In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 02-1877

WOLVERINE MUTUAL INSURANCE, 

Plaintiff-Appellee,

v.

JOHNNY VANCE, DAWN VANCE,

JOHNNY R. TINSLEY (VANCE), BY AND

THROUGH HIS NATURAL PARENT AND GUARDIAN

AND NEXT FRIEND, PAMELA TINSLEY, et al.,

Defendants-Appellants.

____________

Appeal from the United States District Court

for the Northern District of Indiana, South Bend Division.

No. 00 C 768—Robert L. Miller, Jr., Chief Judge.

____________

ARGUED DECEMBER 3, 2002—DECIDED APRIL 10, 2003

____________

Before EASTERBROOK, MANION, and EVANS, Circuit Judges.

MANION, Circuit Judge.

I.

Wolverine Mutual Insurance Co. filed a declaratory action

in federal court seeking to determine the extent of the

coverage owed to policyholder Michael Gingery and, in
2 No. 02-1877

1 Johnny Ray Tinsley and Kacey Tinsley bring their action

through Pamela Tinsley. Pamela Tinsley and Johnny Ray Vance

are the parents of Kacey and her brother Johnny.

turn, the victims of his crime. The district court, in granting

summary judgment in Wolverine Mutual’s favor, concluded that Gingery’s coverage did not provide for his

defense or indemnification in the subsequent civil suit

brought by his victims because Gingery had been found

guilty in state court of the intentional crime of attempted

murder. We affirm.

II.

On May 3, 2000, Michael Eugene Gingery shot Johnny

Ray Vance after an altercation near the street outside

Gingery’s house. At the time of the offense, Gingery had

a homeowner’s insurance policy with Wolverine Mutual

Insurance Co. (“Wolverine”) that excluded from coverage

for personal liability those actions expected or intended

by the insured. Gingery was subsequently prosecuted for

attempted murder, and, while the criminal trial was proceeding, Johnny Ray Vance and Dawn Vance, and Johnny

Ray Tinsley and Kacey Tinsley1

 (hereinafter “plaintiffs”)

filed two separate civil complaints against Gingery in the

Elkhart, Indiana superior court. The complaints alleged,

in part, that Gingery negligently and carelessly shot Johnny

Vance and proximately caused damages to all of the plaintiffs. In December 2000, Wolverine filed a complaint in

federal court for declaratory judgment seeking to establish its duties and obligations under Gingery’s homeowner’s insurance.

On July 18, 2001, a jury found Gingery guilty of attempted

murder, a verdict that required the jury to find specific
No. 02-1877 3

2 Michael Gingery did not oppose the summary judgment

motion in the district court, and he does not participate in this

appeal. Even though the plaintiffs are not a party to Gingery’s

and Wolverine’s insurance contract, we have held that a tort

victim may appeal from a declaration that a policy of insurance

is inapplicable, even if the insured does not participate in the

appeal. Grinnell Mutual Reinsurance Co. v. Reinke, 43 F.3d 1152,

1153 (7th Cir. 1995). However, the plaintiffs only have standing to appeal the district court’s determination that Wolverine

owes no duty to indemnify. The plaintiffs do not have standing to appeal the district court’s finding that Wolverine does

not have a duty to defend Gingery. As we stated in Grinnell,

“an appellant must seek relief rather than injury at the hands

of the court of appeals.” Id. at 1154. Because the plaintiffs cannot show how they will gain by providing Gingery with a better defense at his civil trial, they have no standing to appeal

the district court’s decision that Wolverine does not owe Gingery a duty to defend in their civil action.

intent under Indiana Code § 35-41-5-1. In light of this

verdict, Wolverine filed a motion for summary judgment

in its declaratory judgment action, claiming that Gingery’s

conviction for an intentional act precluded liability coverage.

The district court granted summary judgment in Wolverine’s favor, concluding that Wolverine did not owe Gingery

a duty to defend or indemnification under the policy because his criminal conviction for attempted murder required a jury to find that his acts that led to the plaintiffs’

injuries were intentional. The court also concluded that,

although the plaintiffs were free to allege that Gingery had

acted negligently in their civil suit, that would not trigger

coverage under Gingery’s homeowner’s policy because

Wolverine’s contractual obligations run only to Gingery.

The plaintiffs appeal.2
4 No. 02-1877

III.

