Poole v. State Farm Fire & Cas. Co.

• Decision Date: 16 October 1996
• Docket Number: Civil Action No. 95-B-1711.
• Citation: 941 F.Supp. 964
• Parties: William R. POOLE, Plaintiff, v. STATE FARM FIRE & CASUALTY COMPANY, Defendant.
• Court: U.S. District Court — District of Colorado

Page 964

941 F.Supp. 964

William R. POOLE, Plaintiff, v. STATE FARM FIRE & CASUALTY COMPANY, Defendant.

Civil Action No. 95-B-1711.

United States District Court, D. Colorado.

October 16, 1996.

Daniel M. Reilly, Kim E. Laasko, McKenna & Cuneo, Denver, CO, for Plaintiff.

Jon F. Sands, Bostrom & Sands, P.C., Denver, CO, for Defendant.

MEMORANDUM OPINION & ORDER

BABCOCK, District Judge.

In this declaratory judgment action, plaintiff, William R. Poole (Poole), seeks a determination that he is entitled to liability coverage under the terms of his homeowners insurance policy. Poole was convicted of first-degree murder. The estate of his victim then brought a wrongful death action against Poole. Poole seeks to force his insurance carrier to defend and indemnify him in the wrongful death action. Defendant, State Farm Fire & Casualty Co. (State Farm), moves for summary judgment based upon a provision in the policy excluding coverage for intentional acts causing bodily injury. Because I conclude that Poole is estopped from relitigating the issue of his intent after his criminal conviction, I will grant State Farm's motion.

I.

The parties have stipulated to the following facts. Poole shot and killed Nathan Mosher in Trinidad, Colorado, on January 14, 1992. On that date, Poole had in effect a homeowners liability insurance policy (Policy), issued by State Farm. Mr. Mosher's parents sued Poole for the wrongful death of their son. Poole filed a claim under the Policy in April 1992. State Farm initially provided a defense to Poole under reservation of rights. Upon Poole's conviction for first-degree murder in the killing of Mr. Mosher, State Farm disclaimed coverage.

The criminal case was tried in Las Animas County District Court, Colorado. Poole refused to allow counsel to enter a plea of not guilty by reason of insanity or to assert the defense of impaired mental condition. The trial court ordered Poole to be examined by the Colorado Mental Health Institute. One staff psychiatrist at the Institute opined that Poole was legally sane at the time of the shooting; however, a different staff psychiatrist concluded that Poole was legally insane at the time of the shooting. The court found that Poole was competent to stand trial and that entry of a plea of not guilty by reason of insanity, against Poole's wishes, was not necessary for a just determination of the charges.

The trial court excluded evidence regarding Poole's mental condition because the affirmative defense of impaired mental condition had not been specifically asserted. The case was tried to a jury, and Poole was convicted of first-degree murder. He is incarcerated in a Colorado state penitentiary. His conviction was affirmed by the Colorado Court of Appeals on March 17, 1994.

Poole filed this action on June 19, 1995 in Las Animas County District Court. State Farm removed the case to this court pursuant to 28 U.S.C. §§ 1441(a) & 1332. Poole seeks a declaration that State Farm is required to defend and indemnify him in the action brought by Mr. Mosher's parents for wrongful death.

II. SUMMARY JUDGMENT STANDARD

The very purpose of a summary judgment motion is to assess whether trial is necessary. White v. York Int'l Corp., 45 F.3d 357, 360 (10th Cir.1995). Fed.R.Civ.P. 56 provides that summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, admissions, or affidavits show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The nonmoving party has the burden of showing that there are issues of material fact to be determined. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2551, 91 L.Ed.2d 265 (1986).

CHOICE OF LAW

In a diversity action, federal district courts apply the choice of law rules of the forum state. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Looking to the law of this forum state, Colorado has adopted the Restatement (Second) of Conflict of Laws (1971) for resolving choice of law issues arising in contract actions. Wood Brothers Homes v. Walker Adjustment Bureau, 198 Colo. 444, 447, 601 P.2d 1369, 1372 (1979). The objective of the Restatement is to identify the state having the most significant relationship to the particular issue. Id.

