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Atlantic Employers Ins. Co. v. Tots & Toddlers Pre-School Day Care Center

Decided: March 2, 1990.

ATLANTIC EMPLOYERS INSURANCE COMPANY, PLAINTIFF-RESPONDENT,
v.
TOTS & TODDLERS PRE-SCHOOL DAY CARE CENTER, INC., RLN, INC., T/A TOTS & TODDLERS LEARNING CENTER, ROBERT KNIGHTON, NANCY KNIGHTON, DYFS AND JEFFREY DENBO, DEFENDANTS-RESPONDENTS, AND R.S., INDIVIDUALLY AND AS GUARDIAN AD LITEM FOR K.S., JR. AND S.S., MINORS, INDIVIDUALLY, JOINTLY AND SEVERALLY AND K.S., SR., INDIVIDUALLY; J.C., INDIVIDUALLY AND AS GUARDIAN AD LITEM FOR J.W.C., MINOR, INDIVIDUALLY AND M.C., INDIVIDUALLY; T.B., INDIVIDUALLY AND AS GUARDIAN AD LITEM FOR M.B., MINOR, INDIVIDUALLY, AND C.B., INDIVIDUALLY; C.G., INDIVIDUALLY AND AS GUARDIAN AD LITEM FOR A.G., MINOR, INDIVIDUALLY, AND T.G., INDIVIDUALLY, INTERVENORS-APPELLANTS



On appeal from the Superior Court, Law Division, Camden County.

Dreier, Scalera and D'Annunzio. The opinion of the court was delivered by Scalera, J.A.D.

Scalera

This is an action for declaratory judgment by Atlantic Employers Insurance Company (Atlantic), the insurance carrier for RLN, Inc., trading as Tots & Toddlers Day Care Center (Tots & Toddlers) and Robert Knighton and Nancy Knighton, his wife, as "owners" thereof.

The appellants, as proposed intervenors, are the various children who were allegedly sexually abused while attending the insured day care center and their parents. The parents have collectively filed two personal injury suits alleging specifically that Robert Knighton sexually abused their children while they were attending the day care center and that Nancy Knighton and the corporation were negligent in allowing it to happen.

Their suits assert causes of action for negligence and intentional tort.*fn1

Atlantic sought a declaration in this suit that, under the insurance policy issued by it to Tots and Toddlers and Robert and Nancy Knighton, it did not have to provide a defense for the other complaints filed by appellants or indemnify for any consequent judgments.

Appellants filed a timely motion to intervene in this suit, and Atlantic filed a motion for summary judgment, both of which were heard together. The defendants, as named insureds, apparently felt themselves to be judgment-proof and did not bother to answer this complaint. The trial judge denied appellants the right to intervene based on his reasoning that the insurance policy issued by Atlantic was a contract for indemnification rather than one in which appellants could be considered as third-party beneficiaries. However, he did permit appellants to argue fully the merits of Atlantic's summary judgment motion which he ultimately granted. Both of these determinations are the subject of this appeal.

Appellants assert that they should have been permitted to intervene concerning the liability coverage question raised by Atlantic. Also, they claim that disposition by way of summary judgment in favor of Atlantic was inappropriate here since Atlantic has an obligation to provide a defense to the defendants and indemnify them for any judgments obtained in their underlying suits.

R. 4:33-1 deals with intervention of right and provides that:

Upon timely application anyone shall be permitted to intervene in an action if the applicant claims an interest relating to the property or transaction which is

the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest ...


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