Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-06-03628/USCOURTS-ca8-06-03628-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 06-3628

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Allstate Insurance Company,

Appellant,

v.

Tonja Blount; Nathan Smith;

Andrew J. Grimes; Barbara

Grimes; Mitchell Y. Choi,

Appellees.

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Appeal from the United States

District Court for the 

Western District of Missouri.

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Submitted: March 15, 2007

 Filed: June 26, 2007

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Before COLLOTON, HANSEN and GRUENDER, Circuit Judges. 

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GRUENDER, Circuit Judge.

Allstate Insurance Company (“Allstate”) brought a declaratory judgment suit

seeking a determination that the homeowner’s insurance policy it issued to Barbara

Grimes (“Grimes”) did not provide coverage for damages awarded against her in a

wrongful death suit. The district court held that the damages were covered by the

policy and granted summary judgment against Allstate. For the reasons that follow,

we affirm in part and reverse in part.

Appellate Case: 06-3628 Page: 1 Date Filed: 06/26/2007 Entry ID: 3322714
1

With respect to Grimes, the suit alleged that she negligently: failed to supervise

Gormley, failed to control Gormley, failed to protect Gormley, failed to provide

assistance to Gormley, supervised Gormley, and created a substantial risk to the life

of Gormley. We will refer to these collectively as the “negligence claims.”

2

Defending an insured under a “reservation of rights” allows the insurer to

assume the defense of the claim and later “contest whether or not a judgment

ultimately entered in the case f[alls] within the policy coverage.” Butters v. City of

Independence, 513 S.W.2d 418, 424-25 (Mo. 1974). 

-2-

I. BACKGROUND

This case arises out of the underlying wrongful death suit Tonja Blount filed in

the Circuit Court for Greene County, Missouri, against Nathan Smith, Grimes,

Andrew Grimes and Mitchell Y. Choi (collectively, “defendants”), alleging that

defendants negligently caused or contributed to the death of her son, Jeffrey Cale

Gormley, who had became ill, and eventually died, after drinking alcohol and using

drugs while at Grimes’s home.1

 

At the time of the alleged actions, Grimes was insured under a homeowner’s

insurance policy with Allstate. The policy covered “damages which an insured person

becomes legally obligated to pay because of bodily injury or property damage arising

from an occurrence to which the policy applies” (“damages provision”). Allstate

defended Grimes under a reservation of rights in the wrongful death proceeding.2

 At

the same time, however, Allstate filed the instant declaratory judgment suit in federal

court seeking a determination that the negligence claims in the wrongful death suit

were not covered by the damages provision and, alternatively, were excluded under

the policy’s exclusion for “bodily injury or property damage intended by, or which

may be reasonably expected to result from the intentional or criminal acts or

omissions of, any insured person” (“criminal acts exclusion”). 

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3

The statute provides that “[a] person commits the crime of involuntary

manslaughter in the first degree if he or she . . . [r]ecklessly causes the death of

another person.” Mo. Rev. Stat. § 565.024.1.

4

In the response to Allstate’s motion for summary judgment before the district

court, Grimes admitted that she pled guilty because she acted as alleged by the

prosecution in the criminal complaint and at the plea hearing.

-3-

While the wrongful death and declaratory judgment suits were pending, Grimes

faced state criminal charges related to the death of Gormley. In the criminal

proceeding, Grimes pled guilty to first-degree involuntary manslaughter, a violation

of Mo. Rev. Stat. § 565.024.1.3

 Specifically, Grimes admitted to “recklessly caus[ing]

the death of Jeffrey Cale Gormley by providing her home to minors for the

consumption of alcohol and/or controlled substances without adult supervision.” 

At the guilty plea hearing, the prosecutor recited the factual basis for the charge.

Following the prosecutor’s factual recitation, Grimes admitted to the facts and entered

her guilty plea.4

 The admitted facts established that Choi, Smith, Andrew Grimes and

Gormley drove to a convenience store where they purchased two cases of beer and a

bottle of bourbon. The boys then drove to Grimes’s home where they arrived around

7:30 p.m. There, Gormley drank alcohol and consumed Xanax. At some point during

the evening Gormley fell and hit his head, creating a knot above his eye. Thereafter,

Gormley laid down underneath a coffee table where he passed out. Around 11:00

p.m. that evening, Smith called Tracie Whitlock, Gormley’s girlfriend, to inform her

that Gormley was “having problems.” Andrew Grimes called her around 1:00 a.m.

to tell her that Gormley did not “look right” and was having trouble breathing.

