Court Opinion

ID: 9696929
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:01:48.024868+00
Date Added: 2024-06-11T18:20:27.836718
License: Public Domain

PAPADAKOS, Justice,
dissenting.
I am obliged to dissent from my brethren in this decision because of my fundamental disagreement with their characterization of the issue. While I have no objection to the legal principles enunciated by the Majority, I take serious exception to their factual conclusion that the Township suffered no insurable loss and, therefore, must be denied recovery under the insurance policy.
The fatal flaw in the Majority’s reasoning is their insistence that the Township “suffered losses arising out of *251surcharges imposed upon former township supervisors.” In reality, of course, the imposition of surcharges was derived from the Township’s monetary loss in overpayments to the contractor. The surcharges thereby constituted a derivative action which was predicated upon the original financial loss suffered by the Township and which is fully compensable under the law. Had the Township not sustained the loss, there would have been no surcharge. I greatly fear, in short, that my colleagues have placed the cart before the horse. They wave a magic wand and make the predicate disappear into thin air. As a matter of fact, of course, the existence of the original monetary loss will not go away for the obvious reason that it is the essential reality of this case.
The Township purchased insurance to cover those amounts which it was legally obligated to pay. That obligation specifically must encompass the original monetary loss, and in this respect the Majority simply is refusing to define the issue properly. I read the terms of the insurance contract in a light which would cover this particular claim.
Furthermore, the Majority fails to distinguish between the Township and its officials as separate and distinct legal entities. There is no reason why the Township should not be permitted to secure insurance coverage against the initial legal payments to contractors and allow the insurer to be surcharged against the officials.
Finally, I also take exception to the extraneous inferences employed by the Majority in its analysis. While it is true that they conclude in this case that there is no evidence of willful or fraudulent misconduct, I cannot understand why they found it necessary to juxtapose within their opinion a lengthy legal delineation of the consequences which could attend such behavior. Civic pride induces our good citizens to conduct the affairs of their own governments in a virtuous manner. Gratuitous implications leading to guilt by association are unwarranted on this record.