Stidham v. Millvale Sportsmen's Club

• Citation: 618 A.2d 945,421 Pa.Super. 548
• Parties: Phyllis R. STIDHAM, Administratrix of the Estate of Brett Chadwick Stidham, Deceased, Appellant, v. The MILLVALE SPORTSMEN'S CLUB and the Plane View Inn v. Robert E. McLAUGHLIN.
• Decision Date: 25 January 1993
• Court: Pennsylvania Superior Court

Page 945

618 A.2d 945

421 Pa.Super. 548

Phyllis R. STIDHAM, Administratrix of the Estate of Brett

Chadwick Stidham, Deceased, Appellant, v. The MILLVALE SPORTSMEN'S CLUB and the Plane View Inn v. Robert E. McLAUGHLIN.

Superior Court of Pennsylvania.

Argued Aug. 26, 1992.

Filed Nov. 13, 1992.

Reargument Denied Jan. 25, 1993.

Robert L. Byer, Pittsburgh, for appellant.

Alan T. Silko, Pittsburgh, for participating party.

Before MONTEMURO, KELLY and BROSKY, JJ.

KELLY, Judge:

In this appeal we must again consider the comprehensive homeowner's insurance policy provision excluding coverage for bodily injury or property damage which is expected or intended by the insured. Specifically, we must decide the extent to which a guilty plea by an insured to third degree murder in a prior criminal proceeding forecloses the victim of the harmful conduct from litigating, in an underlying civil action, the issue of the insured's intent. We find that the trial court erred in summarily applying the doctrine of collateral estoppel, thereby dispatching the victim's garnishment action against the insurer. Furthermore, the pleadings and affidavits demonstrate a genuine triable factual issue such that the insurer was not entitled to judgment as a matter of law. Accordingly, we reverse and remand for further proceedings consistent with this opinion.

I. FACTS AND PROCEDURAL HISTORY

The trial court opinion set forth the undisputed facts as follows:

In 1988, Robert E. McLaughlin was insured under a home owner's policy issued by Aetna [Casualty and Surety Company] which contained a bodily injury liability limit of $50,000. The policy contained the standard exclusion for injuries which are "expected or intended" by the insured.

This lawsuit arises out of an incident which occurred on June 19, 1988, in which McLaughlin shot and killed Brett Stidham. In December 1988, the Administratrix of the Estate of Brett Stidham filed wrongful death and survival actions against a club (Millvale Sportsmen's Club) and a bar (Plane View Inn) at which McLaughlin had consumed alcohol prior to the shooting. In September 1989, Millvale and Plane View joined McLaughlin as an additional defendant. The complaint joining McLaughlin alleged negligent, careless, reckless, and/or willful conduct. At the time he was joined, McLaughlin had pleaded guilty to third degree murder, three counts of aggravated assault, recklessly endangering another person, and criminal mischief and was incarcerated in the state correctional facility. ¹

McLaughlin requested Aetna to provide coverage and a defense under the policy. Aetna denied coverage and declined to defend McLaughlin [in a letter to McLaughlin, dated June 1, 1990].

Plaintiff's claims against the original defendants and the additional defendant were tried before the Honorable David S. Cercone between January 7, 1991, and January 11, 1991. During the trial, which included the testimony and cross-examination of McLaughlin and his wife, plaintiff settled the claims against Millvale and Plane View. The remainder of the case continued as a non-jury trial. At the conclusion of the trial, Judge Cercone rendered a verdict in plaintiff's favor and against McLaughlin in the amount of $1,250,000. Delay damages were added to the verdict resulting in a total molded verdict of $1,474,503.43. A judgment was entered against McLaughlin in that amount.

Plaintiff then instituted this garnishment proceeding to recover the entire judgment with interest, based upon Aetna's alleged breach of its fiduciary duty to its insured and bad faith conduct with respect to its investigation of the claim against its insured, its denial of coverage to the insured, its failure to settle the claim against the insured within the policy limits and its exposing its insured to a foreseeable and substantial excess verdict.

McLaughlin has assigned plaintiff any causes of action which he may have against Aetna arising out of its denial of coverage and its failure to settle plaintiff's claim against Aetna within the policy limits. However, McLaughlin has retained his right to assert claims for attorney's fees and costs incurred in defending the underlying proceedings.

If permitted to do so, plaintiff would be able to introduce evidence that could establish the following facts at trial:

At the time of the shooting, McLaughlin was a fifty-three year old man who had been married to Eileen McLaughlin for more than thirty years. They had twelve children, most of whom were college graduates. He was an army veteran and a former union boilermaker. He had never been arrested and had no history of violent behavior. He was an active member of St. Bonaventure Church. He was an avid sportsman, who enjoyed hunting and fishing. For a short period of time, he owned a bait and tackle shop. He seldom drank alcohol.