Whitlock instructed Andrew Grimes to alert his mother of Gormley’s condition and

to call her back if the problems persisted. Whitlock did not receive any other phone

calls. Grimes was aware that Gormley was sixteen years old and had been drinking

and doing drugs in her home. Her only instruction to the boys was to move the coffee

table so that Gormley would not break it when he awoke. Eventually, emergency

personnel arrived at Grimes’s home where they pronounced Gormley dead. Gormley

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5

Non-mutual collateral estoppel “allow[s] strangers to the prior suit to assert

collateral estoppel against parties to the prior suit to bar relitigation of issues

previously adjudicated.” Oates v. Safeco Ins. Co. of Am., 583 S.W.2d 713, 719 (Mo.

banc 1979). 

-4-

died from respiratory failure resulting from intoxication. The medical examiner

concluded that had Gormley received medical attention he would have lived. 

Following Grimes’s criminal conviction, Allstate moved for summary judgment

against Grimes, Andrew Grimes and Blount in the declaratory judgment suit. In

effect, Allstate argued for the application of non-mutual collateral estoppel,5

 asserting

that Grimes’s guilty plea and resulting criminal conviction prevented her from

challenging the fact that the policy’s damages provision does not apply and that the

criminal acts exclusion does apply, thereby precluding coverage for any damages

awarded against her in the wrongful death suit. The district court denied Allstate’s

summary judgment motion, holding that the negligence cause of action pled in the

wrongful death suit was “separate and distinct” from the conduct established by the

guilty plea and conviction and that “it is likely coverage exists for this separate cause

of action.” 

Also subsequent to Grimes’s criminal conviction, Blount, Grimes and Andrew

Grimes entered into an agreement under Mo. Rev. Stat. § 537.065 with respect to the

wrongful death suit. An agreement under this provision “expressly authorizes an

insured to settle a personal injury or wrongful death action by agreeing that the

plaintiff may collect the settlement only against the insurer.” Esicorp, Inc. v. Liberty

Mut. Ins. Co., 193 F.3d 966, 971 (8th Cir. 1999). It does not determine the insured’s

liability but merely limits enforceability of a judgment. O’Donnell v. St. Luke’s

Episcopal Presbyterian Hosps., 800 F.2d 739, 741 (8th Cir. 1986). In the present

case, the agreement provided that:

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-5-

The § 537.065 agreement also provided that the parties agreed to allow a consent

judgment of $1,500,000 to be entered in favor of Blount and against Grimes and

Andrew Grimes, jointly and severally. Finally, the agreement noted that Grimes and

Andrew Grimes expressly denied all liability. The parties waived a trial by jury. The

trial court stated that:

[h]aving heard the evidence, and with the consent of defendants Andrew

Grimes and Barbara Grimes, [the court] finds the issues in favor of

plaintiff Tonja Blount for the wrongful death of [Gormley]. . . . The

Court, also with the consent of defendants Andrew Grimes and Barbara

Grimes, awards damages in the amount of $1,500,000 . . . and further

finds this amount to be fair and reasonable.

The trial court then entered a consent judgment consistent with the § 537.065

agreement.

Thereafter, Grimes, Andrew Grimes and Blount moved for summary judgment

in the declaratory judgment suit, asserting that the judgment in the wrongful death suit

“serves as res judicata as to the issue of the validity of the claims of negligent failure

to render aid.” They argued that because it had been conclusively established that

Grimes acted negligently and because negligence constitutes an “occurrence” under

the policy’s damages provision, there was no genuine issue of material fact as to

whether the civil damages award was covered under that provision. The district court

agreed and entered summary judgment in favor of Grimes, Andrew Grimes and

Blount. 

Appellate Case: 06-3628 Page: 5 Date Filed: 06/26/2007 Entry ID: 3322714
-6-

The next day, the district court issued an order directing the parties to show

cause as to why the suit should not be dismissed as to defendants Smith and Choi,

neither of whom were parties to the motions for summary judgment. No party filed

a response. Consequently, the district court dismissed these two defendants. Allstate

now appeals the district court’s denial of summary judgment in favor of Allstate, its

entry of summary judgment in favor of Grimes, Andrew Grimes and Blount

(collectively, “Appellees”), and its dismissal of Smith and Choi. 

