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June 1, 1989

CHRISTINE CALABRESE, individually and in her official capacity as former Chairperson of the Hudson County Board of Elections, FRANK CALECA, LEE S. LICHTENBERGER, the Hudson County Superintendent of Elections, HARVEY L. BIRNE, as Hudson County Superintendent of Elections, GERALD McCANN, individually and in his official capacity as former Mayor of the City of Jersey City, MATTHEW BURNS, JOHN FINN, MARK MUNLEY, Defendants; GERALD McCANN, MARK MUNLEY, JOHN J. FINN, MATTHEW BURNS, Defendant Third-party Plaintiffs, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., Third-party Defendant; GERALD McCANN, Defendant Third-party Plaintiff, v. J.R. INSURANCE BROKERAGE, INC., Third-party Defendant

The opinion of the court was delivered by: DEBEVOISE

 This matter involves motions by defendant third-party plaintiffs Gerald McCann, Mark Munley, John J. Finn and Matthew Burns against third-party defendant National Union Fire Insurance Company of Pittsburgh, PA ("NUFI") for summary judgment pursuant to Fed. R. Civ. P. 56 or, alternatively, for a declaratory judgment pursuant to Fed. R. Civ. P. 57 that NUFI is obligated to defend and indemnify them in this action. NUFI, in turn, cross-moves for summary judgment as to McCann, Munley, Finn and Burns, or seeks, in the alternative, a declaratory judgment that it has no obligation to defend or indemnify the defendant third-party plaintiffs. In addition, third-party defendant J.R. Insurance Brokerage, Inc. ("J.R.") moves for summary judgment on defendant third-party plaintiff McCann's complaint against it and McCann, in turn, cross-moves for summary judgment against J.R. Burns opposes J.R.'s motion for summary judgment.

 I. Introduction

 This case involves the interpretation of a standard broad form comprehensive general liability insurance policy that was apparently drafted to cover commercial risks and in this case issued by the insurer to cover the activities of three political organizations associated with the reelection of Gerald McCann as Mayor of Jersey City. The parties' arguments seemingly present the court with a choice between the defendant third-party plaintiffs' tortured interpretation of the policy provisions and the third-party defendant insurer's strictissimi juris approach to the same language and rather disingenuous protestations that it did not have complete knowledge of the insureds' activities. This case is admittedly a close one and for that reason alone, if no other, favors the insureds.

 II. Background of the Dispute

 In April 1985, Mayor Gerald McCann of the City of Jersey City ran for reelection against Anthony Cucci and two others. No candidate obtained a majority of the votes cast. Under the laws governing mayoral contests in Jersey City, a run-off election was scheduled in June between the two highest vote getters, McCann, who received 46% of the vote and Cucci who received 49%. *fn1"

 Cucci apparently enjoyed broad-based support among the black and Hispanic neighborhoods in the city. The complaint alleges that in preparation for his rematch with Cucci, McCann with the advice of Finn, who was brought in as a consultant to the campaign, and Munley, who was then the city Director of Housing and Economic Development, developed a strategy to undercut Cucci's strength that would impede or prevent voting in the election districts in neighborhoods that were heavily black or Hispanic.

 Third, by virtue of his position as Chairman of the Hudson County Democratic Party, McCann was permitted in practice to select election district members who would, among other things, serve as challengers in the local polling places. McCann used this privilege to appoint off-duty Jersey City policemen to this function in heavily black and Hispanic voting districts. These officers allegedly harassed eligible voters and prevented them from casting ballots. Fourth, instructions were provided to all district board members directing them to prevent any individual whose name appeared on the challenge list from voting unless the voter produced a current lease, if the voter was a resident in public housing, or a phone, gas or electric bill in the voter's name.

 Fifth, color-coded lists of names used to challenge prospective voters on the basis of race were allegedly prepared and sixth, there was a failure to provide adequate bilingual assistance both at polling places and at the courthouse for those individuals that attempted to obtain court orders permitting them to vote.

 Finn allegedly authored and distributed the instruction sheet for all McCann campaign workers instructing them to accept only utility bills, or for individuals in public housing, only a current lease displaying the voter's name. These instructions conflicted with normal voting procedures used in the county. With Munley, Finn is also alleged to have held training sessions with the McCann-appointed election district board members. Burns served as counsel to the campaign and allegedly coordinated the work of campaign workers who procured documentation of voter fraud and the use of police officers to serve as district election board members in black and Hispanic neighborhoods.

 Plaintiffs are a class of black and Hispanic voters who were allegedly prevented or discouraged from voting in the June 11, 1985 run-off election. In addition to the factual averments recited above, their second amended complaint sets out no fewer than thirteen separate causes of action arising under the Ku Klux Klan Act of 1861, 42 U.S.C sec. 1983, the Civil Rights Act of 1866, 42 U.S.C sec. 1985, and the Voting Rights Act of 1965, 42 U.S.C. sec. 1971 et seq. Plaintiffs seek equitable, declaratory and compensatory relief. In an opinion and order entered on May 14, 1986, I certified the plaintiff class. Vargas v. Calabrese, 634 F. Supp. 910 (D.N.J. 1986).

