United States District Court, D. New Jersey
MCNULTY, United States District Judge.
the court is the motion of Montville Township Board of
Education ("Montville") for reconsideration of my
prior Opinion ("Op.", ECF no. 22) and Order (ECF
no. 23). In that Opinion, I held that Montville's
insurer, Zurich American Insurance Co. ("Zurich"),
did not have a duty under the GCL Coverage Part of the policy
to defend Montville against state-court claims brought
against it by Child M. Child M alleges that Montville, while
it employed Jason Fennes as a teacher for twelve years, knew
about abusive acts by Fennes, failed to notify the
authorities, and agreed not to tell potential future
employers about that conduct in order to induce Fennes to
resign. In 2010, Fennes did resign, and went on to a position
at Cedar Hill Prep, where he sexually abused a number of
students. He was later criminally charged for acts of sexual
abuse. Montville's silence, Child M claims, enabled and
facilitated Fennes's abuse of her at Cedar Hill.
sought a declaratory judgment by order to show cause, and has
contended throughout that Zurich is obligated to defend it
against Child M's allegations under the GCL Coverage Part
of its general commercial liability ("GCL") policy.
Zurich has declined to do so, based on, inter alia,
the GCL Coverage Part's exclusion of claims "arising
from" or "relating in any way" to
the claims as presented by Montville, I considered whether
Zurich's duty to defend under the GCL Coverage Part was
vitiated by the abusive acts exclusion. The scope of the duty
to defend, I held, is determined by the nature of the
allegations against the insured-i.e., the
kind of claim being made. To simplify a bit, if the
plaintiff does not allege a covered risk, the insurer has no
duty to defend against the allegation. Montville's
insistence that it was not actually guilty of any wrongdoing
with respect to the abuse of students, I wrote, did not alter
the nature of the claims being asserted, or the issue of
whether the risk fell within the coverage of the GCL Coverage
degree, Montville seems to request that I reconsider my
disposition of the issues under the GCL Coverage Part. I
discuss that contention in Section II.B.1, infra,
but reject it.
however, Montville has switched its approach. Now it argues
that it is entitled to defense costs (and presumably
coverage) under a different part of the policy: the Abusive
Acts ("AA") Coverage Part. Without really
acknowledging the switch, Montville objects in substance that
the bulk of the discussion in the prior Opinion is
inapplicable to the AA Coverage Part. And no wonder-that was
not the issue that Montville's papers, fairly read,
presented to the Court.
issue now before the Court is whether Montville's new
position is cognizable on reconsideration. Citing a brief
reference in its Reply and Opposition brief, and a
head-scratching footnote in my Opinion where I attempted to
make sense of that reference, Montville insists that-or
rather, blusteringly acts as if-the AA Coverage Part issue
has been in the case all along. Indeed, Montville's
counsel appears to be trying to convince the author of the
Opinion that his Opinion (which devoted a few sentences of a
footnote to a version of the issue) "focused on
the 'prior known acts' exclusion of the 'AA
Coverage Part."' ((Reconsideration Br. 7, ECF no.
31; emphasis added)
I would not lightly deny an insured, and particularly a
school district, the benefit of its insurance policy because
its counsel's tactics were ill-considered, or even
because I thought counsel had wasted the time and resources
of its adversary and the Court. I will analyze the motion to
reconsider, as it bears on the AA Coverage Part, in Section
Standard on Motion for Reconsideration
standards governing a motion for reconsideration are well
settled. See generally D.N.J. Loc. Civ. R. 7.1(i).
Reconsideration is an "extraordinary remedy, " to
be granted "sparingly." NL Indus. Inc. v.
Commercial Union Ins. Co., 935 F.Supp. 513, 516 (D.N.J.
