Allstate Vehicle and Property Insurance Company v. Richardson et al

Filing 69

OPINION AND ORDER GRANTING 62 First MOTION for Summary Judgment filed by Allstate Vehicle and Property Insurance Company, DENYING 50 MOTION to Dismiss filed by Matthew S Richardson. As this order resolves all pending claims in this case, the Clerk is directed to CLOSE this case. Signed by Judge Philip P Simon on 5/15/19. (ksp)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
ALLSTATE VEHICLE AND
PROPERTY INSURANCE COMPANY,

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Plaintiff,
vs.
MATTHEW S. RICHARDSON, and
SHEILA SMITH, PERSONAL
REPRESENTATIVE OF THE ESTATE
OF JOSHA C. SMITH,
Defendants.

OPINION AND ORDER
This is a declaratory judgment action filed by Allstate Vehicle and Property
Insurance Company, seeking a declaration that it does not owe any indemnity or duty
to defend to defendant Matthew Richardson in separate lawsuit filed in Indiana state
court. That separate lawsuit is a wrongful death action, brought against Richardson by
the Estate of Joshua C. Smith. Before me are two motions, defendant Richardson’s
Motion to Dismiss or in the Alternative Stay the Proceedings [DE 50], and plaintiff
Allstate’s Motion for Summary Judgment [DE 62.] For the reasons outlined below, I will
deny Richardson’s motion to dismiss/stay and grant Allstate’s motion for summary
judgment on its declaratory judgment claims.
Background
This case began with a road rage incident which occurred on December 18, 2015.
After the incident—and the exact timeline of events and reasons for them remain
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unclear—Richardson drove home and Joshua C. Smith, the other motorist, drove to the
same address. From there things got tragic. There was an altercation between Smith and
Richardson, and at some point, Richardson came outside of his home with a loaded
firearm. A bullet was fired from Richardson’s gun which struck Smith in his femoral
artery. Smith later died from his injuries.
Richardson was charged with multiple crimes. He proceeded to trial, and
Richardson was found guilty of and convicted of murder under Indiana Code 35-42-11(1) and pointing a firearm at another under Indiana Code 35-47-4-3(b). Specifically,
Richardson was found to have “knowingly or intentionally kill[ed] another human
being.” I.C. 35-42-1-1(1). As a result of these convictions, Richardson was sentenced to
55 years in prison. [DE 64-6 at 4 (Def.’s Resps. to Pl.’s Reqs. for Admissions).]
Richardson remains in prison at this time.
Richardson appealed his criminal convictions, but his appeal was dismissed with
prejudice by the Court of Appeals of Indiana on September 28, 2017. [DE 52-1.] The
dismissal order indicates that the appeal was dismissed because Richardson failed to
timely file his brief. There is no evidence that Richardson sought review of his
conviction or the Court of Appeals’ order with the Indiana Supreme Court. Nor is there
evidence that he has filed any other post-conviction relief, let alone any such relief that
has been granted.
On August 24, 2017, (after the time for Richardson to file his brief had expired),
the Estate of Joshua C. Smith filed a wrongful death action against Richardson. In this
lawsuit, Smith’s estate alleges that Richardson “accidentally” shot Smith and that
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Smith’s death was “directly and proximately caused by the negligent act of Richardson
discharging the semi-automatic rifle and striking Smith in the leg.” [DE 64-3, Wrongful
Death Compl. at ¶¶ 10, 13.] Allstate has provided counsel to Richardson in that case,
under a reservation of rights, and at present, the case has not proceeded much beyond
the pleading stage.
On March 22, 2018, Allstate filed this lawsuit, claiming it has no duty to defend
or duty to indemnify Richardson because the conduct at issue in the wrongful death
lawsuit is excluded under the relevant insurance policy. [DE 1.] The insurance policy at
issue contains the following exclusion:
We do not cover any bodily injury or property damage intended
by, or which may reasonably be expected to result from the
intentional or criminal actions omissions of, any insured person.
The exclusion applies even if:
such insured person lacks the mental capacity to govern his or
her conduct;
such bodily injury or property damage is of a different kind or
degree than intended or reasonably expected; or
such bodily injury or property damage is sustained by a
different person than intended or reasonably expected. This
exclusion applies regardless of whether or not such insured person
is actually charged with, or convicted of a crime.
[DE 64-2 at 51, 53.] The parties all agree that the terms of the insurance policy control;
the question is simply whether, as a matter of undisputed fact, Richardson’s conduct is
excluded (entitling Allstate to summary judgment) or if fact issues remain to be
decided, either in this court, or before an Indiana state court (in which case the matter
likely will need to be stayed or dismissed).

