Court Opinion

ID: 9699402
Source: CourtListenerOpinion
Date Created: 2023-08-25 20:22:36.082069+00
Date Added: 2024-06-11T12:39:40.029629
License: Public Domain

Clifford, J.
dissenting. By making the proceeds of a comprehensive general liability insurance policy available to compensate the estate and next-of-kin of a murder victim who perished in an intentionally set fire, the Court has devised a way to reach the “deep pockets.” In achieving this remarkable result the majority obligates other insured property owners to bar the losses intentionally inflicted by a criminal merely because that criminal likewise happened to .carry liability insurance on his property. In so doing the Court has disregarded the specific provisions of the policy in question as well as long-established public policy considerations. The law of insurance has thereby been turned on its head. I dissent.
On May 11, 1973 Marilyn Ortega Perez and three others died in a fire on Washington Place, Passaic. The owner of the property, defendant Joseph Satkin, was convicted of felony-murder on an indictment charging him with having *493intentionally caused the fire. Suit was instituted against Satkin for Ms. Perez’s injuries and damages occasioned by the fire and the resultant pecuniary loss of her next-of-kin. Ambassador Insurance Company, Satkin’s liability insurance carrier on this and at least forty-nine other pieces of his income-producing property, refused to defend Satkin and denied coverage. This declaratory judgment action tests the company’s decision in that regard.
In finding coverage the Court reasons that on the face of the policy the company’s obligation to defend and pay on behalf of its insured is “obviousthat the policy contains no exclusion for the insured’s intentional wrongdoing, and in fact constitutes an undertaking “to pay an innocent person monetary damages due to any liability of the insured, whether or not resulting from the insured’s wilful criminal act,” ante at 483-484; and that the public policy principle against insurance coverage for intentional wrongdoing is vindicated by enforcing the carrier’s payment to the injured party and permitting the insurer thereafter to be subrogated to the injured person’s rights against the insured. On each supporting ground this reasoning fails.
Eirst, the policy does not, on its face, provide coverage. In setting forth the policy provisions, ante at 481-482, the majority has quoted only so much of the insurance contract as spells out an obligation on the part of the company to “pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of [bodily injury or property damage] * * * caused by an occurrence * * *” (emphasis added). Conspicuously absent from the majority’s analysis, however, is any discussion of the definition of “occurrence,” which the policy defines as “an accident * * * which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured * * *.”1 That the fire in question was not, *494under any meaning of the word, an accident, seems beyond question. Nor is there any doubt that the bodily injury resulting here was “intended.” The Restatement (Second) of Torts § 8A (1965) provides that
[t]he word “intend” is used throughout the Restatement of this subject to denote that the actor desires to cause consequences of his act, or that he believes that the consequences are substantially certain ta result from it (emphasis supplied).
Applying this definition in the instant case, see Hanover Insurance Group v. Cameron, 122 N. J. Super. 51, 61 (Ch. 1973), there can be little question that Satkin “intended” to cause the victim’s bodily injuries. By burning one of his rented dwelling houses at three o’clock in the morning, Sat-kin undoubtedly knew that injuries were substantially certain to follow his intentional act. So while there is no specific exclusion for the insured’s intentional acts, neither is there coverage for Satkin’s satanic conduct in this case. See, e. g., Chemlec Midwest Service, Inc. v. Insurance Co. of North America, 288 F. Supp. 763, 769 (W. D. Wis. 1968) (dicta) (applying New Jersey law) (injury to property “caused by accident” means injury to property not wilfully or inten*495tionally inflicted but caused by negligence of insured); Anton v. Fidelity & Casualty Co. of New York, 117 Vt. 300, 91 A. 2d 697 (1952) (“bodily injury * * * caused by accident” does not include coverage for wilful acts of the insured); Weis v. State Farm Mutual Auto Insurance Co., 242 Minn. 141, 64 N. W. 2d 366, 368 (1954) (where policy provided coverage only for injuries “caused by accident,” no coverage where insured intentionally drove into another car).
