DANIELLE VILLA v. JOHN F. SHORT, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0993-05T10993-05T1

DANIELLE VILLA,

Plaintiff,

v.

JOHN F. SHORT, JOSEPH SHORT,

Individually and as Executor

of the Estate of Elsie Short,

Defendants/Third-Party

Plaintiffs-Appellants,

v.

ELIZABETH ANN MULDER,

Third-Party Defendant,

and

ALLSTATE NEW JERSEY INSURANCE

COMPANY,

Third-Party Defendant-

Respondent.

_______________________________

 

Argued November 6, 2006 - Decided December 26, 2006

Before Judges Lintner, Seltzer and

C.L. Miniman.

On appeal from Superior Court of

New Jersey, Law Division, Gloucester

County, L-2166-98.

Susan L. Moreinis argued the cause for appellant.

David J. D'Aloia argued the cause for respondent (Saiber Schlesinger Satz & Goldstein, attorneys; Mr. D'Aloia, of counsel and on the brief; Deborah

D'Angelo, on the brief).

PER CURIAM

This is an insurance coverage dispute. Plaintiff, Joseph Short, individually and as the executor of the estate of his deceased wife, Elsie Short, appeals from a summary judgment dismissing his third-party complaint seeking a defense against, and indemnity for, claims of negligent supervision of his adult son, allowing the sexual molestation of Danielle Villa. We affirm.

Danielle Villa filed a complaint alleging that defendant, John F. Short, an adult suffering from intellectual deficits, molested her while she was an infant on various occasions between 1983 and 1988. The complaint also alleged that John Short's parents, Elsie Short, who had died before the complaint was filed, and Joseph Short, had failed to supervise their son properly, thus permitting the molestation. Plaintiff filed a third-party action, seeking a defense from defendant under a homeowners policy. On cross-motions for summary judgment, the motion judge ultimately determined that the policy afforded no coverage and dismissed the complaint against Allstate. All other issues in the underlying dispute have now been resolved and Joseph Short appeals the determination that no coverage was provided by the policy.

The principles by which this dispute is to be resolved are well settled. To determine whether Allstate was required to defend the claim against the Shorts, "'[t]he complaint should be laid alongside the policy and a determination made as to whether, if the allegations are sustained, the insurer will be required to pay the resulting judgment .'" Trs. of Princeton Univ. v. Aetna Cas. & Sur. Co., 293 N.J. Super. 296, 301 (App. Div. 1996) (quoting Danek v. Hommer, 28 N.J. Super. 68, 77 (App. Div. 1953), aff'd o.b., 15 N.J. 573 (1954)), leave to appeal granted, 147 N.J. 574 (1997).

Deciding whether there will be a duty to pay if the underlying allegations are sustained requires a court to

first look to the grant of coverage in the insuring agreements to determine whether coverage exists. If it does, the court must next determine whether the policy contains any exclusions from or limitations on that coverage. If coverage does not exist under the insuring agreement, the inquiry is at an end. There is no need to look to the exclusions because they cannot expand the basic coverage granted in the insuring agreement.

[Barry R. Ostrager & Thomas R. Newman, Handbook on Insurance Coverage Disputes

1.03(b) (12th ed. 2004) (internal citations and quotations omitted).]

Moreover, "[a]s a threshold matter, the interpretation of an insurance contract is a question of law which we decide independent of the trial court's conclusions." Simonetti v. Selective Ins. Co., 372 N.J. Super. 421, 428 (App. Div. 2004). Principles of interpretation, however, require that ambiguities be resolved in the insured's favor so as to afford coverage. Therefore, a broad reading is given to provisions extending coverage while exclusions are read narrowly. Search EDP, Inc. v. Am. Home Assurance Co., 267 N.J. Super. 537, 542 (App. Div. 1993), certif. denied, 135 N.J. 466 (1994); Stafford v. T.H.E. Ins. Co., 309 N.J. Super. 97, 103 (App. Div. 1998). Nevertheless, where the language of the policy is unambiguous, "'courts should not write for the insured a better policy of insurance than the one purchased.'" Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001) (quoting Gibson v. Callaghan, 158 N.J. 662, 670 (1999)).