On a few occasions in his life, he drank alcoholic beverages to excess. On these occasions, he suffered from an alcohol amnestic syndrome or, in layman's terms, an alcoholic blackout. During those periods of time, he had no conscious awareness of his actions and no memory of events.

The date of the shooting was Father's Day. McLaughlin planned to shoot skeet at the Millvale Sportsmen's Club and then to attend a family dinner at his home. He had been a member of the Millvale Sportsmen's Club for approximately fifteen years. The shooting range was crowded and several members invited him to drink alcoholic beverages with them in the bar area. He consumed a substantial amount of alcohol and began to lose awareness of his actions. After leaving the Millvale Sportsmen's Club, he has limited recollection of events. He recalls driving on Route 8, stopping at a store, and later entering the Plane View Inn.

At the Plane View Inn, he consumed two shots of Jim Beam and two draft beers. McLaughlin did not know any of the persons in the bar and he did not speak to anyone in the bar. He did not feel or appear to be angry, agitated, or hostile.

Brett Stidham (age twenty-two) and a friend were at the Plane View Inn at the time. Stidham was employed as a technician for TEI Analytical Services, Inc. His friend and he had driven to Butler to retrieve his work clothes. On the return trip from Butler, Stidham and his friend stopped at the Plane View Inn because Stidham was interested in motorcycles and had observed a motorcycle with a side car in the parking lot. Stidham, his friend, and the owner of the motorcycle were seated across the bar from McLaughlin. These three persons did not have any conversation with McLaughlin.

McLaughlin left the bar and went to his truck. He reentered the bar with his shot gun. He does not remember using the gun. He remembers leaving the bar when he heard shattering glass. He proceeded to drive home.

When he arrived at home, he was slumped over the wheel of his car. His wife and his son carried him to his room where he became ill. He slept the rest of the night. The following morning, he was reading an article in The Pittsburgh Post Gazette which discussed a shooting that had occurred in the Plane View Inn. Although he had no awareness of participating in such a shooting, he felt that he was in the bar and that he might have had some connection with it.

Although he was not a suspect at the time, he called his priest, went to his church and made a confession. He then went to the State Police, where he proceeded to give a statement. McLaughlin was subsequently charged with the crimes of third degree murder and aggravated assault. During the criminal proceedings, McLaughlin was represented by H. David Rothman, Esquire. McLaughlin was examined by a psychologist, psychiatrist, and neurologist who prepared reports concerning the incident.

On November 18, 1988, McLaughlin entered a guilty plea to the crimes of third degree murder and aggravated assault. At the colloquy that took place at the guilty plea, McLaughlin stated under oath:

Q. And are you content to enter a plea of guilty to murder of the third degree as I have described it to you?

A. Yes, I am.

Q. Do you realize that does not require proof of a specific intent to kill? Do you understand that?

A. Yes.

Q. Did you have a specific intent to kill or hurt anybody that day?

A. No, I didn't.

Q. All right. As to the three counts of aggravated assault, wherein persons were either seriously or otherwise injured, again, that does not require proof of a specific intent to harm; do you understand that?

A. Yes, I do.

Q. In connection with the homicide charge, even if you did not comprehend what you were doing at the time, the law of Pennsylvania does not equate that to legal insanity. Do you understand that?

A. Yes, I do.

After the guilty plea, McLaughlin was sentenced to a prison term of twenty to forty years.

At the trial of this present cause of action, plaintiff will also be able to introduce evidence that would establish the following facts with respect to Aetna's response to McLaughlin's request to provide coverage and a defense:

The criminal lawyers who were handling the appeal of McLaughlin's sentence asked Aetna to defend McLaughlin in the underlying action and to cover the claim. The lawyers supplied Aetna with case law which in their opinion established that Aetna had a duty to enter an appearance based on the allegations in the complaint. Aetna did not conduct any investigation into the incident, did not consult legal counsel, and did not obtain a copy of the complaint to join its insured. It nevertheless denied coverage [on June 1, 1990,] six months after the claim had been submitted.

Prior to the trial of the underlying action, plaintiff's counsel also contacted Aetna. On June 19, 1990, plaintiff's counsel mailed a letter and memorandum of law to the Aetna claim manager, James R. Hayes, stating that Aetna's denial of coverage was in bad faith. The letter further informed Aetna that the damages in the Stidham case were far in excess of the policy limits. Thus,...