STATE FARM FIRE AND CASUALTY COMPANY, Plaintiff-Appellant,
v.
Virgil L. FULLERTON, et al., Defendants,
W. Bryant Buckner, Individually and as Representative of the
Estate of Karen Jones, deceased; Jacob Joseph Anslum,
Individually and as Representative of the Estate of Karen
Jones, deceased; Stephen Paul Buckner, Individually and as
Representative of the Estate of Karen Jones, deceased,
Defendants-Appellees.
No. 96-40078.
United States Court of Appeals,
Fifth Circuit.
July 22, 1997.
Paul M. Boyd, Tyler, TX, Michael William Minton, Johnston & Minton, Fort Worth, TX, for Plaintiff-Appellant.
Michael Jacobellis, Tonahill, Hile, Leister and Jacobellis, Beaumont, TX, James Kevin Dutton, Tonahill, Hile, Leister & Jacobellis, Jasper, TX, for Defendants-Appellees.
Appeal from the United States District Court for the Eastern District of Texas.
Before KING and HIGGINBOTHAM, Circuit Judges, and LAKE,* District Judge.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
This case requires us to surmise how a Texas court would rule on a question that has received diverse answers in those states that have considered it: whether an insured's guilty plea in a prior criminal proceeding can preclude third parties from collecting on the insured's policy. More specifically, we must determine whether Texas law allows the heirs of the victims of a shooting to argue that the shooting was unintentional in spite of the fact that the insured pled guilty to murder.
We hold that the insured's guilty plea satisfies the requisites of issue preclusion. We will reverse the district court's declaration that the policy affords coverage and enter judgment in favor of State Farm.
I.
On July 7, 1992, Virgil L. Fullerton killed his wife, Artie Harris Fullerton, and his step-daughter, Karen Denby Jones, with a shotgun at their rural residence. Fullerton's precise motive has never come to light, but the family had experienced considerable domestic friction. A number of dangerous incidents convinced him that his wife was trying to kill him. At one point, Artie Fullerton considered filing assault charges against her husband, and after her death her relatives asserted that Fullerton treated her cruelly. Whatever the story behind the slayings, Fullerton did not try to escape justice: he immediately called the sheriff's department and went peaceably to jail.
The state of Texas charged Fullerton with two counts of capital murder. His attorney concluded that Fullerton had a good chance of acquittal if he pled not guilty by reason of insanity. But the attorney was reluctant to adopt that strategy because Fullerton was approaching seventy years of age and was in poor health. Unlike an order of commitment to a psychiatric hospital, a conviction on something less than capital murder might allow Fullerton to return home if he entered the last stages of a terminal illness. Based on this advice, Fullerton pled guilty to the lesser offense of simple murder. The court sentenced him to life imprisonment. The judgment of conviction stated that Fullerton was mentally competent, and the issue of his mental competence to form the intent to kill never surfaced before the court. He remains incarcerated.
The heirs of the two victims brought wrongful death actions against Fullerton in state court. At the time of the shooting, Virgil and Artie Fullerton held a homeowners' insurance 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, the issuer of the policy, provided Fullerton a defense under a reservation of rights and filed this declaratory judgment action in federal court to establish that it has no duty to defend or indemnify Fullerton against the wrongful death claims. Its complaint listed Fullerton and the representatives of Karen Jones's estate as defendants.1 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 Artie Harris Fullerton and Karen Denby Jones." The other defendants--Stephen Paul Buckner, Jacob Joseph Anslum, and W. Bryant Buckner (collectively "the Buckners")--moved for appointment of a guardian ad litem on the grounds that Fullerton is not mentally competent. The court granted the motion over State Farm's objection.
State Farm moved for summary judgment on the theories that Fullerton's conviction collaterally estops the Buckners from litigating Fullerton's intent and that the evidence that Fullerton shot his wife and Jones intentionally leaves no genuine issue of material fact. In support, it attached transcripts and other documents from the criminal proceedings. The court denied the motion without explanation. It similarly denied State Farm's motion for judgment as a matter of law at the close of evidence.2
At trial, the Buckners presented expert opinion that Fullerton was "severely mentally ill" at the time of the shooting because he was suffering from a "delusional disorder" that caused him to believe that the victims wanted to kill him. The jury credited this testimony and found that the killings were unintentional. State Farm appeals and asserts a number of errors, including evidentiary and instructional errors. Because we agree with State Farm's assertion that the Buckners are precluded from litigating the issue of Fullerton's intent, we do not reach any other issues presented on appeal.
