Selected Risks Insurance v. Dean , 233 Va. 260 ( 1987 )

COMPTON, J.,

delivered the opinion of the Court.

In Virginia, the settled rule is that “a judgment of conviction or acquittal in a criminal prosecution does not establish in a subsequent civil action the truth of the facts on which it was rendered” and “such judgment of conviction or acquittal is not admissible in evidence” in the civil case. Smith v. New Dixie Lines, 201 Va. 466, 472, 111 S.E.2d 434, 438 (1959) (citations omitted). “The reason for the rule is that the parties in a criminal proceeding are not the same as those in a civil proceeding and there is a consequent lack of mutuality.” Id. In this dispute about insurance coverage, the insurer asks us not to apply the foregoing rule and to create an “exception” for the particular facts of this case. We deny this request.

On February 7, 1981, appellee William Monroe Dean injured appellee Annette Berry when he drove his truck into her while she was standing on a sidewalk in the City of Richmond. As a result, Dean was charged criminally under the maiming statute, Code § 18.2-51, and was sued civilly by Berry. In the civil suit, Berry sought recovery of damages, alleging Dean was guilty of careless, reckless, and negligent conduct which caused her injuries.

Subsequently, Dean was convicted in a bench trial of unlawful wounding upon a plea of not guilty. Intent is a necessary element of that offense. Banovitch v. Commonwealth, 196 Va. 210, 216, 83 S.E.2d 369, 373 (1954). The criminal judgment became final in January 1982.

In September 1982, appellant Selected Risks Insurance Company filed the present proceeding naming Dean and Berry as defendants. In a motion for declaratory judgment, the insurer asserted that on the day of the incident Dean was the named insured in a policy of motor vehicle liability insurance issued by the company. The insurer contended that Dean had intentionally struck Berry and that its policy contract excluded intentional acts from the liability coverage. The insurer asked the trial court to declare the rights of the parties under the policy and to rule that Dean was not entitled to coverage for the claims made against him by Berry as a result of the incident in question.

Subsequently, the insurer moved for summary judgment, asserting, under the doctrine of collateral estoppel, that the criminal conviction was conclusive evidence that Dean had intentionally injured Berry. Alternatively, the insurer moved that the conviction be admitted at the trial either as prima facie evidence or as some evidence on the question of intention. These motions were denied.

The case was tried before a jury and no reference to the criminal proceeding was permitted by the trial court. The jury found that Dean did not intentionally strike Berry. The court entered judgment on the verdict and declared that Dean was covered under the policy with respect to Berry’s claims against him. We awarded the insurer an appeal from the November 1983 judgment.

On appeal, the insurer contends “that based upon the full criminal trial and subsequent conviction” of Dean, its insurance contract “clearly provided no coverage” for Dean. Thus, the insurer argues, the trial court should have “judicially relieved” it in this declaratory judgment proceeding from the duty of providing a defense in the damage suit and of paying any sums awarded Berry against Dean.

The insurer points out that the finding of intent was specifically disputed by Dean in the criminal trial and notes there is no dispute in this case that “this specific criminal intent is the same intent involved in a civil insurance setting.” In addition, the insurer observes that the evidence at the two trials was substantially the same and that the same eyewitnesses to the incident testified at both hearings. The primary differences between the two proceedings, the insurer argues, were its involvement in the declaratory judgment trial and the fact the jury in the present proceeding reached a different result from that of the judge in the criminal trial.

Relying on Eagle, Star and British Dominions Ins. Co. v. Heller, 149 Va. 82, 140 S.E. 314 (1927), the insurer notes that this Court “early-on carved out an exception” to the foregoing general rule and insists that a further exception is justified here where Dean has been “convicted of a serious criminal offense in a full and fair trial before an impartial and equivalent trier of fact which necessarily determined the ‘intent’ issue beyond a reasonable doubt.” Citing cases from other jurisdictions, the insurer urges that no “logical reason suggests itself for requiring another submission of the same facts to another trier of fact ... in the same Court employing a lesser standard of proof.” This argument would have merit if it were not contrary to the established law of the Commonwealth.

For at least 118 years, this Court, in dealing with the preclusive effect of a criminal judgment upon a subsequent civil action arising from the same transaction, has recognized that the criminal charge and the civil action, “though founded on the same fact, are distinct remedies, prosecuted by different parties and for different purposes,” and that there is a “want of mutuality.” Honaker v. Howe, 60 Va. (19 Gratt.) 50, 51, 56 (1869). The reasons for the rule “that a judgment rendered in a criminal prosecution, whether of conviction or acquittal, does not establish in a subsequent civil action the truth of the facts on which it is rendered,” Aetna v. Czoka, 200 Va. 385, 388, 105 S.E.2d 869, 872 (1958), have also been articulated as follows: “(1) The parties are different in a criminal proceeding from those in a civil action; (2) the objects of the two proceedings are different; (3) the results and procedures of the two trials are different; and (4) there is a lack of mutuality.” Id. at 389, 105 S.E.2d at 872.

