Western States Insurance v. Kelley-Williamson Co.

Citations: 569 N.E.2d 1289; 211 Ill. App. 3d 7; 155 Ill. Dec. 678; 1991 Ill. App. LEXIS 559Docket: 2-90-1023

Court: Appellate Court of Illinois; April 4, 1991; Illinois; State Appellate Court

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Western States Insurance Company appealed a trial court's dismissal of its complaint for declaratory judgment, which found the company must provide coverage to David Derwent under an insurance policy. The plaintiff argued that the policy's exclusion for intentional acts applied since Derwent intentionally crashed his vehicle into a gas station owned by Kelley-Williamson Company. The trial court affirmed that the exclusion did not apply, as Derwent was found guilty but mentally ill in a related criminal case, where he claimed he acted out of insanity at the time of the incident.

During a bench trial, both parties stipulated to the insurance policy's exclusion clause and the transcript of Derwent's prior criminal proceedings. Derwent testified that he drove into the gas station intending to commit suicide, acknowledging he knew it would cause damage. His mental state was described as deteriorating, believing he was being attacked verbally by co-workers and hearing voices. After packing his belongings and attempting to escape his perceived threats, he ultimately decided to crash his vehicle into the gas station as a means of ending his life. The court ruled that Derwent's actions did not constitute "intent" as defined by the policy, leading to the affirmation of coverage by the appellate court.

Derwent, in a state of panic, drove his vehicle into a building at high speed upon seeing approaching lights. He had not previously received treatment for mental health issues but continued to hear voices following the incident. Hugh Knapp, vice-president of operations at Jane Addams Community Mental Health Center, diagnosed Derwent with a psychotic disorder, stating he was mentally ill and unable to make rational decisions. Dr. Kamal Modir, a psychiatrist, diagnosed him with schizophrenia and testified that Derwent was insane at the time of the incident, believing he intended to commit suicide by driving into the building.

The trial court found Derwent clinically and legally insane, determining he lacked the intent required under the insurance policy, thus obligating the plaintiff to provide a defense against a lawsuit filed by Kelley. The plaintiff appealed this decision, arguing that the trial court did not adequately weigh Derwent's criminal conviction as evidence of intentionality. It is established that a criminal conviction can serve as prima facie evidence in civil cases. The trial court acknowledged the conviction but found that the evidence presented by Derwent's mental state significantly outweighed it. The plaintiff also argued that Derwent's stipulations in the criminal case constituted judicial admissions that should be uncontestable in the civil case, referencing a precedent where a defendant's admissions in a battery case could not be disputed.

The defendant was not found guilty but received an order of supervision based on stipulated facts, followed by an expungement that impounded the court record. In a subsequent tort action, the plaintiff called the criminal proceeding judge to testify about the stipulations recorded. The court admitted this testimony, noting that the defendant had made a binding admission of having struck the plaintiff, although the stipulations were not deemed conclusive evidence of battery. Judicial admissions are binding only in the original proceedings and become ordinary evidentiary admissions in subsequent cases, allowing for explanation or contradiction. 

The trial court correctly assessed that the stipulated facts from the criminal case were not binding on the defendant in the tort case. The plaintiff argued that the trial court erred in finding that the defendant, Derwent, did not intend to cause damage to a gas station and in its interpretation of an exclusionary clause in the insurance policy. The court referenced Aetna Casualty & Surety Co. v. Dichtl, stating that an insane person's acts do not exempt them from civil liability, but intent under insurance exclusions requires the mental capacity to form intent at the time of the injury. 

The court determined that intent means either desiring the consequences or believing they are substantially certain to occur. The plaintiff contended that the trial court should have considered Derwent's degree of mental illness in assessing intent, citing relevant case law. The court affirmed that intentionality regarding insurance exclusions is subjective and must account for a party's incapacitation. However, this is ultimately a factual determination for the trier of fact. The trial court concluded that Derwent was legally insane and incapable of exercising free will or forming the necessary intent under the insurance policy at the time of the incident. The appellate court found no basis to overturn the trial court's findings, leading to an affirmation of the judgment.