December 8, 2008
STEPHEN W. SHEBEST, PLAINTIFF,
JOHN SLATER, DEFENDANT/THIRD-PARTY PLAINTIFF-APPELLANT,
ALLSTATE NEW JERSEY INSURANCE COMPANY, THIRD-PARTY DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-1345-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 20, 2008
Before Judges Sabatino and Simonelli.
In this insurance coverage dispute arising out of an injury sustained on a golf course, the Law Division granted summary judgment to the third-party defendant insurer, Allstate New Jersey Insurance Company ("Allstate"). The Law Division specifically determined that the "intentional act" exclusion in Allstate's policy barred the coverage claim. We conclude that there are genuine issues of material fact regarding the mechanics of the underlying incident and the insured tortfeasor's state of mind. Consequently, we vacate summary judgment and remand for trial.
On May 16, 2003, plaintiff Stephen W. Shebest and defendant/third-party plaintiff John Slater were playing in an informal outing at a golf course in Myrtle Beach, South Carolina. Shebest is a resident of Virginia, and Slater is a resident of New Jersey. Shebest and Slater were previously socially acquainted, as were the other members of the golfing party. Slater alleges that the men were drinking alcoholic beverages during their round of play and that the trio had accepted a challenge to consume a full bottle of whiskey, plus an unspecified number of beers, by the end of the round. As their game progressed, Shebest and Slater were making wagers with one another. It rained much of the day.
At some point in the golf round, Shebest and Slater exchanged words, apparently precipitated by Shebest boasting that his wife could outdrive Slater's wife from the tee box. The sequence of events thereafter is not entirely clear from the motion record.*fn1 It is undisputed, however, that at the eighteenth hole Shebest fell to the ground and injured his right wrist as he reached to break his fall. Shebest was taken to a local emergency room, where his injured wrist was placed in a splint. Three days later Shebest returned to New Jersey where he was diagnosed with a comminuted intra-articular fracture of the distal radius of the wrist.*fn2
In May 2005 Shebest filed a two-count complaint in the Law Division against Slater seeking compensation for his personal injuries. Count One essentially sounded in negligence alleging that Slater breached his "duty of reasonable care" to Shebest and that Slater "carelessly, recklessly and negligently made potentially harmful contact" with him. Count Two alleged a higher level of culpability on Slater's part asserting that he "unlawfully and without any just cause or provocation struck with force and assaulted" Shebest, and that Slater "wantonly, forcibly, willfully and maliciously seized and violently pushed [Shebest] down to the ground." Count Two, unlike Count One, specifically included a claim for punitive damages.*fn3
Slater's answer denied most of the contentions in the complaint, including its central allegation that Slater had pushed Shebest down to the ground. Slater simultaneously filed a third-party complaint against Allstate, alleging that the insurer had breached its obligations to defend and indemnify him under Slater's homeowners policy.
In its answer to the third-party complaint, Allstate acknowledged that it had issued a homeowners policy to Slater covering the policy period when Shebest was injured. However, Allstate denied coverage on several grounds,*fn4 including a contention that the policy's intentional-act exclusion applied.
Allstate accordingly counterclaimed against Slater for a declaratory judgment that it has no duty to defend or indemnify him in this particular claim.
After a period of discovery, including depositions of Shebest and Slater and the exchange of interrogatories and various other documents, Slater and Allstate cross-moved for summary judgment on the coverage issues. The focus of the motions was the following exclusion set forth in the homeowners policy:
Guest Medical Protection: "Losses We Do Not Cover Under Coverage Y: 1. We do not cover any bodily injury intended by, or which may reasonable [sic] be expected to result from the intentional acts or omissions of, the insured person." [(Boldface in original).]
This exclusion mirrors a separate provision under the "Family Liability" portion of the policy, which likewise excludes bodily injury or property damage "intended by, or which may reasonably be expected to result from the intentional acts or omissions of, the insured person."
Slater maintained that the intentional-act exclusion did not apply in this case, because he allegedly lacked the subjective intent to trigger the exclusion and also because there are multiple factual versions of the occurrence presented in the discovery materials. In particular, Slater pointed to various statements in which, contrary to some of Shebest's other accounts of the incident contending that he had been pushed to the ground, he asserted that he had fallen down after slipping on a wet hill.
The Law Division granted Allstate's motion and denied Slater's cross-motion. The motion judge conclusively determined that "what we have here is unquestionably . . . an intentional act on the part of the defendant [Slater], and that intentional acts created a situation where it was reasonably to be expected than an injury would result, the type of injury, indeed, that we're talking about in this case."