Even without resort to the policy definition of “occurrence,” it seems to me that the same meaning — an accident resulting in unexpected or unintended damage — should be ascribed to that word in its present context. It should convey such meaning as ordinarily would be expected within the confines of the instrument — here a liability insurance policy — in which it is used. Consulting the dictionaries, we find “■occurrence” defined as “something that takes place; esp.: something that happens unexpectedly and without design” (Webster’s Third New Int’l Dictionary, 1971); or as “a coming or happening; any incident or event, especially one that happens without being designed or expected” (Black’s Law Dictionary, rev. 4th ed., 1968). Indeed, this commonsense interpretation of “occurrence” as being virtually synonymous with “accident” is supported by the case law. See, e. g., Deodato v. Hartford Insurance Co., 143 N. J. Super. 396, 402 (Law Div. 1976) (“an occurrence need not be a sudden event, but may be a process, as long as the incident or event is not designed or expected”) (emphasis added); see also Truck Insurance Exchange v. Rohde, 49 Wash. 2d 465, 303 P. 2d 659 (1956).
Second, even if the policy in question can somehow be read to provide coverage in its insuring agreement, there is an implied exclusion for the situation in which the insured “torches” a residential dwelling. This implied exclusion is based not on public policy but on the expectancies of the parties to the insurance contract. Professor Robert E. Keeton, in Insurance Law (1971) § 5.3(a) at 278-79, explains the theory as follows:
*496The phrase “implied exception” as used in insurance law ordinarily refers to a basis for an insurer’s non-liability that is not expressed anywhere in the contract but is said to be implicit in the nature of the agreement and the circumstances to which it applies. Common examples of implied exceptions are the rules denying recovery under fire insurance for losses caused by “friendly fires,” under marine insurance for losses caused by ordinary deterioration of goods or by inherent vice, and under liability insurance for losses caused intentionally by the insured.
An examination of the whole array of implied exceptions recognized in insurance law reveals that most of the losses to which implied exceptions apply can be explained as illustrations of one or the other of two principles. First, insurance contracts do not ordinarily cover economic detriment of a type occurring so regularly in relation to an insured enterprise or activity that it is commonly regarded as a cost rather than a risk of that activity or enterprise. Second, insurance contracts do not cover economic detriment that is not fortuitous from the point of view of the person (usually the insured) whose detriment is asserted as the basis of the insurer’s liability. For example, a loss is not fortuitous in this sense if caused intentionally by that person.
Quite plainly the “economic detriment” here (liability translated into money damages) is not fortuitous from the point of view of the author of this tragedy, Satlrin; and it is his detriment that is “asserted as the basis 'of the insurer’s liability.” To suggest that in fact the person whose detriment we are concerned with is Ms. Perez’s representative and that as to the decedent this conflagration was entirely fortuitous misses the point. That approach skips an essential step in the analysis. The issue here is whether in the first instance coverage is to be afforded this wrongdoer for his intentional act and not whether, if coverage is afforded, Satkin can thereafter be made to answer over to his liability insurance carrier by application of subrogation principles. Without even considering whether, as surely it appears to, the majority’s analysis embraces coverage for punitive damages, I would hold that the expectancies of the parties to this insurance contract were that any intentional tort would be excluded from coverage.
