Allstate Indem. Co. v. Hieber

• Decision Date: 17 December 2014
• Docket Number: No. 1–13–2557.,1–13–2557.
• Citation: 24 N.E.3d 139
• Parties: ALLSTATE INDEMNITY COMPANY, Plaintiff–Appellee, v. Louise HIEBER, Special Administrator of the Estate of Holly Hieber, deceased, Defendant–Appellant (Osvaldo Salazar, Manuel Salazar, and Graciela Salazar, Defendants).
• Court: United States Appellate Court of Illinois

24 N.E.3d 139

ALLSTATE INDEMNITY COMPANY, Plaintiff–Appellee

v.Louise HIEBER, Special Administrator of the Estate of Holly Hieber, deceased, Defendant–Appellant (Osvaldo Salazar, Manuel Salazar, and Graciela Salazar, Defendants).

No. 1–13–2557.

Appellate Court of Illinois, First District, Third Division.

Dec. 17, 2014.

O'Connor Law Group, LLC, of Chicago (Bryan J. O'Connor, Jr., of counsel), for appellant.

Morse, Bolduct & Dinos, LLC, of Chicago (Peter C. Morse and Cynthia Ramirez, of counsel), for appellee.

OPINION

Justice MASON

delivered the judgment of the court, with opinion.

¶ 1 The trial court granted plaintiff Allstate Indemnity Company summary judgment, holding that it is not required to defend or indemnify Osvaldo Salazar, Manuel Salazar, and Graciela Salazar for an accidental shooting that took the life of Holly Hieber. Defendant Louise Hieber, as special administrator of her daughter's estate, appeals. We agree with the trial court that an exclusion in Allstate's policy of homeowners insurance applies and, therefore, affirm.

¶ 2 BACKGROUND

¶ 3 Allstate issued a homeowners policy to the Salazars effective March 2011. In that policy, Allstate agreed, in relevant part, to “pay damages which an insured person becomes legally obligated to pay because of bodily injury * * * arising from an occurrence.” The policy defines an “occurrence” as “an accident” resulting in bodily injury. The policy also contains the following exclusion:

“We do not cover any bodily injury or property damage intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person. This exclusion applies even if:

(a) Such insured person lacks the mental capacity to govern his or her conduct;

(b) Such bodily injury or property damage is of a different kind or degree than intended or reasonably expected; or

(c) Such bodily injury or property damage is sustained by a different person than intended or reasonably expected.

This exclusion applies regardless of whether or not such insured person is actually charged with, or convicted of a crime.”

¶ 4 The following facts are taken from the record in the criminal case against Osvaldo Salazar.

¶ 5 On July 10, 2011, Brittany Garcia spent the day with her friends at the beach, including Hieber, Osvaldo, Heather Davis, and Oscar Barragan. At the beach they drank beer, took Xanax and smoked marijuana. They returned to Osvaldo's house after purchasing more beer and hung out in the garage. Osvaldo pulled out a .25–caliber semiautomatic handgun—which he had purchased on the street—to show to his male friends. He pulled back the slide on the top of the gun while displaying it to ensure that it was loaded.

¶ 6 Davis told Osvaldo to put the gun away before he hurt somebody because it had been pointing toward her as he showed it off. Osvaldo put the gun away in the garage, but took it out again later to show off to other friends who showed up. Osvaldo gave the gun to Barragan to hold. Barragan took the magazine out and saw there were bullets in it. He held the gun and magazine for a while, then put the magazine back in and returned the gun to Osvaldo. Barragan did not recall if the safety was on when he returned the gun to Osvaldo.

¶ 7 Someone approached Hieber to see if she wanted to go get a keg of beer and buy more marijuana. Hieber agreed. At that point, Hieber, Osvaldo, and Barragan were the only people in the garage. Hieber turned around to leave and Osvaldo's gun discharged. Hieber lay on the floor of the garage, shot and bleeding from her head, the gun in Osvaldo's hand. No one saw how Osvaldo was holding the gun or what he was doing with it when it discharged. Osvaldo ran from the scene and hid the gun farther down the alley about five houses away. When police arrived, Osvaldo and the others initially told them Hieber had been shot in a drive-by shooting. When the spent casing was located under Hieber's body, police suspected the story was not true. While in custody, Osvaldo admitted that he accidently shot Hieber, who died the next day. Osvaldo later took police to the location in the alley where he had hidden the gun. The gun had one live round in the chamber and four live rounds in the magazine.

¶ 8 The State charged Osvaldo with four crimes, including involuntary manslaughter. 720 ILCS 5/9–3(a)

(West 2010). A person commits the offense of involuntary manslaughter “if his acts whether lawful or unlawful which cause the death are such as are likely to cause death or great bodily harm to some individual, and he performs them recklessly.” Id. After a bench trial, the court found Osvaldo guilty as charged. Specifically, the court found that Osvaldo had been drinking and decided to show off his handgun to his friends:

“I can think of few things more reckless, careless, wanton and brazen than * * * to take a loaded gun among intoxicated people and start waving it around.”

