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Cumberland Mutual Fire Insurance Co. v. Murphy

May 23, 2005

CUMBERLAND MUTUAL FIRE INSURANCE COMPANY, PLAINTIFF-APPELLANT,
v.
TIMOTHY MURPHY, III, TIMOTHY MURPHY, JR. SANDRA MURPHY, GINA M. SANTIAGO AND FERDINAND SANTIAGO, DEFENDANTS-RESPONDENTS.



On certification to the Superior Court, Appellate Division.

SYLLABUS BY THE COURT

(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. The Court wrote no majority opinion in this case. The facts and procedural history were derived from the concurring opinion.)

In this appeal, the Court addresses the meaning of two exclusionary clauses in a homeowner's insurance policy written by Cumberland Mutual Fire Insurance Company (Cumberland).

On January 20, 2001, at approximately 11:00 p.m., fourteen-year-old Timothy Murphy, III and two friends began shooting BB's to "ding" passing cars. They climbed onto a wooden platform on the property of one of the boys, Eric Elder, which was twenty-five feet from the roadway. The night was dark and moonless, and it was sleeting; visibility was poor. One of Murphy's BB shots hit Gina Santiago who was driving a soft top jeep along the road near the Elder home. The BB went through the soft top and hit Santiago causing permanent blindness in her right eye, as well as a susceptibility to further complications.

Murphy admitted to shooting intentionally at the cars but denied that he intended to hurt anyone. He claimed that he did not understand at the time that someone could get hurt. He also conceded that he knew that what he was doing was "wrong," "illegal," and might subject him to "juvenile court." Despite knowing those risks, Murphy thought that he was just having fun with his friends.

After an investigation, the State filed a delinquency petition against Murphy alleging facts that, if committed by an adult, would have constituted possession of a firearm for an unlawful purpose and aggravated assault. Murphy admitted to aggravated assault with a civil reservation that prevented use of that admission in any future proceeding. Murphy was adjudicated delinquent and was sentenced to two years probation, the payment of certain fines, attendance at a gun safety course, and community service.

In January 2002, Gina Santiago and her husband sued Murphy and his parents in federal court for the injuries she sustained. Cumberland, the Murphy family's homeowner's insurance carrier, filed a declaratory judgment action in Superior Court against Murphy, his parents, and the Santiagos, seeking a declaration that it was not obligated to provide coverage to the Murphy family for Gina Santiago's injuries. Cumberland denied coverage based on two exclusions contained in the Murphy's homeowner's policy. One exclusion provides that the insurer will not cover bodily injury or property damage, whether expected or not expected or intended, that is the consequence of an insured's willful harm or knowing endangerment. The other relevant exclusion bars coverage for any damages or loss directly or indirectly caused or resulting from a knowing violation of a penal law or ordinance committed by or with the consent of the insured.

Cumberland and the Santiagos filed cross-motions for summary judgment, seeking a judicial determination whether the policy provisions clearly excluded Murphy's acts from coverage. After a hearing on the motions, the trial court denied Cumberland's motion. In granting the Santiagos' motion, the judge noted that the material facts -- that multiple shots were fired and that Murphy fired the BB that hit Gina Santiago - were undisputed. The court concluded that the circumstances surrounding the shooting would not support a presumption that Murphy had any subjective intent to injure anyone. Specifically, the trial court held, among other things, that Mrs. Santiago's injury was not a foreseeable consequence of Murphy's actions, given the weather, the boys' stated intention, their distance from the roadway, the few shots that hit their mark, and the unlikely chance that the Santiago vehicle would have a soft, permeable top. The judge noted that although Murphy did something extremely stupid, the prank was not one in which he envisioned the horrible injury he caused. Cumberland appealed to the Appellate Division, which affirmed the decision of the trial court.

The Supreme Court granted certification.

HELD: The members of the Court being equally divided, the judgment of the Appellate Division is AFFIRMED. The occurrence in this case was an "accident" within the meaning of the Cumberland homeowner's policy.