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Discussion
I.

Richardson’s Motion to Dismiss or Stay
Richardson, proceeding without a lawyer, has filed a document titled

“Defendant’s Objections and Responses to Plaintiff’s Request for Admissions and
Production of Documents and a Motion to Dismiss or, in the Alternative to Stay the
Proceedings.” [DE 50.] While this filing covers a lot of bases, it is at bottom, a request to
stay this case while Richardson tries to have his conviction overturned in state court.
Given the requested relief, it makes sense to address this motion before Allstate’s
motion for summary judgment.
The basis for Richardson’s request that these proceedings be stayed is a species of
the doctrine known as Younger abstention. Younger abstention is a court-created
doctrine which holds that federal courts cannot, except with very limited possible
exceptions not at issue here, enjoin ongoing state criminal proceedings. Younger v.
Harris, 401 U.S. 37, 46 (1971). The main thrust of Richardson’s motion is that in his
criminal case, he had ineffective assistance of counsel and that once this fact is proven, it
will entitle him to a new trial at which he will prevail. The problem for Richardson is
both simple and fatal: his appeal of his state court conviction was dismissed with
prejudice by the Court of Appeals of Indiana on September 28, 2017. See Richardson v.
State, Cause No. 64A05-1705-CR-1178 [DE 52-1.] His conviction is thus final, and while
Richardson implies in his motion that he will be seeking some sort of post-conviction
relief, no such relief has been sought. Presumably the basis for that relief would be that
Richardson’s counsel’s failure to file his appellate brief constituted ineffective assistance
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of counsel, and Richardson may have a valid argument. See Clay v. Director, Juvenile
Division, Dept. of Corrections, 749 F.2d 427, 431 (7th Cir. 1984) (“Failure by an attorney to
perfect an appeal where the client has indicated a desire to appeal amounts to
ineffective assistance of counsel.”). But “may” is not enough to stay this case.
Richardson included in his opposition to summary judgment a letter from
attorney (Brian Woodward) dated December 12, 2018 which discusses the possibility of
seeking post-conviction relief (and the possibility of a civil suit against Richardson’s
criminal counsel who failed to perfect his appeal). [DE 66-2.] It has been approximately
six months, but Richardson has not notified the court that he has filed any petition for
post-conviction relief. Nor has my own review of Indiana state court electronic dockets
indicated that any post-conviction relief has been sought. Thus, there are no ongoing
state criminal proceedings which would be threatened by me considering this case. See
Tobey v. Chibucos, 890 F.3d 634, 651 (7th Cir. 2018) (“Federal courts generally may not
intervene in ongoing state criminal proceedings.”); see also Samuels v. Mackell, 401 U.S.
66, 72-73 (1971) (holding that federal courts should not issue declaratory judgments
which would impermissibly interfere with ongoing state criminal prosecutions). And I
cannot delay consideration of the matter simply because Richardson told me six months
ago that he would do something which he has so far failed to do.
Beyond Richardson’s underlying criminal case, there is of course another live
lawsuit pending which overlaps with the case before me. That is the state court
wrongful death lawsuit filed by Smith’s estate which is presently pending before the
Superior Court of Porter County, Indiana. The analysis is distinct from the above
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Younger abstention question and Richardson does not fully flesh out this argument, but
I will nonetheless address it.
To determine whether I, a federal district court judge, should yield or abstain
from deciding the issues in the case before me on account of a pending state court case
which touches upon similar issues is known generally as Colorado River abstention. See
generally Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976). In
the context of a potential conflict between a state case and a federal Declaratory
Judgment Act case, such as this one, the question is also known as a question of
Wilton/Brillhart “abstention.” 1 As with all of these related doctrines, the goal is to avoid
“gratuitous interference with the orderly and comprehensive disposition of a state court
litigation” by federal courts. Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 495 (1942). Of
course, “the mere pendency of another suit is not enough in itself to refuse a
declaration.” Sears, Roebuck & Co. v. Zurich Ins. Co., 422 F.2d 587, 590 (7th Cir. 1970).
Instead, to determine whether or not to exercise my discretion, the Seventh Circuit has
instructed me to review “the overlap between the federal and state proceedings in light
of the substantive law that informed the declaratory judgment action and the
underlying liability case.” Med. Assur. Co. v. Hellman, 610 F.3d 371, 379 (7th Cir. 2010).

