Beatrice Six Exonerated; Insurer on the Hook for Defense
In 1985 in the town of Beatrice, Nebraska, a woman named Helen Wilson was raped and murdered. The case went cold, until a group of Gage County sheriffs reopened it in 1989, interviewing witnesses and potential suspects. Soon, six people were charged with Wilson’s death and became known as the Beatrice Six.
By December 1989, all six were behind bars.
Then, in 2009, DNA evidence showed that the Beatrice Six was never at the crime scene. They were each granted pardons nearly 20 years after their wrongful conviction.
Five of the members of the Beatrice Six filed civil rights lawsuits in July 2009 against Gage County and the county sheriffs who investigated them. By 2011, the sixth member also filed suit, and the cases were consolidated.
The Beatrice Six alleged the sheriffs had manufactured and coerced false or misleading evidence for the purpose of arrest, prosecution, conviction and imprisonment. They called the investigation “reckless” and added the interrogation was “improper” from the start.
At the time of Wilson’s death and her case’s conclusion, Gage County held three insurance policies through Employers Mutual Casualty Company (EMC): commercial general liability, a linebacker policy and umbrella coverage. EMC denied defense and indemnification for the underlying Beatrice Six suit under all three policies.
Meanwhile, the jury sided in favor of the Beatrice Six, awarding $28 million in damages. The decision was upheld on appeal.
Gage County filed a complaint against EMC in 2017, alleging the insurer had a duty to indemnify the county up to a $2 million aggregate limit under the CGL policy.
EMC claimed the Gage County “investigation leading to the arrests of the [Beatrice Six] involved special skill, training and knowledge, which constitutes a professional service.” Therefore, the professional services exclusion within the CGL policy barred coverage.
A 2018 court decided in favor of EMC, stating the CGL policy’s professional services exclusion applied.
In appeals court, Gage County alleged the district court erred in “failing to conclude that when the policies are considered in context, the parties intended for law enforcement to be an occupation not a professional service.”
The appeals court, upon review of the policies, reversed the district court’s decision.
Scorecard: The appeals court reversed the district court ruling, adding that it had erred in siding with EMC. Further proceedings are likely to follow.
Takeaway: When procuring coverage for a business, be sure to review that any potential exclusions do not directly bar the company’s day-to-day work from coverage. &