Country Mut. Ins. Co. v. Duncan, 85-2572

• Decision Date: 01 July 1986
• Docket Number: No. 85-2572,85-2572
• Citation: 794 F.2d 1211
• Parties: COUNTRY MUTUAL INSURANCE COMPANY, Plaintiff-Appellant, v. Alvina J. DUNCAN, Special Administrator for Charles Hartzell, Deceased, and Clarence Lindhorst, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1211

794 F.2d 1211

COUNTRY MUTUAL INSURANCE COMPANY, Plaintiff-Appellant, v. Alvina J. DUNCAN, Special Administrator for Charles

Hartzell, Deceased, and Clarence Lindhorst,

Defendants-Appellees.

No. 85-2572.

United States Court of Appeals, Seventh Circuit.

Argued Feb. 25, 1986.

Decided July 1, 1986.

Cornelius Thomas Ducey, Jr., Ducey, Feder & Ducey, Ltd., Belleville, Ill., for plaintiff-appellant.

Mark R. Osland, Crowder & Scoggins, Ltd., Columbia, Ill., for defendants-appellees.

Before FLAUM and RIPPLE, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

FLAUM, Circuit Judge.

Country Mutual Insurance comes before this court following an unsuccessful attempt to rid itself of its alleged contractual obligation to defend Clarence Lindhorst from a wrongful death action brought by the estate of a man Lindhorst was convicted of murdering. Country Mutual disputes whether as a matter of law, or under the particular facts of this case, a person who pleads guilty to voluntary manslaughter can be found to have acted "unintentionally" within the meaning of an insurance contract. It is Country Mutual's contention that the criminal conviction collaterally estops Lindhorst from claiming in a subsequent civil action that he did not act intentionally. Under the law of Illinois, the law that we, sitting in diversity, must adhere to, Lindhorst's guilty plea would not be given preclusive effect and Country Mutual has not otherwise convinced us that the jury verdict should be disturbed.

I.

This case arises out of a macabre drama that was played out in the pre-dawn hours of March 7, 1980 in the town of Columbia, Illinois. On the night of March 6 Clarence Lindhorst went out with no intention of returning home until the next day. His wife, Desiree, also had plans for the evening with an old high school friend, Charles Hartzell, the eventual victim. Clarence abandoned his plans and returned home at approximately 1:00 a.m. At 7:00 a.m. Clarence, who was asleep in the upstairs bedroom, awoke only to be startled by noises he heard coming from downstairs. Convinced that a burglar was downstairs he quickly dressed and grabbed his rifle. The evidence indicates that Clarence was so agitated by the threat of a break-in that he lost control of his bodily functions. He then preceded downstairs in search of the source of the early morning noises.

Clarence explored the first floor of his home but was unable to find any evidence of entry. Turning a corner he came upon the extra bedroom where he saw his wife in the bed sleeping alongside Charles Hartzell. Almost instantaneously Clarence raised the rifle to his waist and from approximately eight feet away he fatally shot Desiree's companion. Immediately after pulling the trigger Clarence went into a state of shock, unable to do anything but stare at the body.

According to the record Desiree, who was awakened by the shot, expressed surprise to find Clarence home and inquired about the location of his van. Ironically it is the van that set the wheels of this tragedy into motion. It was Clarence's habit to park the van outside, but because he had washed it earlier in the day Clarence put the van in the garage for the night. Thus, Desiree was presumably unaware that her husband was home. Clarence was, apparently, too agitated to respond to her questions about the location of the van leading her to conclude that the vehicle was stolen. She then left the room to call the police in order to report the theft of the van. Only upon her return did she acknowledge that a man had been shot by turning to Clarence and saying "[Y]ou shot Charlie." At this point Clarence regained enough of his wits to phone the police to inform them of the shooting and to turn himself in.

Although he was charged with murder, Clarence entered into negotiations with the prosecutor resulting in the entry of a guilty plea to one count of voluntary manslaughter. He received a sentence of 60 days in jail on a work release program and four years probation.

On March 4, 1982 Alvina J. Duncan, the special administrator for Charles Hartzell, filed a wrongful death suit against Clarence Lindhorst. In response Clarence made a demand upon Country Mutual to defend and indemnify him under a homeowner's insurance policy, which provided that:

We promise to pay on behalf of an insured for damages resulting from bodily injury or property damage caused by an occurrence, ...

The term "occurrence" was defined as:

... an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage.