The plaintiffs argue that the district court erred as a matter of law when it concluded that Wolverine did not owe

Gingery indemnification under his homeowner’s insurance policy. They contend that, under Indiana law, the

conviction of a policyholder of a crime that includes

intent as an element does not negate the contractual obligation the insurance company has to provide indemnification to the policyholder. This court reviews the district

court’s grant of summary judgment de novo, construing

all facts in favor of the plaintiffs, the nonmoving party.

Commercial Underwriters Ins. Co. v. Aires Envtl. Servs. Ltd.,

259 F.3d 792, 795 (7th Cir. 2001). Summary judgment is

proper when the “pleadings, depositions, answers to

interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as

to any material fact and that the moving party is entitled

to a judgment as a matter of law.” Fed. R. Civ. P. 56(c).

In this case we sit in diversity, and therefore we are

required to apply the substantive law of the forum state,

Indiana. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938).

In fulfilling the mandate of Erie, we must apply the law

of the state as we believe the highest court of the state

would apply it. State Farm Mutual Auto. Ins. Co. v. Pate, 275

F.3d 666, 669 (7th Cir. 2001). The plaintiffs argue that,

pursuant to Indiana precedent, they are not estopped from

arguing Gingery’s intent in a civil action despite his criminal conviction. They further contend that, because they

are permitted to allege that Gingery was negligent, Wolverine is obligated to indemnify Gingery pursuant to his

homeowner’s policy.

We agree with the plaintiffs with respect to their first

argument. Collateral estoppel would not apply to the

plaintiffs in this scenario because that doctrine only pre-
No. 02-1877 5

3 When used “defensively,” collateral estoppel forecloses a

plaintiff from asserting a claim that the plaintiff had previously

litigated and lost against another defendant. “Offensive” collateral estoppel bars a defendant from relitigating an issue the

defendant previously lost against another plaintiff. Parklane

Hosiery Co. v. Shore, 439 U.S. 322, 329 (1979).

cludes a party from relitigating those issues already litigated and decided. Doe v. Tobias, 715 N.E.2d 829, 831 (Ind.

1999); see also, Holtz v. J.J.B. Hilliard W.L. Lyons, Inc., 185 F.3d

732, 739 (7th Cir. 1999). Trial courts must consider two

factors in determining whether to apply collateral estoppel:

“whether the party against whom the judgment is pled

had a full and fair opportunity to litigate the issue, and

whether it would be otherwise unfair under the circumstances” of the particular case. Tofany v. NBS Imaging,

616 N.E.2d 1034, 1037 (Ind. 1993). Because a tort victim

does not have an opportunity to litigate on his own behalf

in a criminal proceeding, Indiana courts have held that

a tort victim is not collaterally estopped from relitigating

the insured’s intent despite a verdict or a guilty plea in

a criminal trial. Meridian Ins. Co. v. Zepeda, 734 N.E.2d

1126, 1132 (Ind. Ct. App. 2000). See also, Kimberlin v. DeLong,

637 N.E.2d 121, 125 (Ind. 1994).

The Indiana Court of Appeals addressed the issue of

offensive collateral estoppel in a context very similar to

the case at hand in Meridian Insurance Co. v. Zepeda, 734

N.E.2d 1126 (Ind. Ct. App. 2000).3

 In Zepeda, the insurer

filed a declaratory judgment action in Indiana state court

claiming that it had no duty to indemnify its insured,

Zepeda, in a personal injury action filed by his shooting

victim, King, after a criminal jury found Zepeda guilty

of aggravated battery. Id. at 1129. Meridian’s policy excluded coverage for “expected or intended acts.” Id. Merid-
6 No. 02-1877

ian sought to collaterally estop both Zepeda and King from

litigating the issue of Zepeda’s intent, after the jury in

Zepeda’s criminal case found his acts to be intentional in

finding him guilty of aggravated battery. Id. The court

found that King could litigate the issue of Zepeda’s intent

because King, as the victim, never had a full and fair

opportunity to litigate this issue in the criminal trial. Id.

at 1128, 1131-32.

However, the court found that Zepeda, the insured, was

precluded from relitigating the issue of his intent because none of the policy concerns applicable to civil defendants in using offensive collateral estoppel was applicable to Zepeda. Id. at 1130. Zepeda, and, by analogy,

Gingery, each had the incentive and opportunity to litigate

the issue of intent in his previous criminal prosecution.

