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Allstate Insurance Co. v. Schmitt

Decided: February 27, 1990.


On appeal from Superior Court of New Jersey, Law Division, Morris County.

King, Baime and Keefe. The opinion of the court was delivered by Baime, J.A.D.


[238 NJSuper Page 620] This appeal requires us to construe exclusionary language contained in a homeowners policy barring coverage for bodily

injury "reasonably expected to result" from the insured's criminal acts. At issue is whether this provision relieves the insurer from its obligation to defend and indemnify its insured with respect to harm that is said to be the unintended result of his reckless criminal conduct. An ancillary question is whether a clause excluding coverage for losses caused by the insured's criminal acts, without reference to his intent, is contrary to public policy. Finally, we must determine the preclusive effect, if any, of a criminal judgment in collateral civil proceedings.


We need not recount the facts at length. It is undisputed that sometime in the early morning hours of January 20, 1984 at Smiles Cocktail Lounge and Restaurant (Smiles), Joseph Scalera struck Peter Schmitt's face with a glass. The record is somewhat unclear with respect to the circumstances that precipitated this incident. Apparently, Scalera believed that Schmitt's date, Susan Crane, had inadvertently spilled a drink on him earlier in the evening. When Scalera later confronted Crane, Schmitt attempted to intervene. In their deposition testimony, both Crane and Schmitt stated that, without any menacing movement or provocation by Schmitt, Scalera suddenly thrust his glass into Schmitt's face, causing multiple and severe lacerations. Scalera's account of the incident, as related to the police after his arrest, did not differ markedly from that of Schmitt and Crane. According to Scalera, he struck Schmitt with the glass because "he thought a fight was going to start between the two. . . ."

An indictment was later returned charging Scalera with aggravated assault by "recklessly caus[ing] bodily injury to another with a deadly weapon." N.J.S.A. 2C:12-1b(3). Scalera entered a plea of guilty to the charge. In providing a factual basis for the plea, see R. 3:9-2, Scalera, for the first time, claimed that Schmitt had struck him and that he had merely retaliated by hitting him in the face. According to Scalera, he

didn't realize that he had a glass in his hand until it shattered. Scalera was subsequently sentenced to 364 days in the Morris County jail.

On January 17, 1986 Schmitt filed a complaint against Scalera and the 5738 Corporation, the owner of Smiles. In his complaint, Schmitt sought compensatory damages, claiming that Scalera had assaulted him and that Smiles had failed to provide its patrons with adequate security. Scalera immediately notified Allstate Insurance Company (Allstate), asserting that Schmitt's claim was covered under the homeowners policy issued to his mother. Allstate then instituted a declaratory judgment action to resolve the issue of coverage, naming as defendants Scalera, Schmitt and Smiles. Schmitt's action against Scalera and Smiles was stayed pending resolution of the coverage issue.

In its declaratory judgment action, Allstate contended that it was under no obligation to defend or indemnify Scalera for losses resulting from his criminal act. Allstate argued that the homeowners policy issued to Scalera excluded coverage for losses resulting from criminal behavior, without reference to whether or not it was the insured's conscious object or intent to cause the injury sustained by the victim. Schmitt, Scalera and Smiles all claimed that the policy exclusion does not encompass losses that were the unintended results of criminal conduct. They argued that the exclusionary language was applicable only if the injury resulting from the criminal act was one specifically contemplated by the insured. Alternatively, they asserted that any interpretation of the exclusion that did not require the injury be intended by the insured violated public policy.

We need not describe the somewhat unusual procedural context in which the issue of coverage was considered and decided. Suffice it to say, the Law Division judge treated the parties' respective arguments as motions for summary judgment. In an oral opinion, the judge determined that the exclusionary

language barred coverage with respect to the insured's criminal acts, whether or not intentional, and whether or not the injury inflicted was specifically contemplated by the attacker. Based upon this construction of the policy exclusion, the Law Division judge deemed Scalera's criminal conviction wholly dispositive of the coverage issue. Allstate was granted summary judgment on this basis.


We first consider whether the policy exclusion bars coverage for unintended bodily injury resulting from an insured's criminal act. The operative language reads as follows:

Exclusions -- Losses We Do Not Cover

We do not cover any bodily injury or property damage which may reasonably be expected to result from the intentional or criminal acts of an insured person or which is in fact ...

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