II.
Our inquiry into the preclusive effect of Fullerton's guilty plea is governed by Texas law. Angel v. Bullington,
The second requirement need not detain us. Fullerton pled guilty to a violation of Tex. Penal Code § 19.02. By entering this plea, he admitted that he intended to kill his victims or at least knew that his actions would cause their deaths.3 In other words, his convictions were valid because he admitted that the deaths were not accidents. The convictions are inconsistent both with the Buckners' suggestion that Fullerton's delusions made the shootings acts of self-defense and with their contention that he was legally insane during the incident. If the criminal proceedings decided anything, it was that the shootings were not "occurrences." See Dinnery v. State,
The first and third requisites for issue preclusion require more searching analysis. We first take up the question of whether a guilty plea counts as "full and fair litigation" under Texas law. Then we ask whether the preclusive effect of Fullerton's plea extends to the Buckners; in the traditional language of collateral estoppel, we must determine whether the Buckners are in privity with Fullerton.
III.
If Fullerton had been convicted on the murder counts after a full trial, there would be no question that the jury's factual finding that he killed intentionally would satisfy the full-and-fair-litigation prong of the test for issue preclusion. Texas law collaterally estops an insured who has suffered a conviction for murder before a jury from arguing in a subsequent coverage dispute that the killing was not willful. Francis v. Marshall,
Unfortunately, Texas courts have not decided whether a guilty plea produces similarly preclusive effects in subsequent coverage litigation. We are thus in the uncomfortable position of speculating how a Texas court might answer a close question of first impression. We may consult a variety of sources in making an Erie-guess: dicta in Texas court decisions, the general rule on the issue, and the rules in other states that Texas might look to, as well as treatises and law journals. Hill v. London, Stetelman, & Kirkwood, Inc.,
A.
A survey of the preclusive effects of guilty pleas in other jurisdictions gives us little guidance. Even if Texas wanted to follow the general rule, it would be unable to identify a majority view with any confidence.
Some courts treat a conviction pursuant to a guilty plea in the same way they would treat a conviction imposed by a jury after a full-blown trial. An especially thorough and well-reasoned justification for this approach appears in Ideal Mutual Ins. Co. v. Winker,
Overruling a prior case, Book v. Datema,
[a] defendant who pleads guilty may be held to be estopped in subsequent civil litigation from contesting facts representing the elements of the offense. However, under the terms of this Restatement such an estoppel is not a matter of issue preclusion, because the issue has not actually been litigated, but is a matter of the law of evidence beyond the scope of this Restatement.
Unable to find any cases utilizing the American Law Institute's notion of "evidentiary estoppel," the court "conclude[d] that the conclusive effect given to a guilty plea ... is founded on issue preclusion rather than estoppel." Winker,
The same result obtained in State Mutual Ins. Co. v. Bragg,
Similarly, in State Farm Fire & Cas. Co. v. Sallak,
But some courts refuse to treat guilty pleas as fully litigated matters for the purposes of collateral estoppel. The Supreme Judicial Court of Massachusetts, for example, has distinguished convictions that resulted from full-blown trials from convictions that resulted from guilty pleas and has held that collateral estoppel does not apply in the latter situation. The court explained that allowing re-litigation of facts underlying guilty pleas would compromise neither of the central goals of issue preclusion: efficiency and fairness.
When a defendant pleads guilty, waiving his right to a trial by jury, scarce judicial and prosecutorial resources are conserved. While the judge taking the plea must satisfy himself that there is a factual basis for a charge, he need not find that the defendant actually committed the crime to which he is pleading guilty. Cf. North Carolina v. Alford,
Aetna Cas. & Sur. Co. v. Niziolek,
A Texas court could approach this body of law in a variety of ways. The fact that the record supports Fullerton's claim that he had a viable insanity defense distinguishes this case from many of the decisions applying collateral estoppel. In Winker, for example, the court noted that the insured "[a]pparently ... decided that the chances of prevailing on an insanity defense were slight given the medical experts' opinions."
