Clemmer v. Hartford Insurance Co.

• Citation: 151 Cal.Rptr. 285,22 Cal.3d 865
• Parties: , 587 P.2d 1098 Marjorie J. CLEMMER et al., Plaintiffs and Appellants, v. HARTFORD INSURANCE COMPANY, Defendant and Appellant. L.A. 30759.
• Decision Date: 19 December 1978
• Court: United States State Supreme Court (California)

Page 285

151 Cal.Rptr. 285

22 Cal.3d 865, 587 P.2d 1098

Marjorie J. CLEMMER et al., Plaintiffs and Appellants, v. HARTFORD INSURANCE COMPANY, Defendant and Appellant.

L.A. 30759.

Supreme Court of California, In Bank.

Dec. 19, 1978.

As Modified on Denial of Rehearing Jan. 17, 1979.

[587 P.2d 1100] Gibson, Dunn & Crutcher, John H. Sharer and Fred F. Gregory, Los Angeles, for plaintiffs and appellants

Overton, Lyman & Prince, Carl J. Schuck, John D. McCurdy and Valerie Baker, Los Angeles, for defendant and appellant.

MANUEL, Justice.

By this action plaintiffs, the widow and the son of a victim of a killing, sue to recover from the liability insurer of the slayer the amount of a wrongful death judgment obtained against him. Following a jury verdict the trial court entered judgment against the defendant insurer, but it subsequently granted defendant's motion for new trial, tendered on all issues, on the sole issue submitted to the jury i. e., whether the death in question was caused by a willful act and denied it on all other issues. Plaintiffs appeal from the aforesaid order granting a new trial. Defendant appeals from orders of the trial court denying its motions (1) for judgment notwithstanding the verdict, (2) to set aside and vacate the judgment and enter a new and different judgment, and (3) for a new trial on all issues. Its appeal must be dismissed insofar as it purports to be from the latter two orders, such orders being nonappealable. Defendant has also filed a protective crossappeal from the whole of the judgment. (Cal.Rules of Court, rule 3(c).)

FACTUAL BACKGROUND

Plaintiffs, Marjorie Clemmer and Hugh Clemmer, are respectively the widow and minor son of Dr. Hugh Clemmer, deceased. Dr. Daniel Lovelace had worked for Dr. Clemmer, and he was shocked when the latter on January 29, 1971, advised him that the employment relationship would be terminated. The next day Dr. Clemmer was shot and killed by Dr. Lovelace, the Hartford Insurance Company's insured. Just prior to the shooting Dr. Lovelace, from his apartment window, had observed Dr. Clemmer in a nearby gas station. Dr. Lovelace placed a pistol in a shoe box, went to his car, placed the box and pistol on the seat, and drove across the street (from his apartment) to the gas station. He pulled next to a gas pump and spoke to the attendant. He then left the car and, carrying the gun, approached Dr. Clemmer. He greeted Dr. Clemmer, then shot him twice. These shots were followed by two more shots. Finally, Dr. Lovelace knelt close to the victim and at close range shot him in the head. The gun was placed on the ground. Dr. Lovelace remarked that he knew what he was doing and that Dr. Clemmer was destroying him professionally.

For the slaying of Dr. Clemmer, Dr. Lovelace was tried and convicted of murder in the second degree. At the criminal trial Dr. Lovelace did not testify, and at the conclusion of the guilt phase he withdrew his plea of not guilty by reason of insanity. Thereafter plaintiffs obtained a default judgment against Dr. Lovelace in the sum of $2,003,421 for the wrongful death.

In the instant action, commenced by plaintiffs against the Hartford Insurance Company (Hartford), plaintiffs claim that Hartford is obligated to satisfy the judgment against Dr. Lovelace because of a personal comprehensive liability policy issued by Hartford with limits of $5 million. Hartford defended the action on the ground, among others, that Dr. Lovelace's killing Dr. Clemmer was a willful act and thus excluded from coverage by the law of this state (citing Ins.Code, § 533). ¹ The trial court made divers rulings. ² Inter alia The jury returned a special verdict ⁴ that Dr. Lovelace lacked the mental capacity to intend to shoot and harm Dr. Clemmer and lacked such capacity to govern his own conduct. After the filing of findings of fact and conclusions of law, based upon the evidence and the jury's verdict, judgment for plaintiffs was entered in the sum of $2,003,480 less $50,000, the amount "deductible" under the policy.

                it rejected the contention that the second degree murder conviction of Dr. Lovelace collaterally estopped [22 Cal.3d 873] the plaintiffs from contending the killing was not willful. 3  The court also rejected Hartford's move to reopen the question of damages
                

Hartford next moved for a new trial asserting, among other things, the insufficiency of the evidence to support the jury's verdict. This motion was granted by the trial court. The new trial motion was denied as to other grounds urged, and the court also denied defendant's motion for judgment notwithstanding the verdict predicated upon the grounds that (1) plaintiffs were collaterally estopped by the second degree murder conviction, and (2) that the evidence required a defense judgment. The trial court also denied Hartford's motion to set aside and vacate the judgment under Code of Civil Procedure section 663.

