Cretens v. State Farm Fire & Cas. Co.
| Decision Date | 01 March 1999 |
| Docket Number | No. Civ. 97-440-TUC-WFN (JCC).,Civ. 97-440-TUC-WFN (JCC). |
| Citation | 60 F.Supp.2d 987 |
| Court | U.S. District Court — District of Arizona |
| Parties | James CRETENS and Bonita Cretens, individually and as the next friends of Amber Nicole Cretens, Plaintiff, v. STATE FARM FIRE & CASUALTY COMPANY, a foreign corporation, Defendant. |
WM. FREMMING NEILSEN, Chief Judge.
Pursuant to 28 U.S.C. § 636, Fed. R.Civ.P. 62(b) and the Rules of Practice of the District, this matter was referred to United States Magistrate James Carruth for Report and Recommendation ("Report"). Defendant State Farm moved for partial summary judgment on Plaintiffs' breach of contract claim based on the intentional act and household exclusion clauses. On November 20, 1998, Magistrate Judge Carruth filed a Report and Recommendation and copies were mailed to all parties. The Report found questions of fact exist as to whether the insured had the capacity to form intent for purposes of the intentional act exclusion. The Report also found that there was a question of fact as to whether the household exclusion was enforceable. Consequently, Magistrate Judge Carruth recommends that State Farm's motion be denied.
State Farm filed an objection to the Report to which Plaintiffs filed a response. State Farm filed a reply brief. The Court then allowed Plaintiffs to file a supplemental brief. On February 17, 1999, this Court held a telephonic conference. Having reviewed the file, heard from counsel, and been fully advised in this matter, the Court declines to adopt the conclusions of the magistrate judge's Report and Recommendation. The Report includes the factual bases underlying this case and provides a comprehensive discussion of Arizona's insurance law in the area of intentional act clauses. Thus, while this Court has conducted a de novo review of the record, it will only repeat those facts or law relevant to the present discussion.
When Jeffrey Poer purchased homeowner's insurance from State Farm, the policy included an intentional act exclusion. This exclusion precludes coverage for damages which are "expected or intended" by an insured. See Defendant's Separate Statement of Facts in Support of Motion For Partial Summary Judgment ("DSOF"), Ex. 1 at 15. State Farm argues that this intentional act exclusion coupled with A.R.S. § 13-807, bars Plaintiffs' breach of contract claims.
With A.R.S. § 13-807, the Arizona legislature has statutorily provided that an insured may not deny an essential allegation of a criminal offense in a subsequent civil trial.1 The insured, Jeffrey Poer, killed his wife and was later convicted by a jury of voluntary manslaughter during "sudden quarrel or heat of passion." At trial, Poer raised an insanity defense which the jury rejected when it found him guilty of manslaughter.
The magistrate judge found that because a rational jury could differ as to whether Poer had the mental capacity to form intent at the time he killed his wife, summary judgment was not appropriate. This Court disagrees. While the discussion is excellent on general principles of insurance law with respect to intent, the cases relied upon by the magistrate judge did not involve an insured convicted of an intent crime. Significantly, the Report contained no meaningful analysis of the two cases, K.B. v. State Farm Fire and Casualty, 189 Ariz. 263, 941 P.2d 1288 (Ariz.Ct.App.1997) and Western Agricultural Ins. v. Brown, 1998 WL 778014 (Ariz.Ct.App.1998) which did involve convictions of intent crimes and the impact of section 13-807 to a later civil suit.
In the case relied upon by Plaintiffs and the magistrate judge, Republic v. Feidler, 178 Ariz. 528, 875 P.2d 187 (App.1993), the Defendant, while under the influence of alcohol and drugs, stabbed the victim in the back several times causing severe injuries. The defendant pled no contest to aggravated assault and the victim brought suit against the defendant's homeowner's policy. Aggravated assault requires a mental state of "intentionally, knowingly, or recklessly" causing "serious injury." A.R.S. §§ 13-1203(A)(1) and 13-1204(A)(1). As defined in A.R.S. § 13-105(6)(a)(b) and (c), recklessness is the minimum mental state for aggravated assault. Feidler, 178 Ariz. at 533, 875 P.2d at 192. Since that case concerned a "no contest plea," the minimum mental state necessary for the insured/defendant in Feidler, was that he acted recklessly. Id. Since recklessness did not rise to the level of intentional conduct for purposes of the intentional act exclusion, Feidler held that A.R.S. § 13-807 did not bar the parties from litigating whether the insured "lacked the mental capacity to intend injury for insurance coverage purposes." Id.