¶ 9 In 2012, Hieber's estate filed a complaint against the Salazars, alleging that Osvaldo negligently handled the gun, and that Osvaldo's parents (Manuel and Graciela) negligently stored the gun and allowed Osvaldo access to it. The Salazars tendered the claim to Allstate. Allstate filed a declaratory judgment action against Hieber's estate and the Salazars, seeking a declaration that it was not obligated to defend or indemnify the Salazars in the underlying action. The trial court granted summary judgment to Allstate, finding that the exclusion in Allstate's policy for bodily injury reasonably expected to result from the insured's criminal acts applied and, therefore, Allstate was not obligated to defend or indemnify the Salazars in the underlying suit. Hieber's estate appealed.

¶ 10 STANDARD OF REVIEW

¶ 11 Summary judgment is appropriate where the pleadings, depositions, admissions, and affidavits—when construed against the moving party—show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. Indian Harbor Insurance Co. v. MMT Demolition, Inc., 2014 IL App (1st) 131734, ¶ 25, 382 Ill.Dec. 695, 13 N.E.3d 108

. We review the grant of summary judgment de novo. Id. ¶ 26.

¶ 12 ANALYSIS

¶ 13 Courts interpret insurance policies as contracts and give effect to the parties' intentions as expressed in the policy. American Family Mutual Insurance Co. v. Jeris,

376 Ill.App.3d 1070, 1072–73, 316 Ill.Dec. 264, 879 N.E.2d 331 (2007). We apply clear and unambiguous terms according to their plain meaning, while ambiguous terms should be construed against the insurer. Id. at 1073, 316 Ill.Dec. 264, 879 N.E.2d 331.

¶ 14 As noted above, Allstate's policy excludes coverage for bodily injury “intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person.” The plain meaning of this provision excludes coverage in two circumstances. First, coverage is excluded when the insured intended to inflict bodily harm. Allstate Insurance Co. v. Brown, 16 F.3d 222, 225 (7th Cir.1994)

. The record in the criminal trial makes clear that Osvaldo did not intend to injure or kill Hieber. See Aetna Casualty & Surety Co. v. Freyer, 89 Ill.App.3d 617, 620, 44 Ill.Dec. 791, 411 N.E.2d 1157 (1980) (defining “intent” in exclusionary clause as desiring consequences of an act or believing that the consequences are substantially certain to occur). As such, coverage is not excluded under the intended-injury part of the exclusion.

¶ 15 As to the second part of the exclusion, the policy inquires whether the bodily injury was such that it “may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person.” As it applies here, the exclusion precludes coverage where the injury is the reasonably expected result of the insured's criminal act. Our inquiry into the “act” portion of the exclusion is simple. Because Osvaldo was convicted after trial of involuntary manslaughter, under any definition of the word, Osvaldo's act of handling the gun was “criminal.” See Black's Law Dictionary 430 (9th ed. 2009) (“Having the character of a crime; in the nature of a crime * * *.”); Webster's Third New International Dictionary 536 (1993) ( “involving or being a crime”). The only issue then is whether it can be said that Hieber's injury could reasonably be expected to result from Osvaldo's criminal act.

¶ 16 Allstate first argues that Osvaldo's criminal conviction collaterally estops Hieber's estate from contending that Hieber's death was not the reasonably expected result of Osvaldo's criminal act. In support, Allstate cites American Family Mutual Insurance Co. v. Savickas, 193 Ill.2d 378, 250 Ill.Dec. 682, 739 N.E.2d 445 (2000)

. In Savickas, the insured shot and killed a man and was convicted of first degree murder. Id. at 380, 250 Ill.Dec. 682, 739 N.E.2d 445. At the insured's criminal trial, he “admitted that the gun did not go off accidentally” and “that he intentionally pointed the gun at the decedent and intentionally pulled the trigger while the gun was so aimed.” Id. at 382, 250 Ill.Dec. 682, 739 N.E.2d 445. The victim's estate sued the insured for wrongful death, and the insured tendered the claim to his homeowners insurance carrier. Id. at 380–81, 250 Ill.Dec. 682, 739 N.E.2d 445. The insurance company filed a declaratory judgment action, alleging no coverage, and the trial court granted summary judgment as the policy excluded coverage for injury “ ‘which is expected or intended by any insured.’ ” Id. at 382, 250 Ill.Dec. 682, 739 N.E.2d 445.

¶ 17 Our supreme court held that the insured's criminal conviction constituted conclusive proof of the facts on which it was based, including the insured's intent, and that collateral estoppel precluded relitigation of those issues in the declaratory judgment action. Id. at 387, 250 Ill.Dec. 682, 739 N.E.2d 445. Expressly overruling the holding of Thornton v. Paul, 74 Ill.2d 132, 151, 23 Ill.Dec. 541, 384 N.E.2d 335 (1978)

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