Opinion ID: 2609845
Heading Depth: 3
Heading Rank: 1

Heading: Self-Insurance Act Coverage

Text: The relevant portions of the Wyoming State Self-Insurance Act provide as follows: (c) Expenditures shall be made out of the self-insurance account for the following claims which have been settled or reduced to final judgment:       (iv) Claims against a peace officer employed by the University of Wyoming or a local government arising under 42 U.S.C. 1983 or other federal statutes   :       (B) The conditions and limitations of subsection (e) of this section apply to all claims under this paragraph.       (e) The state shall defend claims against its public employees, or a state judicial officer exercising the authority vested in him, arising under 42 U.S.C. 1983 or other federal statutes, subject to the following conditions: (i) The state shall defend and, to the extent provided by paragraph (v) of this subsection, indemnify any of its public employees against any claim or demand, whether groundless or otherwise, arising out of an alleged act or omission occurring in the scope of duty;       (v) Unless the act or omission upon which a claim is based is determined by the court or jury to be within the public employee's scope of duty, no public funds shall be expended in payment of the final judgment against the public employee[.] Wyoming Statute 1-41-103 (Cum.Supp.1993) (emphasis added). The act defines public employees as [v] any officer, employee or servant of the state, provided the term: (A) Includes elected or appointed officials, peace officers and persons acting on behalf or in service of the state in any official capacity, whether with or without compensation; (B) Does not include:       (III) Any local government employees or officials including county and prosecuting attorneys. Wyoming Statute 1-41-102 (Cum.Supp.1993) (emphasis added). The act incorporates the definition of peace officer found at W.S. 7-2-101 (Cum.Supp.1993), which provides in part: (iv) Peace officer means: (A) Any duly authorized sheriff, under sheriff or deputy sheriff who has qualified pursuant to W.S. 9-1-701 through 9-1-707[.] In addition, the act provides: (a) Except as otherwise provided in subsection (b) of this section, the risk manager shall:       (iv) Provide legal services for the defense of claims covered by this act through the attorney general or through private attorneys approved by the attorney general[.] Wyoming Statute 1-41-105 (1988) (emphasis added). When construing statutes, we first review the language of the statute to determine whether it is ambiguous. If we find it to be unambiguous, we apply its plain meaning and do not consult the numerous rules of statutory construction. If, however, we find the statute ambiguous, that is its meaning is uncertain, doubtful, or if a single term can fairly be said to mean different things, then we may resort to the rules of statutory construction. Moncrief v. Wyoming State Bd. of Equalization, 856 P.2d 440, 443 (Wyo.1993) (quoting Amoco Production Co. v. State, 751 P.2d 379, 381 (Wyo.1988)). We find that the Wyoming State Self-Insurance Act is ambiguous with respect to who and what is covered under the act; stated another way, the question presented is who are the insured. Unlike most private insurance policies where the terms of the policy specifically identify those individuals or entities insured by the policy, the State Self-Insurance Act fails to directly identify the insured parties. Subsections (a) and (b) of W.S. 1-41-103, designate how the self insurance fund is created and maintained. Subsection (c) is concerned with payment of claims which have been settled or reduced to final judgment, including claims made against a peace officer employed by    a local government arising under 42 U.S.C. 1983. Subsection (e) designates those claims which the State has a duty to defend and to indemnify. The ambiguity arises because of inconsistencies between subsections (c) and (e). Subsection (e) requires that the State provide a defense to and indemnify claims brought against state public employees. Public employees are defined as peace officers    acting on behalf or in service of the state. Public employee does not include any local government    official. Thus, the Natrona County Sheriff is not a public employee for whom the State must provide a defense. If, however, a claim based on § 1983, brought against a local government peace officer, is reduced to final judgment or has been settled, subsection (c) requires payment by the State out of the self-insurance account. The term peace officer means any duly authorized sheriff. W.S. 7-2-101. The Natrona County Sheriff is a local government peace officer. The statute, therefore, in one breath provides that a § 1983 judgment or agreed settlement against a local government peace officer be paid by the State out of the self-insurance fund; but, in the next breath, provides that there is no duty to defend or indemnify § 1983 claims against local government officials. Adding further confusion to the scenario, W.S. 1-41-105 requires the