Subsequently, Shebest and Slater settled their underlying dispute for a sum of money, which apparently is within the Allstate policy limits. Slater, who continues to seek indemnification and defense costs, now appeals the summary judgment entered in Allstate's favor.
In reviewing the Law Division's order we adhere to the well-settled principles governing summary judgment expressed in Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995) and Rule 4:46-2(c). A motion for summary judgment is to be granted only if "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." Brill supra, 142 N.J. at 528-29 (1995); R. 4:45-2(c). In determining whether there is a genuine issue of material fact for summary judgment purposes, the court must ascertain "what reasonable conclusions a rational jury can draw from the evidence." Brill, supra, 142 N.J. at 535. To make the determination, the court must accept as true all evidence that supports the position of the party defending against the motion and accord the non-moving party the benefit of all legitimate inferences which can be deduced therefrom. Ibid.
The "essence of the inquiry" on summary judgment is therefore "'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Id. at 536 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2512, 91 L.Ed. 2d 202, 214 (1986)). The court is required to consider whether the "competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Id. at 540.
On appeal, we apply these same well-established principles in reviewing, de novo, an order granting or denying summary judgment. See N.J. Div. of Taxation v. Selective Ins. Co., 399 N.J. Super. 315, 322 (App. Div. 2008) (citing Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998)).
Where, as here, the pivotal issue in the case concerns an actor's state of mind, our courts are reluctant to grant or sustain summary judgment without a plenary hearing or trial unless the proofs concerning the state-of-mind issue are so one-sided or conclusive to render such an evidential proceeding unnecessary. See, e.g., Cumberland Mut. Fire Ins. v. Beeby, 327 N.J. Super. 394 (App. Div. 2000) (reversing summary judgment in a coverage dispute where the facts reasonably could support an insured's claim that his objectively assaultive conduct was not intended to cause harm); see also Prudential Property & Casualty Insurance Co. v. Karlinski, 251 N.J. Super. 457, 467 (App. Div. 1991) (cautioning against summary judgment where an action or defense requires a state-of-mind assessment, particularly in the absence of "clear precedent" that resolves the issue).
We further recognize that the summary judgment order before us involves the construction and application of language in an insurance policy. In general, insurance policies are liberally construed to afford coverage that a fair interpretation will allow. Villa v. Short, 195 N.J. 15 (2008); American Wrecking Corp. v. Burlington Ins. Co., 400 N.J. Super. 276, 282 (App. Div. 2008). The specific phrasing of the pleadings filed in a coverage matter is not always dispositive. "Insureds expect their coverage and defense benefits to be determined by the nature of the claim against them, not by the fortuity of how the plaintiff, a third party, chooses to phrase the complaint against the insured." SL Industries, Inc. v. American Motorists Insurance Co., 128 N.J. 188, 198-99 (1992); see also Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 165, 173 (1992). Accordingly, an insurer cannot "construct a formal fortress of the third party's pleadings and  retreat behind its walls" in an effort to avoid its duty to defend. SL Industries, Inc., supra, 128 N.J. at 198-99.
Here, we are presented with an intentional-act exclusion within a homeowners policy. In that context, our Supreme Court has held that coverage ordinarily is not provided where an intentional act creates intended results. Id. at 207. Conversely, depending on the policy terms, coverage generally exists for the unintended and unforeseen results of an intentional act. Ibid.; see also Cumberland Mut. Fire Ins. Co. v. Murphy, 183 N.J. 344, 349 (2005) (holding that "a 'covered accident' includes the unintended consequences of an intentional act, but not an injury that is, itself, intended."); Voorhees, supra, 128 N.J. at 181-83.
Otherwise stated, the proper focus, in a case like this involving an intentional-act exclusion, is "on the insured's intent to cause  injury rather than on [the insured's] intent to commit the act that resulted in the injury." SL Industries, supra, 128 N.J. at 207; see also Voorhees, supra, 128 N.J. at 183; Karlinski, supra, 251 N.J. Super. at 464.
"Assuming the wrongdoer subjectively intends or expects to cause some sort of injury, that intent will generally preclude coverage." SL Industries, supra, 128 N.J. at 212; see also Morton Int'l v. General Accident Ins. Co., 134 N.J. 1, 85 (1993). If there is evidence that the extent of the injuries was improbable, the court must consider whether the insured subjectively intended or expected to cause that injury. "Absent exceptional circumstances that objectively establish the insured's intent to injure, we will look to the insured's subjective intent to determine intent to injure." Voorhees, supra, 128 N.J. at 185.
