Opinion ID: 2162163
Heading Depth: 1
Heading Rank: 4

Heading: Restitution Unaffected Insurance Payment and Release

Text: The Association had purchased an insurance bond which provided coverage against employee theft in a maximum limit of $10,000. The insurer determined that the Association's loss, as a result of Benton's embezzlement, exceeded the policy limits. Accordingly, the insurer paid the Association the maximum limits of $10,000 pursuant to the bond. In connection with its receipt of that insurance payment, the Association signed a release of its claim under the bond which stated, in part: In further consideration of said payment, the [Association] does hereby release and forever discharge said Selective Insurance Company of America from any and all liability, claim and demand under the Bond # B821648 furnished on behalf of Angola By The Bay Property Owners Association I. Benton contends that the foregoing language constitutes a general release, which operated in her favor for purposes of determining restitution. According to Benton, under the terms of the general release, the Superior Court was prevented from ordering restitution in favor of either the Association or its insurer. The release at issue in this appeal specifically refers to the bond, under which the insurer was contractually liable to the Association, and not to any direct claims the Association had arising from Benton's theft. The only claims released by the Association were those arising from that bond against its insurer, Selective Insurance Company of America. Moreover, the release provided for an assignment of the Association's direct right of civil recovery against the miscreant, Benton, in favor of the insurer. This Court has recognized that an injured or aggrieved party can give a general release that inures to the benefit of third party strangers to that document. [16] The terms of the release in this case, however, demonstrate that it is a special release of the insurer. [17] Thus, it does not operate as a general release to relieve Benton from either civil liability or the obligation to make restitution for her criminal conduct. [18] The Superior Court properly held that the Association's release of its insurance carrier's obligation under the bond did not preclude the entry of an order for Benton to make full restitution. The amount of the theft by Benton, together with the Association's out-of-pocket loss, was $21,450.65. Because $10,000 of this loss had already been paid by the Association's insurer, the Superior Court divided its restitution award. [19] The first $11,450.65 was to be paid to the Association. The remainder was to be paid to the insurer. [20] That apportionment is consistent with this Court's prior holdings. [21]