Court Opinion

ID: 9533495
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:32:11.319626+00
Date Added: 2024-06-11T13:29:04.090854
License: Public Domain

LONG, J.
dissenting.
I would affirm the judgment of the Appellate Division insofar as it concludes that the triggering event for coverage was the filing of the criminal complaint against Ford, and would adopt the reasoning of Paterson Tallow over that of Meeker Sharkey. In my view, the outcome of Meeker Sharkey was driven by the fact that there was insurance coverage only on the date of the acquittal, not on the date the criminal charges were filed. Under the rules governing the interpretation of ambiguous insurance contracts, the outcome in favor of accessing the only available insurance coverage was foreordained.
On the contrary, here, as Judge Petrella, writing for the Appellate Division, observed:
[T]he Florham Park Board was covered by Selective at the institution of the criminal action, and Utica at its termination. The Board had the requisite insurance coverage. The only question for the court was which party would have to pay the indemnification____
*312[T]he “final disposition” language of N.J.S.A 18AU6-6.1 does not address the triggering event for coverage. Bather, it concerns when the defendant in a criminal action is entitled to reimbursement from the Board.
[Bd. of Educ., supra, 344 N.J.Super. at 567, 782 A.2d 972.]
Put another way, the acquittal requirement is merely a prerequisite to an action by an employee for indemnification.
The coverage issue is entirely distinct. What is covered in an indemnity policy is an occurrence. The covered occurrence in Paterson Tallow was the institution of a criminal prosecution. So it is here. The ultimate vindication of Ford, through his acquittal, merely provided evidence of what had been the case all along, that he was innocent and had incurred expenses in defending himself that legitimately belonged to the Board. Insurers insure occurrences and not knowledge of occurrences. It was from the indictment that damage flowed to Ford and spilled over on the Board of Education.
Although, as the divergent opinions of the majority and the Appellate Division reflect, the legalities may be debatable, what is not debatable is the policy effect of the majority’s holding. First, it places Boards of Education at peril of non-renewal by the company that is insuring a Board at the time criminal charges are filed. Second, it creates a disincentive for other insurers to step in and provide coverage. Third, it places such an insurer at the distinct advantage of setting premiums based not on the actuarial possibility that a criminal charge will be brought during its policy term but on the knowledge that one has already been brought.
The policies at issue are ambiguous regarding the insurance trigger and the statutes they incorporate do not resolve the ambiguity. Although superficially the majority ruled in favor of the Board, the existence of two insurers at the pivotal points guaranteed coverage in any event. The notion that an ambiguous policy is to be interpreted in a light most favorable to the insured and against the drafter should have encompassed consideration of the difficult situation the majority’s opinion has set up for Boards of Education. For those reasons, I dissent.
*313For reversing — Chief Justice PORITZ and Justices STEIN, COLEMAN, VERNIERO, LaVECCHIA, and ZAZZALI — 6.
For affirming — Justice LONG — 1.