Not for Publication in West's Federal Reporter
United States Court of Appeals
For the First Circuit
No. 08-1890
ERIC SARSFIELD,
Plaintiff, Appellant,
v.
GREAT AMERICAN INSURANCE COMPANY OF NEW YORK,
GREAT AMERICAN ALLIANCE INSURANCE COMPANY,
GREAT AMERICAN ASSURANCE COMPANY,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]
Before
Boudin, Siler*, and Howard, Circuit Judges.
William G. Beck, with whom Michael S. Cessna, Ian Hale, Barry
C. Scheck, and Deborah L. Cornwall, were on brief for appellant.
John P. Graceffa, with whom Richard W. Jensen, and Thomas M.
Prokop, were on brief for appellees.
July 1, 2009
*
Of the Sixth Circuit, sitting by designation.
SILER, Senior Circuit Judge. Plaintiff Eric Sarsfield
appeals the district court’s grant of summary judgment in favor of
defendant Great American Insurance Company of New York. The
district court found that Sarsfield’s complaint against the City in
the underlying action did not allege a wrongful act during the
policy period, and therefore Great American did not have a duty to
defend or indemnify. Sarsfield appeals the grant of summary
judgment. For the following reasons, we affirm.
I.
Sarsfield was convicted of rape in 1987 and served almost
ten years in prison. In 2000, he was exonerated based on DNA
evidence. He then sued the City of Marlborough, Massachusetts,
and several of its employees for federal civil rights and state law
claims arising out of his arrest, prosecution, and imprisonment.
Reading the complaint as a whole, including the detailed
allegations of the individual counts, a reasonable reader would
conclude that Sarsfield was complaining about two different forms
of misconduct by the police:
First, that the police engaged in a highly suggestive
identification process that coerced the victim of the rape to
identify Sarsfield as her rapist. Compounding matters, the police
did not disclose in connection with the trial the victim’s
hesitancy in identifying Sarsfield, nor the measures taken by the
police department to make it appear to the victim that Sarsfield
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was the rapist (including requiring Sarsfield to wear the rapist’s
jacket during a one-on-one identification).
Second, that one of the police officers drafted a police
report that falsely stated that Sarsfield had made several
incriminating statements. The report “turned up” only three days
before trial, but the only issue before the trial judge was its
timing, not its veracity. It appears that the report was entered
into evidence with the police officer testifying to its contents at
trial as a rebuttal witness to Sarsfield.
In response to Sarfield’s suit, the City requested
coverage from Great American, which had issued to the City one-year
general liability policies from 1991-2000. Great American denied
the request, and the City entered into a settlement with Sarsfield.
It stipulated the City’s liability, provided for a $2 million
settlement payment, and assigned to Sarsfield its right to recover
defense costs, the settlement payment, and any other recoverable
costs, expenses, damages, fees and penalties.
The district court held a bench trial on damages, entered
final judgment against the City pursuant to the stipulation, and
awarded Sarsfield approximately $13 million in damages. Sarsfield
sought to recover the portion of the judgment allocated for the
time period after July 1, 1991 ($11,615,940), plus attorneys’ fees
and costs for the underlying suit.
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The parties filed cross-motions for summary judgment.
Sarsfield asserted that Great American breached its duty owed to
the City by not defending and indemnifying the City in the
underlying suit. Great American asserted that it had no duty to
defend or indemnify. The district court denied Sarsfield’s motion
and granted Great American’s motion for summary judgment,
concluding that Great American did not have a duty to defend or
indemnify the City.
II.
“We review de novo the grant or denial of summary
judgment, as well as pure issues of law.” Rodriguez v. Am. Intern.
Ins. Co. of P.R., 402 F.3d 45, 46-47 (1st Cir. 2005) (internal
citations omitted). “The presence of cross-motions for summary
judgment neither dilutes nor distorts this standard of review.”
Mandel v. Boston Phoenix, Inc., 456 F.3d 198, 205 (1st Cir. 2006).
