On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-1499-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 21, 2009
Before Judges Lisa, Baxter and Alvarez.
In this insurance coverage dispute, plaintiff D.R. appeals from summary judgment dismissing her complaint seeking a defense and coverage from defendant Allstate Insurance Company (Allstate). D.R. sought a defense and coverage because she and her minor son J.R. were sued for damages resulting from J.R.'s alleged sexual molestation of a child, S.M., who attended the day care center D.R. operated out of her home. We now reverse.
Through her guardian ad litem, S.M. filed the underlying tort action on November 16, 2005. The complaint asserted theories of recovery including: vicarious liability, because J.R. occasionally assisted plaintiff in her day care operations; negligent supervision and hiring of J.R.; and ordinary negligence.
D.R. filed this declaratory judgment action seeking a defense and coverage from Allstate on May 19, 2006. The proceedings were consolidated by consent for discovery purposes; motions and cross-motions for summary judgment were filed in April and May 2007. On July 9, 2007, the motion judge granted summary judgment to Allstate as to J.R., finding that it had "no obligation to provide a defense or indemnification." This order is not appealed. The sole issue before us is whether the policy provides coverage for D.R.
On April 11, 2008, the motion judge granted summary judgment to Allstate as to D.R., and denied her cross-motion to compel Allstate to extend coverage. The motion judge's decision was based on his reading of J.S. v. R.T.H., 155 N.J. 330 (1998), High Point Insurance Co. v. J.M., 398 N.J. Super. 562 (App. Div. 2008), and J.C. v. N.B., 335 N.J. Super. 503 (App. Div. 2000).
He interpreted the cases to mean that public policy forbids any insurance coverage for the sexual molestation of children. The order was signed on May 27, 2008. On July 31, 2008, a consent judgment was entered in favor of S.M. and her guardian ad litem against only D.R. for $225,000 in the underlying tort action.*fn1
D.R. operated a fully-licensed day care center for approximately eighteen years. During the relevant time frame she was insured by Allstate through a "Deluxe Policy" with a "Home Day Care" rider purchased for an extra premium. Until October 30, 2004, the policy excluded coverage for intentional acts of "the" insured. Effective October 31, 2004, the exclusion was rewritten so as to apply to "an" insured.
S.M. claimed that the physical and emotional harm resulting from J.R.'s molestation was inflicted prior to October 31, 2004, although initially this fact was in dispute. The grant of coverage in the pre-October 31, 2004 policy was exclusive of bodily injury "intended by, or which may reasonably be expected to result from the intentional acts or omissions of the insured person." (Emphasis added). The parties stipulated that ...