LEONIA BOARD OF EDUCATION v. INSURANCE CORPORATION OF HANNOVER

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1316-04T11316-04T1

DOCKET NO. A-3957-04T1

LEONIA BOARD OF EDUCATION,

Plaintiff-Respondent,

v.

INSURANCE CORPORATION OF

HANNOVER,

Defendant-Appellant.

______________________________

LEONIA BOARD OF EDUCATION,

Plaintiff-Appellant,

v.

INSURANCE CORPORATION OF

HANNOVER,

Defendant-Respondent.

____________________________________________________________

 

Argued May 16, 2006 - Decided June 20, 2006

Before Judges Coburn, Lisa and S.L. Reisner.

On appeal from the Superior Court of New Jersey,

Law Division, Bergen County, L-7317-03; L-5190-00.

Benjamin A. Fleischner argued the cause for

appellant in A-1316-04 and respondent in

A-3957-04 (White, Fleischner & Fino, attorneys;

Nancy Lyness, of counsel; Mr. Fleischner, on

the brief in A-1316-04; Brian M. Thorn,

on the brief in A-3957-04).

Stephen R. Fogarty argued the cause for

respondent in A-1316-04 and appellant in

A-3957-04 (Fogarty & Hara, attorneys;

Mr. Fogarty, of counsel; Mr. Fogarty and

Scott W. Carbone, on the brief in A-1316-04;

Scott W. Carbone, on the brief in A-3957-04).

PER CURIAM

We have consolidated these appeals for purposes of this opinion and will discuss first A-1316-04. Defendant, Insurance Corporation of Hannover ("Hannover"), appeals from a declaratory judgment ordering it to defend Robert Quinn under a reservation of rights and later litigate the issue of whether the insurance policy, issued to plaintiff, Leonia Board of Education (the "Board"), provides liability coverage for Quinn for his conduct. The judgment also directed Hannover to reimburse the Board for $18,006.50 in counsel fees and costs incurred in the proceeding.

When plaintiff filed this declaratory judgment action, and when the coverage issue was decided below, no civil complaint had yet been filed. Plaintiff's claim for insurance coverage for Quinn was based on notices received by the Board under the Tort Claims Act from a male high school student, K.C., and his parents. The first notice listed March 30, 2003, as the date of the incident and said that Quinn, the High School's Athletic Director,

did sexually assault and batter . . . K.C. Mr. Quinn, while unclothed, did command the Claimant both to give him a massage and to touch him in inappropriate ways. Mr. Quinn also committed unwarranted and offensive touching of the Claimant and afterwards, showered with him in the locker room.

The notice said that the activity occurred between 3:00 and 4:00 p.m. in the Athletic Trainer's Room. The first supplemental claim notice indicated, without describing them, that there had been incidents "[o]ver a period of years," and ending with the incident of March 30, 2003, which the notice described as before. However, this notice also said that the injuries suffered were "as a result of the egregious, illegal and criminal acts wrongfully and negligently committed" by Quinn (emphasis added). The last claim notice added a claim asserting violation of K.C.'s federal Civil Rights.

An "insurer's duty to defend the insured is broader than its duty to indemnify," F.S. v. L.D., 362 N.J. Super. 161, 166 (App. Div. 2003), and "is determined by comparing the allegations in the complaint with the language of the policy." Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 173 (1992).

When the two correspond, the duty to defend arises, irrespective of the claim's actual merit. . . . When multiple alternative[] causes of action are stated, the duty to defend will continue until every covered claim is eliminated. As one court has stated:

To hold otherwise would be to place upon the insured the burden of demonstrating in advance of the underlying litigation which of the competing theories of recovery against it was applicable for purposes of insurance, thereby frustrating one of the basic purposes of such a clause in the insurance contract--protection of the insured from the expenses of litigation.

[Voorhees, supra, 128 N.J. at 173-74 (quoting Solo Cup Co. v. Fed. Ins. Co., 619 F.2d 1178, 1185 (7th Cir. 1980)).]

It does not matter whether "the claims are poorly developed and almost sure to fail." Id. at 174. Rather "[t]he duty to defend . . . is determined by whether a covered claim is made, not by how well it is made." Ibid. The parties assumed below that in this context the policy should be compared to the tort claim notices, and we shall accept that assumption for purposes of this opinion.

The Board's insurance policy contains an express exclusion for intentional acts. Thus, the court must determine whether the notices allege only conduct intentional in nature, as Hannover argues, or whether they also assert claims of un-intended injury.

In Atlantic Employers Insurance Co. v. Tots & Toddlers Pre-School Day Care Center, Inc., 239 N.J. Super. 276, 283 (App. Div.), certif. denied, 122 N.J. 147 (1990), the court held that while typically courts look to the subjective intent of an actor to determine his intent to injure for purposes of policy coverage, the sexual assault of a child was so inherently injurious that the harm caused could never be accidental, and therefore, the actor's intent could be presumed from the act itself. In Voorhees, supra, 128 N.J. at 184, the Court, in dicta, adopted the Tots & Toddlers objective approach, but expressly limited it to instances "[w]hen the actions are particularly reprehensible." The Court reaffirmed the general principle that "[a]bsent exceptional circumstances that objectively establish the insured's intent to injure, [the court] will look to the insured's subjective intent to determine intent to injure." Id. at 185.

In Atlantic Employers Insurance Co. v. Chartwell Manor School, 280 N.J. Super. 457, 465 (App. Div. 1995), the court viewed a complaint similar to the notices filed here, and found that despite the seemingly sexual nature of the conduct alleged, the accused's explanation of punishment coupled with the mixture of sexual and non-sexual actions asserted was sufficient to remove the complaint from the Tots & Toddlers objective approach and afford the accused the opportunity to establish his subjective intent for purposes of insurance coverage.

Here, the notices allege more than that Quinn committed sexual acts against K.C. They also claim that he negligently engaged in other unspecified, but offensive, conduct. Accordingly, the judge properly applied the Voorhees subjective, rather than objective, test to find that Hannover must extend coverage to Quinn, and we affirm the judgment on this appeal. We turn next to A-3957-04.

After Hannover filed its appeal, the Board moved in the initial action for additional counsel fees incurred in opposing a coverage motion filed by Hannover in the subsequent action filed by K.C., and for enforcement of the prior counsel fee award. The judge granted an enforcement order but declined to act on the request for additional fees because the appeal filed by Hannover deprived it of jurisdiction to deal with that issue. That ruling is unquestionably correct, R. 2:9-1(a), and must be affirmed without prejudice to a renewal of the motion for counsel fees in the trial court on remand.

Affirmed and remanded.

 

We find no merit in Hannover's claim of judicial estoppel. Neither in its application to the court for compensation in Quinn's criminal matter, nor in its victim impact statement, did the Board assert that all of Quinn's acts were intentional or outside the scope of his employment. The Board only addressed those acts for which he was criminally convicted. A civil suit might very well claim damages for acts beyond those for which Quinn was convicted, some of which may have been unintentional, within the meaning of the insurance policy, or only negligent. And indeed the facts alleged in the Tort Claim Notice were sufficiently general as to potentially encompass acts covered by the policy.

(continued)

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7

A-1316-04T1

June 20, 2006