Applying these principles, in Cumberland Mut. Fire Ins. Co., supra, 183 N.J. at 344, the Supreme Court held that a young boy who was shooting BBs into a roadway at night during a storm was covered by his parents' homeowners insurance policy when a woman was struck by one of the BBs and injured. The Court observed that there was "no basis for the conclusion that [the boy] subjectively intended or expected to injure anyone." Id. at 350.
Similarly, in Karlinski, which the Supreme Court quoted with approval in SL Industries, supra, we considered whether an insurance company had improperly denied coverage when James Karlinski, a teenager, broke the hip of another teenager during a fight. Karlinski, supra, 251 N.J. Super. at 466. In that case, the insurance policy in question excluded coverage for "bodily injury . . . which is expected or intended by the insured." Id. at 461. Accepting James's testimony as true that the other boy was a "tormentor and bully to James" and an "instigator of the scheduled confrontation both in advance of, and at, its inception," there was a reasonable basis to conclude that James had succumbed to peer pressure, and that he "lacked an intention to cause injury beyond [the] transient discomfort of a minor physical encounter." Id. at 465. These circumstances raised a legitimate factual dispute as to whether the broken hip had been expected or intended by the tortfeasor. Consequently, we vacated summary judgment that had been granted in the carrier's favor because the Law Division judge had "undertook to resolve [the] factual dispute on the motion" and had not given sufficient consideration to the insured youth's version of the facts. Ibid.
The core questions here are therefore whether Slater subjectively intended to injure Shebest, whether Slater's conduct actually inflicted the injury, as opposed to Shebest's own loss of footing, and whether the wrist injury that Shebest sustained was of a kind that Slater would have reasonably anticipated to flow from his behavior. Slater argues that the Law Division erred in deciding these issues conclusively on the motion papers in Allstate's favor as a matter of law. We agree.
The record as a whole reveals considerable vacillation and contradiction in the participants' narratives of what occurred on the golf course leading up to Shebest's injury. As we have already noted, Shebest's complaint alleged that Slater had deliberately pushed him to the ground. However, the record from the South Carolina hospital reflects that Shebest told the medical staff that "someone ran at him, he side-stepped, slipped on a wet hill, [and] went down catching himself on the right hand." That record from the day of the incident makes no mention of Slater pushing Shebest.
The record from the New Jersey emergency room three days later, May 19, notes that Shebest said "[h]e does not remember the events very clearly[.]" This record does indicate that Shebest "was playing golf with a friend" and that the friend "tackled him on the T[ee]." Shebest then "fell[,] injuring his wrist."
In his February 2006 answers to interrogatories, Shebest offered an even more dramatic version:
Suddenly, the defendant [Slater] tackled me, violently throwing me off the edge of the tee box and thrusting me into the ground.
My wrist was extended at that moment as I tried to catch my fall and was shattered as a result.
At his subsequent deposition, however, Shebest was far more equivocal about whether there was any physical contact between Slater and him, and the nature of such contact. In particular, Shebest declined to say that he was "tackled" by Slater:
[ALLSTATE'S COUNSEL:] What caused you to go over [the tee box]?
[SHEBEST:] I don't know that I could tell you the precise catalyst. The point being is we both went over.
[ALLSTATE'S COUNSEL:] Did John [Slater] tackle you?
[SHEBEST:] I'm not sure I would use that word. As I said, he came up to me, right up against me and we both went over the back of the tee box and I, go ahead.
Additionally, Shebest vacillated in his testimony as to whether he had slipped of his own accord, at one point asserting that he would not "rule that [possibility] out," but moments later expressing confidence that he "would not have fallen on [his] own." Shebest also gave conflicting responses as to whether the slippery conditions played a role in his fall:
[ALLSTATE'S COUNSEL:] It was the result of defendant [Slater's] contact that caused you to fall on the ground. Is that fair to say:
[SHEBEST'S COUNSEL:] I object to the form.
[SHEBEST:] I would say yes.
[ALLSTATE'S COUNSEL:] You didn't slip on your own. Is that correct?
[SHEBEST:] I'm not going to rule that out. I think there were several things that contributed to us going down, so I will not characterize it as, so it didn't have anything to do with it being slippery. I'm sure that had something to do with it.
[ALLSTATE'S COUNSEL:] So you don't even know whether him making contact with you caused you to fall at all. It that fair to say?
[SHEBEST'S COUNSEL:] Objection to the form.
[SHEBEST:] I am confident that I would not have fallen on my own.
[ALLSTATE'S COUNSEL:] But for John [Slater] coming into contact with you?
[SHEBEST:] I agree that certainly played a role in us both falling over the edge of the tee box.
Shebest also expressed uncertainty about what it appeared that Slater was attempting to do in moving towards him:
[ALLSTATE'S COUNSEL:] And you agree it wasn't incidental contact?
