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State Farm Fire and Casualty Company v. Charlene Gregory


June 8, 2012


On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-4614-09.

Per curiam.


Argued May 15, 2012

Before Judges Fisher, Baxter and Carchman.

This appeal has as its genesis a suit filed in 2008 by L.M. against Harold and Charlene Gregory, in which L.M. alleged Harold sexually abused her commencing in 1971 and ending in 1973 or 1974, "when [L.M.] was 9 years old, and while [Harold] was an adult." L.M. also alleged that Charlene, Harold's wife, knew or should have known at the time of Harold's "propensity for child abuse, and the risks and hazard presented to L.M., and that Charlene had a duty to warn L.M. or her parents." That action is still pending in the trial court.

Harold and Charlene sought coverage under the homeowner's insurance policy issued to them by State Farm Fire and Casualty Company, which filed the complaint in this action seeking a declaratory judgment. Among other things, State Farm asserted in this action that it had no obligation to either defend Charlene against or indemnify Charlene for L.M.'s claims. The trial judge granted State Farm's motion for summary judgment, and Charlene appeals, arguing that summary judgment was barred because of the presence of disputed questions of material fact regarding the content of the homeowners' policy and whether she knew or should have known of her spouse's alleged propensity for child abuse. Charlene also argues, among other things, that the policy exclusion upon which State Farm relies does not unambiguously exclude coverage of an innocent spouse and that the public policy against permitting insurance coverage in child abuse matters should not apply here. We find no merit in Charlene's arguments nor do we find any principled reason for reaching a conclusion different from High Point Ins. Co. v. J.M., 398 N.J. Super. 562 (App. Div. 2008), which is fully applicable -- and fatal -- to Charlene's arguments.

Indeed, because High Point is conclusive, we preface our discussion with a summary of that case and its holding. In High Point, the guardians of two children brought a personal injury action against the defendant-wife, alleging she sexually assaulted one of the children and caused emotional and physical injury to the other. Id. at 565. The lawsuit also alleged --like L.M.'s claim against Charlene -- that the defendant-husband "knew or should have known of . . . [the wife's] deviant behavior, and . . . did nothing to prevent [it] or warn the appropriate people." Ibid. The trial court granted summary judgment for the insurer, and the husband and wife appealed. Id. at 567.

We affirmed the denial of insurance coverage for the wife, reasoning that, in light of her guilty plea, public policy precluded indemnification for a loss incurred as a result of her own willful wrongdoing. Id. at 574. We also affirmed the denial of coverage for the husband, stating that "[w]e agree and affirm the judgment substantially for the reasons expressed" by the trial judge, who held that:

The public policy of the State of New Jersey is clear and it does not allow for insurance policies to be interpreted so as to provide liability coverage for spouses of sexual molesters. . . . [The husband] can reasonably expect that if he maintains his household steps negligently, his homeowner policy will provide coverage; he cannot reasonably expect that if he failed to protect children exposed to his wife's sexual proclivities and he knew about it or should have known about it, he would have coverage. [Id. at 569 (citations omitted).]

We concluded in High Point that the "public policy involved, designed to have a spouse remain vigilant for the protection of a child victim, and the lack of 'reasonable expectations' that the insurance provides such coverage for the spouse of an abuser, precludes coverage, at least without language far more inclusive than that involved here." Id. at 573 (citation and footnote omitted).

The trial judge here relied on High Point in concluding that public policy precluded any insurance coverage for Charlene, who has ineffectually attempted to distinguish High Point in a number of ways. We find her arguments to be of insufficient merit to warrant further discussion. R. 2:11- 3(e)(1)(E). We add only the following brief comments regarding two of Charlene's attempts to distinguish High Point.

In the first, Charlene refers to the uncertainties surrounding the precise content of the insurance policy that would have been in effect at the time of the events alleged by

L.M. Neither State Farm nor Charlene was able to produce a copy of the applicable policy. Charlene relies upon a form policy, dated January 1973, provided by State Farm in discovery, claiming its provisions represent those that would have been included in her State Farm policy at the time; State Farm contends that the January 1973 form was not approved for use until 1976 and that its 2002 policy reflected the content of the policy then in effect. Because the policies are essentially the same in all significant respects relevant to this controversy, we conclude that the parties' disagreement or the uncertainty about the content of the policy in effect at the time is no obstacle to summary judgment. The specific wording of the exclusions in State Farm's 1973 and 2002 homeowner policies*fn1 is essentially the same as the exclusion's wording in the policy interpreted in High Point. As relevant to Charlene's argument, all three policies excluded bodily injury or damage that is expected or intended by "the insured." Id. at 567 (emphasis added). Insofar as it relates to the public policy disfavoring coverage for claims against the spouse of an alleged child abuser, we found no ambiguity in the phrase "the insured" in High Point and find none here. Nor do we ascribe to Charlene's tortured argument that portions of the Supreme Court's later decision in Villa v. Short, 195 N.J. 15, 26-27 (2008) (contrasting "the insured" in finding no ambiguity in the phrase "an insured" contained in an intentional act exclusion), somehow undermines our High Point decision.

Charlene's second argument is that she should not have been denied coverage because she denies knowledge of Harold's alleged propensities for child abuse. Whether her assertions are true or not and whether L.M.'s allegations are true or not have no bearing on the coverage issues raised in this case. Coverage does not turn on whether the injured person can ultimately prove his or her allegations but whether the allegations fall within the coverage defined by the policy. L.M.'s claim against Charlene is not covered regardless of whether it is valid or baseless.


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