The opinion of the court was delivered by: ARTHUR SPATT, District Judge
MEMORANDUM OF DECISION AND ORDER
The third-party action involves a dispute over whether the third
party defendant, the New York Municipal Insurance Reciprocal ("NYMIR" or
the "third party defendant"), has the duty to defend and indemnify the
third-party plaintiff, the Village of Old Field (the "Village" or the
"third-party plaintiff") in connection with this class action lawsuit.
This case is brought on behalf of that class of people who had been
ticketed by the Village's constables from 1994 to the present (the
"first-party action" or the "Brewer action").
Presently before the Court are the following motions: (1) a motion for
summary judgment by the Village seeking, among other things, a
declaration that the NYMIR has a duty to defend the Village in the
Brewer action; (2) a motion for summary judgment by the NYMIR, for among
other things, a declaration that it does not have an obligation to defend
the Village or provide indemnification in the Brewer action; and (3) a
motion by the Village, pursuant to Federal Rule of Civil Procedure
("Fed.R. Civ. P") 56(f) seeking additional discovery in order to oppose
the motion for summary judgment brought by the NYMIR.
From April 1, 1994 to April 1, 2000, the Village of Old Field
subscribed to the New York Municipal Insurance Reciprocal as its
insurance carrier. As a NYMIR subscriber, the Village was afforded
insurance coverage for a variety of exposures including,
among other things, Law Enforcement Liability.
The Law Enforcement Liability Policy (the "Policy") provides in
[NYMIR] will pay on behalf of the INSURED all sums
which the INSURED shall become legally obligated
to pay as damages because of WRONGFUL ACT(S) which
1. PERSONAL INJURY
2. BODILY INJURY, or
3. PROPERTY DAMAGE
caused by an OCCURRENCE and arising out of the
performance of the INSURED's duties to provide law
enforcement and/or other departmentally approved
activities as declared in the Application . . . and
all operations necessary and incidental thereto.
Policy § A.
The Policy included the following definitions:
INSURED means the [Village] and all full or
part-time and all auxiliary or volunteer law
enforcement officers of the [Village].
WRONGFUL ACT means any actual or alleged act,
error, omission, neglect or breach of duty by the
OCCURRENCE means an event, including continuous or
repeated exposure to conditions, which results in
PERSONAL INJURY, BODILY INJURY or PROPERTY DAMAGE
sustained, during the policy period, by any person or
organization and arising out of the performance of the
INSURED'S law enforcement duties.
PERSONAL INJURY means:
a. Assault and battery;
b. Discrimination, unless insurance thereof is
prohibited by law;
c. False arrest, detention or imprisonment, or
d. False or improper service of process;
e. Humiliation or mental distress;
f. The publication or utterance of a libel or
slander or of other dafamatory or disparaging
material . . .;
g. Violation of civil rights protected under
42 U.S.C. § 1981 et sequential or State Law;
h. Violation of property rights;
i. Wrongful entry, eviction or other invasion of
the right of public occupancy; if such offence
is committed during the policy period.
Policy § E.
On October 10, 2000, the plaintiffs commenced the first party action by
filing a Summons and Class Action Complaint (the "Initial Complaint") in
the United States District Court for the Eastern District of New York.
The Initial Complaint named the Village and fifteen current and former
employees and/or officials in both their individual and official
capacities (the "defendants"). This action was commenced by and on behalf
of that class of people who had been ticketed by the Village's constables
from 1994 to the present. In particular the Brewer plaintiffs allege,
among other things, that the Village created a private police force,
purportedly cloaked with legitimate public authority, to enforce traffic
and other laws and collect fines for alleged violations of those laws
through a distinct enterprise. The complaint included violations of the
Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et
seq., ("RICO") and 42 U.S.C. § 1983 ("Section 1983").
On or about October 18, 2000, the Village tendered its defense of the
Brewer action to the NYMIR. Thereafter, on November 14, 2000, NYMIR,
through coverage counsel, issued a disclaimer letter, advising the
Village that no coverage existed under any of the policies that were
issued to the Village prior to its withdrawal from the NYMIR in or about
A First Amended Class Action Complaint was filed on March 14, 2001 (the
"First Amended Complaint"). On April 6, 2002, the plaintiffs filed a
Second Amended Class Action Complaint (the "Second Amended Complaint").
On October 25, 2002, the Second Amended Complaint was forwarded to NYMIR
by counsel to another carrier affording the Village with insurance
In a letter dated November 7, 2002, the NYMIR, through its counsel,
disclaimed coverage for the causes of action set forth in the Second
Thereafter, on or about March 11, 2003, the Village filed this
third-party complaint against the NYMIR seeking, among other things, a
declaratory judgment, pursuant to 28 U.S.C. § 2201, et seq., that NYMIR
is obligated to pay for the Village's defense of the Brewer action
pursuant to the terms of the Policy. The third-party complaint also seeks
damages for the NYMIR's alleged breach of the defense and indemnification
provisions of the Policy, based on the refusal to pay by NYMIR for the
Village's defense and to provide indemnification in the Brewer action.
As stated above, presently before the Court are three separate
motions: (1) a motion for summary judgment by the Village seeking, among
other things, a declaration that the NYMIR has a duty to defend the
Village in the Brewer action; (2) a motion for summary judgment by the
NYMIR, for among other things, a declaration that it does not have an
obligation to defend the Village or provide indemnification in the
Brewer action; and (3) a motion by the Village, pursuant to Rule 56(f)
seeking additional discovery in order to oppose the motion for summary
judgment brought by the NYMIR.