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Voorhees v. Preferred Mutual Insurance Co.

Decided: June 17, 1992.

EILEEN VOORHEES, PLAINTIFF-RESPONDENT,
v.
PREFERRED MUTUAL INSURANCE COMPANY, DEFENDANT-APPELLANT.



On appeal from the Superior Court, Appellate Division, whose opinion is reported at 246 N.J. Super. 564 (1991).

Garibaldi, Wilentz, Handler, Pollock, O'Hern, Stein, Clifford

Garibaldi

The opinion of the court was delivered by

GARIBALDI, J.

The primary issue in this appeal is whether a homeowner's insurance policy providing coverage for bodily injuries caused by the insured will cover liability for emotional distress accompanied by physical manifestations. We hold that it will. Further, we hold that the event causing the distress will be deemed an accidental occurrence entitling the insured to coverage when the insured's actions, although intentional, were not intentionally injurious.

I

In the underlying suit, filed in 1985, Eileen Voorhees was sued by her child's teacher for her comments questioning the teacher's competency and fitness. The complaint against Voorhees indicates that Voorhees and other parents had expressed their concern about the teacher at an open school-board meeting and had requested that their children be removed from her class. The school board decided to relieve the teacher of her teaching duties pending the results of a psychiatric examination. Local newspapers published stories regarding the controversy. The teacher alleged that

the January 17, 1985 issue of The Cranford Chronicle, one of the defendant newspapers in this case, quotes the defendant, Eileen Voorhees, as speaking for the parents of some of the school children of the plaintiff and as saying that she, Eileen Voorhees, was glad the Board of Education had finally "done something." The article goes on to quote the defendant, Eileen Voorhees, as having stated, "We have been warning them since September that there were serious problems which should be investigated. I'm just sorry it took an incident like the one on December 10 to convince them."

After the psychiatric examination, the schoolteacher was considered fit to resume teaching, and did so at a special assignment.

The teacher sued Voorhees, the local Board of Education, the Superintendent of Schools, the school principal, the local newspapers, and one other parent seeking compensation for the injuries she had suffered due to their behavior. Count four of the complaint, concerning Voorhees and the other parent, alleged that at various times and on various dates * * * defendants [other parent] and Eileen Voorhees made false and erroneous statements about the competency and fitness of the plaintiff, such statements serving to place plaintiff before the public in a false light, further serving to interfere with her rights of privacy and to inflict upon her humiliation, embarrassment, emotional distress and mental anguish. The statements as well as conduct of these defendants respecting the plaintiff herein were made and carried out willfully, deliberately, recklessly and negligently. Moreover, these defendants knew or should have known that their statements about plaintiff were false and would probably, as occurred, place plaintiff before the public in a false light, interfere with her rights of privacy, cause her severe humiliation, embarrassment, emotional distress and mental anguish.

As a direct and proximate result of the foregoing, plaintiff was damaged in her reputation as a professional teacher and has been unable and remains unable to function in her customary teaching assignment. Moreover, she has been placed before the public in a false light, has had her rights of privacy interfered with and has suffered and continues to suffer embarrassment, humiliation, emotional distress and mental anguish.

As a direct and proximate result of the foregoing, plaintiff was damaged in her reputation as a professional teacher and has been unable and remains unable to function in her customary teaching assignment. Moreover, she has been placed before the public in a false light, has had her rights of privacy interfered with and has suffered and continues to suffer embarrassment, humiliation, emotional distress and mental anguish.

The teacher alleged that the parents' accusations and the school system's response caused her extreme emotional distress. Medical evidence generated in response to interrogatories revealed that the emotional distress associated with the events had resulted in "an undue amount of physical complaints," including "headaches, stomach pains, nausea, * * * [and] body pains * * *

Voorhees was insured under a homeowners policy issued by Preferred Mutual Insurance Company. That policy obligated the insurer to

pay * * * all sums for which any insured is legally liable because of bodily injury * * * caused by an occurrence to which this coverage applies[, and to] defend any suit seeking damages, provided the suit results from bodily injury * * * not excluded under this coverage.

In its definitions section, the policy stated that

Bodily injury means bodily harm, sickness or disease to a person including required care, loss of services and death resulting therefrom.

Occurrence means an accident * * *.

The policy excluded coverage for "liability * * * caused intentionally."

Voorhees requested Preferred Mutual to defend her against the schoolteacher's suit. The carrier refused on two grounds: one, that the policy expressly excluded coverage for liability created by intentional acts; and two, that the teacher's claim sounded in libel and/or slander, causes of action that result in "personal" rather than "bodily" injury claims, and are therefore not covered under the policy.

The underlying case settled for $750 in August 1987. Voorhees alleges she spent more than $14,000 defending the suit. In September 1988, Voorhees filed this suit against Preferred Mutual for damages for breach of the insurance contract. Both parties moved for summary judgment.

The trial court granted Preferred Mutual's motion. The trial court quickly disposed of Preferred Mutual's first contention, that the policy excluded coverage for liability resulting from intentional acts, by noting that the complaint alleged not only intentional conduct but also negligent conduct, which would be covered. However, the trial court agreed with Preferred Mutual's second contention that the complaint alleged defamation, a cause of action not covered under the bodily-injury policy. The court based its decision on Lumbermen's Mutual Casualty Co. v. United ...


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