The policy's exclusions included:

Liability and Medical Payments, Coverages A & B, does not apply to bodily injury or property damage:

1. Caused intentionally by or at the direction of an insured.

Country Mutual took the position that the first exclusion precluded any liability on its part to Clarence and sought declaratory relief to that effect in federal district court.

The district court refused to accept the insurance company's contention that the plea of guilty to voluntary manslaughter estopped Clarence from denying the intentionality of his actions. The conviction was admitted into evidence along with extensive expert and lay testimony about Clarence's psychological state before, during, and after the tragedy. The case was submitted to the jury for the limited purpose of determining intent and a verdict was returned finding that Clarence had not acted "intentionally." The jury apparently found the defense's claim of irresistible impulse convincing. Based on this finding the district judge concluded that Country Mutual was obligated under the insurance contract to defend and indemnify Clarence Lindhorst.

Country Mutual comes before this court seeking review of three decisions below. First, and foremost, Country Mutual argues that under Illinois law a guilty plea to voluntary manslaughter collaterally estops the defendants from contesting intent, thus entitling the insurance company to summary judgment as a matter of law. Second, the company asserts that the court committed reversible error by failing to give plaintiff's instructions on the elements of voluntary manslaughter and on the issue of insurance coverage. Third, Country Mutual claims that the district judge erred in interpreting the insurance contract as covering these events.

II.

As a preliminary matter Country Mutual's alternative factual argument concerning the sufficiency of the evidence, as opposed to its three "legal" claims enumerated above, can be summarily disposed. Both sides put forth extensive evidence concerning Clarence's psychological make-up, as well as a factual account of the fateful evening and subsequent developments, including the plea of guilty to one count of voluntary manslaughter. Lacking any special insight into the workings of the human mind that was not possessed by the jury, this court, under applicable Illinois law, cannot on this record definitively determine that Country Mutual should have received a directed verdict on the issue of intent. See Kuziw v. Lake Engineering Co., 586 F.2d 33, 35 (7th Cir.1978) (federal court sitting in diversity where Illinois law governs should follow standard for directed verdicts and judgments notwithstanding the verdict set out in Pedrick v. Peoria & Eastern Railroad, 37 Ill.2d 494, 510, 229 N.E.2d 504, 513-14 (1962) ("In our judgment verdicts ought to be directed and judgments n.o.v. entered only in those cases in which all evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand.")). Thus, in the absence of a legal barrier to the submission of the intent issue to the jury, the verdict of lack of intent will not be disturbed.

The Collateral Estoppel Effect of the Guilty Plea

As a federal court sitting in diversity on a case arising in Illinois we are bound under the doctrine of Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), to apply the law of Illinois. See Ace Cycle World, Inc. v. American Honda Motor Co., 788 F.2d 1225, 1228 (7th Cir. April 11, 1986). Country Mutual attempts to characterize this case as one of those tough situations where a federal court must determine the law of a state in the absence of guidance from the state. In fact they have suggested that we certify the collateral estoppel effect issue to the Illinois Supreme Court. Despite Country Mutual's best efforts to paint a picture of confusion and error, the law in Illinois regarding the preclusive effects of guilty pleas in civil actions is fairly clear and the district judge acted in accord with that law.

The Illinois Supreme Court in Thornton v. Paul, 74 Ill.2d 132, 23 Ill.Dec. 541, 548-49, 384 N.E.2d 335, 342-43 (1979), held that proof of a criminal conviction is admissible in a subsequent civil action as prima facie evidence of the facts underlying the conviction. In Thornton the court specifically distinguished the use of criminal convictions from the collateral use of guilty pleas. Country Mutual seizes this statement as evidence that the scope of the civil use of guilty pleas is an open question in Illinois. In reality it appears that the opposite is true; Thornton dealt with the "open issue," the use of convictions. The use of guilty pleas was well-established prior to that decision.

While Country Mutual correctly asserts that there is no Illinois Supreme Court ruling explicitly on the admissibility of guilty pleas, a substantial number of Illinois appellate courts and federal courts sitting in diversity have held that a guilty plea is introduced into evidence as an admission against interest. See Galvan v. Torres, 8 Ill.App.2d 227, 131 N.E.2d 367 (1956). See also Brown v. Green, 738 F.2d 202, 206 (7th Cir.1984); Waldron v. Hardwick, 406 F.2d 86, 90 (7th Cir.1969); People v. Powell, 107 Ill.App.3d 418, 63 Ill.Dec. 336, 338, 437 N.E.2d 1258,...