Opinion ID: 3009566
Heading Depth: 2
Heading Rank: 2

Heading: The Company will reimburse the

Text: Public Entity for all Loss for which the Public entity shall be required by law to indemnify the Insureds for any civil claim or claims first made against them because of a Wrongful Act, provided that the claim is first made during the policy period and written notice of said claim is received by the Company during the policy period. (emphasis added). While the claims made portion of the policy is identical to that of the prior agreement, there is a significant difference in the policy's exclusion provision. In the past, the parties had agreed to a typical prior litigation exclusion clause that bars all claims relating to pre-policy lawsuits. When the policy was renewed, however, Insurers expanded the scope of that provision. The new exclusion states: It is understood and agreed that the insurer shall not be responsible for making any payment for loss in connection with any claim made against any insured based upon, arising out of, or in consequence of or in any way involving: (1) any prior and/or pending litigation as of 2/1/89 [pre-policy period] including but not limited to matters before local, state, or federal boards, commissions, or administrative agencies, or (2) any fact, or circumstance, or situation underlying or alleged in such litigation or matter. (emphasis added). Insurers added language that effectively restricts coverage to only those claims completely unrelated to any pre-policy dispute, regardless of whether the dispute involved a legal claim covered by the policy. Township has argued both before us and before the district court that it did not expect that the new exclusionary language would bar claims that had not previously been presented to it as insurable claims, e.g., petitions for injunctive relief or proceedings before administrative agencies. B. The Blanche Road Dispute In December 1989, Blanche Road named Township and many of its current and former officials and employees in a federal civil rights suit pursuant to 42 U.S.C. § 1983. See Blanche Road Corp. v. Township, No. 89-9040 (E.D. Pa. filed December 20, 1989). The suit was the culmination of several years of contention arising from the development of the Blanche Road Industrial Park located in Township. In 1987, Blanche Road commenced development of certain parcels of land by securing the necessary town building permits and entering into agreements of sale with several buyers. Subsequently, Township made some financial demands which Blanche Road alleged were not required by any town ordinance. Township then issued a stop work order and cited Blanche Road with certain town ordinance violations. On December 30, 1987, Blanche Road appealed the order to the Town Code Appeals Board. While the appeal was pending, Township revoked Blanche Road's building permits and issued a second stop work order. Thereafter, on January 20, 1988, Blanche Road filed a complaint in quo warranto in the Court of Common Pleas of Bucks County, Pennsylvania. It sought an order declaring that the Town Code Appeals Board members' appointments were null and void. Blanche Road wanted the members excluded from serving on the Board. Blanche Road also filed an equity action in state court on February 19, 1988. In that suit, Blanche Road sought injunctive and declaratory relief as well as some ancillary damages. Blanche Road asked the court to enjoin Township from enforcing a stop work order and levying fines or penalties. Moreover, it wanted the court to declare the stop work order null and void. The only damages Blanche Road sought were for the delay of some construction work and certain related interest and wages. The suit was settled when both parties stipulated that the building permits would be reinstated.1 1 . We note that there were two other state court proceedings that related to the Blanche Road dispute. Neither of Blanche Road subsequently filed its federal civil rights complaint alleging that certain Township officials had violated the Due Process Clause by attempting to coerce payments not required by law and by impeding Blanche Road's development of the Industrial Park. In addition, Blanche Road claimed that Township had violated the Equal Protection Clause by applying different standards from those used for other developers. This was the first time that Blanche Road filed a federal action against Township seeking money damages. It was also the first time that Blanche Road raised constitutional claims and the first time that many of the town officials were named as defendants. A trial was held, and a jury entered a verdict in favor of Blanche Road in the amount of $2,000,000 plus interest, costs, and attorneys' fees. The district court subsequently granted Township's motion for a new trial. That trial is apparently still pending.