United States District Court, N.D. Indiana, South Bend Division
OPINION AND ORDER
P. SIMON, JUDGE.
a tragic case about bad choices - choices that led to life
changing consequences for one young man and life ending
consequences for another, a 16-year-old boy. Really the case
is about something much more pedestrian - money, and more
specifically, about insurance coverage and whether the
imprisoned man is owed a defense and indemnification from an
insurance carrier, State Farm, in a threatened civil action
by the deceased boy's father.
facts are grim and almost entirely undisputed. Here's
what happened: 16-year-old T.M. and a friend of his set up a
drug deal where they were supposed to sell drugs to Zachary
Sanders. Sanders arrived at the agreed upon location - a park
in St. Joseph County. T.M. and his buddy entered Sanders'
car but instead of engaging in the drug deal, they had
another thing in mind. T.M. pulled a gun on Sanders, stuck it
at the back of his head and told him to hand over the money.
There would be no drug deal; just a robbery. Sanders
initially resisted, but with a gun pointed at him, eventually
he complied and gave them the money. Two other people were
with T.M. and his friend that night. They knew the robbery
was going to take place, and in fact they witnessed it from a
nearby car. One of the cohorts supplied the gun for the
robbery having gotten it from her grandfather's house. As
mentioned, T.M. was 16 years old at the time of the robbery;
Sanders was 20.
getting the money, T.M. and his friend fled on foot through a
large grassy area in the park. Sanders went after them in his
car. He floored the accelerator and, according to an accident
reconstructionist, traveled approximately 250 feet before
running T.M. over and killing him. During the pursuit,
Sanders accelerated and turned the car suggesting that he was
bent on running T.M. over. An incriminating text recovered
from Sanders' cell phone helps to confirm this. After
striking T.M., Sanders fled the scene. The two witnesses who
came to the scene with T.M. and his friend went over to
T.M.'s unconscious body and retrieved the handgun from
under him and returned it to the grandfather's home. It
was later retrieved by the police. See generally DE
enforcement officers were drawn to Sanders after analyzing
T.M.'s cell phone which showed contact between the two. A
review of Sanders' phone revealed a smoking gun. As noted
above, the day after the incident in the park, Sanders texted
a friend telling him that the drug deal did not go down as
planned. He explained to his friend that “I didn't
get [the pills] he robbed me But it's aight I ran him
over when he was running away.” DE 24-1 at 4. Sanders
admitted to the police that he was the one who sent the
incriminating text message. Id. He further admitted
that he did in fact run T.M. over but, contrary to what he
said in his text message, claimed he did it out of panic and
fear. DE 20-3.
was charged in state court with voluntary manslaughter under
Indiana Code § 35-42-1-3(a). A person commits the crime
of voluntary manslaughter when he “knowingly
or intentionally kills another human being .
. . while acting under sudden heat . . . “ Id.
(emphasis added). Sanders was specifically charged with
committing the voluntary manslaughter knowingly but not
intentionally. At trial, consistent with what he previously
told the police, Sanders testified that he acted out of fear.
Sanders believed that T.M. was going to shoot him as T.M. was
retreating through the field, and that his decision to run
T.M. over was done as a “flight response” and
“a reaction to the gun.” DE 25-1 at 3-4. Sanders
also told the jury that he “felt [he] was in
danger” and that he “never intended to run [T.M.]
over.” Id. at 4 and 5. The jury didn't buy
it and found him guilty of knowingly killing T.M. while under
heat of passion. DE 20-4. He was subsequently sentenced to
twenty years in the Indiana Department of Corrections, and
his conviction was recently affirmed on appeal. DE 20-5;
that Sanders used to run T.M. over was owned by his
grandmother and insured by State Farm. T.M.'s father,
Charles Mapes, has threatened a lawsuit against Sanders. DE
20-6. To that end, Mapes' counsel has inquired whether
State Farm intends to defend and indemnify Sanders. DE 20-6.
State Farm responded with this declaratory judgment action.
The pertinent policy covers liability claims against an
insured who causes bodily injury by an
“accident.” DE 20-7 at 9. The policy also
specifically excludes coverage for an “INSURED WHO
INTENTIONALLY CAUSES BODILY INJURY . . .” DE 20-7 at 10
(all caps in original).
issue before me is whether Sanders' voluntary
manslaughter conviction for “knowingly” killing
T.M. means it wasn't an “accident” and,
alternatively, whether the summary judgment record
establishes that Sanders' actions were intentional thus
precluding coverage under the policy exclusion for damage
caused by intentional actions of the insureds.
judgment is proper if "there is no genuine dispute as to
any material fact and the movant is entitled to a judgment as
a matter of law." Fed.R.Civ.P. 56(a). A genuine dispute
about a material fact exists only "if the evidence is
such that a reasonable jury could return a verdict for the
nonmoving party." Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). In making this
determination, a court construes "all facts and
reasonable inferences from the record in the light most
favorable to [ ] the non-moving party." Moser v.