“The interpretation of an insurance contract and the application of
policy language to known facts present questions of law for the
judge to decide.” Herbert A. Sullivan, Inc. v. Utica Mut. Ins. Co.,
788 N.E.2d 522, 530 (Mass. 2003). The parties agree that
Massachusetts law controls.
Massachusetts courts use general rules of contract
interpretation to construe an insurance policy. Brazas Sporting
Arms, Inc. v. Am. Empire Surplus Lines Ins. Co., 220 F.3d 1, 4 (1st
Cir. 2000). The duty to defend is broader than the duty to
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indemnify. Boston Symphony Orchestra, Inc. v. Commercial Union
Ins. Co., 545 N.E.2d 1156, 1158 (Mass. 1989). “The duty to defend
is based on the facts alleged in the complaint and those facts
which are known by the insurer.” Id. We have described the
analytical framework for duty-to-defend cases:
[T]he question of the initial duty of a liability insurer
to defend third-party actions against the insured is
decided by matching the third-party complaint with the
policy provisions: if the allegations of the complaint
are “reasonably susceptible” of an interpretation that
they state or adumbrate a claim covered by the policy
terms, the insurer must undertake the defense.
Herbert A. Sullivan, Inc., 788 N.E.2d 522 at 530 (internal
quotation marks and citations omitted). Generally, the
policyholder bears the initial burden of proving coverage. Camp
Dresser & McKee, Inc. v. Home Ins. Co., 568 N.E.2d 631, 633 (Mass.
App. Ct. 1991).
III.
Sarsfield bases his claim for insurance coverage upon the
Law Enforcement Liability (“LEL policy”) coverage included in the
general liability policies from 1991 through 2000, specifically
relying on the policy which became effective on July 1, 1992. The
policies contained the following relevant language:
We will pay those sums that the Insured becomes legally
obligated to pay as damages because of “wrongful act(s)”
which result in:
1. personal injury;
2. bodily injury;
3. property damage;
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caused by an “occurrence” and arising out of the
performance of the Insured’s duties to provide law
enforcement activities. This insurance applies to
“wrongful act(s)” which occurs in the “coverage
territory” and during the policy period.
We will have the right and duty to defend any “suit”
seeking those damages.
. . . .
1. “Bodily Injury” means bodily injury, sickness or
disease sustained by a person, including death resulting
from any of these at any time.
. . . .
3. “Occurrence” means an event, including continuous or
repeated exposure to substantially the same general
harmful conditions.
4. “Personal Injury” means injury, other than “bodily
injury,” arising out of one or more of the following
offenses:
. . .
c. false arrest, detention or imprisonment;
d. malicious prosecution;
. . .
f. humiliation or mental distress;
. . .
i. violation of civil rights protected under 42 USC
1981 ET sequential
[sic] or state law;
. . . .
7. “Wrongful Act(s)” means any or all of the following:
a. actual or alleged errors;
b. misstatement or misleading statement;
c. act or omission; or
d. negligent act or breach of duty;
by any Insured while performing law enforcement
duties.
Sarsfield argues that the “wrongful acts” occurring after
1992 were the City police officers’ conduct in affirmatively
covering up and failing to turn over exculpatory evidence once
Sarsfield was in prison. As to the “personal injury,” he argues
that the injuries were non-bodily injuries that arose out of the
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offenses of denial of parole, denial of access to courts for
post-conviction relief, and having to register as a sex offender.
Great American argues that the “wrongful acts” at issue here are
the arrest, malicious prosecution, and false imprisonment of
Sarsfield, and since these all occurred before the policy became
effective, they do not trigger coverage. It asserts that there is
no covered injury because all of the alleged injuries arise out of
offenses, including malicious prosecution and false arrest, which
occurred before 1992.