In this case, the district court held that Gingery could

not establish why collateral estoppel should not apply,

and he does not appeal that decision. Gingery is therefore precluded from arguing that he did not intentionally

injure Vance. Cf. Snodgrass v. Baize, 405 N.E.2d 48, 55 (Ind.

Ct. App. 1980) (holding that evidence of a previous criminal conviction for intentional conduct was sufficient to

uphold trial court’s finding in subsequent civil suit that

defendant had acted intentionally).

This preclusion prevents us from agreeing with the

plaintiffs’ second argument, that Wolverine owes Gingery indemnification in their civil suit. Even though a

third-party victim may pursue legal theories in a civil action that an insured may not, the plaintiffs have not cited

any Indiana precedent for the proposition that an insurance company must indemnify the insured based on

that civil action. In fact, the case law in Indiana supports

the opposite conclusion. Indiana is not a “direct action”

state, meaning that an injured third party may not bring
No. 02-1877 7

4 Gingery’s homeowner’s policy also reflects this position,

stating that “no action with respect to [personal liability insurance] can be brought against us until the obligation of the

insured has been determined by a final judgment or agreement

signed by us.”

a direct action against a wrongdoer’s liability insurer

until he first obtains a judgment against the insured.

Rausch v. Reinhold, 716 N.E.2d 993, 1002 (Ind. Ct. App. 1999);

Cromer v. Sefton, 471 N.E.2d 700, 703 (Ind. Ct. App. 1984);

Donald v. Liberty Mutual Ins. Co., 18 F.3d 474, 480-81 (7th

Cir. 1994).4

 Once a personal injury plaintiff succeeds in

obtaining a judgment against the insured, he can bring

an action against the liability carrier if it refuses to honor

the terms of the insurance policy. Cromer, 471 N.E.2d at

703. In other words, in Indiana an injured plaintiff “stands

in the legal shoes” of the insured, and his claim can be no

greater than the insured’s claim would be against his

own insurer under the insurance policy. See Araiza v.

Chrysler Ins. Co., 699 N.E.2d 1162, 1163 (Ind. Ct. App. 1998),

rehearing granted in part and modified in, Araiza v. Chrysler

Ins. Co., 703 N.E.2d 661 (Ind. Ct. App. 1998); see also Selleck

v. Westfield Ins. Co., 617 N.E.2d 968, 970-71 (Ind. App.

1993) (accord); Redar v. Allstate Ins. Co., 497 N.E. 2d 566, 568

(Ind. Ct. App. 1985) (accord); Motorists Mut. Ins. Co. v.

Johnson, 218 N.E.2d 712, 715 (Ind. App. 1966).

Thus because Wolverine’s contractual duty runs only to

Gingery, the plaintiffs can only recover insurance proceeds insofar as their rights derive from Gingery’s rights

under his homeowner’s policy. See Cromer, 471 N.E.2d

at 703 (“[T]here is no duty or fiduciary relation running

from the insurer to the injured plaintiff. The insurer’s only

duty is to the insured on its contract.”); cf. State Farm Fire

& Cas. Co. v. Fullerton, 118 F.3d 374, 385-86 (5th Cir.
8 No. 02-1877

1997) (noting that by holding that tort victims’ rights are

derivative of the insured, they have placed Texas among

the bulk of other jurisdictions that have considered the

question). In this context, we examine the plaintiffs’ claims.

Gingery’s actions fall outside his policy with Wolverine

because they have been held to be intentional in his criminal case. The district court held that Gingery is estopped

from asserting that his acts were unintentional and he

has not appealed that ruling. Accordingly, the plaintiffs,

relegated as they are to standing in Gingery’s “legal shoes,”

may not seek indemnification from Wolverine under

Gingery’s homeowner’s policy.

The plaintiffs’ inability to recover insurance proceeds

does not wholly deprive them of a remedy. They can still

obtain damages against Gingery in their civil action,

although Gingery may not be able to satisfy the judgment.

However, whatever cause of action the plaintiffs eventually choose to pursue against Gingery, it will be his

responsibility, and not the responsibility of Wolverine, to

pay the damages caused by his actions.

IV.

For the foregoing reasons we affirm the district court.

A true Copy:

Teste:

 _____________________________

Clerk of the United States Court of 

Appeals for the Seventh Circuit 

USCA-02-C-0072—4-10-03