Jan. 30, 2023 – A man’s conviction for second degree reckless homicide for causing a death in his home does not preclude his action for indemnification under his homeowner’s insurance policy, the Wisconsin Supreme Court has ruled.

In Dostal v. Strand, 2023 WI 6 (Jan. 26, 2023), the supreme court also held (4-3) that it was inappropriate to grant summary judgment for the insurer on the issue of whether the policy’s intentional acts exclusion applied.

Justice Ann Walsh Bradley wrote the majority opinion, joined by Justice Rebecca Dallet, Justice Brian Hagedorn, and Justice Jill Karofsky. Chief Justice Annette Ziegler dissented, joined by Justice Patience Roggensack and Justice Rebecca Bradley.

A Reckless Death

Lindsey Dostal and Curtis Strand were the parents of a three-month-old girl, Haeven, who died while in Strand’s care in 2017.

Strand said the child suffered a fall. But the medical examiner concluded that the injuries that killed Haeven – a fractured skull and a brain injury – were too severe to have been the result of a fall.

After being charged with first-degree reckless homicide and obstructing an officer, Strand was convicted of second-degree reckless homicide.

When Dostal sued Strand in Barron County Circuit Court, Strand contacted his insurer, State Farm Insurance (State Farm), and sought defense and indemnification under his homeowner’s policy. State Farm moved to stay the adjudication of Strand’s liability until the coverage issue had been resolved.

State Farm moved for summary judgment on the coverage issue. The circuit court granted State Farm’s motion.

Of Occurrences and Accidents

Under the insurance policy, State Farm was obligated to pay up to the liability limit and tender a defense to Strand in any suit brought against him for damages due to bodily injury or property damage caused by “an occurrence.”

The policy defined an occurrence as “an accident, including exposure to conditions, which results in (a) bodily injury; or (b) property damage; during the policy period.” The policy contained an exclusion of coverage for “bodily injury … which is either expected or intended by the insured.”

The circuit court judge concluded that because the jury found beyond a reasonable doubt that Strand recklessly caused the death of the child by creating an unreasonable and substantial risk of great bodily harm and death, the child’s death could not be “an occurrence” under the policy.

Dostal appealed. The Wisconsin Court of Appeals affirmed. Dostal then appealed to the Wisconsin Supreme Court, which reversed in a 4-3 decision.

No Definition for ‘Accident’

On appeal, State Farm argued that Strand’s conviction for second degree reckless homicide precluded a finding that his conduct was an accident.

Justice A.W. Bradley began her opinion for the majority by explaining that issue preclusion would not apply unless the issue of whether Strand’s conduct was an accident had actually been litigated.

A.W. Bradley pointed out that the insurance policy defined “occurrence” as an “accident,” but provided no definition for “accident.”

State Farm argued the issue of Strand’s fault was actually litigated in his criminal trial. Because Strand’s conduct was judged to be reckless, State Farm argued, it could not have been an “accident.”

No Wisconsin Case on Point

With no Wisconsin case directly on point, Justice A.W. Bradley looked to appellate court cases from New York and Illinois that considered whether the reckless conduct of an insured bars indemnification for “accidents.” Those cases found no preclusive effect to convictions for crimes involving reckless conduct.

Justice A.W. Bradley concluded that whether Strand’s conduct counted as an “accident” under the insurance policy had not actually been litigated.

A.W. Bradley noted that because the jury was not asked to return a special verdict, it made no specific factual findings; as a result, it was impossible to know which of Strand’s acts the jury had determined to be reckless.

Risk of Occurrence vs. Occurrence

Justice A.W. Bradley also reasoned that, regarding the meaning of the word “accident,” being aware of the risk of a thing happening and the thing then happening were not the same.

“If a person is driving 90 miles per hour on a city street, such conduct would not doubt be reckless, but that doesn’t mean it isn’t an ‘accident’ if the driver unintentionally hits a pedestrian,” A.W. Bradley wrote. “Such an event may still occur ‘by chance’ or ‘without one’s foresight or expectation.’”

Intentional Acts Exclusion

Justice A.W. Bradley concluded that genuine issues of material fact remained regarding whether the policy’s intentional acts exclusion applied.

Under Wisconsin case law, she explained, a court may infer intent to injure where an injury is substantially certain to result from the conduct of the insured.

However, A.W. Bradley pointed out, a court may not infer intent to injure as a matter of law simply because the insured’s behavior violated a criminal statute. Justice A.W. Bradley also noted that intent is clearly not an element of a reckless crimes.

“If the intentional acts exclusion is to apply, the crime must involve the insured committing an intentional act that carries a substantial risk of death,” A.W. Bradley wrote. “If [Strand’s] conduct was indeed an ‘accident,’ such a determination would compel the additional conclusion that his conduct was surely not ‘intentional’ so as to indicate that the exclusion applies.”

Dissent: Recklessness and Accident Are ‘Inconsistent’

In her dissent, Chief Justice Ziegler argued that the jury had settled the issue of whether Haeven’s death was accidental.

She also argued that the majority had ignored Wisconsin case law that defined “accident” in an insurance policy as an event “that takes place without one’s foresight or expectation.”

Because the jury found beyond a reasonable doubt that Strand was aware that his actions created an unreasonable and substantial risk to Haeven, the risk of her death could not have been unexpected to Strand or unforeseen by him.

“As the terms are defined in our statutes and precedent, the definitions of ‘criminal recklessness’ and ‘accident’ are inconsistent with each other,” Ziegler wrote.