1996). Generally, reconsideration is granted in three
scenarios: (1) when there has been an intervening change in
the law; (2) when new evidence has become available; or (3)
when necessary to correct a clear error of law or to prevent
manifest injustice. See North River Ins. Co. v. CIGNA
Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995);
Carmichael v. Everson, 2004 WL 1587894, at *1
(D.N.J. May 21, 2004). Local Rule 7.1(i) requires such a
motion to specifically identify "the matter or
controlling decisions which the party believes the Judge or
Magistrate Judge has overlooked." Id.; see also
Egloff v. New Jersey Air Nat'l Guard, 684 F.Supp.
1275, 1279 (D.N.J. 1988). Evidence or arguments that were
available at the time of the original decision will not
support a motion for reconsideration. Damiano v. Sony
Music Entm't, Inc., 975 F.Supp. 623, 636 (D.N.J.
1997); see also North River Ins. Co., 52 F.3d at
1218; Bapu Corp. v. Choice Hotels Int'l, Inc.,
2010 WL 5418972, at *4 (D.N.J. Dec. 23, 2010) (citing P.
Schoenfeld Asset Mgmt. LLC v. Cendant Corp., 161
F.Supp.2d 349, 352 (D.N.J. 2001)).
ease of reference, I repeat here my summary of the pertinent
allegations of Child M's state-court complaint:
• Prior to working at Cedar Hill, Montville employed
Fennes as a teacher and track coach at William Mason
Elementary School. During the 12 years he worked at
Montville, Fennes sexually abused minor students. (Compl. p.
• Montville knew about, or was on notice of, such sexual
abuse. Montville nevertheless failed to report Fennes to the
appropriate authorities as required by law. (Id.)
• Montville entered into an agreement, dated May 4,
2010, with Fennes, in which Montville agreed to "limit
the scope of information" it would communicate to
potential employers "in exchange for" his
resignation. (Id. at 12)
• Fennes "performed various acts of sexual
molestation against" Child M (Id. at 5)
• But for Montville's failure to report and
"provide pertinent and highly relevant information"
about Fennes to potential employers, such as Cedar Hills,
Child M would not have been sexually abused by Fennes.
(Id. at 12-15)
action, Montville prevailed on a motion for summary judgment.
That judgment, however, was for the most part reversed by the
Appellate Division. Child M. v. Fennes, Docket No.
A-0873-15T2, 2016 WL 4473253, 2016 N.J.Super. Unpub. LEXIS
1955, *2-*8 (App. Div. Aug. 25, 2016). My Opinion quoted at
length from the Appellate Division's opinion. (Op. 6-10)
(Montville's objection to my having done so is discussed
at Section II.B.l, infra.)
Correction of Date, New Evidence
proceeding to the substance, I briefly consider two discrete
subsidiary issues raised by the reconsideration motion.
introductory paragraph of the Opinion, I wrote that that
"In 2012, one of Fennes's alleged victims,
Child M, a Cedar Hills student, sued (among others)
Montville." (Op. 1; emphasis added} That sentence
inaccurately telescopes the events. The original 2012
state-court complaint named only Fennes and Cedar Hill;
Montville was added by amendment later, in 2015.
makes much of what was clearly a slip of the pen; I did not
misapprehend the facts. Two pages later, in the formal
statement of facts, I described the procedural history
In August 2012, Child M and her parents sued Fennes and Cedar
Hill. On January 23, 2015, Child M filed a third amended
complaint that named Fennes, Cedar Hill, Montville, and
others as defendants.
misstatement on page 1 had no effect on the Court's
decision. Nevertheless, accuracy is important.
Reconsideration is granted to die extent that I will order
that the sentence on page 1 of the Opinion be amended to
delet "In 2012, " and to read in its amended form
as follows: "One of Fennes's alleged victims, Child
M, a Cedar Hills student, sued (among others)
proffers a document, dating from 2010 but "new" in
the sense that it was obtained by Montville after I had filed
my Opinion. (ECF no. 25, sealed) Because Montville represents
that it did not possess the document, there is at least an
argument that it could not have been expected to bring it to
the Court's attention ...