Insurance companies ask judge to rule they don’t have to pay Beatrice 6 award

July 29, 2018 GMT

For the second time this month, attorneys have trekked to a third-floor courtroom in Lincoln to tell a judge why someone else should pay a $28.1 million federal jury verdict affirmed against Gage County in June.

Friday, it was Employers Mutual Casualty’s turn.

The county’s taxpayers alone will be on the hook if the judge agrees with the insurance companies.

Gage County had a general liability policy with Employers Mutual Casualty from Feb. 2, 1989, to Feb. 2, 1990, that covered personal injuries arising from false arrests and malicious prosecution.

But Karen Bailey, Employers Mutual Casualty’s attorney, argued that the Iowa-based company had no duty to defend the county in the case or pay the judgment because of an exclusion in the policy for claims arising from rendering or failing to render professional services.

So, much of Friday’s 45-minute hearing came down to whether the actions of the Gage County sheriff’s deputies at the center of the case — Burt Searcey and Wayne Price — qualified as professional services.

Bailey argued they did. Joel Bacon, an attorney representing Gage County in the civil case, argued they didn’t.

Searcey and Price were at the center of a cold-case investigation in 1989 that sent Joseph White, Ada JoAnn Taylor, Thomas Winslow, James Dean, Kathleen Gonzalez and Debra Shelden — dubbed the Beatrice 6 — to prison for the 1985 rape and murder of Helen Wilson.

The six spent a combined 75 years in prison until DNA testing tied Bruce Allen Smith, a man with no known connection to the six, to the crime in 2008.

In 2009, they sued the county, the sheriff and the deputies. The first trial ended in a deadlock. The second, in 2016, resulted in the $28.1 million verdict.

Gage County’s last chance at reprieve lies with the U.S. Supreme Court, which it hasn’t yet asked to hear the case.

In the meantime, there are a flurry of civil cases between Gage County and a number of insurance companies working their way through Lancaster County District Judge Jodi Nelson’s court.

In the latest hearing Friday, Bailey said the completion of arrest warrants, the arrest of suspects and the interviews of witnesses and interrogation of suspects, which allegedly included suggestible interviews that instilled a false narrative for witness statements, clearly arose from the deputies’ knowledge, training and experience as law enforcement officers.

“There can be no doubt that these law enforcement agents were engaged in professional services,” she argued.

Bailey said even if the judge found the exclusion didn’t apply, it’s Employers Mutual Casualty’s position that the federal judge dismissed all the claims that would’ve been covered under the policy long before the case went to trial.

On the other side, Bacon argued that while civil rights violations, such as those the jury found here, aren’t specifically mentioned in the Employers Mutual Casualty policy, “that doesn’t mean there isn’t coverage.”

There still can be facts that support a case of malicious prosecution, which is covered, he said.

As for the issue of whether the deputies were offering professional services, Bacon argued they weren’t.

He said he in no way meant to cast aspersions on law enforcement; it’s a very necessary occupation.

But if you look at case law, Bacon said, there just isn’t the level of education and training needed for it to qualify as a profession.

“The professional exclusion doesn’t apply here,” he argued.

Bailey countered that none of the allegations in the Beatrice 6 lawsuit arose out of manual or routine tasks.

“This wasn’t just a traffic stop,” she said.

At a hearing July 11, Nebraska Intergovernmental Risk Management Association, which has covered the county since 1997, argued it shouldn’t have to pay the judgment because the injury at issue occurred before Aug. 2, 1989, the retroactive date listed in the policy for law enforcement coverage.

The question for the judge in that case was whether the injury was a one-time event, the date of their arrests as NIRMA argues, or ongoing.

Westport Insurance Corp., American Alternative Ins. Corp. and United National and Travelers Indemnity Co. all were represented at the July 11 hearing, seeking a finding by Nelson that they don’t have to pay either.

Nelson took the cases under advisement.