Summary judgment to insurer reversed in Betty Anne Waters civil lawsuit

The story of how Betty Anne Waters obtained a GED, a college degree, and a law license all for the purpose of exonerating her brother, Kenneth Waters, who was wrongfully convicted of murder, was publicized in the movie Conviction. 

After Kenneth died in an accident six months after Betty Anne won his release from prison, she sued on behalf of his estate the town of Ayer, Massachusetts for unconstitutional and tortious conduct resulting in Kenneth's wrongful conviction and incarceration.  That lawsuit resulted in a settlement in which the town assigned to Betty Anne its rights against its insurer, Western World Insurance Company.  (In addition, the estate received $3.4 million from other insurers.)

Betty Anne then sued as assignee Western World, alleging that it breached its duty to defend the town.  The Massachusetts Superior Court granted summary judgment to Western World.  In Waters v. Western World Ins. Co., 2013 WL 499215 (Mass. App. Ct.) (unpublished), the Massachusetts Appeals Court reversed the granting of summary judgment.

The law enforcement officers liability policies Western World issued to the town of Ayer were in effect after Kenneth's conviction.  They provided coverage for negligent acts, errors or omissions, including for false arrest, false imprisonment, and malicious prosecution.  The policy had an exclusion for willful violations of a penal statute or ordinance committed by or with the knowledge or consent of the insured.

The underlying complaint alleged that the town had a policy, custom and practice, continuing throughout Kenneth's incarceration, of failing to adequately train and supervise employees with respect to the disclosure of exculpatory evidence; that it failed to undertake any reinvestigation to discover and remedy the fact that undisclosed exculpatory evidence existed; and that it ignored its affirmative duty to disclose information that would have demonstrated Kenneth's innocence.

The Massachusetts Appeals Court held that those allegations implicate acts, errors and omissions during the Western World policy period, and that they leave open the potential for liability to be predicated on covered negligence.  In a dig, the court cited to another case in which Western World, as a party, established that supervisory liability under 42 U.S.C. s. 1983 (the federal civil rights act) may sound in negligence. 

The court held that Western World could not establish based upon the allegations of the underlying complaint that the exclusion for willful conduct excluded coverage.  The complaint contained no explicit allegations of violation of a penal statute or that any insured was ever charged with or convicted of criminal conduct in relation to the matter.