## Facts

- Dr. Daniel Lovelace, insured under a Hartford liability policy, worked for Dr. Hugh Clemmer.
- After Clemmer informed Lovelace their employment relationship would end, Lovelace shot and killed Clemmer at a gas station the next day.
- Lovelace was convicted of second-degree murder; he withdrew an insanity plea and did not testify at trial.
- Clemmer’s widow and minor son obtained a wrongful-death judgment against Lovelace.
- The judgment creditors sued Hartford directly under California Insurance Code § 11580 to collect the judgment.
- Hartford denied coverage, relying on the policy’s willful-act exclusion and California Insurance Code § 533 (barring coverage for “loss caused by the wilful act of the insured”).

## Issues

1. Whether sufficient evidence supported the jury’s finding that the killing was not a “willful act” because Lovelace lacked mental capacity to govern his conduct.
2. How “wilful act” under Insurance Code § 533 should be construed, including whether it requires a preconceived design to inflict injury.
3. Whether Lovelace’s second-degree murder conviction collaterally estopped the judgment creditors from litigating mental capacity and “willful act” for coverage purposes.
4. Whether Hartford, with notice of the underlying wrongful-death action and the prospect of default, could avoid being bound by the resulting judgment by standing on a noncoverage position.

## Decision

- The Supreme Court affirmed the denial of Hartford’s motion for judgment notwithstanding the verdict.
- The Supreme Court affirmed the order granting a new trial limited to the “willful act” issue, holding the trial court did not abuse its discretion in finding the verdict unsupported after weighing the expert evidence.
- The Court held that § 533 does not bar coverage for every intentional act; it applies only when the insured acted with a “preconceived design to inflict injury.”
- The Court rejected Hartford’s claim that the murder conviction conclusively resolved the § 533/policy “willful act” issue for coverage purposes.
- The Court held Hartford had sufficient notice and, if coverage were established, could be bound by the wrongful-death judgment because it did not seek to set aside the default or assume control of the defense.

## Legal Principles

- Insurance Code § 533 bars indemnity only for losses caused by an insured’s willful act committed with a preconceived design to inflict injury; general intent to commit the act is not necessarily enough.
- In deciding a motion for new trial, a trial judge may weigh credibility and reject expert testimony; an appellate court reviews a limited new-trial order for abuse of discretion.
- A criminal conviction for second-degree murder is not automatically conclusive on the insurance-coverage question under § 533 when the civil issue requires a specific finding about intent to injure and related mental capacity.
- An insurer with notice of the occurrence and of litigation risking a default judgment cannot remain passive on a noncoverage position and later avoid being bound; it must take timely steps to protect its interests (including seeking relief from default and assuming the defense if appropriate).

## Conclusion

The court held that § 533’s willful-act bar requires a preconceived design to injure, affirmed a limited new trial on whether the killing met that standard given disputed mental-capacity evidence, and ruled that an insurer with notice that stands silent may be bound by an underlying judgment if coverage is ultimately found.


Clemmer v. Hartford Ins. Co., 22 Cal. 3d 865 (Cal. 1978)