Before the court in this instance was a motion for partial summary judgment filed by Selective Insurance Company and a motion for summary judgment filed by RLI Insurance Company. This case is Selective Insurance Company of the Southeast v. RLI Insurance Company, 2015 WL 4250364.

The coverage dispute arose from the wrongful conviction of Clarence Elkins. He was later exonerated and then sued the city of Barberton and its police officers for malicious prosecution, false imprisonment, intentional infliction of emotional distress, and loss of consortium. During the time period relevant to this matter, Barberton had excess insurance policies through Selective and RLI. The RLI policy had a policy period from June 29, 1997 to June 29, 1998. The Selective policy had a policy period from June 29, 1998 to June 29, 1999.

The claim was settled, with Selective contributing to the settlement but RLI denying any coverage. RLI argued that the malicious prosecution claim by Elkins did not occur during RLI's policy period. Selective, having been assigned Barberton's rights under the policy, brought this lawsuit seeking contribution from RLI.

The United States District Court, N.D. Ohio, Eastern Division, noted that the question before it was whether under Ohio law and in light of the relevant language of the insurance policies, the malicious prosecution of Elkins occurred for the purposes of insurance coverage at the time charges were filed or at some other time. Selective claimed that the malicious prosecution occurred when the charges were filed against Elkins on June 11, 1998. RLI countered that the malicious prosecution occurred at the time the police failed to disclose a memo that could have supported Elkins' claim of innocence; this happened no earlier than January 6, 1999. If Selective was correct, the occurrence would fall within the policy period provided by the RLI policy; if RLI was correct, because the memo was not created until six months after the RLI policy terminated, RLI's policy was not applicable.

The court found that the RLI policy had to pay when the insured (Barberton) became legally obligated to pay because of personal injury caused by an occurrence. In this case, Barberton became legally obligated to pay when it agreed to settle the case. The occurrence was the pattern of misconduct that occurred while the RLI policy was in effect. Therefore, the court decided that the malicious prosecution of Elkins occurred for coverage purposes when criminal charges were filed.

The court found that the majority or courts around the country have determined that coverage for a malicious prosecution claim is triggered at the time the underlying criminal charges are filed. A minority of courts have adopted the rule that malicious prosecution occurs for coverage purposes at the time the underlying criminal charges are resolved in favor of the defendant. As an example of the majority opinion, the court quoted the Eighth Circuit observation that “the time of occurrence is when the claimant sustains damages, not when the act or omission causing the damage takes place”. Moreover, Ohio case law said that, when determining whether something constitutes an occurrence under the insurance policy, the focus should be on the injury and its immediate attendant causative circumstances.

The court concluded that the injury to Elkins began the day of his arrest, when criminal charges were filed. Thus, Selective's motion for partial summary judgment was granted and RLI's motion for summary judgment was denied.

Editor's Note: The U.S. District Court follows the majority judicial opinion in determining that coverage for a malicious prosecution claim is triggered at the time the underlying criminal charges are filed.