State Farm Automobile Insurance Company v. Sanders et al
OPINION AND ORDER: State Farm's Motion for Summary Judgment 20 is GRANTED, and it is now DECLARED that State Farm has no duty to defend nor indemnify Sanders for actions he took on February 19, 2016 which resulted in the death of T.M. The Clerk should enter Judgment in favor of State Farm and against Zachary Sanders and Charles Mapes accordingly. Signed by Judge Philip P Simon on 10/19/2017. (jss)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
STATE FARM MUTUAL AUTOMOBILE
ZACHARY SANDERS and CHARLES
MAPES, as Parent and Guardian of T.M.
Opinion and Order
This is 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-yearold 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.
The facts are grim and almost entirely undisputed. Here’s what happened: 16year-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.
After 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
Law 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.
Sanders 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; 24-1.
The car 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).
The 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.
Summary 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. 2005).
Let’s 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).
An 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).
The 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.
Under 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).
It is 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 his claim
can be no greater than Sanders’ own claim would be under the policy. See id. Sanders
is estopped from asserting that his acts were not knowingly, and so Mapes, standing in
Sanders’ “legal shoes,” also may not assert that Sanders’ acts were not done knowingly.
But what does it mean to do something “knowingly?” Is it the same as doing it
intentionally? The State Farm policy provides coverage for “accidents” resulting in
injury caused by an insured. The policy does not define the term “accident” but the
Indiana Supreme Court has held that the term “accident” as used in an insurance policy
means “an unexpected happening without an intention or design.” Auto-Owners Ins.
Co., 842 N.E.2d at 1283. Several courts have sensibly held that when someone is found
to have done something “knowingly” that means it wasn’t an accident. See e.g. State
Farm Fire & Cas. Co. v. C.F., 812 N.E.2d 181, 185 (Ind. App. 2004); State Farm Fire & Cas.
Co. v. C.W., 2010 WL 597930 (N.D. Ind. Feb. 17, 2010). This is because people act
“knowingly” if, when they engage in the conduct, they are aware of a high probability
that they are doing so. Ind. Code § 35-41-2-2(b); Boyko v. State, 566 N.E.2d 1060, 1061
(Ind. Ct. App. 1991). They are not acting through ignorance, mistake or accident. See
e.g., Committee on Federal Criminal Jury Instructions of the Seventh Circuit, Pattern
Criminal Jury Instructions of the Seventh Circuit § 4.10 (2012 ed.). In other words,
when Sanders ran down T.M. with his car in that St. Joseph County park, he did it
knowingly, or so the state criminal jury found. This means under Indiana law it wasn’t
an accident, and therefore there is no coverage.
But let’s suppose that there is some difference between acting “knowingly” and
acting “intentionally” as Mapes argues. It gets him nowhere in this case because based
on the evidence submitted in support of summary judgment, it is plain to me that
Sanders acted intentionally in any event. Recall that under Indiana law I am permitted
to look beyond the four corners of the complaint to consider the evidence that has been
put before me on summary judgment to determine whether there is a duty to defend.
Auto-Owners Ins. Co., 842 N.E.2d at 1291. Mapes has not moved to strike any of that
evidence, and so I will consider it. And the evidence presents a compelling case that
Sanders intended to run T.M. over. The police reports indicate that an accident
reconstruction was done and showed that Sanders traveled 250 feet before hitting T.M.
with his car, he made turns suggesting he was trying to hit him, and there was evidence
that he accelerated as well. The topper of course is the text Sanders sent the next day.
He told his friend the drug deal didn’t go down. “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. That certainly
suggests that Sanders “ran him over” intentionally. In the face of this evidence, no
rational jury could find by a preponderance of the evidence that Sanders didn’t act
intentionally, especially since another jury rejected the same position under the more
exacting beyond a reasonable doubt standard applicable in criminal cases.
In sum, under Indiana law, when Sanders knowingly ran T.M. over (as was
found by the jury in his criminal case), that necessarily means that it wasn’t an accident
as defined in the policy of insurance. And in any event, the exclusion in the policy for
intentional actions applies because no reasonable jury could find that Sanders acted
unintentionally when he ran T.M. over. State Farm’s Motion for Summary Judgment is
therefore GRANTED (DE 20), and it is now DECLARED that State Farm has no duty to
defend nor indemnify Sanders for actions he took on February 19, 2016 which resulted
in the death of T.M. The Clerk should enter Judgment in favor of State Farm and
against Zachary Sanders and Charles Mapes accordingly.
ENTERED: October 19, 2017
s/ Philip P. Simon
PHILIP P. SIMON, JUDGE
UNITED STATES DISTRICT COURT
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