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Insurance – Municipal – Police Department – Wrongful Acts – Same Defendant

Even though the same rape case was the backdrop for the Hickory Police Department’s wrongful acts in 1987-1988 and again from 2003 to 2011, the acts were separate: the earlier wrongful acts involved withholding exculpatory evidence from the district attorney and hence from defense counsel; the later acts were the delays (eight years’ worth) in searching its evidence archives for a fingerprint card that eventually led to defendant’s release from prison. Since these acts were separate, and since defendant Argonaut Great Central Insurance Co. insured the HPD at the time of the 2003-2011 acts, Argonaut had a duty to defend the HPD when the wrongfully convicted man sued.

We reverse the trial court’s order granting Argonaut’s motion to dismiss as to Argonaut’s duty to defend. We remand for further proceedings as to Argonaut’s duty to indemnify.

Argonaut’s policy says it covers “’damages’ arising out of a ‘wrongful act’ only if the ‘wrongful act’ was first committed or alleged first committed . . . [d]uring the policy period.” Argonaut did not insure the HPD at the time of the 1987-1988 wrongful acts.

The policy defines “wrongful acts” as “any act, error or omission flowing from or originating out of ‘law enforcement activity.’ All acts, errors or omissions committed by one or more insured that are substantially the same or are in any way directly or indirectly related – either logically, causally, or temporally – shall be deemed to constitute one ‘wrongful act,’ regardless of the number of claims or claimants.”

Using the ordinary meanings of these words, we find that the two wrongful acts are not “substantially the same” or “logically, causally, or temporally” related.

While both wrongful acts are associated with Willie Grimes’ wrongful imprisonment, the wrongful act from 1987-1988 includes Grimes being identified as a suspect due to the HPD’s dubious investigation and failure to turn over the fingerprint and other evidence which led to Grimes’ wrongful arrest, prosecution, and conviction. The wrongful act from 2003-2011 includes the HPD’s failure to check and recognize that it still had the fingerprint evidence in its possession. The failure to turn this evidence over to the North Carolina Center on Actual Innocence prolonged Grimes’ incarceration by approximately eight years. These two separate wrongful acts are not “substantially the same.”

Further, we do not find that it is necessary or expected that the HPD’s wrongful act from 1987-1988 would reasonably result in the HPD’s wrongful act from 2003-2011. Likewise, the HPD’s failure to turn over exculpatory evidence from 1987-1988 and the failure to produce evidence related to the case when asked from 2003-2011 does not follow as reasonable. Accordingly, we do not find the acts to be logically related.

While the 2003-2011 wrongful act could not have happened without the 1987-1988 wrongful act, the 2003-2011 wrongful act is not an effect of the 1987-1988 wrongful act. The 2003-2011 wrongful act is the result of the HPD’s protocols for handling archived evidence, which is totally unrelated to withholding exculpatory evidence from a district attorney. The wrongful act of the HPD from 1987-1988 did not cause the HPD’s actions in 2003-2011. Therefore, we find that the two wrongful acts are not causally related.

The two wrongful acts occurred approximately 16 to 24 years apart. Because of the time that has elapsed between the two wrongful acts, we do not find a temporal connection between them.

The HPD’s wrongful act from 1987-1988 is not substantially the same or directly or indirectly related, either logically, causally, or temporally to the wrongful act committed by the HPD from 2003-2011.

The wrongful act committed by the HPD from 2003-2011 is not excluded by the policy; therefore, Argonaut has a duty to defend the City of Hickory from Grimes lawsuit. Argonaut breached this duty when it failed to do so. Because the facts of the underlying case have not been determined, we cannot reach Argonaut’s duty to indemnify the city.

Reversed and remanded.

City of Hickory v. Grimes (Lawyers Weekly No. 012-082-18, 15 pp.) (Hunter Murphy, J.) Appealed from Catawba County Superior Court (Michael Robinson, J.) Paul Culpepper for plaintiff; Burton Craige, Narendra Ghosh, Paul Smith, Walter Brock Jr. and Andrew Flynt for defendants. N.C. App. Unpub.


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