## Facts

- Deborah Pfeifer sued the City of Brookfield and former police officer Stephen M. McNeill under 42 U.S.C. § 1983, alleging that during a traffic stop McNeill forced her to perform a sex act and violated her Fourth and Fourteenth Amendment rights.
- Pfeifer sought compensatory and punitive damages and alleged the City was grossly negligent in supervising McNeill.
- The City retained von Briesen & Purtell, S.C. to defend it; Western World Insurance Company, the City’s law-enforcement liability carrier, agreed to the representation subject to litigation and billing guidelines.
- Western World’s guidelines included limits on research time without approval, authorization requirements for major tasks/expenses, and a request that only one attorney staff the case.
- The underlying civil-rights case settled for $20,000.
- After settlement, von Briesen billed Western World $60,012.72 for defense fees and costs; Western World disputed $45,243.44 as excessive, redundant, or incurred contrary to guidelines (including extensive research, multiple-lawyer staffing, and substantial time on an unsuccessful motion to dismiss based on a caption defect).
- Western World filed a cross-claim against Sentry Insurance seeking a declaration that Sentry owed the City a duty to defend and indemnify; Sentry relied on policy exclusions aimed at police and law-enforcement activities.

## Issues

1. Whether Sentry’s policy imposed a duty to defend and indemnify the City in the § 1983 action despite exclusions for police and law-enforcement activities.
2. Whether the defense fees and costs billed to Western World were reasonable and reimbursable in light of the case, the results obtained, and Western World’s billing and staffing instructions.

## Decision

- The court held Sentry had no duty to defend or indemnify the City because unambiguous policy exclusions for law-enforcement/police-activity claims barred coverage for Pfeifer’s allegations.
- The court held von Briesen’s defense fees were unreasonable in part and reduced the recoverable amount.
- In evaluating reasonableness, the court considered the nature and value of the matter, the services performed, duplication of effort, compliance with insurer guidelines, and proportionality between the settlement value and the defense spend.
- The court disallowed time and expenses it found excessive, redundant, unauthorized under the agreed guidelines, or disproportionate to what was reasonably required for the defense.

## Legal Principles

- Insurance coverage disputes are governed primarily by the policy’s plain language; unambiguous exclusions are enforced as written.
- An insurer’s duty to defend is not triggered where the complaint’s allegations fall entirely within a clear exclusion.
- When an insurer permits insured-selected counsel subject to express billing and litigation guidelines, those guidelines may be used as a benchmark in assessing the reasonableness and reimbursability of defense fees.
- Excessive research, duplicative staffing, and substantial time on unsuccessful or marginal procedural motions may be reduced as unreasonable, particularly where costs materially exceed what is proportionate to the matter’s value and complexity.

## Conclusion

The court rejected Western World’s attempt to shift defense and indemnity responsibility to Sentry because Sentry’s unambiguous law-enforcement exclusions barred coverage for the municipality’s § 1983 exposure, and it separately reduced the insured’s defense fee request after finding portions of counsel’s billing excessive, duplicative, and inconsistent with the insurer’s agreed guidelines.


Pfeifer v. Sentry Ins., 745 F. Supp. 1434 (E.D. Wis. 1990)