RPA Lunch & Learn – Case RPA Lunch & Learn – Case 22Friday, June 18, 2010 12:00 noon CST

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Case 2 - FactsCase 2 - Facts

Loss◦ Police damaged all six unit doors of

a two building apartment complex. ◦ Damage occurred pursuant to a raid

conducted with a warrant.◦ Insured files a claim for the

damage.

Search Warrant Damage This is the neighborhood; it could be these buildings.

Copyright Google Maps – (claiming fair use)

Search Warrant Damage

This is the neighborhood and probably the building.

Copyright Google Maps – (claiming fair use)

Search Warrant Damage

This is the neighborhood and probably the building.

Copyright Google Maps – (claiming fair use)

Search Warrant Damage This is other side of the street.

Copyright Google Maps – (claiming fair use)

Search Warrant Damage This is the building from the side street view.

Copyright Google Maps – (claiming fair use)

Search Warrant Damage This is side street looking the other way.

Copyright Google Maps – (claiming fair use)

Case 2 - AdjustmentCase 2 - Adjustment

Adjustment◦ IA sent to investigate◦ Insured advised that it was police damage◦ IA tried to get the police report but it

wasn’t provided

Denial◦ Insurer denied the claim pursuant to

Governmental Authority exclusion

Case 2 - AdjustmentCase 2 - Adjustment

Adjustment◦ IA sent to investigate◦ Insured advised that it was police damage◦ IA tried to get the police report but it

wasn’t provided

Denial◦ Insurer denied the claim pursuant to

Governmental Authority exclusionDoes anyone see a problem

yet?

Case 2 – Policy languageCase 2 – Policy language

Policy Language

We will not pay for loss or damage caused directly or indirectly by . . . seizure of property by order of Governmental Authority.

Policy Language

We will not pay for loss or damage caused directly or indirectly by . . . seizure of property by order of Governmental Authority.

What’s this all about?

Case 2 - WarrantCase 2 - Warrant

Warrant

A male accepted money from a confidential informant and went into 2329 for a minute and came out with two bags of crack cocaine.

Warrant was issued for 2329 S. 7th Street, 3 story masonry.

Warrant

A male accepted money from a confidential informant and went into 2329 for a minute and came out with two bags of crack cocaine.

Warrant was issued for 2329 S. 7th Street, 3 story masonry.

Case 2 - ProblemsCase 2 - Problems

Problems◦ Insurer didn’t see the warrant◦ The police forcibly entered 2327 and 2329

S. 7th Street.◦ They forcibly entered all of the apartment

units.◦ Insured claimed exclusion didn’t apply to

overly broad search Didn’t say 2327 Didn’t specify an apartment

Question Question Case 2 - warrantCase 2 - warrant

The trial court probably held that the damage caused when the police executed the warrant was:

a.covered for 2327 because police exceeded the warrant

b.covered for 2327 and 2329 because warrant was too broad

c.excluded because the conduct was reasonably within the scope of the warrant

Issues - WarrantsIssues - Warrants

What should insurer’s do?

Should there be a presumption that judge and police followed the law?

Burden of proof?◦What did insured say?◦What did insurer know in good faith?

Holding Holding Case 2 - warrantCase 2 - warrant

Court held: b. covered for both 2327 and 2329

- The warrant was unconstitutionally broad- The warrant lacked particularity

Kao v. Markel Insurance Co., 2010 WL 1508210 (U.S.D.C. E.D.Pa. 2010)(trial court opinion – motion for reconsideration was filed)

Other CasesOther Cases- warrant- warrant

Damage within scope of Warrant is excluded under governmental acts exclusion.

Alton v. Manufacturers and Merchants Mut. Ins. Co. 416 Mass. 611, 624 N.E.2d 545 (Mass.1993).

Damage done while catching a fugitive is not excluded. Merrimack Mutual Fire Ins. Co. v. Slater, No. 2004110, 2007 WL 2045429 (Mass. Super., Bristol County 6/13/07) (unpublished) (husband barricaded himself in the house - tear gas and stray bullets mentioned).

Court refused to apply the exclusion for damage caused by police that acted far beyond the parameters of the search warrant.  The warrant authorized the police to seize two items.  Instead, they seized 2000 items and failed to return most of the items despite a court order to do so. 

Danulevich v. Hartford Fire Ins. Co., 421 A.2d 559 (Super. Ct. Conn. 1980).

Issues - WarrantsIssues - WarrantsBroadness- can’t make a warrant for an entire multiunit complex- Apparently police can execute an overbroad warrant

if they reasonably failed to recognize the problem- Here however, they should have stopped once they

entered and discovered closed apartment doors- - by proceeding, they were not acting under

governmental authority

Under this ruling, what should insurer’s do?

- Review the warrant for validity; and- Review the facts to see if it was legally executed.- Watch more Law and Order