Homeowner’s Policy And Intentional Act

Insurance lawyers in Brock Texas need to understand what a homeowners policy covers and what it does not cover.  A 1997, United States 5th Circuit opinion lets us know one of the occurrences not covered.  The style of the opinion is, State Farm Fire & Casualty Company v. Fullerton.

Fullerton killed his wife and step daughter.  His motive was never explained.  He immediately called to the sheriff’s department and turned himself in.  Based on advice of his attorney, Fullerton pleaded guilty to the lesser offense of simple murder.  The Court sentenced him to life in prison.  The heirs of two of the victims brought a wrongful death action against Fullerton in state court.  At the time of the shooting, Fullerton held a homeowners policy that provided coverage for, among other things, personal liability for bodily injuries.  In general, the policy covered injuries “caused by an occurrence” and defined an “occurrence” as “an accident, including exposure to conditions, which results in bodily injury … during the policy period.”  It excluded, however, injuries caused intentionally by or at the direction of the insured.

State Farm provided Fullerton with a defense under a reservation of rights and filed a declaratory judgment action.  Fullerton himself did not answer the suit.  He stated by affidavit:  “I do not believe that insurance coverage exists for these claims because any action taken by me was intentional and intended to cause harm” to his wife and step daughter.  The Court granted the defendant’s motion to appoint a guardian ad litem.  State Farm moved for summary judgment on the theory that Fullerton’s conviction collaterally estopped the heirs from litigating Fullerton’s intent and that the evidence that Fullerton shot his wife and Jones intentionally left no genuine issue of material fact.  The trial court denied the motion for summary judgment.  At trial, the jury found that the killings were unintentional.  State Farm appealed.

The judgment was reversed and rendered in favor of State Farm.  The 5th Circuit held that the guilty plea collaterally estopped the litigation of Fullerton’ intent.  Although a Texas court has not decided whether a guilty plea produces a preclusive effect, the 5th Circuit concluded that Texas would most likely follow the rule that a valid guilty plea serves as a full and fair litigation of the Facts necessary to establish the elements of the crime and thus a Texas Court would preclude Fullerton from contesting State Farm’s assertion that he acted “intentionally.”