Making a Murderer’s Policy Problems
Did exclusions and coverage issues play a factor in Steven Avery’s case?
By Mitchell Ayes , Ryan Lang
By now, millions of people across the world have watched Making a Murderer, a wildly popular Netflix series that was filmed over a 10-year period and followed the life of Steven Avery, a man from Manitowoc County, Wisconsin, who was wrongfully convicted of first-degree sexual assault, attempted first-degree murder, and false imprisonment before being sentenced to 32 years in prison.
Due to the alleged misconduct of then-Manitowoc County Sheriff Thomas Kocourek and then-Manitowoc County District Attorney Denis Vogel, Avery was convicted of sexually assaulting Penny Ann Beernsten, a 36-year-old woman who, on July 29, 1985, was raped and choked unconscious during an afternoon jog near Two Rivers, Wisconsin.
On Sept. 10, 2003, 18 years into his prison sentence, Avery was released after DNA evidence proved that Beernsten’s attacker was not Avery, but rather a man named Gregory Allen. At the time, Allen already was serving a 60-year prison term in Green Bay, Wisconsin, for a sexual assault that took place after the 1985 attack on Beernsten. As will be discussed in more detail, as a result of alleged police and prosecutorial misconduct, Steven Avery filed suit against Manitowoc County, Kocourek, and Vogel, seeking $36 million in damages in order to redress his wrongful conviction and imprisonment for the felony crimes of sexual assault, attempted murder, and false imprisonment.
Interestingly, in episode two of Making a Murderer, Avery’s attorney, Walter Kelly, stated that Manitowoc County’s insurer would not have provided coverage for Kocourek or Vogel because it was a case of intentional deprivation of civil rights, but he did not further comment on the issue. Unfortunately, as will be discussed, this case settled before discovery was completed, which means that the county’s insurance policy was not put into evidence or made public, and there were no arguments made with regard to policy exclusions or language. Therefore, this article will look to policy exclusions involving governmental units and their employees, including law enforcement agencies, which Manitowoc County’s insurer may have asserted in denying coverage to the defendants in Avery’s civil lawsuit. Moreover, we will examine the reasons that State Farm denied coverage to Kocourek under his homeowners’ insurance policy.
Understanding the Facts
On Sept.18, 2003, Manitowoc District Attorney Peggy Lautenschlager asked Wisconsin’s attorney general to investigate Manitowoc County’s handling of Avery’s 1985 case. Three months later, after reviewing the evidence, Manitowoc County cleared the district attorney’s office of any wrongdoing in the matter. Despite the Wisconsin attorney general’s findings of no wrongdoing, in 2005, Avery filed his civil suit against Manitowoc County, Kocourek, and Vogel. Avery sued Kocourek as an individual, as well as in his official capacity as the sheriff of Manitowoc County. Avery also sued Vogel as an individual, only with respect to his executive, administrative, and advice and counsel functions and in his official capacity as district attorney of Manitowoc County. Stephen M. Glynn, who represented Avery in his 1995 motion for a new trial, along with Kelly, represented Avery in his civil lawsuit for wrongful conviction.
Avery’s complaint sought damages in the amount of $36 million—$18 million for compensatory damages and $18 million for punitive damages—while also requesting all costs and reasonable attorneys’ fees. Additionally, as part of his complaint, Avery requested that, as the then-sheriff and then-district attorney of Manitowoc County, the county was responsible for the indemnification of Kocourek and Vogel under Wisc. Stat. §895.46(1)(a), which states:
If the defendant in any action or special proceeding is a public officer or employee and is proceeded against in an official capacity or is proceeded against as an individual because of acts committed while carrying out duties as an officer or employee and the jury or the court finds that the defendant was acting within the scope of employment, the judgment as to damages and costs entered against the officer or employee, except as provided in s. 146.89 (4), in excess of any insurance applicable to the officer or employee shall be paid by the state or political subdivision of which the defendant is an officer or employee.
In determining whether an employee is acting within the scope of their employment, the court must evaluate the employee’s conduct to determine if it is at least partially actuated by a purpose to serve the employer and occurs within the time and space limits of his authority. In Making a Murderer, while some of the actions and omissions that Kocourek and Vogel are accused of are egregious, it is clear that they were acting within the scope of their employment as the sheriff and district attorney of Manitowoc County, the county in which they investigated, prosecuted, and convicted Avery.
Many insurers offer municipal and public risk package policies, but they often contain exclusions for which the insurer will not provide coverage. One exclusion commonly found in these municipal and public risk package policies is a “deliberate act exclusion,” which typically states that the insurer will not pay for or defend claims against the insured “[a]rising out of the deliberate violation of any federal, state, or local statute, ordinance, rule, or regulation committed by or with the knowledge and consent of the insured.”