As the Seventh Circuit has noted, “[u]se of the term ‘abstention,’ however, is not
entirely accurate, as it normally refers to a group of judicially-created doctrines. The
decision to stay an action under the Declaratory Judgment Act does not require the
court to reach for a judicially-created abstention doctrine. Rather, the Act itself provides
the district court with the necessary discretion. And unlike Colorado River abstention,
discretion under the Declaratory Judgment Act does not turn on the existence of
parallel proceedings.” Hellman, 610 F.3d at 378–79 (7th Cir. 2010).
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As part of this inquiry, I must consider whether the parties to the two actions are
identical, whether going forward with the declaratory action will serve a useful purpose
in clarifying the legal obligations and relationships among the parties or will merely
amount to duplicative and piecemeal litigation, and whether comparable relief is
available to the plaintiff seeking a declaratory judgment in another forum or at another
time. Nationwide Ins. v. Zavalis, 52 F.3d 689, 692 (7th Cir. 1995).
In answering this question, Zavalis is on all fours with the question of Allstate’s
duty to defend in this case. In Zavalis, an insurer filed a declaratory judgment in federal
court regarding its alleged duty to defend and duty to indemnify in a state court
lawsuit under a homeowners’ insurance policy. The underlying state court lawsuit
concerned a prank by students at the University of Illinois Champaign-Urbana who
snuck into the University’s stadium at night, sprayed lighter fluid on the field
(apparently to burn the lets “F-O-O” into it), set the astroturf ablaze, and accidentally let
the fire spread out of control, causing major damage to the stadium. The University
sued the students in Illinois state court. Zavalis, 52 F.3d at 690-91. The district court,
relying upon its discretion under the Declaratory Judgment Act, dismissed the federal
lawsuit, but the Seventh Circuit reversed because the insurer’s “declaratory suit
present[ed] a dispute that [was] fundamentally distinct from the matters before the state
court.” Id. at 692.
For the same reasons, the same result is required here. The purpose of the
pending state court wrongful death suit filed by Smith’s estate is to determine whether
Richardson is responsible, in tort, for Smith’s death. Allstate is not a party to the
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wrongful death suit against Richardson. The purpose of the lawsuit before me,
however, is to determine what obligations Allstate, as insurer, owes Richardson, the
insured. That issue is not before the state court suit. Thus, dismissal or abstention as to
the issue of Allstate’s duty to defend is not required or necessary here.
That said, in Zavalis, the Seventh Circuit affirmed the district court’s decision not
to reach the matter of the insurer’s duty to indemnify because “resolution of that duty
would necessarily require [the district court] to address a factual question at the heart
of” the related state court case. Zavalis, 52 F.3d at 693. “When the underlying facts and
the nature of the insured’s conduct are disputed, the court presiding over the
declaratory action typically cannot decide whether the insured acted negligently or
intentionally (and consequently whether he has coverage or not) without resolving
disputes that should be left to the court presiding over the underlying tort action.” Id. In
that case, the question was whether fire damage caused to a football field was
intentional or expected and thus beyond the policy.
At first blush, that seems quite like the question before the state court in the
wrongful death lawsuit filed by Smith’s estate. But as discussed below, answering that
question does not require me to address any disputed factual matters at the heart of the
underlying lawsuit, just as the state court will not have to either. That is because, as a
matter of collateral estoppel, whether Richardson acted intentionally in discharging the
firearm which led to Smith’s death has already been fully litigated in Richardson’s
underlying criminal trial. This type of situation was specifically recognized by the
Seventh Circuit in Zavalis as the type of case in which a district court need not refrain
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from deciding the issue of an insurance company’s duty to defend. Id. at 694 (“In other
instances, where the underlying circumstances are either undisputed or, in light of
previously established facts, beyond dispute, a court may be able to make a ready
determination as to the insured’s actual conduct and evaluate the duty to defend
accordingly.”) (emphasis added) (citing Allstate Ins. Co. v. Carioto, 551 N.E.2d 382, 386-89
(Ill. App. 1990)).
II.

