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Prudential Property & Casualty Insurance Co. v. Kollar

Decided: July 23, 1990.

PRUDENTIAL PROPERTY & CASUALTY INSURANCE COMPANY, PLAINTIFF-RESPONDENT,
v.
ERNEST KOLLAR, SR., DEFENDANT-APPELLANT, AND ROY E. TERRELL, JOSEPH E. OLIVE AND GERALD S. HANNAGAN, JR., DEFENDANTS



On appeal from Superior Court, Law Division, Salem County.

Long, Gruccio and Landau. The opinion of the court was delivered by Gruccio, J.A.D.

Gruccio

Defendant Ernest Kollar, Sr. appeals from a judgment granting plaintiff Prudential Property & Casualty Insurance Company (Prudential) summary judgment in an action for declaratory judgment.

On May 21, 1986, Kollar's home and personal property were damaged by fire. Police later determined that one or more of defendants Roy E. Terrell, Joseph E. Olive and Gerald S. Hannagan, Jr. started the fire in an effort to conceal their burglary. Olive pled guilty to burglary and theft. Hannagan and Terrell pled guilty to burglary, theft and aggravated arson pursuant to plea agreements. By the terms of his agreement, Terrell was placed on probation. Had he been convicted after a trial, he could have received a five- to ten-year term of imprisonment on the arson count alone. Kollar's insurance carrier paid him for a portion of his loss, then filed a subrogation suit in his name against defendants Terrell, Olive and Hannagan. The gravamen of the complaint was that the fire was set by defendants either intentionally or negligently. Terrell engaged his own counsel as to the intentional claim. However, since he resided with his father, Clinton E. Terrell, he demanded that Prudential, under the provisions of his father's homeowner's policy, assume his defense and indemnify him with regard to the negligence counts of the complaint.*fn1 Prudential responded by bringing this action against Terrell, Kollar, Olive and Hannagan for a declaration that it was not required to defend or indemnify Terrell.

Prudential moved for summary judgment. After oral argument the judge granted the motion and filed a letter opinion with complete findings of fact and conclusions of law as required under R. 4:46-2. In sum, the motion judge agreed with Prudential's contention that Terrell's guilty plea unequivocally established his intent to commit arson, thereby collaterally estopping him from relitigating the issue. Prudential, therefore, was not required to defend or indemnify Terrell in the subrogation action as his policy excluded from coverage acts "expected or intended by the insured."

On this appeal, we are asked to determine whether Terrell's plea of guilty to the charge of aggravated arson is so dispositive of his intent as to collaterally estop him from relitigating the issue, thereby allowing Prudential to disclaim its obligation to defend and indemnify Terrell.

The Prudential homeowner's policy issued to Terrell's father contained the following exclusion:

1. Coverage E -- Personal Liability . . . does not apply to bodily injury or property damage:

a. which is expected or intended by the insured.

By the terms of the policy, Terrell, as an additional insured, was not covered for property damage which he expected or intended.

Under our Code, a person is guilty of aggravated arson

if he starts a fire or causes an explosion, whether on his own ...


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