Municipal Insurer Must Pay Share of $14.9 Million Wrongful Incarceration Settlement

A Massachusetts Superior Court judge recently found a municipal insurer responsible for a share of a $14.9 million settlement with a man wrongly incarcerated for 36 years.

MIIA Property & Casualty Group, Inc. was ordered to pay the town of Braintree 40.62%, or $6,052,380, of the $14.9 million settlement in a law enforcement liability case.

MIIA insures cities, towns and government entities in the Commonwealth against property/casualty losses. As one of the town’s insurers, MIlA provided Braintree with law enforcement liability and general liability coverage for the years 2002-2017. The percentage of MIIA’s share of the settlement reflects MIAA’s “time-on-the risk,” with other insurers picking up the earlier years.

Suffolk Superior Court Judge Peter B. Krupp in Boston found that MIIA was liable under the law enforcement liability policy but not the general liability coverage.

For 36 years, Fredrick Weichel was incarcerated for a 1980 murder in Braintree that he did not commit. After his release, Weichel sued the town and some of its employees. After settling those suits for $14.9 million, the town sued MIIA for refusing to indemnify it for part of the settlement.

Weichel’s 1981 conviction was overturned in 2017 after it was learned that the Braintree police department had a report and evidence identifying another man as the murderer but the police never informed defense counsel, state police or the district attorney of that report. It was only after Weichel’s attorney made public records requests in 2010 and 2013 that the report was released.

The Superior Court ultimately granted Weichel a new trial, finding that the report was plainly exculpatory and contradicted the Commonwealth’s theory of Weichel’s involvement in the murder. Weichel’s conviction was overturned and he was released, having served approximately 36 years of a life sentence.

After his release he sued the town in the federal district court for Massachusetts in Boston, asserting claims for violations of his constitutional rights and for malicious prosecution, as well as claims for bodily injuries while in prison and mental and physical health problems that continued even after release. He also alleged that between 1980 and 2009, the town withheld the exculpatory report despite multiple records requests and rearranged documents in the report’s binder to sow confusion about the evidence, delaying his release by at least four years.

In connection with the federal litigation, MIlA engaged a law firm to represent the town and paid the town’s defense costs. At the same time. MIIA reserved the right to deny indemnification with respect to a judgment or settlement paid to Weichel.

In December 2020, Weichel offered to settle for $36 million. About two years later, in a civil suit against the Commonwealth, a Suffolk Superior Court jury found Weichel actually innocent and awarded him $33 million, which was reduced to the $1 million statutory cap.

The following January, defense counsel advised MIIA that the town potentially faced “astronomical damages” and recommended attempting to settle the case, while noting that it would be difficult to settle because of the $33 million verdict rendered against the Commonwealth.

Weichel reduced his demand to $22 million and then to $14.9 million, but he refused to lower the demand further. In September 2024, the town agreed to pay $14.9 million to settle the litigation.

Braintree proposed that MIlA and its other insurers contribute pro rata based on each insurer’s time-on-the risk and subject to each insurer’s liability limit. MIIA believed that it had no indemnity obligation for any portion of the Weichel settlement, never offered more than $1 million, and rejected the use of a pro rata allocation. The town entered into the $14.9 million settlement without MIlA’s agreement to participate.

The town then sued MIAA alleging the insurer breached its duty to indemnify and engaged in unfair claim settlement practices in violation of the state’s consumer protection statute for failing to pay its share.

The parties moved for summary judgment. The judge allowed the town’s motion for summary judgment on the duty to indemnify claim but granted MIAA’s motion to dismiss the unfair claims practices claim.

Judge Krupp reasoned that because the underlying litigation settled, the court must look to “the basis for the settlement” to determine an insurer’s indemnification obligation, and the “relevant inquiry” is “how the parties to the settlement viewed the relative merits of the plaintiff’s claims at the time of the settlement.” He found that the town satisfied the burden of demonstrating that the claimed acts that formed the basis for the settlement were covered by a MIIA policy.

The town argued that by settling with Weichel, it compensated him for bodily injury that occurred during his imprisonment that fell under the law enforcement liability policy. MIIA contended that the town did not show that the occurrence of imprisonment caused bodily injury, or that bodily injury occurred during its contract period (2002-2017).

The judge sided with the town, noting that under the plain language of the insurance contract, Weichel’s wrongful imprisonment was a continuing “occurrence” arising from the town’s law enforcement activities. He referenced the record at settlement that indicated bodily injuries after 2002 including undertreated infections (2002-03), injury from inmate assaults (2006-07), open wound left unaddressed for over a year (2011), and basal cell carcinoma untreated for a year (2016-17).

The judge also noted that prior to mediation, Braintree and MIIA considered literature regarding injuries arising from long-term incarcerațion. Moreover, the Suffolk Superior Court jury awarded Weichel damages after evaluating “physical pain and suffering, and mental pain and suffering.”

The judge concluded that the basis for the town’s settlement of federal claims included Weichel’s claim for bodily injuries that occurred within the coverage period. The town had met its burden to show a duty to indemnify on this basis.

The town also argued that the post-conviction failure to produce the exculpatory report and the improper production of the report in 2010 fell within the MIIA contract period. MIIA argued that the offense of wrongful conviction and false imprisonment occurred at the time of conviction, and that the post-conviction failure to produce the report did not create an additional injury or trigger coverage. MIIA further argued that Weichel’s claim of improper production of the report was “far- fetched” and Braintree had not given it credence.

The judge noted that under Massachusetts law, an initial wrongful conviction does not trigger coverage during the entire imprisonment period. However, the judge continued, failure to disclose exculpatory evidence in response to record requests may constitute a separate offense that would trigger a duty to indemnify under MIIA’s policies. The relevant inquiry thus is “how the parties to the settlement viewed the relative merits of the plaintiff’s claims at the time of the settlement.”

Before the settlement, MIlA recognized in a letter to National Casualty Co. that Weichel’s allegation of a failure to produce the exculpatory report would trigger personal injury coverage in years in which requests were ignored. The town also showed that the allegation was not considered meritless at the time. The town also believed that Weichel would be a credible and sympathetic witness to the jury. Citing these undisputed facts, the judge found that Braintree had demonstrated that the settlement was partially based on alleged post-conviction offenses of failure to respond to record requests, which triggered MIlA’s indemnification obligation.

MIIA also argued that there was no coverage due to an exclusion in the law enforcement liability policies that was triggered because the town knew about Weichel’s false imprisonment prior to its contract period. But the judge found that MIlA failed to prove the town or its police officers knew of the injury before the contract period.