Insurance Should Never Apply to Indemnify Insured for its Intentional Acts
Post 4838
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Slyvia Melania Tejada de Tapia was injured at work and filed a workers’ compensation claim against her employer, 74 Industries, Inc. (74 Industries), which was settled pursuant to an order approving settlement with dismissal under statute called the Section 20 Settlement resulted in the dismissal of plaintiff’s workers’ compensation claims with prejudice. Workers’ Compensation is an exclusive remedy for an employee injured at work without fault.
In Sylvia Melania Tejada De Tapia v. 74 Industries, Inc. and Velcro USA, Inc., et al. v. New Jersey Manufacturers Insurance Company, No. A-2643-21, Superior Court of New Jersey, Appellate Division (July 12, 2024) the Appellate Division explained why workers’ compensation has no effect on tort law.
FACTS
Plaintiff suffered an injury after she was bitten or stung by an insect during the course of her employment as a sewing machine operator with 74 Industries. According to plaintiff, insects routinely infested the packages of fabric and materials that employees handled and frequently bit and stung employees. Plaintiff was hospitalized for treatment related to the infection she suffered as a result of the insect bite. The infection caused her right leg to swell and form green open sores.
New Jersey Manufacturers Insurance Company’s (NJM) had issued a standard workers’ compensation insurance policy (the Policy) to 74 Industries and recommended settlement of plaintiff’s workers’ compensation claim. Prior to the settlement, however, plaintiff had also filed a complaint in the Law Division alleging intentional torts against 74 Industries. 74 Industries filed a third-party complaint against NJM seeking coverage under the Policy for plaintiff’s claims of intentional wrong asserted against 74 Industries. NJM denied coverage citing policy exclusions for intentional torts and moved to dismiss 74 Industries’s third-party complaint. The Law Division judge granted NJM’s motion to dismiss 74 Industries’s third-party complaint for failure to state a claim.
NJM defended 74 Industries in workers’ compensation court and eventually recommended 74 Industries settle plaintiff’s case for a lump sum payment of $25,000 by way of an order approving settlement with dismissal.
Prior to the entry of the Section 20 settlement, however, plaintiff had filed an action in the Law Division alleging her injuries were caused by 74 Industries’s intentional misconduct under the principles explained by the Court in Laidlow v. Hariton Mach. Co., 170 N.J. 602, 14 (2002).
Plaintiff had filed a series of amended complaints, each of which included the same four counts against 74 Industries.
The court further found that plaintiff’s allegations fell squarely within the Policy’s C5 exclusion for “intentional wrongs” and rejected 74 Industries’s contention the Policy was ambiguous because the C7 exclusion and C7 endorsement provided coverage for “bodily injuries” under Part Two of the Policy.
DISCUSSION
The interpretation of an insurance policy, like any contract, is a question of law. In attempting to discern the meaning of a provision in an insurance contract, the plain language is ordinarily the most direct route. The plain and unambiguous language in the C5 endorsement clearly covers plaintiff’s intentional tort claims that result from a subjective intent to injure and those that are substantially certain to have caused injury.
As the motion court acknowledged, plaintiff asserts that she was threatened with adverse employment action if she left the jobsite for medical treatment, which based on a fair reading of the complaint suggests a cause of action for coercion. Defendant’s claim that it is entitled to coverage under the C7 exclusion fails because plaintiff’s causes of action are founded on intentional wrongs.
Lastly, the Appellate Division rejected 74 Industries’s argument that public policy supports coverage for intentional wrongs as New Jersey courts have consistently held that exclusions for intentional wrongs contained in insurance policies are legally valid.
Therefore there was no basis to support 74 Industries’s argument that public policy favors coverage for plaintiff’s intentional wrongs filed in Law Division. Therefore the court could discern no basis to conclude NJM had a duty to defend or indemnify 74 Industries against plaintiff’s intentional wrong claims made in the Law Division fourth-amended complaint.
ZALMA OPINION
Insurance, by definition, only insures against fortuitous conduct, an accident. Intentional acts, like those pleaded by Ms. Tejada de Tapia are not fortuitous but intentional and not insurable. The insurer, to be safe, added an exclusion for intentional acts which made clear its position and the requirement of fortuity.
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Concealing a Weapon Used in a Murder is an Intentional & Criminal Act
Post 5002
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In Howard I. Rosenberg; Kimberly L. Rosenberg v. Chubb Indemnity Insurance Company Howard I. Rosenberg; Kimberly L. Rosenberg; Kimberly L. Rosenberg; Howard I. Rosenberg v. Hudson Insurance Company, No. 22-3275, United States Court of Appeals, Third Circuit (February 11, 2025) the Third Circuit resolved whether the insurers owed a defense for murder and acts performed to hide the fact of a murder and the murder weapon.