On the other hand, Fullerton's affidavit acknowledging responsibility and his decision not to respond to State Farm's declaratory judgment act suggest that a belief in his own innocence did not color his guilty plea. If the acknowledgment of guilt was not an Alford-type plea, a Texas court might find it highly reliable. The uncontradicted circumstances do not suggest self-defense, and Fullerton's behavior immediately after the shootings is not characteristic of someone who, "as a result of severe mental disease or defect, did not know that his conduct was wrong." TEX. PENAL CODE § 8.01 (West 1994). See also Love v. State,
In short, the unsettled law in other jurisdictions leaves us unenlightened on how Texas would resolve the question of full and fair litigation. Perhaps the more recent decisions tend to favor treating a guilty plea as the equivalent of a conviction after a trial. But nothing approaching a consensus has emerged. Predicting how a Texas court might act requires us to glean what few hints we can from the tenor of relevant Texas opinions.
B.
We ground our conclusion that Texas would regard Fullerton's plea as full and fair litigation on three observations. First, Texas has not hesitated to give default civil judgments preclusive effect, in spite of the cursory nature of the adjudication leading to those judgments. Second, language in a 1949 Texas Supreme Court case suggests a willingness to give guilty pleas to murder charges heavy weight in later civil proceedings. And finally, Texas courts have indicated that Texas issue-preclusion rules are virtually identical to the issue-preclusion rules followed in federal courts, which routinely give guilty pleas preclusive effect.
Texas courts ask not whether the issue to be precluded could have been litigated, but whether it was actually litigated--whether it was "adequately deliberated and firm." Mower v. Boyer,
These general principles do not counsel against our finding that Fullerton's criminal proceedings included a full and fair airing of his intent. The judge gave Fullerton a full hearing; indeed, he did just what Fullerton asked him to do, which was accept his guilty plea. There was no need for a reasoned opinion. And Fullerton had the right to appeal his conviction. Unlike the Mary Carter agreement in Scurlock Oil, Fullerton's plea did not skew the proceedings against him. He cannot take advantage of abstract legal statements designed to protect parties "whose procedural predicament is not of their own making." Trapnell,
We are reluctant to place much weight on the fact that, for Texas civil litigants, "[a]n agreed judgment ... has the same degree of finality and binding force as one rendered by a court at the conclusion of adversary proceedings." Forbis v. Trinity Universal Ins. Co.,
Rather than ground our Erie-guess on generalities, we turn to two specific Texas opinions. First, the case of Mendez v. Haynes Brinkley & Co.,
Mendez involved factors not present in this case. The building owners, in contrast to Fullerton, initiated the first suit themselves. More importantly, they did not face the agonizing decision of whether to preserve the possibility of winning a subsequent suit at the cost of risking a capital murder conviction. Nevertheless, both the default judgment in Mendez and the conviction in this case were the results of one-sided litigation. In both, a court entered judgments that flowed from the failure of one side to assert any defense. This treatment of default judgments suggests that in Texas "full and fair litigation" need not involve contested issues. See also Rexrode,
Although several decades old, at least one other Texas case shows an inclination to credit the facts underlying guilty pleas. In Greer v. Franklin Life Ins. Co.,
Whatever be the rule as to admissibility or effect in a civil suit such as this of a criminal conviction of the crime in issue, we think the wholly unqualified admission of a plea of guilty with the other evidence above mentioned and in the absence of contrary evidence, established intent and illegality as a matter of law.
The Greer court's explanation of why the wife was ineligible for benefits contains an ambiguity. We are not certain whether the court meant to rely on the plea as especially convincing evidence or as a prior preclusive judgment. The references to "admissibility" and "other evidence" suggest that the case does not turn on issue preclusion. But the passage is consistent with the notion that especially reliable guilty pleas automatically establish certain facts "as a matter of law." Even if we read Greer 's holding in terms of preclusion, it involves defensive, rather than offensive, issue preclusion. Nevertheless, it is a clue that Texas law takes seriously guilty pleas to murder when they bear on a subsequent coverage dispute.
Texas courts have indicated that there is "little difference" between Texas and federal rules of issue preclusion. Trapnell,
We conclude that a Texas court would treat Fullerton's guilty plea as full and fair litigation of his intent to kill his wife and step-daughter.
IV.
Fullerton is content to go without coverage. This case requires us to determine whether his plea counts as full and fair litigation not for him, but for the Buckners, who hope to receive proceeds under Fullerton's policy. Although we recognize the dangers of formalism tied up in the word "privity," see Wright, Miller & Cooper, 18 Federal Practice & Procedure § 4448 (1981), we follow Texas courts in continuing to use that label in our inquiry into whether Texas law allows State Farm to extend the preclusive effect of the murder conviction from Fullerton to the heirs of Fullerton's victims.
