Dostal v. Strand

• Citation: 405 Wis.2d 572,984 N.W.2d 382,2023 WI 6
• Decision Date: 26 January 2023
• Docket Number: 2020AP1943
• Parties: Lindsey DOSTAL, Individually and as Special Administrator of the Estate of Haeven Dostal, Plaintiff-Appellant-Cross-Respondent-Petitioner, v. Curtis STRAND and ABC Insurance Company, Defendants, State Farm Fire and Casualty Company, Intervening-Defendant-Respondent-Cross-Appellant.
• Court: United States State Supreme Court of Wisconsin

405 Wis.2d 572

984 N.W.2d 382

2023 WI 6

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

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

No. 2020AP1943

Supreme Court of Wisconsin.

Oral Argument: October 6, 2022

Opinion Filed: January 26, 2023

For the plaintiff-appellant-cross-respondent-petitioner, there were briefs filed by Michael J. Brose, Mackenzie E. Campbell, Morgan A. Richie, and Doar, Drill & Skow, S.C., New Richmond. There was an oral argument by Mackenzie E. Campbell.

For the intervening-defendant-respondent-cross-appellant, there was a brief filed by William L. Moran, Maya H. Digre, and HAWS-KM, P.A., St. Paul. There was an oral argument by William L. Moran.

An amicus curiae brief was filed by Michael J. Cerjak and Cannon & Dunphy, S.C., Brookfield, for Wisconsin Association for Justice.

ANN WALSH BRADLEY, J., delivered the majority opinion of the Court, in which DALLET, HAGEDORN, and KAROFSKY, JJ., joined. ZIEGLER, C.J., filed a dissenting opinion, in which ROGGENSACK and REBECCA GRASSL BRADLEY, JJ., joined.

ANN WALSH BRADLEY, J.

¶1 The petitioner, Lindsey Dostal (Dostal), both individually and as special administrator of the estate of Haeven Dostal, seeks review of a court of appeals decision affirming the circuit court's grant of summary and declaratory judgment in favor of State Farm.¹ The court of appeals determined that Curtis Strand's conduct did not constitute an "occurrence" covered by the State Farm policy at issue because his conviction for second-degree reckless homicide established that the death was not the result of an accident.

¶2 Dostal contends that Strand's criminal conviction does not preclude a finding that Haeven's death was the result of an accident. She further advances that the State Farm policy provides coverage for her claims against Strand and that neither the resident relative nor the intentional acts exclusion bars coverage.

¶3 In contrast, State Farm asserts that issue preclusion bars relitigation of the issue of whether Haeven's death was the result of an accident. It argues that Strand's criminal conviction is dispositive on the issue of available insurance coverage under Strand's policy, and that there is no coverage for Dostal's claims. State Farm further contends that the policy's resident relative and intentional acts exclusions preclude coverage.

¶4 We conclude that issue preclusion does not bar Dostal from seeking insurance coverage for her claims against Strand. The issue of whether Strand's conduct constituted an "accident" was not actually litigated in the prior criminal proceeding. Additionally, we conclude that there are genuine issues of material fact regarding the application of the resident relative and intentional acts exclusions such that summary judgment is inappropriate.

¶5 Accordingly, we reverse the decision of the court of appeals and remand to the circuit court for further proceedings consistent with this opinion.

I

¶6 The following facts are undisputed. Additional facts will be set forth as necessary in our analysis.

¶7 Dostal and Strand were in an on-and-off relationship for 17 years. Dostal gave birth to Haeven on April 3, 2017, and Strand was subsequently adjudicated the father.

¶8 On July 11, 2017, Haeven passed away as a result of head trauma

that occurred while she was in Strand's care. Law enforcement conducted an investigation into Haeven's death.

¶9 As part of the investigation, law enforcement spoke with Strand multiple times, during which Strand gave inconsistent accounts of what happened. In a statement given to police on July 10, 2017, Strand said that Haeven fell off of his knee and hit the floor as he attempted to burp her. Strand was interviewed again in November of 2017, at which time he stated that he was warming a bottle, turned around and hit the kitchen island, dropping Haeven to the floor. In both versions of events, Strand put Haeven to bed without seeking medical attention.