II. DISCUSSION

1. Standard of Review

“In reviewing the district court’s grant of summary judgment, we review de

novo its conclusions of law, including the availability of issue preclusion,” also called

collateral estoppel. Liberty Mut. Ins. Co. v. FAG Bearings Corp., 335 F.3d 752, 757

(8th Cir. 2003) (internal citations omitted); see also Boudreau v. Wal-Mart Stores,

Inc., 249 F.3d 715, 719 (8th Cir. 2001) (“A trial court’s determination as to whether

the legal prerequisites for issue preclusion have been met on the facts before it is a

mixed question of law and fact, subject to de novo review by this court.”). 

Interpretation of an insurance policy and application of collateral estoppel are

matters of state law. Am. Family Mut. Ins. Co. v. Co Fat Le, 439 F.3d 436, 439 (8th

Cir. 2006); FAG Bearings, 335 F.3d at 758. It is undisputed that the issues in this case

are governed by Missouri law. “In interpreting state law, we are bound by the

decisions of the state’s highest court.” Minn. Supply Co. v. Raymond Corp., 472 F.3d

524, 534 (8th Cir. 2006) (internal quotation omitted). “When a state’s highest court

has not decided an issue, it is up to this court to predict how the state’s highest court

would resolve that issue.” Id. “Decisions of intermediate state appellate courts are

persuasive authority that we follow when they are the best evidence of what state law

is.” Id. 

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-7-

2. Appellees’s Motion for Summary Judgment

Although Appellees’s motion for summary judgment was filed and decided

after Allstate’s motion, we choose to address it first. Once the district court had

denied Allstate’s motion for summary judgment—concluding that Grimes’s guilty

plea and conviction did not, by way of collateral estoppel, establish that the criminal

acts exclusion applied—it granted Appellees’s motion for summary judgment. In so

doing, the district court held that the wrongful death consent judgment conclusively

established that there was an “occurrence” under the policy’s damages provision and

that therefore the damages entered against Grimes were covered under the policy.

Allstate argues that the district court erred in granting summary judgment to Appellees

because the consent judgment entered in the wrongful death suit pursuant to the

§ 537.065 agreement does not prevent, or collaterally estop, Allstate from litigating

the issue of coverage. 

In support of its grant of summary judgment to Appellees, the district court

relied on Short v. Taylor and Gunning v. State Farm Mutual Automobile Insurance

Co. for the proposition that a “judgment entered by consent of the parties . . . within

the court’s jurisdiction . . . should be given the same force as any other judgment.”

Gunning, 598 S.W.2d 479, 481 (Mo. Ct. App. 1980); accord Short, 38 S.W. 952, 954

(Mo. 1897). This proposition is generally true when the judgment is being enforced

against a party to the underlying § 537.065 agreement that precipitated the consent

judgment. By contrast, where the consent judgment is sought to be enforced against

a non-party to the underlying agreement, the analysis is somewhat different. In a

scenario such as the present one, the Missouri Supreme Court has held that § 537.065

agreements do not deprive an insurer of its right to be heard on the question of policy

coverage. Butters v. City of Independence, 513 S.W.2d 418, 425 (Mo. 1974). In

Butters, the insured city entered into a § 537.065 agreement with an injured party and

sought to enforce it against the insurer. Id. at 424-25. The Missouri Supreme Court

noted that, by entering judgment pursuant to the § 537.065 agreement, the trial court

Appellate Case: 06-3628 Page: 7 Date Filed: 06/26/2007 Entry ID: 3322714
6

Although Appellees broadly characterized their argument before the district

court as res judicata, the Supreme Court has recognized that res judicata encompasses

“issue preclusion, long called ‘collateral estoppel’ (an issue of fact or law, actually

litigated and resolved by a valid final judgment, binds the parties in a subsequent

action, whether on the same or a different claim).” Baker v. General Motors Corp.,

522 U.S. 222, 233 n. 5 (1998) (internal citations omitted). 

-8-

had “purported to determine the question [of the insured’s liability] without a trial.”

Id. at 425. Noting that the “insurer has had no opportunity to be heard on the issue of

the factual basis for the [insured]’s liability,” the Missouri Supreme Court held that

the insurer “was entitled to a trial on the coverage issue.” Id. Such is the case here.

 Neither the § 537.065 agreement nor the consent judgment indicate the factual basis

for Grimes’s liability, and both are unclear as to which of the several negligence

claims are the basis upon which the consent judgment was entered. Thus, Allstate has

had no opportunity to develop the factual basis for Grimes’s liability or be heard on

its policy defenses. See id. As a result, Allstate is entitled to litigate these issues. See

id. 

