Ideal Mut. Ins. Co. v. Winker, 66163

Decision Date19 May 1982
Docket NumberNo. 66163,66163
PartiesIDEAL MUTUAL INSURANCE COMPANY, a Corporation, Appellee, v. Dennis R. WINKER, Appellant.
CourtIowa Supreme Court

Thomas R. Eller of Nash, Eller, Brink & Claussen, Denison, for appellant.

David E. Green, Carroll, for appellee.



In this appeal we determine whether a guilty plea entered in a criminal prosecution precludes the convicted party from relitigating the issue of his criminality in a subsequent declaratory action brought against him by an insurer to construe an exclusionary provision of its policy.

On February 18, 1979, Dennis R. Winker shot and killed his estranged girl friend, Mary Jo Heiman, while she was working as a waitress at the Country Kitchen Cafe in Carroll, Iowa. At the time Winker was an off-duty deputy of the Carroll County Sheriff. He was charged with first-degree murder, but on June 22, 1979, he pled guilty to a charge of second-degree murder after entering into a plea bargain with the county attorney. The district court accepted the plea and sentenced him accordingly.

The administrator of Heiman's estate subsequently brought a civil action against Winker asking damages for wrongful death. At the time of the shooting, Winker was insured under a law enforcement officers comprehensive liability insurance policy issued to the Carroll County Sheriff by Ideal Mutual Insurance Company (Ideal).

Prompted by the administrator's action, Ideal brought the present declaratory action against Winker to determine whether the policy obligated it to defend him in the wrongful death action and to indemnify him in the event he incurred civil liability. Ideal claimed that Winker was off duty and the policy did not cover the incident, and also that the incident came within exclusionary clause (j) of the policy. That clause states:

This insurance does not apply...


(j) to damages assessed against an insured as punitive or exemplary damages or resulting from a criminal act.

(Emphasis added.) Winker filed an answer averring affirmatively inter alia that the death of Mary Jo Heiman was not the result of an intentional criminal act, but rather, a mental breakdown. He asserted that exclusionary clause (j) was therefore inapplicable to deny coverage.

Ideal then filed an application for adjudication of law points seeking a determination that it had no obligation to defend or indemnify Winker when the loss was attributed to his own criminal act and that a mental breakdown, if proven, would not constitute a defense to the terms of exclusionary clause (j). In ruling on the application, the trial court, by agreement of the parties, took judicial notice of the criminal prosecution against Winker and of the guilty plea to the second-degree murder charge. The trial court found that the guilty plea conclusively established for purposes of the declaratory action that Winker had committed a criminal act. The trial court also held that a mental breakdown, even if proven, would not constitute a defense to the exclusionary terms. It therefore concluded that exclusionary clause (j) would apply to deny coverage for the loss resulting from Winker's criminal act regardless of any mental breakdown he may have suffered. The ruling resolved all the issues presented by the declaratory action and, for purposes of appeal, became a final order. See Iowa R.Civ.P. 105.

Winker appealed. He contends in this court that the trial court erred in its adjudication of law points (1) in holding that the guilty plea was conclusive proof of his commission of a criminal act for purposes of the declaratory action, and (2) in holding that a mental breakdown was not a valid defense to exclusionary clause (j). We dispose of the case on the first issue and therefore do not reach the second one.

I. Guilty plea--preclusive effect. The trial court applied the doctrine of issue preclusion and held that Winker's guilty plea in the criminal action conclusively established his commission of a criminal act for purposes of the declaratory action. On appeal Winker concedes that the guilty plea was admissible evidence in the present action, but argues that it should not be given preclusive effect. He alleges that the plea was entered only because of the risk of a first-degree murder conviction and not because he admitted second-degree murder. See State v. Buhr, 243 N.W.2d 546, 550-51 (Iowa 1976); State v. Heisdorffer, 217 N.W.2d 627, 629 (Iowa 1974). Notwithstanding that we do not have the plea of nolo contendere, Winker contends he should be permitted to introduce evidence to explain the circumstances surrounding his guilty plea and to establish his affirmative defense of mental breakdown.

