BatesCarey attorneys Adam H. Fleischer and Kevin F. Harris, representing Westport Insurance Corporation, have obtained a unanimous ruling from the Supreme Court of Kentucky holding that Westport did not owe defense or indemnity relative to a malicious prosecution claim and $28 million consent judgment under Westport’s policies because the claimant’s “personal injury” occurred a decade before Westport’s coverage incepted. The decision is expected to influence courts nationwide in analyzing the proper insurance trigger for malicious prosecution and other “personal injury” claims. 

The Supreme Court of Kentucky unanimously affirmed lower court rulings, including a unanimous appellate court ruling, finding that the claimant’s “personal injury” occurred when he was wrongfully charged in the 1980s and that his subsequent incarceration constituted ongoing damages, not new or continuous injuries triggering the Westport policies.

The case arose from William Virgil’s lawsuit against the City of Newport and others for their role in his wrongful conviction for a 1987 rape and murder and sought damages for the decades of incarceration that followed.  The City of Newport was insured by Westport from 1997-2000 and by St. Paul Guardian Insurance Company from 2007-2011. Both insurers denied coverage, arguing that Mr. Virgil’s “personal injury” took place in 1987.

In March 2020, the U.S. Court of Appeals for the Sixth Circuit ruled that St. Paul owed a duty to defend the City based on Mr. Virgil’s suffering in prison. The City argued that, based on the Sixth Circuit’s ruling, Westport’s coverage was also triggered. Westport participated in the defense under a reservation of rights and initiated a coverage action in state court.

Over the last five years of litigation, Westport argued that the St. Paul policy trigger is “injury or damage” that happens during the period and that the St. Paul policies define these terms to mean “any harm” to any person during the period. Therefore, Westport explained, the St. Paul policies were materially different from the Westport policies, and those of many other insurers across the nation, that are triggered only if the “personal injury” at issue “occurred,” or came into existence, during the policy period. The Supreme Court of Kentucky agreed, holding that Mr. Virgil’s “personal injury” indisputably occurred at the time of the malicious charging in 1987 and that Westport’s coverage was not triggered by Mr. Virgil’s continued suffering in prison.