"[P]rivity is not established by the mere fact that persons may happen to be interested in the same question or in proving the same state of facts." Benson v. Wanda Petroleum Co.,
State Farm's assertion of privity would fail if the Buckners could assert their rights directly against State Farm. A New York court, for example, has refused to find privity between co-insured spouses when one spouse has pled guilty to an intentional crime. Fernandez v. Cigna Property & Cas. Ins. Co.,
The Iowa Supreme Court has held that a direct action statute defeats privity between an insured who pleads guilty to a criminal offense and the victim of the crime. In AID Ins. Co. v. Chrest,
Because the Buckners are not themselves insureds, and because Texas has not enacted a "direct action statute," see Jilani v. Jilani,
Thus, although Texas courts have not yet decided specifically whether tort plaintiffs who seek insurance funds are in privity with an insured who pleads guilty to murder, we hold that under Texas law the Buckners are in privity with Fullerton because of the derivative nature of their recovery under the policy.6
This result places Texas among the bulk of other jurisdictions that have considered the question. See, e.g., Aetna Cas. & Sur. Co. v. Jones,
Decisions to the contrary are both less numerous and less recent. See Clemmer v. Hartford Ins. Co.,
V.
Texas courts have also recognized that at bottom issue preclusion is driven by equitable principles. Therefore, they reserve the discretion to decline to apply it when the results would be unfair. Scurlock Oil Co. v. Smithwick,
1. Whether the use of collateral estoppel will reward a plaintiff who could have been joined in the earlier suit but chose to "wait and see." ...
2. Whether the defendant in the first suit had the incentive to litigate that suit fully and vigorously....
3. Whether the second suit will afford the defendant procedural opportunities available in the first suit that could cause a different result....
4. Whether the judgment in the first suit is inconsistent with any other earlier decision....
Finger v. Southern Refrig. Serv.,
The Texas Supreme Court has isolated three goals of issue preclusion: the conservation of judicial resources, the protection of defendants from repetitive lawsuits, and the prevention of inconsistent judgments. Sysco Food Services, Inc. v. Trapnell,
Although the Buckners do not raise the issue, we recognize that the Due Process Clause places limits on the use of offensive, non-mutual issue preclusion. "It is a violation of due process for a judgment to be binding on a litigant who was not a party or a privy and therefore has never had an opportunity to be heard." Parklane Hosiery,
The judgment in favor of the Buckners is REVERSED, and judgment is RENDERED in favor of State Farm.
Notes
* U.S. District Judge of the Southern District of Texas, sitting by designation.
The executrix of Artie Fullerton's estate, Judith A. Pace, was also involved in the case throughout the trial. State Farm, however, succeeded in its motion for judgment notwithstanding the verdict as to Pace because of a policy exclusion for bodily injuries sustained by insureds. Pace has not appealed that ruling
State Farm also urged a judicial estoppel theory based on Anslum's testimony at the sentencing phase of Fullerton's trial. This theory is not before us on appeal
Section 19.02(b) reads:
A person commits an offense if he:
(1) intentionally or knowingly causes the death of an individual;
(2) intends to cause serious bodily injury and commits an act clearly dangerous to human life that causes the death of an individual; or
(3) commits or attempts to commit a felony, other than manslaughter, and in the course of and in furtherance of the commission or attempt, or in immediate flight from the commission or attempt, he commits or attempts to commit an act clearly dangerous to human life that causes the death of an individual.
Neither serious-bodily-injury murder nor felony murder, described in subsections (2) and (3) of the statute respectively, was at issue in the criminal proceedings, and the Buckners do not suggest otherwise. According to the indictment and the complaint, which State Farm filed as an exhibit with its motion for summary judgment, Fullerton "knowingly and intentionally cause[d] the death[s]" of his wife and Jones. Thus, a brief investigation of the pleadings, see Jones v. City of Houston,
We do not agree with the interpretation of Mendez offered in In re Turner,
The passing reference to the recording agent's deposition in Mendez does not indicate that he consented to the judgment against him. Even if he did consent, that fact played no role in the court's application of issue preclusion. See also Greater Houston Transp. Co. v. Wilson,
We do not discern any difference in Texas courts' understanding of privity in the contexts of claim preclusion and issue preclusion. Neel, for example, concerned issue preclusion and applied privity rules delineated in Amstadt without remarking that that case concerned claim preclusion. Similarly, CLS Associates cited Benson to support its privity analysis in spite of the fact that claim preclusion was at stake in CLS Associates and issue preclusion was at stake in Benson
We do not understand Dairyland County Mut. Ins. Co. v. Childress,