JUSTICE LONG, concurring, in which CHIEF JUSTICE PORITZ and JUSTICE ZAZZALI join, is of the view that, in applying the principles enunciated in Voorhees, SL Industries, and Garitta, the occurrence in this case was an "accident" within the meaning of the homeowner's policy. The uncontroverted evidence given by Murphy and his friends provide no basis for a conclusion that they subjectively intended or expected to injure anyone. Nor can it be said, in light of the weather, the distance of the boys from the road, and the few shots that hit their target, that Gina Santiago's injury was an inherently probable consequence of Murphy's conduct. Justice Long disagrees with Cumberland's contention that the heedless conduct of a fourteen-year-old boy was in any way equivalent to the acts previously characterized by the Court as "particularly reprehensible" that would give rise to a presumption of an intent to injure Mrs. Santiago. Moreover, it is impossible to divine the boundaries of the exclusion insofar as it simultaneously does not require an injury to be "expected or intended," but does require it to flow out of "willful harm" or "knowing endangerment." Those terms are imprecise and open to numerous interpretations. Because the language is ambiguous, the policy must be interpreted in favor of coverage. Justice Long also is unpersuaded by Cumberland's reliance on the penal law exclusion. Because of the recognition of two different systems to address adult and juvenile crime, and because the exclusion here does not define a violation of penal law, it can arguably be read as referencing only an adult's violation of a penal statute. Even if that is debatable, the penal law exclusion is ambiguous and must be interpreted in favor of coverage.

JUSTICE WALLACE, dissenting, in which JUSTICES LaVECCHIA and RIVERA-SOTO join, is of the view that, fairly read, the policy excludes coverage for bodily injury or property damage from the insured's "willful harm" or "knowing endangerment," regardless of whether the insured "expected or intended" the precise injury or property damage that occurred. The plain reading of the phrase "whether or not expected or intended by the insured" eliminates the need for an inquiry into the insured's subjective intent. With the elimination of the subjective prong test in the Cumberland homeowner's policy, the focus properly is on whether the insured's conduct demonstrated "willful harm" or "knowing endangerment." Although the Cumberland policy should have defined those terms to avoid ambiguity, the insured's conduct plainly falls within any reasonable definition of "willful harm" or "knowing endangerment." Murphy admitted he intended to shoot the BB gun in the hope of hitting the passing cars and he knew that discharging a firearm towards a person could result in injury or property damage. Because the explicit language of the exclusion eliminates the need to determine the insured's intention, the policy plainly was intended to exclude coverage. Regardless of the existence of any ambiguity in the policy language, the insured had no reasonable expectation of coverage.

JUSTICE RIVERA-SOTO, dissenting, in which JUSTICE LaVECCHIA joins, agrees with the thoughtful dissent of Justice Wallace in respect of the knowing endangerment, willful harm exclusion in the Cumberland policy. Justice Rivera-Soto also finds that the penal law exclusion also bars coverage. The senseless events of January 20, 2001 are a textbook example of the very behavior excluded from coverage by this exemption. There was an event producing bodily injury that resulted from the actions of an insured that constituted a knowing violation of the penal laws of this State. In Justice Rivera-Soto's view, there is no meaningful or principled distinction between the insurance policy's exclusion for acts that knowingly violate our penal laws and the actor's status as a juvenile. The restrictions of the penal laws apply to everyone regardless of age; how those violations are treated based on the actor's age goes only to the measure and manner of punishment imposed, not to the actor's substantive liability for violating those laws. Thus, on the question of whether insurance coverage is applicable or excluded by this policy provision, the age of the insured is irrelevant and a claim of ambiguity cannot be sustained. Murphy's acts clearly violate several penal laws of this State and Murphy admitted, among other things, that he knew what he was doing was illegal. If the policy exclusion does not apply in these circumstances, then it is needlessly being denied its full meaning. Allowing coverage in this case is not just bad law, it is bad public policy.

CHIEF JUSTICE PORITZ, JUSTICE LONG and JUSTICE ZAZZALI concur in the judgment of the Court. JUSTICE WALLACE filed a separate dissenting opinion, in which JUSTICES LaVECCHIA and RIVERA-SOTO join. JUSTICE RIVERA-SOTO also filed a separate dissenting opinion, in which JUSTICE LaVECCHIA joins. JUSTICE ALBIN did not participate.