To determine the state with the most significant relationship to the issue, Colorado courts apply the factors set forth in §§ 6 & 188 of the Restatement. Among other factors, a court should consider "the relevant policies of the forum," "the protection of justified expectations," "certainty, predictability and uniformity of result," and "ease in the determination and application of the law to be applied." Restatement § 6(2). In a contract action, the contacts to be taken into account in applying the factors in § 6 include: (1) the place of contracting; (2) the place of negotiation of the contract; (3) the place of performance; (4) location of the subject matter of the contract, and (5) the domicile, residence, nationality, place of incorporation, and place of business of the parties. Restatement § 188; Wood Brothers, 601 P.2d at 1372.

Applying these principles here, it is apparent that Arizona has the most significant contacts with issues arising as to the interpretation of the contract itself. The Policy was issued by a State Farm office in Tempe, Arizona, and covered Poole's home in Scottsdale. Thus, I conclude that Arizona law applies to a determination of the rights and duties of the parties with respect to the contract.

The "contacts" listed in § 188, however, were not intended to address the issue of which state's law applies to a question of the preclusive effect of a judgment in a case that happens to involve a contract. Rather, the Restatement provides a separate section to address issue preclusion questions. See, Restatement (Second) of Conflict of Laws § 95 (1982) ("What issues are determined by a valid judgment is determined, subject to constitutional limitations, by the local law of the State where the judgment was rendered.").

Although Colorado has not expressly adopted Restatement § 95, I am persuaded that the policy of § 95 is consistent with the general principles set forth in § 6, which Colorado has adopted. Colorado has a more significant interest than Arizona in determining the preclusive effects of its own criminal judgments. Thus, I conclude that Colorado law governs the question whether Poole's prior criminal conviction in Colorado precludes him from relitigating the issue of his intent at the time of the shooting.

III.

The Policy states, in pertinent part: "Coverage L and Coverage M do not apply to ... bodily injury or property damage ... which is either expected or intended by an insured...." Ex. 1 to Stip. of Facts, p. 16. Under Arizona law, this language is considered an "intentional acts exclusion." Republic Ins. Co. v. Feidler, 178 Ariz. 528, 875 P.2d 187, 189 (Ct.App.1993). For the exclusion to apply, it is not enough that the insured committed an intentional act. Rather, the insured must have had a subjective, specific intent to injure the victim. Id. 875 P.2d at 190. Where the insured lacks the "mental capacity to act rationally," the intentional acts exclusion does not apply. Id. at 191.

If Poole intended to injure Mosher within the meaning of the exclusion, State Farm is not required to defend or indemnify him. However, if Poole is permitted to and does show that there is a genuine issue of material fact as to his mental competence at the time he shot Mosher, State Farm cannot prevail on its summary judgment motion. Thus, the threshold question is whether Poole is precluded from litigating here the issue of his mental capacity at the time of the shooting.

State Farm contends that the issue of Poole's intent was necessarily decided in his criminal prosecution for first-degree murder. Because litigation of Poole's mental capacity at the time of the shooting would be a collateral attack on the jury's finding of intent, State Farm argues that Poole should be precluded from litigating the issue here. State Farm contends that Poole had a full and fair opportunity to litigate the issue of intent, including any defenses of mental defect, at his criminal trial. Poole seeks to muddy the waters by arguing that because the issue of his mental capacity was never litigated during the criminal prosecution, he cannot be estopped from raising it here. I agree with State Farm, and I will therefore grant its motion for summary judgment.

In Poole's criminal trial, the jury was instructed that the elements for murder in the first degree are: "(1) that the defendant, (2) in the State of Colorado, at or about the date and place charged, (3) with intent, (4) to cause the death of a person other than himself, and (5) after deliberation, (6) caused the death of that person or another person, (7) [without an affirmative defense.]" Instruction No. 14. The jury was also instructed that "[a] person acts `intentionally or with intent' when his conscious objective is to cause the specific result proscribed by the statute defining the offense." Instruction No. 10. Further, the jury was instructed that "`AFTER DELIBERATION' means not only intentionally, but, also, that the decision to commit the act has been made after the exercise of reflection and judgment concerning the act. An act committed after deliberation is never one which has been committed in a hasty or impulsive manner." Instruction No. 15. Finally, the jury was informed that in order to convict, it must find Poole guilty beyond a reasonable doubt. Instruction No. 5.

Therefore, by returning a verdict against Poole on the count of first-degree murder, the jury found, beyond a reasonable doubt, that Poole intentionally killed Mr. Mosher "after the exercise of reflection and judgment." To prevail here, State Farm need only show by a preponderance of the evidence that...