As Allstate points out, the result obtained by applying Butters can also be

reached by examining the traditional elements of collateral estoppel.6

 “The underlying

goal of issue preclusion, also known as collateral estoppel, is to promote judicial

economy and finality in litigation.” FAG Bearings Corp., 335 F.3d at 758 (applying

Missouri law). To determine whether to apply non-mutual collateral estoppel,

Missouri courts consider the following four factors: 

(1) whether the issue decided in the prior adjudication was identical to the

issue presented in the present action; (2) whether the prior adjudication

resulted in a judgment on the merits; (3) whether the party against whom

estoppel is asserted was a party or was in privity with a party to the prior

adjudication; and (4) whether the party against whom collateral estoppel

is asserted had a full and fair opportunity to litigate the issue in the prior

suit.

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-9-

James v. Paul, 49 S.W.3d 678, 682 (Mo. banc 2001). The doctrine will not apply

where doing so would be inequitable. Id. In the present matter, we need not decide

whether Appellees can satisfy the first, second or fourth prongs because we hold that

they cannot satisfy the third.

James was decided on facts similar to those in this case and resulted in the

Missouri Supreme Court’s holding that the third factor in the collateral estoppel

analysis had not been satisfied. In that case, the insured pled guilty to first-degree

assault and was subsequently sued for negligently causing the injuries resulting from

the assault. Id. at 680-81. As in the present matter, in James the insured and the

injured party entered a § 537.065 agreement whereby the injured party agreed to limit

execution of the judgment in the negligence suit to the insured’s homeowner’s policy.

Id. at 681. After obtaining a judgment, the injured party filed a garnishment action

against the insurer to collect on it, arguing that the insurer was bound by the judgment

in the negligence suit and that collateral estoppel prevented it from denying coverage.

Id. at 681-82. The Missouri Supreme Court held that the insurer was not a party and

was not in privity with any party to the underlying negligence suit, and it refused to

apply collateral estoppel. Id. at 689. The court stated that in the underlying

negligence suit:

[b]oth [the insured] and [the injured party] had identical interests in

having [the insured]’s conduct declared unintentional so as to shift the

obligation of paying damages to [the insurer]. [The insurer]’s interest in

relying on the criminal plea and the coverage exclusion were not aligned

with either that of [the injured] or [the insured] in the civil action. As a

result, the privity necessary to impose collateral estoppel against [the

insurer] was absent. Finally, the inherent conflict between [the insurer]

and [the insured] prevented [the insurer] from effectively asserting its

policy defenses in the civil action until the garnishment proceeding.

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7

Allstate defended the Grimeses under a reservation of rights whereas the

insurance company in James declined to defend the insured in the civil case. Id. at

681. This difference is irrelevant to the collateral estoppel analysis. See Cox v. Steck,

992 S.W.2d 221, 225 (Mo. Ct. App. 1999) (applying the same reasoning as James

where an insurance company defended the insured under a reservation of rights). 

-10-

Id. The same is true here.7

 An inherent conflict of interest prevented Allstate from

raising its policy defenses in the underlying civil suit while defending the Grimeses

under a reservation of rights. See id. Thus, Appellees cannot satisfy the third prong

necessary for collateral estoppel because Allstate, like the insurer in James, was not

a party and was not in privity with any party to the underlying wrongful death suit.

Accordingly, we hold that the wrongful death consent judgment does not bar Allstate

from litigating the issue of policy coverage, and we reverse the district court’s grant

of summary judgment to Appellees.

3. Allstate’s Motion for Summary Judgment

Having determined that the district court’s grant of summary judgment in favor

of Appellees must be reversed, we next turn to Allstate’s argument that the district

court erred in denying summary judgment in its favor. In its motion for summary

judgment, Allstate argued that Grimes is collaterally estopped by her guilty plea and

conviction from challenging the fact that the policy’s damages provision does not

apply and, alternatively, that the criminal acts exclusion does apply. 

First we address the damages provision, which provides that “Allstate will pay

damages which an insured person becomes legally obligated to pay because of bodily

injury or property damages arising from an occurrence to which this policy applies.”

The policy defines an “occurrence” as “an accident, including continuous or repeated

exposure to substantially the same general harmful conditions during the policy

period, resulting in bodily injury or property damage.” The policy does not define the

term “accident.”