 Other individuals initially joined as defendants, members of the Hudson County Board of Elections, were dismissed on motions for summary judgment on various dates. As this rather involved case lumbers on toward the Four-year milestone, the remaining defendants and the insurer have obviously started to reflect on the possibility of settlement and/or become anxious about who will end-up paying the judgment if one is ultimately entered in plaintiffs' favor. I turn now to consideration of the events that led up to the purchase of the insurance policy and the policy itself.

 III. The Insurance Policy

 In the summer of 1984 McCann and his supporters formed an entity which they named the "Democratic Dinner Committee, Fall 1984." Burns served as treasurer of this committee. In the late summer or early fall of 1984, two additional committees were formed, "Professionals for McCann, Inc.", which was an incorporated group organized to raise funds and generate support among city professionals, and "McCann in 85", which was apparently the major organizational group for the McCann campaign. Burns was an incorporator and trustee of the first group and sometime counsel to the second, in each case as a volunteer.

 On August 1, 1984, Jay Hamill an associate at the law firm of Keane, Brady & Hanlon, where Burns worked and who was, like Burns, providing volunteer legal services to the McCann campaign, wrote to Robert Feely of J.R. asking that Professionals for McCann be added as an additional insured to an existing insurance policy covering the Democratic Dinner Committee, Fall 1984. In December 1984 Hamill requested that Feely also add the McCann in 85 group as an additional insured under the same policy.

 In November 1984 Feely apparently advised Hamill that it would be beneficial to obtain a new policy covering all three organizations. Hamill concurred and authorized Feely to obtain a new policy. Hamill stated the he told Feely that wanted a "policy that covered everybody who worked on the campaign for anything that arose out of the campaign." Oroho Affidavit Exhibit A, Hamill Deposition at 20, 23. Hamill wrote an interoffice memorandum to Burns noting that the new policy's coverage limit was $ 1,000,000 and that the new policy "broadens the coverage somewhat." See Burns Affidavit, Exhibit 4.

 Feely went to Edward Johnson of Johnson Excess, Ltd. to obtain underwriting. Under a managing general agency agreement with NUFI, Johnson Excess was permitted to write up to $ 1,000,000 of General Comprehensive Liability coverage on behalf of NUFI. Williamson Affidavit Exhibit 13, Johnson Deposition at 83; Oroho Affidavit Exhibit L, General Agency Agreement, Addendum A. Johnson and his underwriter, Daniel Winneg, wrote a General Comprehensive Liability policy with a Broad Form Endorsement. Johnson states in his affidavit that he understood that the policy would cover volunteers and that the insured organizations would be engaged in attempting to raise money and garner votes. Williamson Affidavit Exhibit 13, Johnson Deposition at 46, 61, 65. Johnson characterized the resulting policy and endorsement as the broadest coverage that Johnson Excess was permitted to write under the terms of the Johnson Excess-NUFI managing general agent agreement. Id. at 120. Since there were no established ratings for this risk and since Johnson Excess was apparently limited to the use of a form policy, the risk was analogized to that of a sales and service organization for purposes of setting a premium. Id. at 92, 94, 97. After the policy was drawn up it was forwarded to NUFI for review according to the terms of Johnson Excess' underwriting agreement. NUFI received and reviewed the policy, but did not make any comments to Johnson Excess or direct Johnson Excess to issue a notice of cancellation. Id. at 45; Williamson Affidavit Exhibit 14, NUFI's Response to Requests for Admission No. 18.

 NUFI Policy No. S995-62-22 was issued on December 26, 1984 and made effective retroactively to November 15, 1984 for the named insureds Democratic Dinner Committee of 1985 and Professionals for McCann, and, by a later endorsement on March 3, 1985, to the Democratic Dinner Committee, Fall 1984.

 The amendatory endorsement to the policy limits coverage to $ 1,000,000 for each occurrence and aggregate of bodily injury and property damage. The policy defines "bodily injury" as

bodily injury, sickness or disease sustained by any person which occurs during the policy period, including death at any time resulting therefrom . . .

 "Occurrence" is defined as "an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured." (emphasis supplied).

 The Broad Form Comprehensive General Liability Endorsement provides in part:


 Advertising and personal injury are defined as follows:

"Advertising injury" means injury arising out of an offense committed during the policy period occurring in the course of the named insured's advertising activities, if such injury arises out of libel, slander, defamation, violation of right of privacy, piracy, unfair competition, or infringement of copyright, title or slogan. "Personal injury" means injury arising out of one or more of the following offenses committed during the policy period:
1. false arrest, detention, imprisonment, or malicious prosecution;
2. wrongful entry or eviction or other invasion of the right of private occupancy;
3. a publication or utterance
(a) of a libel or slander or other defamatory or ...

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