FACTUAL BACKGROUND
Adam Rosenberg and Christian Moore-Rouse befriended one another while they were students at the Community College of Allegheny County. On December 21, 2019, however, while at his parents’ house, Adam shot twenty-two-year-old Christian in the back of the head with a nine-millimeter Ruger SR9C handgun. Adam then dragged...
Renewal Notices Sent Electronically Are Legal, Approved by the State and Effective
Post 5000
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Washington state law allows insurers to deliver insurance notices and documents electronically if the party has affirmatively consented to that method of delivery and has not withdrawn the consent. The Plaintiffs argued that the terms and conditions statement was not “conspicuous” because it was hidden behind a hyperlink included in a single line of small text. The court found that the statement was sufficiently conspicuous as it was bolded and set off from the surrounding text in bright blue text.
In James Hughes et al. v. American Strategic Insurance Corp et al., No. 3:24-cv-05114-DGE, United States District Court (February 14, 2025) the USDC resolved the dispute.
The court’s reasoning focused on two main points:
1 whether the ...
Rescission in Michigan Requires Preprocurement Fraud
Post 4999
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Lie About Where Vehicle Was Garaged After Policy Inception Not Basis for Rescission
This appeal turns on whether fraud occurred in relation to an April 26, 2018 renewal contract for a policy of insurance under the no-fault act issued by plaintiff, Encompass Indemnity Company (“Encompass”).
In Samuel Tourkow, by David Tourkow v. Michael Thomas Fox, and Sweet Insurance Agency, formerly known as Verbiest Insurance Agency, Inc., Third-Party Defendant-Appellee. Encompass Indemnity Company, et al, Nos. 367494, 367512, Court of Appeals of Michigan (February 12, 2025) resolved the claims.
The plaintiff, Encompass Indemnity Company, issued a no-fault insurance policy to Jon and Joyce Fox, with Michael Fox added as an additional insured. The dispute centers on whether fraud occurred in...
Insurance Fraud Leads to Violent Crime
Post 4990
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CRIMINAL CONDUCT NEVER GETS BETTER
In The People v. Dennis Lee Givens, B330497, California Court of Appeals, Second District, Eighth Division (February 3, 2025) Givens appealed to reverse his conviction for human trafficking and sought an order for a new trial.
FACTS
In September 2020, Givens matched with J.C. on the dating app “Tagged.” J.C., who was 20 years old at the time, had known Givens since childhood because their mothers were best friends. After matching, J.C. and Givens saw each other daily, and J.C. began working as a prostitute under Givens’s direction.
Givens set quotas for J.C., took her earnings, and threatened her when she failed to meet his demands. In February 2022, J.C. confided in her mother who then contacted the Los Angeles Police Department. The police ...
Police Officer’s Involvement in Insurance Fraud Results in Jail
Post 4989
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Von Harris was convicted of bribery, forgery, and insurance fraud. He appealed his conviction and sentence. His appeal was denied, and the Court of Appeals upheld the conviction.
In State Of Ohio v. Von Harris, 2025-Ohio-279, No. 113618, Court of Appeals of Ohio, Eighth District (January 30, 2025) the Court of Appeals affirmed the conviction.
FACTUAL BACKGROUND
On January 23, 2024, the trial court sentenced Harris. The trial court sentenced Harris to six months in the county jail on Count 15; 12 months in prison on Counts 6, 8, 11, and 13; and 24 months in prison on Counts 5 and 10, with all counts running concurrent to one another for a total of 24 months in prison. The jury found Harris guilty based on his involvement in facilitating payments to an East Cleveland ...
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To Dispute an Arbitration Finding Party Must File Dispute Within 20 Days
Post 4988
EXCUSABLE NEGLECT SUFFICIENT TO DISPUTE ARBITRATION LATE
In Howard Roy Housen and Valerie Housen v. Universal Property & Casualty Insurance Company, No. 4D2023-2720, Florida Court of Appeals, Fourth District (January 22, 2025) the Housens appealed a final judgment in their breach of contract action.
FACTS
The Housens filed an insurance claim with Universal, which was denied, leading them to file a breach of contract action. The parties agreed to non-binding arbitration which resulted in an award not
favorable to the Housens. However, the Housens failed to file a notice of rejection of the arbitration decision within the required 20 days. Instead, they filed a motion for a new trial 29 days after the arbitrator’s decision, citing a clerical error for the delay.
The circuit court ...