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Allstate argues that Grimes’s act of committing first-degree involuntary

manslaughter cannot be an “accident” and, therefore, Gormley’s death is not an

occurrence under the damages provision of the policy. Allstate’s characterization of

the issue is flawed. To determine coverage issues, Missouri law provides that courts

should “compare the allegations of the underlying complaint to the language of the

insurance policy.” Reliance Ins. Co. v. Shenandoah South, Inc., 81 F.3d 789, 791 (8th

Cir. 1996) (citing Benningfield v. Avemco Ins. Co., 561 S.W.2d 736, 737 (Mo. Ct.

App. 1978)). The underlying complaint in the wrongful death suit alleged claims of

negligence. Therefore, the correct question is whether these claims constitute an

“occurrence” under the policy’s damages provision. The district court held that they

do, and we agree. 

Under Missouri law, a liability policy defining “occurrence” as an accident

necessarily encompasses a negligence claim. Woods v. Safeco Ins. Co., 980 S.W.2d

43, 49 (Mo. Ct. App. 1998) (“[W]hen a liability policy defines ‘occurrence’ as

meaning ‘accident’ . . . Missouri courts [consider this] to mean injury caused by the

negligence of the insured.”) (internal quotation omitted) (alteration in original).

Accordingly, we hold that each negligence claim in the wrongful death suit constitutes

“an occurrence to which the policy applies” under the damages provision.

Although we hold that the negligence claims are covered by Grimes’s

homeowner’s policy, Allstate may still avoid liability if it can demonstrate that the

criminal acts exclusion applies and the so-called “concurrent cause doctrine” does not.

Under Missouri law, the concurrent cause doctrine “provides that when an insured risk

and an excluded risk constitute concurrent proximate causes of an injury, a liability

insurer is liable so long as one of the causes is covered by the policy.” Co Fat Le, 439

F.3d at 439. In determining whether there are concurrent proximate causes of an

injury, Missouri courts examine whether each alleged cause could have independently

brought about the injury. Id. (citing Hunt v. Capitol Indem. Corp., 26 S.W.3d 341,

345 (Mo. Ct. App. 2000)). Under the doctrine, an insured seeking coverage under a

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-12-

provision of a policy must be able to establish an independent claim under that

provision, while at the same time not relying on an element of a claim that falls under

an exclusion of the policy. Id. (citing Centermark Props., Inc. v. Home Indem. Co.,

897 S.W.2d 98, 103 (Mo. Ct. App. 1995)). If the insured cannot so establish, the

exclusion prevails. See id. at 440. Thus, in the present case, only if Grimes’s

negligent failure to supervise, control, protect and provide assistance to Gormley and

her negligent creation of a substantial risk to his life could have independently caused

Gormley’s death may we employ the concurrent cause doctrine. Focusing only on

Grimes’s negligent failure to provide assistance to Gormley, the district court held that

this claim was “clearly distinct” from Grimes’s act of providing her home to minors

for the consumption of alcohol and/or controlled substances without adult

supervision.” We disagree. 

In Hunt, a lounge patron was killed outside a lounge. 26 S.W.3d at 342. The

victim’s family sued the lounge owner, claiming that he negligently failed to protect

the victim from his assailant. Id. The court held that the failure to protect was not a

distinct cause from the assault and battery—the latter being excluded under the

insurance policy—because “[w]ithout the underlying assault and battery, there would

have been no injury and therefore no basis for the [family]’s action against the [lounge

owner] for negligence.” Id. at 345. Similarly, in Co Fat Le, the insured’s son and his

four friends parked a vehicle inside the insured’s garage and closed the garage door.

439 F.3d at 438. The next morning, the son and his friends were found dead inside

the vehicle. Id. The parents of the friends sued the insured for wrongful death,

asserting a claim of negligent failure to warn the decedents of the risks of carbon

monoxide poisoning. Id. The insurer brought a declaratory judgment action seeking

a determination that the claim for negligent failure to warn was excluded under the

policy’s vehicle-use exclusion. Id. The insured argued that the failure to warn was

an independent cause of death and was therefore covered under the concurrent cause

doctrine. Id. at 439. Our court disagreed. Applying Missouri law, we held that “there

would have been no injury if [the insured] had not run the automobile in the closed

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8

The case cited by the district court, Am. Home Assurance Co. v. Pope, 360 F.3d

848 (8th Cir. 2004), is not instructive. That case only addressed whether the claims

were covered or excluded by the policy at issue. Id. at 851-52. Significantly, it did

not reach the issue of whether the two claims were “concurrent and proximate causes.”

