No Coverage for Intentional Act After Conviction for Crime of Reckless Homicide

Lindsey Dostal appealed the grant of summary and declaratory judgment to State Farm Fire and Casualty Company. The court concluded that State Farm did not provide coverage under Curtis Strand’s homeowner’s insurance policy for Dostal’s claims against Strand resulting from the death of Dostal and Strand’s infant daughter, Haeven Dostal while she was in Strand’s care. 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, No. 2020AP1943, Court of Appeals of Wisconsin, District III (October 19, 2021) sought indemnity from State Farm for the wrongful death.

FACTS

The trial court determined Haeven’s death was not the result of an occurrence, which is defined in the Policy as an accident that results in bodily injury or property damage during the policy period. The court concluded that Strand’s criminal conviction of second-degree reckless homicide for causing Haeven’s death precluded Dostal’s claim that Strand’s actions were accidental because criminal recklessness requires more than accidental conduct. It reached this conclusion because, to find Strand guilty of that crime, the jury had to find that Strand created an unreasonable and substantial risk of great bodily harm to Haeven and that he acted with awareness of that risk.

The trial court concluded that under the undisputed facts of this case the Policy did not provide coverage for Dostal’s claims. A jury in a criminal trial rejected the argument that Strand’s actions were accidental and convicted him of second-degree reckless homicide. In doing so, the jury necessarily found, beyond a reasonable doubt, that Strand was aware that his conduct created an unreasonable and substantial risk of harm to Haeven such that her death did not result from an accident. Accordingly, Strand’s conduct did not constitute an occurrence under the Policy.

On July 11, 2017, while in Strand’s care, Haeven died after sustaining a skull fracture and an associated brain injury. As part of the subsequent investigation, Strand provided law enforcement with different versions of the events that led up to Haeven’s death. In each of Strand’s recitations, he stated that Haeven was involved in a fall. The medical examiner, however, determined that Strand’s explanations of the events occurring prior to Haeven’s death were inconsistent with the severity of her injuries. Ultimately, the medical examiner concluded that Haeven’s death was caused by anoxic encephalopathy following resuscitated cardiac arrest due to blunt force trauma.

Strand was convicted of second-degree reckless homicide and obstructing an officer. Thereafter, Dostal commenced a civil lawsuit against Strand and his insurer, alleging that Haeven’s “injuries were proximately caused by the negligent acts of [Strand], including, but not limited to negligent supervision, failing to properly hold or secure Haeven to prevent her from falling, [and] failing to contact emergency services in a reasonable manner.”

State Farm filed a motion for summary and/or declaratory judgment, arguing, in part, that there was no coverage for Dostal’s claims because there was no occurrence under the terms of the Policy. The circuit court granted State Farm’s motion, concluding in pertinent part:

As a matter of law[, ] the conviction of second[-]degree reckless homicide prevents the events from being an “occurrence” due to the fact that the Jury had to find beyond a reasonable doubt that Strand recklessly caused the death of another human being by creating an unreasonable and substantial risk [of] great bodily harm and death and that Strand acted with awareness of that risk.

The court further concluded that the intentional acts exclusion barred coverage because Strand’s intent could be inferred as a matter of law.

DISCUSSION

An appellate court’s goal in interpreting an insurance policy is to give effect to the parties’ intent. We construe a policy as it would be understood by a reasonable person in the position of the insured. If policy language is unambiguous the policy is enforced as written; however, if it is ambiguous-that is, reasonably susceptible to more than one interpretation-we construe it against the insurer and in favor of coverage.

Dostal argued that material disputed facts regarding the injury-causing event are present here, and that the circuit court therefore erred in granting State Farm’s summary judgment motion. Strand told police that Haeven fell off his knee while he was trying to feed her. Alternatively, Strand stated that he dropped Haeven while trying to warm up her bottle. The forensic pathologists provided their opinions on the veracity of Strand’s statements; however, they never provided an alternative theory as to how the incident happened.

As part of the jury instructions, the criminal trial court was explicit as to what constitutes criminally reckless conduct in Wisconsin:

Criminally reckless conduct is defined as conduct that creates a risk of death or great bodily harm to another person, and the risk of death or great bodily harm was unreasonable and substantial, and that the defendant was aware that his conduct created an unreasonable and substantial risk of death or great bodily harm.

The defendant, Mr. Strand, contends that he was not aware that his conduct created an unreasonable and substantial risk of death or great bodily harm, but that what happened was an accident.

If [Strand] did not act with an awareness required for this crime, he is not guilty of this crime.

After receiving these instructions, the jury deliberated and found Strand guilty, beyond a reasonable doubt, of second-degree reckless homicide.  By finding him guilty, the jury  concluded that Strand was aware that his conduct created an unreasonable and substantial risk of death or great bodily harm and, therefore, his conduct was not an “accident.”

When a jury has found an individual’s conduct to be criminally reckless-which requires a finding that the individual was aware that his or her conduct created an unreasonable and substantial risk of death or great bodily harm-it is axiomatic that no accident occurred.

Citing case law from other jurisdictions, Dostal argued that for insurance coverage purposes, reckless conduct involves a different degree of volition than intentional conduct and should not be categorically excluded from the ambit of insurance coverage.  She further asserts a reasonable jury would conclude that Strand’s conduct, even if reckless, was an accident and constituted an occurrence. She therefore contended that the circuit court erred in granting State Farm’s motion.

Dostal’s arguments in this regard misapprehend the insurance policy language at play. Whether a plaintiff’s injuries arose from an occurrence and whether the insured engaged in intentional conduct are separate and distinct analyses. In particular, the “occurrence” analysis asks in the first instance whether the injury-causing event was accidental, while the “intentional act” analysis asks if the insured expected or intended the injury. Wisconsin’s criminal code recognizes a degree of mens rea separate from accidental and intentional that is highly relevant to this case-recklessness.

Merging the “occurrence” analysis with the “intentional act” analysis destroys this separation, violates principles of contract interpretation, and is incorrect as a matter of law.

With the jury instructions as a backdrop, the jury found that the State had proved, beyond a reasonable doubt, that Strand “recklessly cause[d] the death of another human being” by “creat[ing] an unreasonable and substantial risk of death or great bodily harm.” Accordingly the circuit court properly determined the Policy provided no coverage for Dostal’s claims because Haeven’s bodily injuries and death did not result from an occurrence.

ZALMA OPINION

There is nothing more sad than the death of a child except, perhaps, the death of an unwanted child caused by the reckless indifference of her father who was convicted by a jury of his peers of being criminally the cause of the child’s death. Since the criminal jury found guilt beyond a reasonable doubt the act could not have been “accidental” or an “occurrence” that would require an insurer to defend or indemnify the responsible person.

© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.

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He is available at http://www.zalma.com and [email protected]. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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