Dostal v. Curtis Strand & Abc Ins. Co.

• Citation: 967 N.W.2d 157,399 Wis.2d 781,2021 WI App 79
• Decision Date: 19 October 2021
• Docket Number: Appeal No. 2020AP1943
• Parties: Lindsey DOSTAL, Individually and as Special Administrator of the Estate of Haeven Dostal, Plaintiff-Appellant-Cross-Respondent, v. Curtis STRAND and ABC Insurance Company, Defendants, State Farm Fire and Casualty Company, Intervening-Defendant-Respondent-Cross-Appellant.
• Court: Court of Appeals of Wisconsin

399 Wis.2d 781

967 N.W.2d 157

2021 WI App 79

Lindsey DOSTAL, Individually and as Special Administrator of the Estate of Haeven Dostal, ^† Plaintiff-Appellant-Cross-Respondent,

v. Curtis STRAND and ABC Insurance Company, Defendants,State Farm Fire and Casualty Company, Intervening-Defendant-Respondent-Cross-Appellant.

Appeal No. 2020AP1943

Court of Appeals of Wisconsin.

Submitted on Briefs: August 10, 2021

Opinion Filed: October 19, 2021

On behalf of the plaintiff-appellant-cross-respondent, the cause was submitted on the briefs of Mackenzie E. Campbell and Michael J. Brose of Doar, Drill & Skow, S.C., New Richmond.

On behalf of the intervening-defendant-respondentcross-appellant, the cause was submitted on the briefs of Casey B. Suszynski, Maya H. Digre, and William L. Moran of HKM, P.A., St. Paul, MN.

Before Stark, P.J., Hruz and Gill, JJ.

GILL, J.

¶1 Lindsey Dostal (hereinafter, "Dostal") appeals a circuit court's grant of summary and declaratory judgment to State Farm Fire and Casualty Company (hereinafter, "State Farm"). The court concluded that State Farm did not provide coverage under Curtis Strand's homeowner's insurance policy (hereinafter, "the Policy") for Dostal's claims against Strand resulting from the death of Dostal and Strand's infant daughter, Haeven Dostal (hereinafter, "Haeven") while she was in Strand's care. The court determined Haeven's death was not the result of an occurrence, which is defined in the Policy as "an accident, including exposure to conditions" that results in bodily injury or property damage during the policy period. In particular, 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.

¶2 Dostal argues that the Policy provides coverage for Haeven's bodily injury and death because they resulted from an accident; at a minimum, she contends there are genuine issues of fact in that regard. Dostal asserts that the circuit court erred by failing to consider disputed facts regarding the injury-causing event that led to Haeven's death. She further asserts that the court's holding is in error because it equates conduct where there is an awareness of a risk of harm with conduct that intentionally causes harm.

Dostal contends that awareness of a risk of harm, by itself, does not mean that an injury-causing event cannot be an accident.

¶3 Under the undisputed facts of this case, we conclude that 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. Because we conclude there was no occurrence, the Policy provides no coverage for Dostal's claim against Strand. Accordingly, we affirm.¹

BACKGROUND

¶4 Dostal and Strand dated on and off for approximately seventeen years, during which time Dostal became pregnant. After being advised of the pregnancy, Strand told Dostal he did not want to be a father and that Dostal should have an abortion. Notwithstanding Strand's objections, Dostal continued the pregnancy. Prior to the child's birth, Dostal and Strand signed a document whereby Strand essentially relinquished all rights and responsibility for the child. They agreed that Dostal would have sole custody and physical placement of their unborn child, and sole power to make all decisions regarding the child's schooling, residence, and healthcare. In addition, it was understood that Strand would have no contact with the child and would pay no support for her.

¶5 Haeven was born on April 3, 2017. Because Haeven was enrolled in insurance benefits through the State of Wisconsin, the State sought reimbursement for Haeven's medical expenses from Strand. Shortly thereafter, the parties’ written agreement was rejected by the State. A child support agency initiated a paternity/child support action to establish Strand's paternity and his obligation to provide support for Haeven.

¶6 Strand was subsequently formally adjudicated Haeven's father. The circuit court ordered that the parties share joint legal custody of Haeven, and Dostal was granted primary physical placement. Strand was granted minimal temporary physical placement and was ordered to pay child support.

¶7 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.

¶8 Strand was charged with first-degree reckless homicide and obstructing an officer. Following a jury trial, Strand was convicted of second-degree reckless homicide and obstructing an officer.

¶9 Thereafter, Dostal commenced this civil lawsuit against Strand and his insurer,² 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." Dostal also asserted a claim for wrongful death, alleging that she had sustained damages and loss of society and companionship as a result of Haeven's death. Strand tendered this matter to State Farm seeking defense and indemnification under the Policy. Thereafter, State Farm moved to intervene and to bifurcate the issue of insurance coverage and stay proceedings on Strand's liability until coverage was determined.

¶10 Strand's policy with State Farm provides, in part:

SECTION II – LIABILITY COVERAGES

COVERAGE[ ] – PERSONAL LIABILITY

If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence , we will:

1. pay up to our limit of liability for the damages for which the insured is legally liable; and 2. provide a defense at our expense by counsel of our choice. We may make any investigation and settle any claim or suit that we decide is appropriate. Our obligation to defend any claim or suit ends when the amount we pay for damages, to effect settlement or satisfy a judgment resulting from the occurrence , equals our limit of liability.

¶11 The Policy defines "occurrence" as "an accident, including exposure to conditions, which results in (a) bodily injury; or (b) property damage; during the policy period." (Formatting and emphasis altered.) The Policy also contains an intentional acts exclusion, which excludes coverage for "bodily injury ... which is either expected or intended by the insured ."

¶12 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. State Farm further argued that even if there was an occurrence, there was no coverage for the claims under the resident relative and intentional acts exclusions 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. Dostal now appeals.

DISCUSSION

¶13 We independently review a grant of summary judgment, using the same methodology as the circuit court. Hardy v. Hoefferle , 2007 WI App 264, ¶6, 306 Wis. 2d 513, 743 N.W.2d 843. Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. WIS. STAT. § 802.08(2) (2019-20).³ Whether to grant or deny a declaratory judgment is within the discretion of the circuit court. Jones v. Secura Ins. Co. , 2002 WI 11, ¶19, 249 Wis. 2d 623, 638 N.W.2d 575. When the exercise of that discretion turns on the interpretation of an insurance policy, which is a question of law, we independently review the circuit court's decision. State Farm Fire & Cas. Co. v. Acuity , 2005 WI App 77, ¶6, 280 Wis. 2d 624, 695 N.W.2d 883.

¶14 Our goal in interpreting an insurance policy is to give effect to the parties’ intent. American Fam. Mut. Ins. Co. v. American Girl, Inc. , 2004 WI 2, ¶23, 268 Wis. 2d 16, 673 N.W.2d 65. We construe a policy as it would be understood by a reasonable person in the position of the insured. Id. If policy language is unambiguous, we enforce the policy 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. Marnholtz v....