Although read narrowly, "'exclusions are presumptively valid and will be given effect if "specific, plain, clear, prominent, and not contrary to public policy."'" Miller v. McClure, 326 N.J. Super. 558, 565 (App. Div. 1998) (quoting Princeton Ins. Co. v. Chunmuang, 151 N.J. 80, 95 (1997)), aff'd o.b., 162 N.J. 575 (1999). See also NAV-ITS, Inc. v. Selective Ins. Co. of Am., 183 N.J. 110, 119 (2005); Doto v. Russo, 140 N.J. 544, 559 (1995). If done appropriately, an insurer has a right "to fix his undertaking . . . ." Hoboken Camera Ctr., Inc. v. Hartford Accident & Indem. Co., 93 N.J. Super. 484, 499 (App. Div. 1967) (citing Linden Motor Freight Co., Inc. v. Travelers Ins. Co., 40 N.J. 511, 525 (1963)). The insurer carries the burden of bringing the case within the exclusion. Burd v. Sussex Mut. Ins. Co., 56 N.J. 383, 399 (1970).

With these principles in mind, we turn to the policies issued by defendant to plaintiff. Before the motion judge, and before us, the parties dispute whether those policies provided coverage and, if so, whether that coverage was excluded by other policy provisions. The parties agree that two Allstate policies were in effect during the period in which the molestation was said to have occurred. Policy Form AU429 was in effect from June 1, 1983 to June 1, 1985, and Policy Form AU9601 was in effect from June 1, 1985 through the end of the applicable period.

The policies contained slightly different coverage grants. The grant of coverage in the policy effective from 1985 forward provided coverage for "all sums arising from an accidental loss," while the policy previously in effect omitted the language respecting accidental loss. Both policies, however, included identical intentional act exclusions: "We do not cover any bodily injury or property damage which may reasonably be expected to result from the intentional or criminal acts of an insured person or which are in fact intended by an insured person."

Because we believe the exclusion unequivocally removes coverage from the Shorts, we do not consider whether coverage was extended initially. Accordingly, we have no need to address the various arguments relating to the change in the coverage language.

Defendant argues that the language of the exclusion, which removes coverage from any claim arising from the intentional act of "an" insured, must mean that a claim arising from the intentional act of any insured is excluded from coverage. Since the molestation was an "intentional act" committed by John Short, who was an insured, no coverage is provided under the policy to the other insureds. Plaintiff asserts that the clause is, at the least, ambiguous because a reasonable person might read "an" insured to mean "each" insured, so that coverage is excluded only as to the insured committing the intentional act.

We reject plaintiff's position as requiring the type of distortion of the plain words of the exclusion that we are taught to avoid. See Progressive Cas. Ins. Co v. Hurley, 166 N.J. 260, 273 (2001)("[A] court should not engage in a strained construction to support the imposition of liability. Brynildsen v. Ambassador Ins. Co., 113 N.J. Super. 514, 518 (Law Div. 1971).)"; Longobardi v. Chubb Ins. Co. of N.J., 121 N.J. 530, 537 (1990) (strained construction to be avoided).

We do not see how defendant could have written the policy more clearly to express the exclusion from coverage of any claim against any insured arising from an intentional act committed by any insured. The same conclusion was reached by another panel of this court considering the identical exclusion. J.C. v. N.B., 335 N.J. Super. 503, 506-09 (App. Div. 2000), certif. denied, 168 N.J. 294 (2001). See also Argent v. Brady, 386 N.J. Super. 343, 350 (App. Div. 2006) ("Courts have uniformly held that the use of the article 'an' in this context is not susceptible to any other meaning, and in this context cannot be deemed synonymous with 'the.'"). We agree with the analysis and result reached in those cases.