Accordingly, if Manitowoc County’s insurance policy contained a deliberate act exclusion provision, then it helps explain why Manitowoc County’s insurer decided to deny coverage for all defendants. As stated, Avery’s complaint alleges that the actions and omissions of the defendants constituted a violation of the due process and equal protection clauses of the 14th Amendment, as well as a continuing hindrance and obstruction of the due course of justice in violation of the obstruction clause of 42 U.S.C. §1985(2). If these actions were found to be deliberate, as Avery alleges and provides evidence to support, the defendants’ actions would fall under the deliberate act exclusion.
Another exclusion contained in many insurance policies is the “law enforcement exclusion,” which states that an insurer will not pay for or defend claims against the insured that “are based upon or attributable to or arising out of the operation of or activities of any law enforcement agency.” Courts across the nation have interpreted this phrase broadly, construing “arising out of” broadly as “originating from, growing out of, flowing from, incident to, or having connection with.” In fact, courts have applied the exclusion to cases stemming from retaliation and harassment by police officers, finding that these actions were within the scope of the operation or activities of a law enforcement agency. It is important to note that while the term “law enforcement agency” typically refers to police agencies in the U.S., it also includes those who prosecute criminal acts, such as county prosecutors and district attorneys.
Under Wisc. Stat. §895.46, a governmental unit’s liability for the actions of its employees in civil actions is not based upon its insurance coverage. Rather, as noted in Beane v. Sturgeon Bay, it’s based solely on findings of liability and whether the employees were acting within the scope of their employment. Therefore, if Manitowoc County’s insurer provided coverage to the defendants and the settlement amount was larger than the insurance policy’s limits, it is likely that the county’s taxpayers and the state of Wisconsin would have been on the hook for the remainder of the settlement amount, as the county would be responsible for indemnifying Kocourek and Vogel per Wisc. Stat. §895.46(1)(a).
Unfortunately, on Nov. 11, 2005, before discovery could be completed in Avery’s civil suit, he was arrested for the murder of Wisconsin photographer Teresa Halbach, stalling the progression of the matter.
Role of Homeowners’ Insurance
Later, on Feb. 14, 2006, State Farm Fire & Casualty Company filed a complaint for declaratory judgment against Kocourek and the other parties in the matter. Kocourek tendered the case to State Farm under his homeowners’ insurance policy, seeking a defense against the lawsuit and payment of any damages that the plaintiff may recover. State Farm requested that the court declare that its homeowners’ policy did not provide coverage for Kocourek’s lawsuit; that it had no obligation to defend Kocourek in the case; and that it had no obligation to pay any sums of money to the plaintiff on behalf of Kocourek. It asked the court to dismiss with prejudice any claims by any party against State Farm as well as costs and fees as allowed by law.
Kocourek’s homeowners’ insurance policy agreed to provide personal liability insurance coverage up to the limit of liability for damages, and provide a defense on behalf of the insured for claims brought against the insured for damages due to bodily injury or property damage. There were exclusions to the policy, however, which provided that the policy’s personal liability coverage neither applied to bodily injury or property damage that is expected or intended by an insured, nor for bodily injury or property damage arising out of business pursuits of an insured.
State Farm asserted that it was not obligated to defend or indemnify Kocourek because Avery’s complaint alleged that Kocourek was acting within his scope of employment as the sheriff and that he acted intentionally. Therefore, State Farm argued that if the allegations of the complaint were proven true, it would not have been obligated to defend or indemnify Kocourek because the homeowners’ policy neither applied to damages arising out of the insured’s business or profession, nor to the insured’s intentional acts.
Interestingly, on Feb. 15, 2006, the same day that State Farm’s complaint for declaratory judgment was received and filed by the U.S. District Court for the Eastern District of Wisconsin, a mere three months after Avery was accused of killing and burning Halbach’s body, Avery settled his wrongful conviction lawsuit against Manitowoc County, Kocourek, and Vogel for $400,000—a fraction of the original $36 million he was originally seeking. Glynn briefly explained the reasoning behind the low settlement amount in this matter by stating that, despite believing that he had a strong case, the murder accusations against Avery complicated the lawsuit beyond repair. Had the matter not been settled, it likely would have been revealed that Manitowoc County’s insurer would not have provided coverage for similar reasons asserted in State Farm’s complaint.
As has been the case throughout Avery’s entire criminal justice system history, especially in light of his wrongful conviction in 1985, the Making a Murderer series raises many questions as to the guilt of Avery in the 2005 murder of Halbach. The allegations against him left many viewers asserting that he was framed by Manitowoc County as a way to end his civil suit against the county, Kocourek, and Vogel after learning that the county’s insurance policy would deny coverage for the defendants. When Chuck Avery, brother of Steven Avery, was asked about why Manitowoc County would frame his brother in the murder of Halbach, he stated, “There are 36 million reasons why they should be doing this to him.”