Feidler is factually distinguishable from K.B. v. State Farm, supra. In K.B., John, the perpetrator, pled guilty to attempted child molestation. When the victim brought suit for coverage under the homeowner's policy, the intentional act exclusion was found to apply based on John's guilty plea since it involved an element of intent. K.B., 189 Ariz. at 267, 941 P.2d at 1292 (). K.B. held that under section 13-807, the plaintiff was estopped from using John's intoxication to deny that he acted intentionally. Id. Therefore, K.B. held that coverage was precluded under the intentional acts exclusion. Id.
Western Agricultural Ins. v. Brown, supra, reached a similar result. In Western Agricultural, the defendant asserted he was insane when he shot and killed his wife and her companion. The jury rejected the insanity defense and convicted the defendant of first degree murder. In the subsequent civil suit brought by the victims' survivors, the insurance company asserted that based on the defendant's conviction, the plaintiffs were barred as a matter of law by the intentional acts exclusion. The Western Agricultural court agreed and held that where the insured has been convicted of premeditated first degree murder, § 13-807 collaterally estops the insured from asserting mental derangement to avoid the intentional acts exclusion. Western Agricultural, 1998 WL at * 3.
Since Poer had not been convicted of first degree murder with respect to his wife's killing, the magistrate judge apparently found Western Agricultural not helpful in determining whether Poer "expected or intended" the act for insurance purposes. See Report at 17 n. 9. K.B. and Western Agricultural, however, are the only two published cases which analyze the applicability of an intent crime conviction to a subsequent civil lawsuit for homeowner's insurance coverage. Thus, this Court concludes that K.B. and Western Agricultural cannot be so easily discounted. As in K.B. and Western Agricultural, the threshold inquiry must begin with Poer's criminal trial and whether the jury found that he intentionally or knowingly killed his wife. If the answer to that question is yes, then A.R.S. § 13-807 precludes the Plaintiffs from relitigating whether Poer had the capacity to commit an act which was either expected or intended. For the answer, the Court turns to the record of the state criminal proceedings.
Poer was charged with first degree murder of both Kim Poer and her friend, Susan Moore. DSOF, Ex. 3. The case went to trial and during the final instructions the jury was instructed on first degree murder, second degree murder, and manslaughter. Id., Ex. 4 at 19-24. With respect to manslaughter, the jury was instructed:
The crime of manslaughter requires proof of the following three things:
1) The defendant intentionally killed another person; or the defendant caused the death of another person by conduct which he knew would cause death or serious physical injury; and
2) The defendant acted upon a sudden quarrel or heat of passion; and
3) The sudden quarrel or heat of passion resulted from adequate provocation by the person who was killed.
Id. at 21:25-22:10 (emphasis added). The state trial court defined "adequate provocation" to mean:
conduct or circumstances sufficient to deprive a reasonable person of self control. There must not have been a "cooling off" period between the provocation and the killing.
Id. at 22:11-15. The jury was further instructed that:
If you find the defendant guilty of the crime of manslaughter, you must determine whether or not the offense was a dangerous offense.
Id. at 22:23-25. The jury was given the following definition of dangerous offense:
An offense is a dangerous offense if it involved the intentional or knowing infliction of a serious physical injury or the use or exhibition of a deadly weapon or dangerous instrument.
Id. at 23:1-4 (emphasis added). The state trial court then defined "intentionally" for the jury:
"Intentionally" as used in these instructions means that a defendant's objective is to cause that result or to engage in that conduct.
Id. at 23:5-8. The jury was also instructed:
The existence of intent is one of the questions of fact for your determinations.
Id. at 23:11-12. The state trial court then defined "knowingly" for the jury:
"Knowingly" means that a defendant acted with awareness of or belief in the existence of conduct or circumstances constituting an offense. It does not mean a defendant must have known the conduct was forbidden by law.
Id. at 13-17 (emphasis added). The state trial court also instructed the jury that in order to convict Poer of manslaughter,
The State must prove that the defendant did a voluntary act forbidden by law.
"Voluntary act" means a bodily movement performed consciously and as a result of effort and determination.
Id. at 23:21-25.
At trial, Poer argued that he was not responsible for his criminal conduct by reason of insanity. With respect to that defense, the state trial court instructed...
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