¶10 The State initially charged Strand with first-degree reckless homicide² and resisting or obstructing an officer.³ After a jury trial, at which Dostal was a witness, the jury convicted Strand of second-degree reckless homicide⁴ and resisting or obstructing an officer.

¶11 Dostal subsequently brought this civil action for negligence and wrongful death against Strand. With regard to the negligence claim, the complaint alleges 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." As to the wrongful death claim, Dostal alleged that she "has sustained damages due to the wrongful death of her daughter, loss of the society and companionship of her child, and has suffered pecuniary loss and will continue to suffer those losses into the future."

¶12 Strand tendered the matter to State Farm, his homeowner's insurer, seeking defense and indemnification. State Farm moved to intervene, bifurcate liability and coverage proceedings, and stay liability proceedings.⁵ The circuit court granted State Farm's motion and went ahead with coverage proceedings.

¶13 State Farm moved for summary and declaratory judgment, arguing that its policy did not provide coverage for Dostal's claims and that it thus had no duty to defend or indemnify Strand. Specifically, State Farm asserted that there was no "occurrence" (defined as an "accident") triggering coverage. In State Farm's view, the fact that Strand was convicted of second-degree reckless homicide, which required that the jury find that Strand created an unreasonable and substantial risk of death or great bodily harm and that he was aware of that risk, precluded the events at issue "from being labeled a mere ‘accident.’ " State Farm additionally argued that even if there were an "occurrence," coverage remains precluded under a "resident relative" exclusion and an "intentional acts" exclusion.

¶14 The circuit court agreed with State Farm and granted its motion for summary and declaratory judgment. It concluded that "[t]he criminal recklessness in this case requires more than accidental conduct." With regard to the resident relative exclusion, the circuit court determined that "[t]here are disputed material facts as to whether or not Haeven was a resident under the State Farm policy." Finally, as to the intentional acts exclusion, the circuit court concluded that this exclusion "also operates to bar coverage in this case because Strand's intent can be inferred as a matter of law."

¶15 Dostal appealed the circuit court's grant of summary judgment and declaratory judgment in favor of State Farm. Additionally, State Farm cross-appealed from the portion of the circuit court's decision finding disputed issues of material fact as to the application of the resident relative exclusion.

¶16 The court of appeals affirmed the circuit court's decision in a published opinion. Dostal v. Strand, 2021 WI App 79, 399 Wis. 2d 781, 967 N.W.2d 157. Its analysis mirrored that of the circuit court. Namely, the court of appeals determined:

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.

Id., ¶3. Because the court of appeals concluded that there was no occurrence, it declined to address the resident relative and intentional acts exclusions. Id., ¶3 n.1. Dostal petitioned for this court's review.

II

¶17 We are called upon to review the court of appeals’ determination that the circuit court properly granted summary and declaratory judgment to State Farm. We review a summary judgment determination independently of the determinations rendered by the circuit court and court of appeals, applying the same methodology as the circuit court. MacLeish v. Boardman & Clark LLP, 2019 WI 31, ¶22, 386 Wis. 2d 50, 924 N.W.2d 799. Summary judgment is appropriate where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Id.

¶18 The grant or denial of declaratory judgment is addressed to the circuit court's discretion, but when the exercise of such discretion turns on a question of law, we likewise review the question independently of the circuit court and court of appeals’ determinations. Olson v. Farrar, 2012 WI 3, ¶24, 338 Wis. 2d 215, 809 N.W.2d 1. Where the circuit court's grant of declaratory judgment turns upon its interpretation of an insurance policy, a question of law is presented. Id.

¶19 In our review, we examine whether issue preclusion applies. "Whether issue preclusion is a potential limit on litigation in an individual case is a question of law, on which we give no deference to the circuit court's decision." Mrozek v. Intra Fin. Corp., 2005 WI 73, ¶15, 281 Wis. 2d 448, 699 N.W.2d 54.

¶20 Finally, our review requires us to interpret the State Farm insurance policy at issue. The interpretation of an insurance policy presents a question of law we review without deference to the circuit court or court of appeals. Shugarts v. Mohr, 2018 WI 27, ¶18, 380 Wis. 2d 512, 909 N.W.2d 402. "A policy's terms are interpreted as they would be understood from the perspective of a reasonable person in the...