FRANKFORT, Ky. (Legal Newsline) - A Kentucky city can’t tap insurance policies for damages won by a man who spent 28 years in prison on a wrongful conviction for murder, since those policies were issued a decade after he was sent to jail, an appeals court ruled.
Language in the policies limited coverage to injuries stemming from the wrongful conviction itself, not the man’s suffering while in prison afterward, the Kentucky Court of Appeals ruled in a decision it said was the first time a court in the state had interpreted this specific question of insurance law.
The Sixth U.S. Court of Appeals ruled against Travelers Insurance in 2020 in a lawsuit involving the same plaintiff but those policies had different terms allowing for coverage in the case of continuing harm, the Kentucky appeals court said.
William Virgil, who later settled his lawsuit for $28 million, was charged with murder in 1987 by the City of Newport, was convicted and spent the next 28 years in prison until DNA evidence found no link between him and the crime. He then sued the city in federal court, where Travelers challenged coverage and lost.
Westport Insurance, observing the action in federal court, agreed to participate in Newport’s defense but also filed for a declaratory judgment in state court to determine whether it was obligated to cover Newport’s costs. A trial court ruled the insurance policies didn’t provide coverage and the Kentucky appeals court affirmed.
The Westport policies were issued from 1997 to 2000 and differed slightly from the Travelers policies in that they covered only an “occurrence” or offense during the policy period, not injuries stemming later from that offense, the appeals court ruled. Comparing this case to one in which a motorist is injured in a crash but suffers chronic medical problems thereafter, the appeals court said Westport was only liable for the injury of a false arrest during the coverage period, not Virgil’s injuries from later years in jail.
“Westport’s policies are not continuously triggered by damages accumulating over the years like the Travelers policies,” the court said. Coverage could be covered if the insured did something later, such as offering false testimony to keep someone in jail, the court said.