9

Offensive collateral estoppel is an “attempt by a plaintiff to rely on a prior

adjudication of an issue to prevent the defendant from challenging a fact necessary to

the plaintiff’s case and on which the plaintiff carries the burden of proof.” James, 49

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garage. Accordingly, the failure to warn was not an independent concurrent

proximate cause of the decedents’ deaths.” Id. at 440.

The present case fits squarely within Hunt and Co Fat Le. Without Grimes’s

underlying act of providing her home to minors for the consumption of alcohol and/or

controlled substances without supervision, there would be no injury and no basis for

the wrongful death suit. In other words, any negligent failure to supervise, control,

protect and provide assistance to Gormley, or any negligent creation of a substantial

risk to his life, was derivative of, not independent of, Grimes’s act of providing her

home to the minors for the consumption of alcohol and controlled substances without

adult supervision. Because Appellees have failed to show that the covered negligence

claims could have independently brought about Gormley’s injury and resulting death,

the concurrent cause doctrine is not applicable. See id. at 439.8

Having determined that the concurrent cause doctrine does not apply, if Allstate

can prove that the criminal act exclusion applies, then the exclusion will prevail and

the damages entered against Grimes will not be covered under her homeowner’s

insurance policy. See Co Fat Le, 439 F.3d at 439 (“Under Missouri law, the insured

has the burden of proving coverage, and the insurer has the burden of proving that an

insurance policy exclusion applies. “). To this end, Allstate argues that Grimes’s

guilty plea and conviction preclusively establish, under the doctrine of offensive

collateral estoppel, that the policy’s criminal acts exclusion applies. Offensive

collateral estoppel9

 depends on the same four factors outlined previously. Appellees

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S.W.3d at 685. Although Missouri “courts have been less inclined to allow offensive

use of the doctrine rather than defensive when mutuality of parties is lacking,” id. at

685, we note that it is nonetheless allowed, e.g., In re Caranchini, 956 S.W.2d 910,

912 (Mo. 1997); State v. Daniels, 789 S.W.2d 243, 245 (Mo. Ct. App. 1990).

Moreover, although Allstate, as the plaintiff in the declaratory judgment suit, seeks

to assert the doctrine offensively, the suit was filed in anticipation of a garnishment

action foreshadowed by the § 537.065 agreement. In this inevitable garnishment

action, we have no doubt that Allstate, the putative defendant, would have raised the

same collateral estoppel argument in a defensive fashion. This unique posture

assuages any concern we may have regarding the reluctance of Missouri courts to

apply the doctrine offensively. 

-14-

do not challenge Allstate’s satisfaction of the second, third or fourth prongs, and we

therefore focus on the first—“whether the issue decided in the prior adjudication was

identical to the issue presented in the present action.” See James, 49 S.W.3d at 682.

The language of an insurance contract is to be given its ordinary and plain

meaning. Walters v. State Farm Mut. Auto. Ins. Co., 793 S.W.2d 217, 219 (Mo. Ct.

App. 1990). The policy’s criminal acts exclusion states that “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 acts or omissions of, any insured person.”

The parties do not dispute that Grimes is an insured person under the policy and that

she did not intend to injure Gormley. Thus, the plain language of the exclusion

requires Allstate to prove that: (1) Grimes committed an intentional or criminal act;

and (2) bodily injury may have reasonably been expected to result from that act. In

order for collateral estoppel to apply, Allstate must show that these questions were

conclusively decided in a prior adjudication. See James, 49 S.W.3d at 682. We

address each in turn.

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10In light of Burrough, we need not address Allstate’s argument that acting

“recklessly” under Missouri’s first-degree involuntary manslaughter statute amounts

to acting intentionally. Under the policy, our holding that Grimes’s guilty plea

conclusively establishes that she acted criminally is sufficient to satisfy this part of the

exclusion. 

-15-

As to the exclusion’s first requirement, Allstate argues that Grimes’s guilty plea

and criminal conviction conclusively establish that there was a criminal act. We

agree. It is undisputed that Grimes pled guilty to and was convicted of first-degree

involuntary manslaughter. The conviction conclusively establishes that Grimes

committed a criminal act, and we hold that Appellees are collaterally estopped from

challenging the satisfaction of this part of the exclusion. See Allstate Ins. Co. v.

