On appeal from the Superior Court of New Jersey, Law Division, Hudson County.
Before Judges Pressler, Stern and Humphreys. The opinion of the court was delivered by Stern, J.A.D.
The opinion of the court was delivered by: Stern
The opinion of the court was delivered by
Pursuant to leave granted, defendant Acme Carriers, Inc. (Acme) appeals from the denial of its motion to compel defendant Chubb & Sons (Chubb) to provide a defense, and the granting of Chubb's cross-motion for summary judgment against plaintiff and Acme, relieving Chubb of any obligation under its policy. The motion Judge found that an exclusion in the policy for theft by an employee of the insured
squarely covers the facts of this case. Cause of injury here (clearly the act of theft) determines coverage. Exclusion is clear and comprehensive under these facts.
We agree and affirm the judgment.
The plaintiff imports and distributes shrimp. It sustained a loss of 200 cases of shrimp between inspection by government authorities at Port Newark and arrival at its Newark warehouse. It is undisputed, for present purposes, that Acme's driver, co-defendant Ramon Perez was arrested and convicted, pursuant to his guilty plea, of stealing the shrimp while transporting it to the warehouse as an employee or agent of Acme.
Chubb had issued a Motor Truck Cargo Liability policy covering the shipment. The complaint against the insured (Acme), and Chubb under a third party beneficiary theory, asserts, among other grounds, that plaintiff's injury stemmed from Acme's "negligent supervision of its agent and/or employee, defendant Perez."
Chubb was granted summary judgment because the policy expressly excludes coverage "for loss or damage caused by or resulting from (a) any fraudulent, dishonest or criminal act(s) committed alone or in collusion with others by: (1) the insured or any employee ... or any other authorized representative of the insured, whether or not such act(s) be committed during regular business hours ...."
We recognize certain well-defined principles dealing with the construction or insurance policies and exclusionary clauses:
when the language of the policy is clear, the court is bound to enforce its terms as they are written, James v. Federal Insurance Co., 5 N.J. 21, 24, 73 A.2d 720 (1950); Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43, 161 A.2d 717 (1960), so as to fulfill the objectively reasonable expectations of the parties to the contract. Werner Industries, Inc. v. First State Ins. Co., 112 N.J. 30, 35-36, 548 A.2d 188 (1988); Rao v. Universal Underwriters Ins. Co., 228 N.J. Super. 396, 411-412, 549 A.2d 1259 (App.Div. 1988). [And] we are mindful of the corollary of construction that a strict interpretation is required where the clause in question is one of exclusion or exception designed to limit the protection afforded by the general coverage provisions of the policy. Butler v. Bonner & Barnewall, Inc., 56 N.J. 567, ...