In urging us to create an exception in this case, the insurer does not focus on the entire rule relating to criminal-civil preclusion. Instead, the insurer limits the discussion to an attack on the mutuality requirement within the doctrine of collateral estoppel.

According to that doctrine, the parties and their privies in a first action are precluded from litigating in a subsequent action any factual issue “actually litigated and essential to a valid and final personal judgment in the first action.” Bates v. Devers, 214 Va. 667, 671, 202 S.E.2d 917, 921 (1974). The principle of mutuality limits the influence of the initial adjudication “by requiring that to be effective the estoppel of the judgment must be mutual.” Norfolk and Western Ry. Co. v. Bailey, 221 Va. 638, 640, 272 S.E.2d 217, 218 (1980). Thus, “a litigant is generally prevented from invoking the preclusive force of a judgment unless he would have been bound had the prior litigation of the issue reached the opposite result.” Id. As recently as 1980, this Court made a considered, unanimous decision to resist the so-called “modern trend” and not to abrogate the mutuality requirement. Id. at 641, 272 S.E.2d at 219. Since that decision, other courts, including the Supreme Court of the United States in Haring v. Prosise, 462 U.S. 306, 317 n. 10 (1983), have been guided by our position on this subject.

Nevertheless, the insurer argues the doctrine of mutuality should not be enforced in this case, correctly acknowledging that mutuality does not exist. Of course, had Dean been acquitted in the criminal trial, the insurer would not have been precluded from claiming Dean committed an intentional act. The acquittal merely would evidence that the trier of fact was unable to find guilt beyond a reasonable doubt, but would leave open the question whether, by a preponderance of the evidence, Dean acted intentionally. The insurer says that a decision not to impose the mutuality requirement here, and ostensibly in other like cases, “would avoid wasteful relitigation of judicially determined identical issues with the prospect of inconsistent findings on the same facts in the same court as occurred in this case.”

Even if the insurer had mounted an attack on every reason underpinning the criminal-civil preclusion rule, which it has not, we would not be persuaded to disregard the mutuality element of that rule to accommodate the facts of this case. The urge to promote judicial economy by permitting criminal judgments to preclude determination of issues in civil cases should not override the obligation of the courts to maintain the opportunity for litigants to have their civil rights adjudicated in a forum suited for that purpose.

In Virginia, the doctrine of stare decisis is more than a mere cliche. That doctrine plays a significant role in the orderly administration of justice by assuring consistent, predictable, and balanced application of legal principles. And when a court of last resort has established a precedent, after full deliberation upon the issue by the court, the precedent will not be treated lightly or ignored, in the absence of flagrant error or mistake. Kelly v. Trehy, 133 Va. 160, 169, 112 S.E. 757, 760 (1922). We perceive no error, flagrant or otherwise, or mistake committed by the Court in 1980 in Bailey when we declined to follow a “trend” and abrogate the requirement of mutuality. Thus, we will follow our established precedent.

The insurer’s reliance on Heller is misplaced. In that case, the Court refused to apply the general rule. The Court held that proof of a conviction of arson was admissible in evidence as a bar to a civil action. There, the arsonist sought to recover on a fire insurance policy covering the same property which he had been convicted of willfully burning with intent to defraud the insurer. The Court applied a logical exception to the general rule in that case where the arsonist sought to recover damages for his own wrong. Such is not the situation here and there is no compelling reason to create an exception under the facts of this case.

Therefore, we hold the trial court correctly decided the criminal conviction was not conclusive evidence that Dean intentionally injured Berry. From that ruling, it necessarily follows the trial court likewise correctly excluded the conviction both as prima facie evidence and as some evidence on the question of intention.^*

Consequently, the judgment of the trial court will be

Affirmed.

* See Code § 8.01-418 dealing with the manner of proof, in a civil action, of a guilty plea, of a plea of nolo contendere, and of a forfeiture in a criminal proceeding. Enacted in 1970, this statute deals with the evidentiary question of admissions and apparently was enacted to change the rule enunciated in Fulcher v. Whitlow, 208 Va. 34, 41, 155 S.E.2d 362, 368 (1967). Acts 1970, ch. 354.