered injury” included the claimant’s incarceration, the court held there was a duty to defend.  The court further noted that the coverage analysis would be different if the policies had contained “deemer clauses” that specified that all injury should be deemed to happen at the time of the wrongful act that caused the injury.