Ind. Dep't of Corr., 406 F.3d 895, 900 (7th Cir.
start with some basics. The substantive law applicable to
this case is the law of the State of Indiana. The
interpretation of an insurance policy, like other contracts,
is typically a question of law that I can resolve on summary
judgment. Bosecker v. Westfield Ins. Co., 724 N.E.2d
241, 243 (Ind. 2000). When interpreting an insurance policy,
my goal is to ascertain and enforce the parties' intent
as reflected in the insurance contract. Buckeye State
Mut. Ins. Co. v. Carfield, 914 N.E.2d 315, 318
(Ind.Ct.App. 2009). If the policy language is clear and
unambiguous, it should be given its plain and ordinary
meaning. Am. States Ins. Co. v. Adair Indus., Inc.,
576 N.E.2d 1272, 1273 (Ind.Ct.App. 1991). However, ambiguous
terms in the contract are to be construed against the
insurer, especially where the policy excludes coverage.
Cincinnati Ins. Co. v. Flanders Elec. Motor Serv.,
Inc., 40 F.3d 146, 151 (7th Cir. 1994).
insurance company's duty to defend is broader than its
duty to indemnify. Seymour Mfg. Co., Inc. v. Commercial
Union Ins. Co., 665 N.E.2d 891, 892 (Ind. 1996). An
insurer is obligated to defend its insured against suits
alleging facts that might fall within the coverage of the
policy. Fed. Ins. Co. v. Stroh Brewing Co., 127 F.3d
563, 566 (7th Cir. 1997). “[T]here is essentially only
one standard - that the allegations of the complaint,
including the facts alleged, give rise to a duty to defend
whenever, if proved true, coverage would attach.”
Id. Only if there is no possible factual or legal
basis on which the insurer might be obligated to indemnify
will the insurer be excused from defending its insured. Lee
R. Russ, 14 Couch on Insurance § 200:12 (3d ed. 2007);
see also Ticor Title Ins. Co. of Cal. v. FFCA/IIP 1988
Prop. Co., 898 F.Supp. 633, 638-39 (N.D. Ind. 1995) (if
there is even a possibility of coverage, the insurer is
obligated to defend).
first place to look when trying to determine the
insurer's duty to defend is the allegations contained
within the underlying complaint and from those facts known or
ascertainable by the insurer after reasonable investigation.
Knight v. Ind. Ins. Co., 871 N.E.2d 357, 362
(Ind.Ct.App. 2007); Liberty Mut. Ins. Co. v. OSI Indus.,
Inc., 831 N.E.2d 192, 198 (Ind.Ct.App. 2005). In this
case, there is no underlying state court complaint to review.
That is neither here nor there because “in evaluating
the factual basis of a claim and the insurer's
concomitant duty to defend, this court may properly consider
the evidentiary materials offered by the parties to show
coverage.” Wayne Twp. Bd. of Sch. Comm'rs v.
Ind. Ins. Co., 650 N.E.2d 1205, 1208 (Ind.Ct.App. 1995)
(quoting Trisler v. Ind. Ins. Co., 575 N.E.2d 1021,
1023 (Ind.Ct.App. 1991)). For example, the Indiana Supreme
Court has considered extrinsic, designated evidence when
analyzing an insurer's duty to defend. See
Auto-Owners Ins. Co. v. Harvey, 842 N.E.2d 1279, 1291
(Ind. 2006). So too has this Court considered the relevant
designated evidence when determining whether State Farm owes
a duty to defend (and indemnify) Sanders. See Continental
Ins. Co. v. George J. Beemsterboer, Inc., 148 F.Supp.3d
770, 781-82 (N.D. Ind. 2015) (analyzing relevant case law and
finding it appropriate to consider extrinsic evidence in
assessing an insurer's duty to defend). Importantly, the
defendants have neither objected to nor moved to strike any
of State Farm's designated evidence.
Indiana law, a conviction in a criminal case is admissible as
evidence in a subsequent civil proceeding. Does v.
Tobias, 715 N.E.2d 829 (Ind. 1999). What's more, a
conviction can have collateral estoppel effect; it can be
used in an offensive way provided the defendant had a full
and fair opportunity, and the appropriate incentive, to
vigorously litigate the matter in the first action. Id.
(citing Parklane Hosiery Co. Inc. v. Shore, 439
U.S. 322, 330-31 (1979)). (There are other considerations
that have to be taken into account in deciding whether
offensive collateral estoppel will be permitted but they are
not at issue here).
plain that Sanders had an incentive to vigorously argue in
his criminal case that he did not knowingly run T.M. over.
His freedom was at stake. He took the stand at the trial and
tried to convince the jury that he was innocent of any
wrongdoing. But the jury rejected his position and found him
guilty of knowingly running T.M. down with his car - a
voluntary manslaughter. Because that issue has been decided
after Sanders had a full and fair opportunity to contest the
matter in his criminal trial, he is now estopped from
claiming that he did not knowingly run T.M. over. T.M.'s
father did not have a full and fair opportunity to litigate
this issue in Sanders' criminal trial and so cannot now
be estopped from litigating the issue of Sanders' intent.
See Wolverine Mutual Insurance Co. v. Vance, 325
F.3d 939, 944 (7th Cir. 2003). But because State Farm's
contractual duty runs only to Sanders, Mapes can recover
insurance proceeds only insofar as his rights derive from
Sanders' rights under the insurance policy. Thus, Mapes
is relegated to standing in Sanders' “legal shoes,
” and ...