Articles & Updates

911 Call Center Must Face Insurer's Suit Says 8th Circuit

Missouri's Eighth Circuit Court says that a 911 call center had waived its sovereign immunity from an insurer's suit seeking over $1 million in damages for its alleged negligence in monitoring a security alarm panel, because it had purchased insurance without obtaining a sovereign immunity endorsement.

The panel, consisting of three judges, decided that because Audrain County Joint Communications (ACJC) could not prove that it had entered a pre-existing agreement with its insurer, American Alternative Insurance Corp., to exclude coverage for claims to which it would ordinarily have sovereign immunity, a Missouri federal court was correct in finding that the policy had not been properly reformed and that ACJC had waived its sovereign immunity.

ACJC had claimed, in a motion for summary judgment, that it was entitled to sovereign and statutory immunity as a government entity from the suit, filed by Argonaut Great Central Insurance Co. The call center claimed that it and its insurer had retroactively reformed its liability insurance policy by attaching an endorsement excluding coverage for claims to which its sovereign immunity applied. The appellate panel disagreed with ACJC.

"The testimony presented to the district court in the bench trial showed ACJC never discussed sovereign immunity, or even thought about immunity, when it sought a policy from an insurance broker. Similarly, ACJC's evidence failed to show that representatives of the insurer ever discussed sovereign immunity with ACJC," the panel concluded in its published opinion.

For lack of jurisdiction, the appellate panel dismissed the portion of the appeal questioning whether ACJC had immunity as a 911 operator, because the statute at issue only frees ACJC from liability for any civil damages, not from litigation. The appeals court can only consider matters addressing sovereign immunity as they relate to immunity from litigation.

The statute addressed by the panel frees government entities from liability and suits seeking compensatory damages.

The suit filed by Argonaut claimed that ACJC had been negligent in monitoring a security alarm panel that was set off when a grocery store that they insured was burglarized and set on fire in 2006, causing more than $2 million in damage. Argonaut reimbursed the property owner for the damage and subsequently filed the suit, claiming that the ACJC dispatcher on duty at the time had ignored an audible alarm.

The security panels were located at the public 911 call center operated by ACJC, and public employees at the call center were in charge of monitoring those panels. Each of the panels contained a set of lights that corresponded to specific Argonaut insureds, and were supposed to illuminate after an audible alarm was triggered.

The problem arose when ACJC employees noticed that a light bulb corresponding to the grocery store in question was not working several months before the break-in. Although ACJC employees reported the problem to their supervisors, it was never resolved, according to the opinion.

On the night of the 2006 break-in, ACJC employees heard the alarm during the burglary but were not able to determine which Argonaut customer the alarm applied to.

Circuit Judges Kermit E. Bye, Steven M. Colloton and Raymond W. Gruender sat on the panel for the Eighth Circuit.

Argonaut is represented by Richard D. Gerber and Matt R. Leffler of Evans & Dixon LLC.

The case is Argonaut Great Central Ins. v. Audrain County Joint, case number 13-3252 in the U.S. Court of Appeals for the Eighth Circuit.

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