Allstate’s Motion for Summary Judgment
Now onto the main event: Allstate’s motion for summary judgment which seeks

to resolve this case in its entirety in Allstate’s favor without a trial. The familiar
standards of summary judgment apply. Summary judgment is appropriate 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 as to material facts exist 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 deciding if a dispute of
material fact exists, I take “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). A declaratory judgment action concerning the construction of
an insurance policy is a frequent example of a type of case ripe for disposition on
summary judgment.
An insurance policy is a species of contract and in Indiana, the same rules of
construction apply as they would to any other contract. Bradshaw v. Chandler, 916
N.E.2d 163, 166 (Ind. 2009). The interpretation of contracts is a question of law for the
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court to decide. In performing that task, my goal is to determine and enforce the parties’
intent as it appears from the four corners of the insurance policy. Buckeye State Mut. Ins.
Co. v. Carfield, 914 N.E.2d 315, 318 (Ind. Ct. App. 2009). If insurance policy language is
clear and unambiguous, it is given its plain and ordinary meaning. Reuille v. E.E.
Brandenberger Constr., Inc., 888 N.E.2d 770, 771 (Ind. 2008). Absent some ambiguity or
other issue, I cannot rewrite the terms of the insurance policy or extend coverage
beyond what the policy’s plain language contemplates. Med. Assur. Co. v. Weinberger,
973 F. Supp. 2d 925, 36 (N.D. Ind. 2013) (citing Am. States Ins. v. Adair Indus., 576 N.E.2d
1272, 1273 (Ind. Ct. App. 1991)).
Allstate’s argument is a straightforward one. Richardson’s policy has an
exclusion for intentional and criminal acts and his actions which led to Smith’s untimely
death were both intentional and criminal. And while Richardson maintains (and the
underlying lawsuit by Smith’s estate alleges) that the gunshot was an accident, Allstate
says that argument is foreclosed as a matter of settled fact and law by Richardson’s
criminal conviction for murder.
Allstate’s argument is one of collateral estoppel, also known as issue preclusion.
Collateral estoppel is a necessary part of our justice system as a means of avoiding
endless litigation over the same facts before multiple courts. It is not uncommon for
multiple courts or tribunals to be asked to decide the same factual issue as to the same
parties. In our system, when that happens, the decision of the first court must be
followed by any second (or third) court, so long as the issue is one that was actually
decided by the first court with a full and fair opportunity to litigate the issue. It is not a
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doctrine to be used as a trap against unsophisticated litigants or parties which have no
incentive or ability to litigate the issue in the first court, but it is to be used to discourage
parties who lose before one court from shopping around and hoping for a second bite at
the apple in front of another tribunal. See B & B Hardware, Inc. v. Hargis Indus., Inc., 135
S. Ct. 1293, 1298–99 (2015). “For collateral estoppel to apply, four elements must be met:
‘(1) the issue sought to be precluded must be the same as that involved in the prior
litigation, (2) the issue must have been actually litigated, (3) the determination of the
issue must have been essential to the final judgment, and (4) the party against whom
estoppel is invoked must be fully represented in the prior action.’” Meyer v. Rigdon, 36
F.3d 1375, 1379 (7th Cir. 1994) (citation omitted).
Once again, the Seventh Circuit has addressed these issues in a very analogous
case. In Wolverine Mutual Ins. v. Vance ex rel. Tinsley, 325 F.3d 939, 941 (7th Cir. 2003),
after an altercation outside of a home, one man shot another—although thankfully the
man survived. A jury subsequently found the shooter guilty of attempted murder.
Under Indiana law, specific intent is an element of attempted murder. Id. at 942. The
victim filed a tort lawsuit in Indiana state court, and the provider of the shooter’s
homeowners’ insurance policy filed a declaratory judgment action in federal court,
seeking a declaration that it owed no duty to defend or indemnify. The district court
granted summary judgment in favor of the insurer because the shooter’s criminal
conviction, which required a finding of specific intent, meant that his actions were
excluded under the plain language of the insurance policy. Id. The Seventh Circuit

