Watch the full video at https://rumble.com/v287ymy-wisconsin-finds-killing-the-insureds-child-a-potential-accident.html and at https://youtu.be/X9wrUeDnAeo
When there is a serious injury, such as the criminal death of a child, litigation results in an attempt to collect from an insurer because the defendant will have little or no assets to pay for the loss.
IN Lindsey Dostal, Individually and as Special Administrator of the Estate of Haeven Dostal v. Curtis Strand and ABC Insurance Company, State Farm Fire and Casualty Company, Intervening, No. 2020AP1943, 2023 WI 6, Supreme Court of Wisconsin (Jan. 26, 2023), the Wisconsin Supreme Court was asked to allow the child’s mother to sue the criminal whose conduct—the father of the child—unintentionally caused the death so that State Farm, the convicted father’s insurer, must pay the mother for the loss of her child.
Lindsey Dostal (Dostal) sought review of an appellate court’s decision affirming the circuit court’s grant of summary and declaratory judgment in favor of State Farm. The Court of Appeals held that Curtis Strand’s conduct did not constitute an “occurrence” covered by the current State Farm policy because his conviction for second-degree reckless homicide established that the death was not the result of an accident.
State Farm argued that the issue exclusively bars a retrial on the question of whether Haeven’s death was the result of an accident. It argued that Strand’s conviction is dispositive of the issue of available insurance coverage under Strand’s policy and that there is no coverage for Dostal’s claim. State Farm further argues that the policy’s domestic relative and intentional acts exclude coverage.
Dostal gave birth to Haeven on April 3, 2017, and Strand was subsequently convicted as the father. On July 11, 2017, Haeven passed away as a result of head trauma that occurred while in Strand’s care. After a jury trial, in which Dostal was a witness, the jury convicted Strand of second-degree reckless homicide and resisting or obstructing an officer.
Dostal sued Strand for negligence and wrongful death. Strand filed the case with State Farm, his homeowner’s insurer, seeking defense and indemnification.
State Farm argued that its policy did not provide coverage for Dostal’s claims and thus had no duty to defend or indemnify Strand. State Farm argued that there was no “occurrence” (defined as an “accident”) that triggered coverage. The district court agreed with State Farm and granted its motion for summary and declaratory judgment. The Court of Appeal upheld the circuit court’s decision in a published opinion. Dostal v. Strand, 2021 WI.App. 79, 399 Wis.2d 781, 967 NW2d 157.
ANALYSIS
The policy in this case states that coverage is provided for an “occurrence.” An “occurrence” is in turn defined under the policy as an “accident”, resulting in, as relevant here, “bodily injury”.
The offense of second degree reckless homicide requires that the actor creates an unreasonable and substantial risk of death or great bodily harm to another human being and the actor is aware of that risk.
RESIDENT RELATIVE EXCLUSION
State Farm argued that the domestic relative exclusion applied to bar coverage here. In State Farm’s view, Haeven was a “resident” of the Strand household as a matter of law. It points to facts in the record indicating that the paternity court had ordered Strand to have “frequent” physical placement of Haeven, that Strand physically cared for Haeven, and that Strand intended the duration of his relationship with Haeven to be substantial such that he would consider her at agreement on insurance.
But contrary to State Farm’s argument, she testified in Dostal’s deposition that Haeven’s “right of occupancy” with Strand was in question. According to Dostal’s deposition testimony, Strand only cared for Haeven without Dostal present four times, a count that includes two overnight stays. Dostal further testified that there was no formal placement schedule and that Strand “was usually too busy or didn’t have time for the child or didn’t want her there.” In light of this testimony, the Supreme Court concluded that it could not conclude that Haeven was a resident relative of Strand as a matter of law.
The parties’ pleadings show that there are genuine issues of material fact regarding the question of whether Haeven was a resident relative of Strand. Accordingly, summary judgment was inappropriate in this matter.
EXCEPTION OF INTENTIONAL WALKING
If the conduct is intentional and if the conduct is substantially certain to cause harm, the Supreme Court may infer intent to harm only if the degree of certainty that the conduct will cause harm is sufficiently great to justify an inference of intent to harm as a matter of law. .
However, the Supreme Court cannot infer intent to injure in law simply because the insured’s willful act contravened the penal code. A felony conviction gives rise to the inference that an insured intended injury as a matter of law under two circumstances, but only: (1) if intent to injure is part of the offense, and (2) if the offense in question involves the insured committing a intentional act that entails a substantial risk of injury or death.
However, intent is not part of a reckless crime. If the exclusion of intentional acts is to apply, the crime must therefore involve the insured committing an intentional act that entails a tangible risk of injury or death. A determination that Strand’s conduct was reckless does not preclude a finding that his conduct was an accident for purposes of insurance coverage.
In sum, the Supreme Court concluded that the issue of preclusion does not preclude Dostal from seeking insurance coverage for her claim against Strand; The issue of whether Strand’s conduct constituted an “accident” was not actually tried in the earlier criminal proceedings; and there are genuine issues of material fact as to the application of the resident relative and intentional acts exclusions such that summary judgment is inappropriate.
DIFFERENT SPIRITS
Chief Justice Annette Kingsland Ziegler, and two other justices, dissented, as 12 jurors at Strand’s criminal trial unanimously ruled beyond a reasonable doubt that Haeven’s death was not an “accident,” ruling out reopening the issue of Strand’s custody. Strand’s conviction for his act of reckless murder, killing his own child, Haeven, prevents Strand from claiming that Haeven’s death was an accident. If the defendant did not act with an awareness required for this crime, he was not guilty of this crime. Because he was convicted by a unanimous vote of 12 jurors, he acted with the awareness required for the crime.
Strand’s criminal trial does not bind any non-party to that trial. The chief justice and two colleagues concluded that the criminal trial “only binds Strand by preventing him from asserting that his criminally reckless act was a covered ‘accident’ that absolved him of liability to Dostal.”
Because this is an order reversing the granting of a motion for summary judgment, it gives Dostal the right to attempt to present sufficient evidence to a civil jury to convince them that Haeven’s death was an accident and that she was not actually in the house with her father who resident relative. It will be difficult, however, as she only needs to convince nine of twelve jurors that the preponderance of the evidence contradicts the conviction of the crime established by a unanimous vote of a jury convicting Strand of the death of his child. The jury may feel sorry for the mother and punish Strand’s insurer for helping the mother. For me, the dissent is far more convincing than the majority’s decision.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
Subscribe and receive videos limited to Excellence in Claims Handling subscribers at locals.com https://zalmaoninsurance.locals.com/subscribe.
Go to substack at substack.com/refer/barryzalma Consider subscribing to my publications on substack at substack.com/refer/barryzalma
Barry Zalma, Esq., CFE, now limits his practice to serving as an insurance consultant specializing in insurance coverage, insurance claims management, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims attorney and more than 54 years in the insurance industry. He can be reached at http://www.zalma.com and zalma@zalma.com
Write to Mr. Zalma at zalma@zalma.com; http://www.zalma.com; http://zalma.com/blog; daily articles are published on https://zalma.substack.com. Go to the Zalma On Insurance podcast at https://anchor.fm/barry-zalma; Follow Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos on Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to Insurance Claims Library – https://zalma.com/blog/insurance-claims-library
