Attorneys for two men wrongly convicted of rape have filed a counterclaim in Cowlitz County Superior Court alleging that Clark County’s insurance providers colluded to pressure the county to breach a multi-million-dollar settlement with the two men.
The claim also alleges the state agency that provides low-cost coverage to counties, the Washington Counties Risk Pool, along with two insurance providers — American International Group Inc. and its subsidiary, Lexington Insurance Co. — conspired to misrepresent the services the risk pool provides in order to avoid paying a share of the settlement.
According to the claim, the risk pool and Lexington “concocted a scheme” to assert that the county’s third-party liability insurance program wasn’t real insurance, so the risk pool wasn’t contractually obligated to pay the settlement amount.
The risk pool does not refer to itself as an insurer, describing itself as a coalition of Washington counties that, as a group, receives cheaper insurance rates by spreading liability. The claim, filed Friday, argues that because the pool re-insures or directly insures 98 percent of the $25 million in annual coverage provided by the pool’s third-party liability insurance program, it is an insurance provider.
Representatives for the risk pool said they couldn’t comment on the counterclaims on advice of their lawyers.
The two men at the center of the settlement dispute, Alan Northrop and Larry Davis, spent 17 years in prison after they were convicted of raping a La Center woman. With help from the Innocence Project Northwest and a judge’s order to do post-conviction DNA tests, Northrop and Davis were released in 2010 after tests showed DNA taken from the victim came from two different men.
In 2013, the county agreed to pay the men $5.25 million apiece. The county’s settlement also gave the men permission to seek an additional $25 million from the pool. The risk pool balked at the settlement, arguing that such an agreement violated its contract with the county, and it claimed it wasn’t obligated to pay the settlement because the men’s convictions happened before the county had insurance coverage. The county issued a written apology on Nov. 6 to the pool for suggesting that Northrop and Davis could sue the pool.
In November, the risk pool requested the county reverse its settlement with Northrop and Davis, a proposition the county said wasn’t feasible. Attorneys for Northrop and Davis say the pool pressured Clark County to withdraw from its settlement with Northrop and Davis by threatening to terminate the contract.
The risk pool sued Northrop and Davis in Cowlitz County Superior Court last fall, shortly after the county settled with the two men and assigned insurance rights to the risk pool. Attorneys for Northrop and Davis filed a countersuit in King County Superior Court. The two lawsuits are in the process of being consolidated in Cowlitz County.
A months-long dispute between Clark County and the risk pool came to a head in April, when the pool’s executive committee voted to boot the county from the program.
That decision followed a March meeting between the county’s risk manager, Mark Wilsdon, then-commissioner Steve Stuart and the executive committee in Cle Elum. Attorneys further allege that the risk pool may have tampered with witnesses by meeting with county representatives who could provide testimony to challenge Northrop and Davis’ claims.
The risk pool, AIG and Lexington “compelled the county … to propose a plan whereby the county would indemnify the pool from its exposure for the claims in the present lawsuit, without ever informing the court or Davis and Northrop,” the counterclaim says.
A hearing is scheduled for May 30 in Cowlitz County Superior Court.