risk manager to provide legal services for the defense of claims covered by the act. When construing an ambiguous statute, we seek to discover the intent of the legislature by applying rules of statutory construction. Story v. State, 755 P.2d 228, 231 (Wyo.1988), cert. denied 498 U.S. 836, 111 S.Ct. 106, 112 L.Ed.2d 76 (1990). In our search for legislative intent, we look to the mischief the statute was intended to cure, the historical setting surrounding its enactment, the public policy of the state, the conclusions of law, and other prior and contemporaneous facts and circumstances, making use of the accepted rules of construction to ascertain a legislative intent that is reasonable and consistent. State ex rel. Motor Vehicle Div. v. Holtz, 674 P.2d 732, 736 (Wyo.1983). Although legislative history and legislative intent are rarely discoverable in Wyoming, the State Self-Insurance Act here does provide some insight: The legislature recognizes that certain liability insurance policies of the state of Wyoming have been cancelled, that no responsive bids have been received and that there exists a need to develop a method to handle claims brought under the Wyoming Governmental Claims Act and arising under federal law. The legislature declares that the appropriate remedy is to create an account for self-insurance of the state and to provide for a loss prevention program. W.S. 1-41-101 (1988) (emphasis added). That statement of intent suggests that the act was intended to provide coverage for the State, not local governments and their employees. Legislative intent can also be gleaned from the preamble, included when the State Self-Insurance Act was enacted and published as a session law in 1986, which explained the act as: creating the self-insurance account within the earmarked revenue fund to be administered for the payment of certain claims against the state and its public employees and peace officers brought under the Wyoming Governmental Claims Act or arising under federal law   . 1986 Wyo.Sess.Laws ch. 74 (emphasis added). The language of this preamble suggests that the act was intended to insure those claims brought against the State, the state's public employees, and peace officers. There is no mention of local government employees. Whether the State Self-Insurance Act was intended to cover only state peace officers e.g., highway patrolmenor all peace officers e.g., county sheriffsis, however, unclear in the preamble because of the placement of the term its. If the term its modifies both public employees and peace officers, then the act covers only state peace officers; but if its modifies public employees only, then the act likely was intended to cover all peace officers. Additional insight into the legislature's intent when enacting the State Self-Insurance Act appears in other legislation passed at the same time and in conjunction with the State Self-Insurance Act. The 1986 Legislature, in addition to enacting the State Self-Insurance Act, also passed the Local Government Insurance Program. 1986 Wyo.Sess. Laws ch. 81 and W.S. 1-42-101 through 1-42-112. Just as the legislature had declared that the State Self-Insurance Act was intended to cover the state, they similarly declared that the Local Government Insurance Program was intended to insure local governments. See W.S. 1-42-101 (1988). However, peace officers were and are specifically excluded from coverage under the Local Government Insurance Program. See W.S. 1-42-103(c)(i) & (e)(i) (Cum.Supp.1993) and 1986 Wyo.Sess.Laws ch. 81 § 1. The fact that peace officers were specifically excluded from the Local Government Insurance Program and were specifically mentioned in the ambiguous coverage sections of the State Self-Insurance Act demonstrates that the legislature intended the State Self-Insurance Act to cover all peace officers. See W.S. 1-41-103(c)(iv) (Cum.Supp.1993) and 1986 Wyo.Sess.Laws ch. 74 § 1. Additional support for this construction can be found in W.S. 9-2-1017 (1989) which was amended when the State Self-Insurance Act was enacted in 1986. Wyoming Statute 9-2-1017 was amended to provide: (a) The state of Wyoming through the department shall purchase a comprehensive professional liability policy providing coverage for all peace officers if: (i) Coverage is available at a reasonable cost; and (ii) It is economically more feasible to provide coverage through the purchase of insurance than through self-insurance as provided by W.S. 1-41-101 through 1-41-111. See 1986 Wyo.Sess.Laws ch. 74 § 2. The language of that statute evidences an intent that W.S. 1-41-101 through 1-41-111, the State Self Insurance Act, covered all peace officers, not just state peace officers. Resolving the ambiguity under the act, the legislative history suggests that the State Self-Insurance Act was intended to cover § 1983 actions brought against all peace officers in their individual capacity, as defined at W.S. 7-2-101, including county sheriffs. Having determined the basic coverage question, we now turn to the certified question of coverage for official capacity suits.