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affirmed, finding that the shooter had every “incentive and opportunity to litigate the
issue of intent in his previous criminal prosecution.” Id. at 943.
Also instructive is the Court of Appeals of Indiana’ decision in Meridian Insurance
Co. v. Zepeda, 734 N.E.2d 1126 (Ind. Ct. App. 2000). There, the Court of Appeals of
Indiana likewise blessed the use of collateral estoppel as an offensive tool by an
insurance company against its insured in a declaratory judgment action to exclude
“expected or intended acts” from coverage after the insured had been convicted of
aggravated battery. And like the insured in Zepada (and Wolverine Mutual), Richardson
had every incentive and opportunity to litigate his intent or alleged lack thereof in his
criminal trial. 734 N.E. at 1130; see also Snodgrass v. Baize, 405 N.E.2d 48, 55 (Ind. Ct. App.
1980) (holding that evidence of a previous criminal conviction for intentional conduct
was enough to uphold trial court's finding in subsequent civil suit that defendant had
acted intentionally).
Here, the four required elements of collateral estoppel have been met. Whether
Richardson acted “knowingly or intentionally” when he fired the gun was at issue in
his murder trial and is the key issue before me as to whether his conduct is excluded
under the policy. Second, there is no doubt that this issue was actually litigated;
Richardson stood trial and a jury convicted him of murder. Third, the issue of whether
Richardson acted “knowingly or intentionally” was essential to the jury’s verdict that
Richardson was guilty of murder because that requisite state of mind is what
differentiates murder from other forms of homicide such as manslaughter. Finally,
Richardson was represented by counsel at his murder trial and while he tells me his
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counsel was ineffective (but no court has had an opportunity to examine that issue), his
arguments center on his appellate counsel’s failure to file a brief with the Court of
Appeals of Indiana—a wholly separate matter. As such, all four elements of collateral
estoppel are met here and Allstate is entitled to summary judgment on its declaratory
judgment claim that it owes no duty to defend or duty to indemnify Richardson in the
wrongful death lawsuit brought by Smith’s estate in Indiana state court.
It is worth mentioning how, practically speaking, my decision affects Smith’s
estate and the state court wrongful death lawsuit. Again, Wolverine Mutual and Zepeda
are instructive. On the collateral estoppel issue, my decision here will have little if any
effect on Smith’s estate’s ability to hold Richardson liable in the wrongful death action.
Because the criminal case in which Richardson was found guilty of murder was an
action between the state of Indiana and Richardson, it cannot be used against Smith or
his estate. Neither Smith, as the victim, or his estate has had a prior opportunity to
litigate the issue of Richardson’s intent. Zepada, 732 N.E. at 1128, 1131-32. Thus, the
findings of the jury at Richardson’s criminal trial cannot be used against Smith’s estate.
Practically speaking, this may not have much effect at all on liability in the state court
case, as Richardson would presumably be liable to Smith’s estate whether he acted
purposefully, negligently or something in between. I.C. 34-32-1-1; Pickens’ Estate v.
Pickens, 263 N.E.2d 151, 158 (Ind. 1970) (noting wrongful death may be actionable based
on either intentional or negligent conduct). But that is not for me to decide and must be
left to the state court.

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Furthermore, Smith’s estate did not oppose or respond to the motion for
summary judgment, despite being a party to this lawsuit. Even still, if it wishes to
appeal my decision, they have standing to appeal my decision that Allstate has no duty
to indemnify Richardson—although by not opposing summary judgment it may have
issues of waiver. Smith’s estate, however, lacks “standing to appeal the district court’s
finding that [Allstate] does not have a duty to defend [Richardson].” Wolverine Mutual,
325 F.3d at 942; Grinnell Mutual Reinsurance Co. v. Reinke, 43 F.3d 1152, 1153 (7th Cir.
1995) (holding that a tort victim may appeal from a declaration that an insurance policy
excludes coverage even if the insured does not participate in the appeal). And of course,
my decision today does not deprive Smith’s estate of any remedy. It may still obtain
damages against Richardson if it prevails in state court. But defending that lawsuit and
indemnifying Richardson for any damages he is ordered to pay, will not be the
responsibility of Allstate. See Wolverine Mutual, 325 F.3d at 944.
Conclusion
For the foregoing reasons, Defendant Matthew Richardson’s Motion to Dismiss
or in the Alternative Stay the Proceedings [DE 50] is DENIED; and Plaintiff Allstate
Insurance’s Motion for Summary Judgment [DE 62] is GRANTED. As this order
resolves all the pending claims in this case, the Clerk is directed to CLOSE this case.
SO ORDERED on May 15, 2019.
/s/ Philip P. Simon____
PHILIP P. SIMON, JUDGE
UNITED STATES DISTRICT COURT

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