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Judge dismisses part of Gage County’s insurance claim in Beatrice 6 case

October 21, 2018 GMT

Gage County’s excess insurance policies do not cover a $28.1 million verdict against the county in the so-called Beatrice 6 case, a Lancaster County District Court judge said last week.

Attorneys for Gage County sought payment from several insurance companies who carried law enforcement liability insurance policies for the county through a risk-sharing pool dating back to Aug. 2, 1989.

But Judge Jodi L. Nelson dismissed the county’s claim in an Oct. 10 order, finding that Gage County sheriff’s deputies had caused the injury leading to the wrongful conviction of six people before the policies went into effect.

Joseph White, Ada JoAnn Taylor, Thomas Winslow, James Dean, Debra Shelden and Kathleen Gonzalez were arrested in March and April 1989 for the rape and murder of a Beatrice woman four years earlier.

The cold case investigation, led by former Gage County Deputy Burdette Searcey and Reserve Deputy Wayne Price, resulted in five false confessions and one conviction by jury, landing the six in prison for a combined 75 years.

A review of DNA evidence in 2008 led to their exoneration, and in 2009 the six sued Gage County in federal court. In 2016, a federal jury awarded the six a combined $28.1 million.

Gage County’s appeal to the Eighth Circuit Court was rejected, and the county hasn’t yet asked the U.S. Supreme Court to hear the case.

In 2017, attorneys for the county sued the Nebraska Intergovernmental Risk Management Association, a risk-sharing pool that offers insurance to most counties in the state and which began covering Gage County in 1997, and Employers Mutual Casualty, which carried the county’s insurance from Feb. 2, 1989, to Feb. 2, 1990.

Last week, Nelson said Westport Insurance, American Alternative Insurance, United National Insurance and Travelers Indemnity, companies that contracted with Gage County through the risk management association, weren’t responsible for paying the judgment because their policies retroactively took effect on Aug. 2, 1989 -- after the triggering incident against the six took place.

“The Beatrice Six were injured when Gage County’s employees charged and arrested them,” Nelson wrote. “This occurrence -- an event resulting in damage -- involved acts, errors, or omissions of Gage County’s employees.”

Once the six were arrested, Nelson said, Gage County law enforcement may have “continued committing acts, errors, or omissions that were wrongful under federal law,” but those acts did not create a new series of personal injuries covered by the insurance policies.

She added her decision held with previous courts who found law enforcement liability coverage for malicious prosecution to be triggered when a person is charged with a crime.

The court also said Gage County’s three “alternative triggers” for the insurance policies to take effect were unpersuasive:

* Gage County asked Nelson to consider when Searcey, Price or then-Sheriff Jerry DeWitt had committed the wrongful conduct, and whether or not “new or additional injury” arose at that time, which she declined to do.

* The county also suggested “all events from the date of arrest to date of conviction” be a single trigger for insurance coverage, rather than separate potentially triggering events. Nelson said other courts had declined to use that method in similar cases.

* Lastly, Gage County asked Nelson to consider using the date of conviction, several of which took place after the Aug. 2, 1989, retroactive date, to be the culminating injury that triggered insurance coverage.

“(A) conviction-as-trigger rule is inconsistent with the Excess Insurers’ policies because the Beatrice Six suffered injuries before their convictions,” Nelson reiterated. “None of the cases that Gage County cites used a conviction trigger, and this Court has found none.”

Eliminating Gage County’s claims against the excess carriers does not end the county’s pursuit against either of its insurance providers, nor does it release those companies from the lawsuit.

Further decisions in both cases could come over the next few weeks.

As they continue, Gage County has raised its property tax levy to begin paying the judgment. In September, the county board approved raising its levy to the maximum 50 cents per $100 of valuation allowed under law.

The increase will generate $3.8 million in additional tax revenue annually, amounting to roughly $120 in additional taxes for every $100,000 of assessed property.