DISCUSSION

I COLLATERAL ESTOPPEL

Hartford contends that plaintiffs are estopped by Lovelace's second degree murder conviction from asserting a claim of coverage against Hartford. This claim of collateral estoppel is founded upon a provision of the insurance policy ⁵ and Insurance Code section 533. ⁶

In Bernhard v. Bank of America (1942) 19 Cal.2d 807, 122 P.2d 892, this court rejected the mutuality doctrine and recognized the twofold aspect of res judicata. We there pointed out that the doctrine not only bars relitigation of the same cause of action once a final determination has been made by a court of competent jurisdiction, but it also precludes a reexamination as between the parties or their privies of any issue necessarily decided if the issue is involved in any subsequent lawsuit brought on a different cause of action. (Id., at p. 810, 122 P.2d 892.) Thus, we concluded, a party will be collaterally estopped from relitigating an issue only if (1) the issue decided in a prior adjudication is identical with that presented in the action in question; And (2) there was a final judgment on the merits; And (3) the party against whom the Building upon the principles enunciated in Bernhard, this court in Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd. (1962) 58 Cal.2d 601, 25 Cal.Rptr. 559, 375 P.2d 439, held that a party will be estopped from litigating an issue in a civil action where the issue had necessarily been determined by a prior criminal conviction so long as all three requirements set forth in Bernhard are met.

plea is asserted was a party or in privity with a party to the prior adjudication. (id., at p. 813, 122 P.2d 892.) this requirement of identity of parties or privity is a requirement of due process of law. (Id., at p. 812, 122 P.2d 892; Blonder-Tongue v. University Foundation (1971) 402 U.S. 313, 329, 91 S.Ct. 1434, 28 L.Ed.2d 788.)

Hartford's position, simply stated, is this: Dr. Lovelace, it is urged, would be estopped from denying the willfulness of his act in killing Dr. Clemmer in any subsequent action against his insurer, that issue having been necessarily determined by the second degree murder conviction. ⁷ Dr. Clemmer's Survivors, defendant argues, are in privity with Dr. Lovelace because whatever rights they have are derived from Lovelace's insurance policy, and therefore, defendant concludes, those survivors are also collaterally estopped as against Hartford from relitigating the issue of willfulness. For the reasons set forth below, however, we have concluded that the requisite privity between plaintiffs and Dr. Lovelace which would justify application of the doctrine of collateral estoppel is lacking where, although plaintiffs' rights against Hartford are based on Lovelace's insurance policy, plaintiffs' interests in litigating the issue of willfulness differed from those of Dr. Lovelace and were therefore not adequately represented by him in his prior criminal trial.

Privity is a concept not readily susceptible of uniform definition. Traditionally it has been held to refer to an interest in the subject matter of litigation acquired after rendition of the judgment through or under one of the parties, as by inheritance, succession or purchase. (Bernhard, supra, 19 Cal.2d at p. 811, 122 P.2d 892.) The concept has also been expanded to refer to a mutual or successive relationship to the same rights of property, or to such an identification in interest of one person with another as to represent the same legal rights (Zaragosa v. Craven (1949) 33 Cal.2d 315, 202 P.2d 73; Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd., supra, 58 Cal.2d at p. 604, 25 Cal.Rptr. 559, 375 P.2d 439; Rynsburger v. Dairymen's Fertilizer Coop., Inc. (1968) 266 Cal.App.2d 269, 72 Cal.Rptr. 102) and, more recently, to a relationship between the party to be estopped and the unsuccessful party in the prior litigation which is "sufficiently close" so as to justify application of the doctrine of collateral estoppel (Lynch v. Glass (1975) 44 Cal.App.3d 943, 119 Cal.Rptr. 139; People v. One 1964 Chevrolet Corvette Convertible (1969) 274 Cal.App.2d 720, 731, 79 Cal.Rptr. 447; People ex rel. State of Cal. v. Drinkhouse (1970) 4 Cal.App.3d 931, 939, 84 Cal.Rptr. 773.)

Notwithstanding expanded notions of privity, collateral estoppel may be applied only if due process requirements are satisfied. (Blonder-Tongue, supra; Bernhard, supra; Dilliard v. McKnight (1949) 34 Cal.2d 209, 214-215, 209 P.2d 387.) In the context of collateral estoppel, due process requires that the party to be estopped must have had an identity or community of interest with, and adequate representation by, the losing party in the first action as well as that the circumstances must have been such that the party to be estopped should reasonably have expected to be bound by the prior adjudication. (Lynch v. Glass, supra, 44 Cal.App.3d at p. 948, 119 Cal.Rptr. 139.) Thus, in deciding whether to apply collateral estoppel, the court must balance the rights of the party to be estopped against the need for applying...