On appeal from the Superior Court, Law Division, Middlesex County.
Pressler, R.s. Cohen and Kestin. The opinion of the court was delivered by R.s. Cohen, J.A.D. Pressler, P.J.A.D., Dissenting.
[265 NJSuper Page 34] Plaintiff's husband started an action to recover for an injury to their infant son. Defendants filed a third-party complaint against plaintiff for contribution and indemnification. State Farm was the family's homeowners' insurer. Plaintiff requested State Farm to defend her, but it declined to do so. State Farm took the position that the claim was excluded by the terms of the insurance policy. Plaintiff then sought a declaratory judgment that State Farm both covered the third-party claim and was obliged to defend it. The Law Division ruled that the claim was
not covered, but that State Farm nevertheless had the duty to defend plaintiff against it.*fn1 State Farm appealed the ruling that it had to defend; as to it, we reverse. Plaintiff cross-appealed the ruling that there was no coverage; as to it, we affirm.
Plaintiff was walking with her son through a store. According to the complaint filed against the owner and operator of the store, defendants negligently "allowed a free standing display to fall and strike the infant plaintiff." Defendants denied negligence and filed a third-party complaint against the mother (plaintiff here) for indemnification and contribution. They first alleged that plaintiff breached her duty to exercise reasonable care for the safety of her son. Then, defendants charged that plaintiff breached her duty to supervise her son "in that she wilfully and with wanton carelessness failed to watch over and supervise her child." The harsh allegations against plaintiff were doubtless designed to satisfy the rule of Foldi v. Jeffries, 93 N.J. 533, 461 A.2d 1145 (1983), which limits the tort liability of a parent for failure to supervise his or her child to cases in which the parent "has willfully or wantonly failed to watch over [the] child." Id. at 547, 461 A.2d 1145.
When plaintiff sought coverage and a defense, State Farm's position was that, although plaintiff was an insured for liability, so was her infant son, and the policy excluded liability claims of one insured against another insured. In other words, State Farm said there was no coverage for intra-family tort claims.
Coverage L of the policy states:
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage to which this coverage applies, we will
1. pay up to our limit of liability for the damages for which the insured is legally liable; and
2. provide a defense at our expense by counsel of our choice.
Immediately following the quoted provision is a list of exclusions, which includes:
Coverage L and Coverage M*fn2 do not apply to:
h. bodily injury to you or any insured within the meaning of part a. or b. of the definition of insured.
In pertinent part, the definition of "insured" includes:
"you and if residents of your household:
b. any other person under the age of 21 who is in the care of a person described above."
Homeowners' insurance policies commonly exclude bodily injury claims by resident relatives. The reason is that insurers fear collusive intra-family claims they believe put them at a serious disadvantage. It is a hard job to defend a claim when plaintiff and defendant agree that defendant was very negligent and plaintiff was terribly injured.
Recognizing this problem, we validated a policy exclusion just like the present one in Foley v. Foley, 173 N.J. Super. 256, 414 A.2d 34 (App.Div.1980). There, a wife sued her husband for injuries resulting from his negligence and assault. The homeowners' insurer disclaimed on the basis of an exclusion for "bodily injury to any insured." The wife argued that the exclusion violated public policy because Merenoff v. Merenoff, 76 N.J. 535, 388 A.2d 951 (1978), had recently ended interspousal tort immunity for personal injuries arising from a domestic or household accident.
We disagreed. We said that there is no legal requirement that a homeowners' policy have a particular ...