by Ericka J. Thomas (Winter 2017)

Insurance policies are generally renewed or changed on an annual basis, even for larger organizations such as municipalities. However, it is not uncommon for it to take decades for a cause of action to accrue. In such a case, there may be several different insurers whose coverage might be implicated. This was the situation in the recent case of St. Paul Fire & Marine Insurance v. City of Waukegan. 2017 IL App (2d) 160381.

The St. Paul case arose out of a criminal case in Waukegan where Juan Rivera was charged and convicted of sexually assaulting and murdering an eleven-year-old girl in 1992. Rivera “confessed” to the crime after four days of intense questioning. After being tried and re-tried numerous times based upon issues related to the allegedly false confession, new DNA technology excluded Rivera as the rapist and murderer and he was eventually freed in 2012. Rivera then filed suit against the City of Waukegan and numerous individual Waukegan police officers for various civil rights violations relating to his arrest, conviction, and 20-year imprisonment. The City and its officers tendered the claims to the numerous private insurers that it had had over the years to defend.

One of the insurance companies that covered the 2008-09 period (during the third trial of Rivera) filed a declaratory judgment action seeking a determination from the court about whether it had a duty to defend or indemnify the City and officers since the alleged injuries occurred back in 1992, when Rivera was originally arrested. While the declaratory judgment action was pending, the civil rights suit was settled for $20 million. After considering cross-motions for summary judgment in the declaratory judgment action, the trial court determined that the civil rights lawsuit did not trigger coverage under the 2008-09 policy. The City of Waukegan appealed.

With regard to whether the third trial was a new violation that would have triggered coverage, the Court rejected the City’s argument. The Second District Appellate Court stated that Rivera’s second and third trials were continuations of his wrongful prosecution, which increased his damages but were not new injuries. Similarly, the Court rejected the City’s claim that each re-trial created a new claim that the City failed to produce exculpatory evidence to Rivera. This claim arose from an allegation that a knife that was recovered near the crime scene in 1994 was concealed from Rivera and later destroyed by the City and the officers, prohibiting Rivera from using it in his defense.

The court noted that the law enforcement activity that that caused the injury occurred in 1994, well before the dates of the policy in question. The court also rejected the City’s argument that the use of Rivera’s coerced confession during the 2009 trial triggered coverage for his fifth amendment claim. The court cited to a United States’ Supreme Court case that held that a coerced confession is actionable whether or not the confession is used at trial. According to that case, the triggering misconduct in the Rivera matter occurred in 1992, when the confession was taken, not during the third trial and, therefore, not during the coverage period. Ultimately, the Second District Appellate Court affirmed the trial court’s judgment in favor of the insurance company.

This case is a perfect example of the difference between “time of occurrence,” as defined in an insurance policy, and the “time of accrual” of the cause of action. Rivera’s cause of action against the City of Waukegan did not accrue until he was exonerated twenty (20) years after his arrest. Even so, the actions that constituted the alleged civil rights violations had actually occurred at the time of his arrest. In most cases, it is the “time of occurrence” that dictates insurance coverage and not when the cause of action accrues. It is always important to keep accurate records of insurance coverage when an agency changes its insurers for just this reason. If your agency finds itself in a complicated situation such as this, immediately contact your attorney and insurance company for assistance.