The district court first found that Sarsfield’s complaint
did not allege any wrongful act that occurred after 1992. It said
the only two claims Sarsfield asserted in his complaint that
related to the officers’ ongoing concealment were the claim for
suppression of exculpatory evidence and conspiracy to violate his
constitutional rights. It found these to be wrongful acts
occurring before the policy period because these claims were
presented as the officers’ concealment from the prosecutor, and
therefore the wrongful acts ended before Sarsfield was incarcerated
and the policy period began.
Next, the district court assumed, arguendo, that the
complaint alleged wrongful acts based on the officers’ violation of
a continuing duty to disclose their misconduct. Even if this were
sufficient, it found that the injuries resulting therefrom were not
distinct from the injuries incurred upon conviction and
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imprisonment. Further, it found that even if the concealment could
be said to cause a distinct injury, because it first occurred prior
to the policy period, any resulting injury would predate the
policy. Finally, the court considered whether the concealment
could result in a “continuing injury” and found that it could not
be framed this way because theories of continuing injury only apply
in tort cases which concern injuries which may have existed but
were unknown at the time the insured purchased insurance.1
Because we find that the complaint itself failed to
allege wrongful acts occurring within the policy period, we affirm
the district court’s holding only to the extent it rested on this
ground. Finding this sufficient, we do not reach the parties’
arguments relating to that holding.
The policy states that the insurance “applies to
‘wrongful act(s)’ which occurs . . . during the policy period.”
This language supports Great American’s argument that this is an
“occurrence policy,” as opposed to a “claims made” policy, as
argued by Sarsfield. “An ‘occurrence’ policy protects the
policyholder from liability for any act done while the policy is in
effect, whereas a ‘claims made’ policy protects the holder only
against claims made during the life of the policy.” St. Paul Fire
& Marine Ins. Co. v. Barry, 438 U.S. 531, 535 (1978) (citing Barry
1
On appeal, Sarsfield explicitly states he does not make a
“continuing injury” argument.
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v. St. Paul Fire & Marine Ins. Co., 555 F.2d 3, 5 n. 1 (1st Cir.
1977)). Therefore, in order for Sarsfield to succeed, he must show
that his complaint is “reasonably susceptible” of an interpretation
that it describes a “wrongful act” that occurred after 1992, when
coverage began.
The provision of the complaint relied on by Sarsfield to
show he sufficiently alleged a “wrongful act” occurring during the
coverage period is paragraph 53 of his third amended complaint:
Throughout each year of Mr. Sarsfield’s decade of
imprisonment, and indeed in each year of Mr. Sarsfield’s
subsequent parole and after his exoneration, [the
defendant police officers] continued to cover up their
misconduct, including that they had used unduly
suggestive identification procedures with [the rape
victim], fabricated evidence and testified falsely at Mr.
Sarsfield’s criminal trial. During each day that passes
during which defendants refuse to come forward, they
violate their ongoing duties to Mr. Sarsfield and cause
him continued suffering. Indeed, to date none of these
defendants had admitted the truth about their
misconduct.2
As the district court found, the only concealment
specifically discussed was tied to concealment from the prosecutor.
The clause stating that the defendants “continued to cover up their
misconduct” (the “misconduct” being further described as including
the suggestive identification, fabrication of evidence and false
2
Paragraph 53 was a statement in the “Facts” section of the
complaint, and each count started off with a statement
incorporating “all of the foregoing,” yet nowhere in the “Counts”
listed does Sarsfield specifically discuss this ongoing
concealment. Each count re-enumerated the relevant facts to the
claim specifically, and no count included any facts specifically
showing ongoing concealment.
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testimony at the trial) is not enough to allege a “wrongful act”
occurring during the coverage period. Therefore, it cannot be said
that Great American, acting as “an objectively reasonable insured,
reading the relevant policy language,” would expect these alleged
“wrongful acts” to be covered. See Hazen Paper Co. v. United
States Fid. & Guar. Co., 55 N.E.2d 576 (Mass. 1993).
IV.
In sum, Great American had no duty to defend or
indemnify the City for Sarsfield’s cause of action.
Affirmed.
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