Per curiam.

Argued February 15, 2005

The members of the Court being equally divided, the judgment of the Appellate Division is affirmed.

CHIEF JUSTICE PORITZ, and JUSTICES LONG and ZAZZALI concur in the judgment of the Court. JUSTICE WALLACE filed a separate dissenting opinion, in which JUSTICES LaVECCHIA and RIVERA-SOTO join. JUSTICE RIVERA-SOTO also filed a separate dissenting opinion, in which JUSTICE LaVECCHIA joins. JUSTICE ALBIN did not participate.

JUSTICE LONG, concurring.

This case involves the actions of a fourteen-year-old boy who foolishly shot some BBs to "ding" passing vehicles. As a result, the driver of one of the vehicles sustained an injury. The boy's parents sought coverage under their homeowner's policy. Although all parties agree that there is no direct evidence that the boy subjectively intended or expected to cause an injury, the insurer declined coverage on the basis of two exclusionary clauses in its policy. We are here called upon to determine the meaning of those clauses.

I.

The facts established during discovery are as follows. On January 20, 2001, fourteen-year-old Timothy Murphy, III, and his thirteen-year-old friend Eric Kovalchek, visited the home of fifteen-year-old Eric Elder. At around 11:00 p.m., the boys decided to shoot BBs at passing cars. They retrieved a BB gun from the Elders' shed, and climbed onto a ten-foot high wooden platform in a tree at the edge of the Elders' property, twenty-five yards from the road. The night was dark and moonless, and it was sleeting. Visibility was poor.

According to Murphy, he and Elder took turns firing. By listening to the sound of the BBs ricocheting off the vehicles, Murphy estimated that he hit four or five of them. Kovalchek did not remember Elder hitting any cars, though he did recall Murphy hitting two or three, including a Jeep. By all accounts, Kovalchek did not shoot the BB gun.

Murphy admitted to shooting intentionally at the cars, but he denied that he intended to hurt anyone and claimed that he did not understand at the time that someone could get hurt. When asked why he thought that shooting BBs at moving cars would not cause injury, Murphy responded, "Because I never thought that it would hit a person, I was just seeing like to get it to hit the car. I never thought it would go inside of them." Murphy also conceded that, at the time, he knew that what he was doing was "wrong," "illegal," and might subject him to "juvenile court." Despite understanding those risks, Murphy thought at the time that he was just "hav[ing] fun with [his] friends." He acknowledged that the boys talked "a little bit" during their time on the platform, but he could not remember what they had discussed.

For the most part, Elder and Kovalchek confirmed Murphy's version. Elder testified that he never thought that they could hurt anyone and that "it seemed harmless at the time." Elder also stated that nothing was said on the platform that indicated that any of the boys expected or feared that someone would be hurt. Kovalchek said that he told the others, "I don't feel like this is the right thing, I don't think we should be doing this," but, when asked whether Elder or Murphy said or did anything that gave him the idea that they wanted to harm someone, Kovalchek answered, "No, not at all." Further, Kovalchek indicated that no one expressed concern that the BBs could penetrate one of the cars.

At some point that night, Gina Santiago drove her soft-top Jeep along the road in front of the Elders' property. Her husband, Ferdinand, was a passenger in the vehicle. A BB, shot from the platform, struck the Jeep, pierced its plastic window, and entered Mrs. Santiago's right eye. She was permanently blinded in that eye, an injury that leaves her susceptible to further complications.

Elder stated that the boys decided to end the shooting when Santiago's vehicle stopped and the driver got out because they "thought it could have been teenagers like coming back to like find us or something like that . . . ." Kovalchek confirmed that a Jeep stopped on the road after being hit by a BB, which Murphy had fired, and that a passenger got out of the Jeep, walked around it and got back in, and that the Jeep drove off. Murphy denied that the boys were aware that a vehicle had stopped, and he ...


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