Voorhees v. Preferred Mutual Insurance
128 N.J. 165, 8 A.L.R. 5th 937, 607 A.2d 1255 (1992)
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Rule of Law:
Under a standard homeowner's policy, the term 'bodily injury' includes emotional distress that is accompanied by physical manifestations. Furthermore, an 'occurrence' defined as an 'accident' encompasses intentional acts, provided the insured did not intend or expect to cause the resulting injury.
Facts:
- Eileen Voorhees, along with other parents, became concerned about the competency and fitness of her child's teacher.
- Voorhees expressed these concerns at a public school-board meeting, requesting that the children be removed from the teacher's class.
- The school board temporarily relieved the teacher of her duties pending a psychiatric examination.
- A local newspaper, The Cranford Chronicle, published an article quoting Voorhees' comments regarding the school board's action.
- The teacher alleged that Voorhees' statements caused her to suffer humiliation, embarrassment, emotional distress, and mental anguish.
- Medical evidence indicated the teacher's emotional distress resulted in physical complaints, including headaches, stomach pains, nausea, and body pains.
- Voorhees held a homeowner's insurance policy from Preferred Mutual Insurance Company, which covered liability for 'bodily injury' caused by an 'occurrence.'
- The policy defined 'bodily injury' as 'bodily harm, sickness or disease' and 'occurrence' as 'an accident,' while excluding liability 'caused intentionally.'
Procedural Posture:
- The teacher filed a lawsuit against Eileen Voorhees and others.
- Voorhees requested that her insurer, Preferred Mutual Insurance Company, provide a legal defense.
- Preferred Mutual refused to defend, arguing the claims were not for 'bodily injury' and were excluded as intentional acts.
- The underlying suit between the teacher and Voorhees settled for $750.
- Voorhees sued Preferred Mutual in a New Jersey trial court (Law Division) for breach of contract to recover her defense costs of over $14,000.
- The trial court granted summary judgment in favor of Preferred Mutual, agreeing that the claims were for defamation and not 'bodily injury.'
- Voorhees, as appellant, appealed to the intermediate appellate court (Appellate Division), which reversed the trial court's decision in her favor.
- One judge on the Appellate Division panel dissented from the majority opinion.
- The case was appealed to the Supreme Court of New Jersey by Preferred Mutual as a matter of right due to the dissent in the court below.
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Issue:
Does a homeowner's insurance policy covering 'bodily injury' caused by an 'occurrence' obligate an insurer to defend a suit where the insured's intentional statements allegedly caused emotional distress accompanied by physical manifestations?
Opinions:
Majority - Garibaldi, J.
Yes. A homeowner's insurance policy covering 'bodily injury' from an 'occurrence' creates a duty to defend when a claim alleges emotional distress with resulting physical manifestations, and the insured's acts, though intentional, were not subjectively intended to cause injury. The duty to defend is triggered when a complaint alleges a potentially covered claim. The term 'bodily injury' is ambiguous as applied to emotional distress with physical symptoms and must be construed in favor of the insured to meet their reasonable expectations. An 'occurrence,' defined as an accident, is determined by whether the injury was intended, not whether the act was intentional. Unless an act is so reprehensible that intent to injure can be presumed, the court must look to the insured's subjective intent. Here, the teacher alleged physical symptoms stemming from emotional distress, triggering 'bodily injury' coverage, and the complaint's allegation of negligence presumes an absence of intent to injure, thus qualifying as a potential 'occurrence.'
Dissenting - Clifford, J.
No. The policy does not require the insurer to defend this suit. The term 'bodily injury' unambiguously contemplates injury to the physical components of the body, not purely subjective, nonphysical mental suffering, even if physical symptoms are present. This type of harm is properly covered by 'personal injury' policies, not 'bodily injury' policies. Furthermore, an 'occurrence' or 'accident' does not include intentional acts such as making 'false and erroneous statements.' The underlying claim is one for defamation, which is not covered by a standard homeowner's policy.
Analysis:
This decision significantly broadens the scope of coverage under standard 'bodily injury' insurance policies by including the physical consequences of emotional distress. It solidifies the 'injury-focused' test for what constitutes an 'accident' or 'occurrence,' confirming that an insured's intentional acts with unintended harmful consequences can trigger coverage. This ruling increases the likelihood that insurers will have a duty to defend in cases involving emotional distress claims and necessitates a deeper, fact-specific inquiry into the insured's subjective intent to cause harm, rather than just the nature of the act itself.