Burrough, 120 F.3d 834, 837-40 (8th Cir. 1997) (applying Arkansas law) (applying

the same criminal acts exclusion presently at issue and holding that the act of

furnishing a deadly weapon to a minor as proscribed by the Arkansas criminal code

qualified as a criminal act under the exclusion).10

In order for Grimes to be collaterally estopped from challenging the satisfaction

of the exclusion’s second requirement, Allstate must demonstrate that the question of

whether bodily injury may have reasonably been expected to result from Grimes’s

criminal act was decided in a prior adjudication. Because defining the question

presented in the present action is “crucial in determining whether issue preclusion is

available,” see FAG Bearings, 335 F.3d at 759, we proceed by applying Missouri law

to the language of the policy in an effort to define clearly the question presented under

the second part of the exclusion.

First, it is important to note that the policy defines bodily injury as “physical

harm to the body,” and states that whether the bodily injury is “of a different kind or

degree than that intended or reasonably expected” is irrelevant. Even if the policy had

not included this provision, such would be the default rule in Missouri. See Hanover

Ins. Co. v. Newcomer, 585 S.W.2d 285, 289 (Mo. Ct. App. 1979) (holding that where

Appellate Case: 06-3628 Page: 15 Date Filed: 06/26/2007 Entry ID: 3322714
11It was later noted by the Missouri Court of Appeals that “[n]owhere in the

Pacchetti opinion does the court prohibit the use of the objective standard.” United

Servs. Auto. Ass’n Cas. Ins. Co. v. Sorrells, 910 S.W.2d 774, 778 (Mo. Ct. App.

1995). But see Am. Family Mut. Ins. Co. v. Franz, 980 S.W.2d 56, 59 n.1 (Mo. Ct.

App. 1998) (“Pacchetti, with its emphasis on the subjective intent of the insured, also

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policies exclude coverage for injuries that are intended or expected, the exclusion is

“applicable if the insured acts with the intent or expectation that bodily injury will

result even though the bodily injury that does result is different either in character or

magnitude from the injury that was intended”). Thus, the issue is narrowed to

whether, in a prior adjudication, it was established that some degree of physical harm

to the body was reasonably expected to result from Grimes’s criminal act. 

Second, Missouri has employed two different tests to determine whether bodily

injury is reasonably expected to result from an insured’s act. “Under the subjective

test, the coverage is excluded based upon the insured’s own actual subjective intent

to cause harm. Conversely, under the objective test, coverage is excluded if it is

determined that a hypothetical reasonable person would have foreseen harm from his

or her acts.” Cameron Mut. Ins. Co. v. Moll, 50 S.W.3d 329, 332 (Mo. Ct. App. 2001)

(internal citations and quotations omitted). Where the policy language is clear and

unambiguous, the language of the policy determines which test to apply. See id. at

333. 

In Cameron, the policy excluded claims for bodily injury that were “expected

[]or intended” from the “standpoint of the insured.” Id. at 331. The Cameron court

found that “[t]his language plainly suggests a subjective standard should be used.”

Id. at 333. Likewise, in Am. Family Mut. Ins. Co. v. Pacchetti, the policy excluded

claims for bodily injury “which is expected or intended by any insured.” 808 S.W.2d

369, 370 (Mo. 1991). The court therefore stated that “[i]t remains for the insurer to

show that this particular insured expected or intended the result which occurred.” Id.

at 371.11 

Appellate Case: 06-3628 Page: 16 Date Filed: 06/26/2007 Entry ID: 3322714
implicitly rejects the objective test.”). We agree with the Sorrells court that Pacchetti

did not reject the objective test altogether. The language of the policy at issue in

Pacchetti simply required use of the subjective test. See Cameron, 50 S.W.3d at 332

(implicitly holding, post-Pacchetti, that both tests are intact). 

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However, where a policy excluded claims for bodily injury that “[results] from

any occurrence caused by an intentional act of an insured person where the results are

reasonably foreseeable,” the objective test was used. Mid-Century Ins. Co. v. L.D.G.,

835 S.W.2d 436, 437 (Mo. Ct. App. 1992). The Mid-Century court distinguished this

policy language from that in Pacchetti, noting that “[t]he insurance policy pertaining

to this appeal, unlike the policy in Pacchetti, contains an additional provision

excluding coverage for injuries resulting from the intentional acts of the insured which

are reasonably foreseeable.” Id. “This clause requires a determination . . . of whether

the transmission of a venereal disease, such as chlamydia, is a reasonably foreseeable

result of rape,” that is, “one that a reasonable person would recognize . . . could or

might occur.” Id. at 438 (internal quotation omitted). The Mid-Century court

ultimately applied the exclusion holding that “the transmission of a venereal disease,

as a matter of law, is a reasonably foreseeable consequence of rape.” Id. 