[SLATER'S COUNSEL:] I object to form.
[SHEBEST:] Define incidental.
[ALLSTATE'S COUNSEL:] Unintentional.
[SHEBEST:] I can't speak to his intention. [(Emphasis added).]
Later on in his deposition, Shebest was confronted with the second count of his complaint alleging that Slater had "wilfully" and "maliciously" seized and pushed him down to the ground. Shebest was unable to confirm that he agreed with that pleaded accusation. He instead stated:
It's hard for me to say [whether I disagree with those allegations] because it's hard for me to speak to [Slater's] intentions, okay. Like I said, my recollection is that he ran up to me, that he came at me at a quick rate of speed, there was contact and that we both went over in this roll down the edge of this tee box. That's the best answer that I can give.
Slater, meanwhile, initially denied at his deposition that he had walked towards Shebest on the tee box but, rather, contended that Shebest had walked up to him. Slater thereafter qualified his answer, stating that he could not recall for sure whether he had moved at all, but if he had done so, he did not "remember covering any significant ground."
With respect to the issues of physical contact, Slater recalled at his deposition that he had pushed Shebest after Shebest had made disparaging and profane comments about his wife. However, Slater maintained that Shebest was still erect immediately after the push, and did not admit pushing Shebest down to the ground. As Slater put it:
[SLATER:] I confront[ed] Steve [Shebest] about what he said. I don't remember what I said exactly. We were in close proximity, about a foot. I remember pushing Steve. He took a step backwards. He was still standing. We were in close proximity. And then the next thing I recall we were both on the ground.
[ALLSTATE'S COUNSEL:] After Steve [Shebest] said that [disparaging] statement and before you pushed him, there [were] no other comments between the two of you?
[SLATER:] Not that I recall.
[ALLSTATE'S COUNSEL:] Okay. And the reason why you pushed Steve?
[SLATER:] I was offended by what he had said.
Slater disputed that he had tackled Shebest. He also indicated that he had "no recollection" as to how either of the two men ended up on the ground.
Given this meandering and often contradictory paper record, it is not reasonably certain how this incident transpired. Depending on which of the many accounts one adopts, it could be that (1) Slater tackled Shebest; (2) Slater pushed Shebest to the ground; (3) Slater pushed Shebest, but Shebest maintained his balance and subsequently fell down on his own accord; or (4) Slater did not make contact with Shebest, but Shebest fell when trying to side-step Slater.*fn5 The record can reasonably support each of these possibilities, and perhaps others. Additionally, the testimony is conflicting as to whether Shebest moved toward Slater first, or vice-versa. That evidential conflict bears, of course, upon the ultimate question of Slater's intention and state of mind.
Given the murky state of the record, we do not share the motion judge's confidence that the record is bereft of genuine issues of material fact. Instead, we are satisfied that such genuine disputes about the mechanics of this incident persist, as well as substantial doubts about Slater's subjective intentions regarding Shebest while they were on the tee box. The parties' confused recollections are no doubt compounded by the fact that both men evidently consumed substantial amounts of alcohol during the preceding seventeen golf holes, which easily could have dulled their perceptions and affected the clarity of their memories. The players' alcohol consumption and the wetness of the grass from the afternoon rains also could have easily impaired Shebest's ability to maintain his balance atop the elevated tee box. Moreover, the bravado involved in the golf competition, the drinking challenge, and the exchange of insults about the parties' spouses all bear upon the actors' states of mind. It is unclear whether Slater was deliberately trying to hurt Shebest or, alternatively, whether he was trying to defend his wife's honor in a demonstrative manner. The fact that these gentlemen came together that day to take part in what the record describes as a "friendly golf tournament" also is relevant to these intent issues.
On the whole, we conclude that these numerous factual issues are best sorted out in a trial or plenary hearing, at which time the fact-finder*fn6 will have the ability to evaluate, first-hand, the credibility of the witnesses and their demeanor. Although we recognize that Slater did recall at his deposition that he had pushed Shebest, we cannot determine, as a matter of law, on this record whether that supposed physical contact was intended to cause Shebest any injury or harm, or that the wrist injury sustained by Shebest was proximately caused by such pushing and was reasonably foreseeable by Slater. We also cannot determine conclusively whether any harm intended was akin to the "transient discomfort of a minor physical encounter" involved in Karlinski, supra. These issues must instead be sorted out in a plenary fashion with live testimony.
For these reasons, we vacate*fn7 the entry of summary judgment in Allstate's favor and remand for proceedings consistent with this opinion. We do not retain jurisdiction.