American Family Mutual Insurance Company, S.I. v. C.C.

Background

American Family brought this action for declaratory relief, meaning it asked the court to determine the parties’ rights and obligations under an insurance policy. The policy was issued to Heidi Clobes and included uninsured-motorist coverage for bodily injury caused by an accident involving an uninsured motor vehicle.

On September 10, 2017, Juan Carlos Lamas, Jr. drove his car into several bystanders, including C.C., while fleeing a fight. Lamas had been drinking and later entered an Alford plea to three counts of second-degree assault with a deadly weapon. He stated that he did not intentionally or purposely hit anyone and later said he did not intend to injure C.C. or the other bystanders.

C.C. and Alec Batson sued Lamas in Minnesota state court, alleging that he negligently caused their injuries. American Family sought a declaration in this federal case that C.C.’s injuries were not caused by an accident and therefore were not covered by the policy. The federal case was based on diversity jurisdiction and was governed by Minnesota substantive law.

American Family’s motion for summary judgment

American Family argued that the court could decide as a matter of law that Lamas’s conduct was not an accident. It relied on the circumstances of the incident, Lamas’s Alford plea, and its argument that he should have known injury was substantially certain to result from driving drunk in a parking lot containing people.

C.C. opposed summary judgment, arguing that Lamas’s state of mind was disputed. C.C. pointed to evidence that Lamas was trying to escape a dangerous situation, did not see the bystanders before hitting them, did not know them, and did not intend to injure them. C.C. also argued that Minnesota law requires specific intent to injure, not merely intentional conduct.

Under Minnesota law, the court explained, an accident is an unexpected, unforeseen, or undesigned event. Conduct may be intentional while still being an accident if the person did not intend to cause injury. An insurer may establish intent to injure through direct evidence or, in some circumstances, by showing that the act was substantially certain to cause harm and reflected deliberate and calculated indifference to the risk of injury.

The court found that fact issues remained about Lamas’s intent. A reasonable juror could conclude from the record that Lamas did not intend to injure C.C. Because those factual disputes prevented summary judgment, the court denied American Family’s motion for summary judgment. The court described the issue as a close one and noted that the factfinder would ultimately have to determine whether the incident was an accident under the policy.

Lamas’s motion to dismiss

Lamas moved to dismiss the claims against him for lack of subject-matter jurisdiction. He argued that there was no actual legal controversy between him and American Family because he was not a party to the Clobes Policy, had no contractual relationship with American Family, and was not a third-party beneficiary of the policy.

American Family argued that Lamas was an interested party because the policy interpretation could affect the underlying state lawsuit. It also argued that excluding Lamas from the federal case could prejudice his rights and lead to additional litigation.

The court concluded that Lamas’s legal interests were not implicated by interpreting a policy to which he was not a party. It therefore granted Lamas’s motion to dismiss and dismissed him as a defendant in this case.

Disposition

The court denied American Family’s motion for summary judgment. It granted Lamas’s motion to dismiss and dismissed Juan Carlos Lamas, Jr. as a defendant. The order did not resolve whether the insurance policy covers C.C.’s injuries or determine who will prevail at trial.