On certification to the Superior Court, Appellate Division, whose opinion is reported at 284 N.J. Super. 622 (1995).
The opinion of the Court was delivered by Pollock, J. Chief Justice Poritz and Justices Handler, O'hern, Garibaldi, Stein and Coleman join in Justice POLLOCK's opinion.
The opinion of the court was delivered by: Pollock
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
Property Casualty Company of MCA v. Kevin G. Conway, et al. (A-20-96), 147 N.J. 322, 687 A.2d 729.
Argued October 21, 1996 -- Decided January 28, 1997
Pollock, J., writing for a unanimous Court.
The issue in this appeal is whether a homeowner's policy covers the vicarious liability of a named insured arising under N.J.S.A. 18A:37-3 for the intentional vandalism of a public school by the homeowner's minor son.
Kevin Conway (Conway) is insured under a homeowner's policy issued by Property Casualty Company (PCC). The policy covers liability for property damage caused by an "occurrence," which the policy defines as an "accident." The policy does not define "accident." The policy excludes from coverage bodily injury or property damage, "which is expected or intended by the insured." It does not state whether the determination that an event is unexpected or unintended should be from the perspective of all those covered under the policy or from that of only the named insured.
Conway's fifteen-year old son, acting without parental permission, took some beer from the Conway residence. After drinking the beer, he and another juvenile broke into the Glen School, which is owned by the Ridgewood Board of Education and leased to the YMCA of Ridgewood for use as a child care center and kindergarten. The two juveniles caused damage to the school in the total amount of over $11,000. Pursuant to a restitution order of the Family Part, Conway paid one-half of the Board's damages, and the other juvenile's family paid the balance.
Thereafter, the YMCA instituted an action against Conway to recover for damage to its property. In the complaint, the YMCA claims that Conway is liable under N.J.S.A. 2A:53A-15, which imposes liability on parents for the acts of a minor child if the parent "fails or neglects to exercise reasonable supervision and control of the conduct of such infant. . . ." PCC concedes coverage for the claim under that statute. However, the YMCA also claims that Conway is vicariously liable for his son's acts under N.J.S.A. 18A:37-3, which holds parents or guardians of minors liable for damage to public or nonpublic school property caused by those minors.
PCC sought a declaratory judgment that its policy did not cover Conway's liability because his son's vandalism of the school property was not an "accident" within the meaning of the policy. Conway's son is covered under the policy as a relative who resided in Conway's household. The Law Division ruled that the policy did not provide coverage. The Appellate Division reversed.
The Supreme Court granted certification.
HELD: The appropriate balance of the goals of deterrence and compensation is to recognize coverage for vicarious parental liability under N.J.S.A. 18A:37-3 so parents can compensate the school for damage caused by their child.
1. In the judicial construction of insurance policies, courts construe ambiguities liberally in favor of the insured. By failing to define "accident," PCC has introduced ambiguity into the definition of "occurrence." (pp. 4-5)
2. Courts give terms their ordinary meaning. Merely because an act is intentional from the perspective of one insured, it need not be ...