The cases cited by plaintiff contain different policy language and are therefore inapplicable. Property Cas. Co. of MCA v. Conway, 147 N.J. 322 (1997); F.S. v. L.D., 362 N.J. Super. 161 (App. Div. 2003); Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162 (App. Div.), certif. denied, 154 N.J. 608 (1998); and Atlantic Employers Ins. Co. v. Tots & Toddlers Pre-School Day Care Ctr., Inc., 239 N.J. Super. 276 (App. Div.), certif. denied, 122 N.J. 147 (1990), all involved policies that referenced the intentional act of "the," as opposed to "an," insured person. The difference in the language was fully explicated by Judge Coburn's opinion in J.C., supra, and we need do no more than reiterate our agreement with that opinion.

Finally, plaintiff argues that his son's mental deficits created a material dispute as to whether the molestation was "intentional" within the meaning of the policy. The exclusion requires that the harm occasioned by the act be intended; unintended consequences of intentional acts are not excluded from coverage. Lyons v. Hartford Ins. Group, 125 N.J. Super. 239, 245 (App. Div. 1973), certif. denied, 64 N.J. 322 (1974). However, when an act, such as sexual assault, is particularly reprehensible, intent to cause the resulting harm is inferred. Atlantic Employers Ins. Co, supra, 239 N.J. Super. at 282.

The question of the effect of reduced mental capacity on the imputation of intent remains undecided. If the actor is "incapable of distinguishing between right and wrong, or of forming a rational intent to do the act," coverage would exist. Ruvolo ex rel. Ruvolo v. Am. Cas. Co., 39 N.J. 490, 497 (1963). We need not decide whether some lesser incapacity would render the exclusion ineffective because this record is devoid of any indication that John Short's deficits made him less capable than anyone else of appreciating the nature of the molestation. The only evidence that arguably would raise such a question is contained in a report prepared for John Short, not for plaintiff, by Dr. Kenneth J. Weiss dated August 8, 2003. The report was not disclosed in discovery and when plaintiff attempted to produce it in response to the summary judgment motion, the judge declined to consider it because discovery had closed.

Plaintiff did not move before the motion judge for an extension of discovery, to permit a late filing of the report, or for any other relief that would have permitted the judge to consider the report. Accordingly, we cannot consider whether the judge's refusal to consider that report was correct. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973). Nor has plaintiff moved before us for a remand, for leave to supplement the record, or for any other relief that would allow us to consider the report. The report was not, therefore, contained in the record below and may not be considered by us. See Cipala v. Lincoln Technical Inst., 179 N.J. 45, 52 (2004). We express no opinion as to whether any such application would have been successful or if Dr. Weiss's report would have been sufficient to require a denial of the summary judgment motion. We hold only that on this record there is no reason to remove John Short's molestation of Danielle Villa from those cases holding it to be "intentional" within the meaning of the policy exclusion.

 
In sum, the policy exclusion withdrew any coverage that might otherwise exist for plaintiff, and the motion judge properly dismissed the claim for a defense.

Affirmed.

Originally named as a defendant in the underlying liability action, Joseph Short initiated the third-party action with which this opinion deals against Allstate New Jersey Insurance Company. That third-party complaint sought a declaration that Allstate was required to defend the underlying action. Accordingly, we have referred to Joseph Short as "plaintiff" and to Allstate as "defendant."

The word "are" in Policy Form AU9601 is replaced by the word "is" in Policy Form AU429. We do not take the substitution as having substantive effect.

Our analysis makes it unnecessary for us to consider the "joint obligation" clause appearing only in one of the policies. That clause, which purports to bind all insureds to the acts of any insured, adds nothing to our analysis. Defendant has abandoned its reliance on that clause. This renders moot plaintiff's request for copies of prior policies to determine when the "joint obligation" clause was first inserted.

(continued)

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A-0993-05T1

December 26, 2006