*497But it is on the third ground asserted by the Court in support of its conclusion — the public policy dimension — that today’s decision so plainly departs from established law. The Court concedes that as a general rule it would violate public policy to allow indemnification of a person for loss or damage resulting from his wilful wrongding in violation of a criminal statute, reasoning however that this principle is inapplicable when “* * * the wrongdoer is not benefited and an innocent third person receives the protection afforded by the insurance.” Ante at 483. In support of this proposition, the Court relies on Fidelity-Phenix Fire Insurance Co. v. Queen City Bus & Transfer Co., 3 F. 2d 784 (4th Cir. 1925) and Howell v. Ohio Casualty Insurance Co., 130 N. J. Super. 350 (App. Div. 1974). Those cases are clearly distinguishable and afford no support whatsoever for the majority’s position, inasmuch as in each the party recovering from the insurance carrier was an express beneficiary of a fire insurance policy issued to the injured party. Fidelity-Phenix Fire Insurance Co. v. Queen City Bus & Transfer Co., supra, 3 F. 2d at 785 (where corporation is express beneficiary of fire insurance policy, it can recover proceeds when officer of corporation intentionally burns covered property); Howell v. Ohio Casualty Insurance Co., supra, 130 N. J. Super. at 353 (where wife is express beneficiary of fire insurance policy, wife can recover proceeds of insurance policy when husband intentionally burns covered property). These cases were rightly decided and reflect a sound judicial approach: there is unquestionably no public policy reason to prevent a person from obtaining fire insurance protection against the consequences of the intentional criminal acts of third parties.
The instant case, however, does not represent an attempt by a victim of an intentional wrongdoer to recover the proceeds of a fire and accident policy issued to the victim and providing coverage against the intentional criminal acts of third parties. Rather, it involves an effort by a victim to recover the proceeds of a liability policy issued to an insured (the wrongdoer) and providing coverage for the consequences *498of his actions. New Jersey has consistently recognized that it would violate public policy to permit the proceeds of a liability policy issued to an insured to be paid to the innocent victims of an insured’s intentional criminal conduct. Malanga v. Manufacturers Casualty Insurance Co., 28 N. J. 220, 225 (1958) (violative of public policy to indemnify an insured for a loss incurred as a result of an assault and battery committed by insured); Ruvolo v. American Casualty Co., 39 N. J. 490, 496 (1963) (it would be violative of public policy to indemnify an insured for a loss incurred as a result of intentional killing); Lyons v. Hartford Insurance Group, 125 N. J. Super. 239, 244-45 (App. Div. 1973) (violative of public policy to allow insurance indemnification for the civil consequences of one’s intentional wrongdoing); Oakes v. State Farm Fire & Casualty Co., 137 N. J. Super. 365, 368 (App. Div. 1975) (violative of public policy to indemnify an insured for a loss incurred as a result of an assault and battery). ,
There is no persuasive reason offered for departing from the doctrine enunciated in the foregoing cases. That course completely loses sight of one of the guiding purposes of insurance: the wide distribution of accidental rather than intentional losses. The result here is that other insured property owners are required to shoulder the costs incurred as a result of the intentional misconduct of this named insured owner of the property in question. Sound insurance principles and salutary policy considerations are thereby offended.
I would reverse the judgment of the Appellate Division and reinstate the trial court’s determination of no coverage.
Pashman and Handler, JJ., concurring in the result.
For affirmance — Chief Justice Hughes and Justices Sullivan, Pashman, Schreiber and Handler — 5.
For reversal and reinstatement of trial court’s determination: Justice Clieeord — 1.

In complying with the trial court’s request for a copy' of the policy issued by Ambassador to Satkin, counsel for the carrier failed *494to include the page containing “definitionstherefore, the trial court did not have the benefit of the entire policy. Likewise, counsel have not presented argument based on the definition of “occurrence.” At oral argument we inquired about the policy’s definition of “occurrence,” and specifically requested and thereafter received the complete policy. While the Court chooses to ignore the definition section, and counsel for Ambassador, after submitting the full policy, asks (inexplicably) that we “disregard the policy forwarded” to us after oral argument, I do not understand how we can properly — or intelligently • — • decide this case without application of the policy’s definition ,of “occurrence.” I would acc.ept as part of the record so much of the insuring agreement filed with us as contains the definitions of terms used elsewhere in the policy, see R. 2.5-4(a), or at the very least give the attorneys the opportunity to present any argument relating to the definition of occurrence as they might wish to make. See Dresner v. Carrara, 69 N. J. 237, 243 (1976); cf. U. S. Trust Co. of N. Y. v. State, 69 N. J. 253, 257 (1976), rev’d on other grounds, 431 U. S. 1, 97 S. Ct. 1505, 52 L. Ed. 2d 92 (1977).