In the present case, the language of the policy excludes claims for “bodily

injury . . . which may reasonably be expected to result from the intentional or criminal

acts or omissions of, any insured person.” Because the policy language at issue here

does not focus on the subjective intent of the insured, as it did in Cameron and

Pacchetti, and because it looks to what “may reasonably be expected,” we believe that

it is more akin to the language of the policy exclusion in Mid-Century. Thus, in even

more narrow terms, the issue becomes whether, in a prior adjudication, it was

established that the hypothetical reasonable person would have reasonably expected

some degree of physical harm to the body to result from Grimes’s criminal act. See

Cameron, 50 S.W.3d at 332. 

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Third, under Missouri law, something is “expected” if there exists a “strong

probability [that] the consequences in question would result from [the] acts.” United

Servs. Auto. Ass’n Cas. Ins. Co. v. Sorrells, 910 S.W.2d 774, 777-78 (Mo. Ct. App.

1995) (quotation omitted). The consequence in question in this case is physical harm

to the body. Therefore, the issue presented in its most narrow form becomes whether,

in a prior adjudication, it was established that a hypothetical reasonable person would

conclude that Grimes’s criminal conduct created a strong probability that some degree

of physical harm to the body would result. The prior adjudication is Grimes’s guilty

plea and conviction of first-degree involuntary manslaughter.

Arguably, a conviction for first-degree involuntary manslaughter, ipso facto,

establishes that a reasonable person would conclude that there was a strong probability

that the consequences in question would result. Indeed, the Missouri criminal code

defines recklessness, the mental state required under its first-degree involuntary

manslaughter statute, as the “conscious[ ]disregard[] [for] a substantial and

unjustifiable risk . . . and such disregard constitutes a gross deviation from the

standard of care which a reasonable person would exercise in the situation.” Mo. Rev.

Stat. § 562.016.4. While one might reasonably conclude that a “substantial and

unjustifiable risk” equates to a consequence with a “strong probability”of occurring,

our duty in this diversity action is to predict how the Missouri Supreme Court would

apply its law to the facts of this case. Raymond, 472 F.3d at 534. In Pacchetti, the

Missouri Supreme Court stated that “[w]e also reject the suggestion that a showing

that the insured acted recklessly compels a finding that injury was expected.” 808

S.W.2d at 371. Although this isolated statement could be characterized as dictum, we

are nonetheless reluctant to disregard such a plain statement from the Missouri

Supreme Court. Accordingly, we predict that the Missouri Supreme Court would hold

that the issue of whether a reasonable person would conclude that Grimes’s criminal

conduct created a strong probability that some degree of physical harm to the body

would result was not ipso facto decided by Grimes’s guilty plea and conviction. Thus,

because the first prong of collateral estoppel is not met with respect to the second

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12Having reached these conclusions, and as Allstate concedes, we need not

address whether Andrew Grimes is covered by the policy’s joint-obligations

provision, as it is not ripe until a determination is made with respect to whether the

criminal acts exclusion applies to Grimes. 

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requirement of the criminal acts exclusion, Appellees are not barred from litigating

whether it is satisfied. 

In sum, we first hold that the negligence claims are covered by the policy’s

damages provision. We further hold that because the concurrent cause doctrine does

not apply in this matter, Allstate can avoid liability if it demonstrates that the criminal

acts exclusion applies. With respect to that provision, Appellees are collaterally

estopped by Grimes’s guilty plea and conviction from challenging the satisfaction of

the first requirement, whether Grimes committed a criminal act. Collateral estoppel,

however, does not prevent Appellees from challenging the satisfaction of the second

requirement of the exclusion, whether bodily injury may have reasonably been

expected to result from that criminal act. Thus, we affirm the district court’s denial

of Allstate’s motion for summary judgment.12

4. The District Court’s Dismissal of Defendants Smith and Choi

Finally, we address Allstate’s argument that the district court erred in

dismissing defendants Smith and Choi. After granting summary judgment to

Appellees, the district court issued an order to show cause why the case should not be

dismissed as to Smith and Choi. No party responded, and the district court dismissed

them. The district court’s order dismissing the defendants stated that it was “in light

of” its grant of summary judgment to Grimes, Andrew Grimes and Blount. Having

reversed that order, we also reverse the district court’s dismissal of Smith and Choi.

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III. CONCLUSION

We reverse the district court’s entry of summary judgment to Appellees and its

dismissal of defendants Smith and Choi, and we affirm its denial of summary

judgment to Allstate. We remand for proceedings consistent with this opinion.

_______________

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