In making that argument Winker relies on a line of cases commencing with Book v. Datema, 256 Iowa 1330, 131 N.W.2d 470 (1964). In Book this court held that the record in a criminal case showing a guilty plea was admissible as an admission in a subsequent civil action arising out of the same event. The court also held, however, that a guilty plea admitted under those circumstances was not to be given preclusive effect and could be explained through the introduction of other evidence. Id. at 1333, 131 N.W.2d at 471. See Farm and City Insurance Company v. Hassel, 197 N.W.2d 360, 364 (Iowa 1972); Nassif v. Pipkin, 178 N.W.2d 334, 335-36 (Iowa 1970); Martin v. Cafer, 258 Iowa 176, 185, 138 N.W.2d 71, 77 (1965). See also Annot., 18 A.L.R.2d 1287, 1307 (1951).

On the other hand, Ideal cites a number of cases holding that an accused pleading guilty in a criminal proceeding may be precluded in a subsequent civil action from relitigating issues necessarily determined by the criminal conviction. See, e.g., Nathan v. Tenna Corp., 560 F.2d 761, 763 (7th Cir. 1977); Brazzell v. Adams, 493 F.2d 489, 490 (5th Cir. 1974); Metros v. United States District Court for the District of Colorado, 441 F.2d 313, 317 (10th Cir. 1970). In light of the trend reflected by those cases and the recent developments that have reshaped the law of res judicata, the time has arrived for us to re-examine Book and to determine whether an accused's guilty plea should have preclusive effect against him in a subsequent civil action.

A. Substantial support exists for the proposition that a guilty plea should be given preclusive effect against the accused. Two prominent authorities considering the question agree that a convicted person may be estopped from relitigating issues determined by the plea under certain circumstances, but disagree as to the legal basis on which that result rests.

The American Law Institute takes the position generally that a party may not be precluded from relitigating an issue in a subsequent action on a different claim unless the issue was "actually litigated" in the first action. Restatement (Second) of Judgments § 68, and Comments d, e (Tent. Draft No. 4, 1977). The effect of a prior criminal judgment in a subsequent civil action is considered in section 133 of the Restatement. That section does not give "preclusive" effect to a guilty plea in a later civil action for the reason that no "actual litigation" occurred in the criminal proceeding. Restatement (Second) of Judgments § 133, Comment b (Tent. Draft No. 7, 1980) ("The rule of this section presupposes that the issue in question was actually litigated in the criminal prosecution. See § 68, Comment e. Accordingly, the rule of this section does not apply where the criminal judgment was based on a plea of nolo contendere or a plea of guilty."). Comment b does, however, recognize that a convicted person may be "estopped" by his guilty plea from relitigating matters determined in the criminal proceeding. The relevant portion of the comment states:

A defendant who pleads guilty may be held to be estopped in subsequent civil litigation from contesting facts representing the elements of the offense. However, under the terms of this Restatement such an estoppel is not a matter of issue preclusion, because the issue has not actually been litigated, but is a matter of the law of evidence beyond the scope of this Restatement.

(Emphasis added.) The Reporter's Note accompanying the comment states in part:

Preclusion has also been applied when the conviction was obtained by a guilty plea, e.g. Plunkett v. C.I.R., 465 F.2d 299 (7th Cir. 1972), a result that may be correct but which, in the analysis of this Restatement, is properly explained as a matter of estoppel rather than issue preclusion. Cf. Upshaw's Estate v. C.I.R., 416 F.2d 737 (7th Cir. 1969) holding that a guilty plea is evidentiary as an admission.

Restatement, supra § 133, at 70 (emphasis added). Professor Geoffrey C. Hazard, Jr., who served as one of the reporters for the Restatement, explains the estoppel notion referred to in Comment b thus:

A good case can be made for saying that if a matter is distinctly put in issue and formally admitted, the party making the admission should be bound by it in subsequent litigation. This was the old formulation of the rule of "judicial estoppel," as it was then called: "The former verdict is conclusive only as to facts directly and distinctly put in issue...." But how can a matter be "directly and distinctly put in issue"? Obviously, by actual litigation. Another way is through pleadings. In a pleading system where matters are "distinctly put in issue," it makes sense to say that if a proposition is clearly asserted, and if a party is called upon solemnly to admit or deny the proposition, and if the stakes are high enough to assure that the party is serious in dealing with the issue, and if the party then admits or fails to deny the proposition, then he ought to be estopped from controverting it on some other occasion, particularly if that other occasion involves essentially the same transaction. The clearest case for such an estoppel is where a defendant pleads guilty to a...

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