United States District Court, D. New Jersey
McNULTY UNITED STATES DISTRICT JUDGE
before the court are cross-motions for summary judgment by
Montville Township Board of Education ("Montville")
and its insurer, Zurich American Insurance Co.
("Zurich"). Montville has been sued in state court
by Child M. Child M alleges that Montville employed Jason
Fennes for twelve years, knew about sexual misconduct by
Fennes, failed to notify authorities, and agreed not to tell
potential future employers about that conduct to induce
Fennes to resign. After he resigned from Montville in 2010,
Fennes began working for Cedar Hill Prep, where he allegedly
sexually molested several students, including Child M. Child
M claims that Montville's silence enabled and facilitated
Fennes's abuse of her at Cedar Hill Prep.
initially argued that Zurich was obligated to defend it
against Child M's allegations under its General
Commercial Liability ("GCL") policy. Zurich
declined because the GCL policy excludes coverage of claims
"arising from" or "relating in any way"
to "abusive acts." In a prior opinion, I found that
Zurich did not have a duty to defend Montville under the GCL
policy. (ECF No. 22). Montville moved for reconsideration,
which I denied. (ECF No. 37).
motion for reconsideration also asserted, for the first time,
the argument that Zurich had a duty to defend under the
Abusive Acts ("AA") provision of their policy.
Montville insists that this provision has been in issue
throughout the litigation, despite its previous statements to
the contrary. I was reluctant to permit a school district to
sacrifice rightful coverage based on a possible strategic
misstep, but equally reluctant to decide an issue as to which
Zurich had not been given a fair opportunity to respond. I
therefore authorized Montville to file a new motion asserting
that Zurich has a duty to defend it under the AA policy. (ECF
No. 37). Zurich's duty to defend under the AA policy is
thus addressed in these cross-motions for the first time.
Rule of Civil Procedure 56(a) provides that summary judgment
should be granted "if the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law." Fed.R.Civ.P.
56(a); see also Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986); Kreschollek v. S. Stevedoring
Co., 223 F.3d 202, 204 (3d Cir. 2000). In deciding a
motion for summary judgment, a court must construe all facts
and inferences in the light most favorable to the nonmoving
party. See Boyle v. County of Allegheny
Pennsylvania, 139 F.3d 386, 393 (3d Cir. 1998). The
moving party bears the burden of establishing that no genuine
issue of material fact remains. See Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986). "[W]ith
respect to an issue on which the nonmoving party bears the
burden of proof ... the burden on the moving party may be
discharged by 'showing'-that is, pointing out to the
district court-that there is an absence of evidence to
support the nonmoving party's case." Id. at
the moving party has met that threshold burden, the
non-moving party "must do more than simply show that
there is some metaphysical doubt as to material facts."
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574 (1986). The opposing party must
present actual evidence that creates a genuine issue as to a
material fact for trial. Anderson, 477 U.S. at 248;
see also Fed. R. Civ. P. 56(c) (setting forth types
of evidence on which nonmoving party must rely to support its
assertion that genuine issues of material fact exist).
"[Unsupported allegations ... and pleadings are
insufficient to repel summary judgment." Schoch u.
First Fid, Bancorporation, 912 F.2d 654, 657 (3d Cir.
1990). If the nonmoving party has failed "to make a
showing sufficient to establish the existence of an element
essential to that party's case, and on which that party
will bear the burden of proof at trial, ... there can be
'no genuine issue of material fact,' since a complete
failure of proof concerning an essential element of the
nonmoving party's case necessarily renders all other
facts immaterial." Katz v. Aetna Cas. &
Sur. Co., 972 F.2d 53, 55 (3d Cir. 1992) (quoting
Celotex, 477 U.S. at 322-23).
the parties file cross-motions for summary judgment, the
governing standard "does not change." Clevenger
v. First Option Health Plan of N.J., 208 F.Supp.2d 463,
468-69 (D.N.J. 2002) (citing Weissman v. U.S.P.S.,
19 F.Supp.2d 254, 259 (D.N.J. 1998)). The court must consider
the motions independently, in accordance with the principles
outlined above. Goldwell of N.J., Inc. v. KPSS,
Inc., 622 F.Supp.2d 168, 184 (D.N.J. 2009). That one of
the cross-motions is denied does not imply that the other
must be granted. For each motion, "the court construes
facts and draws inferences in favor of the party against whom
the motion under consideration is made" but does not
"weigh the evidence or make credibility
determinations" because "these tasks are left to
the fact-finder." Pichler v. UNITE, 542 F.3d
380, 386 (3d Cir. 2008) (internal quotations and citations
omitted). Nonetheless, when material underlying facts are not
in dispute, summary judgment is appropriate to dispose of
insurance-coverage questions. McMillan v. State Mut. Life
Assur. Co., 922 F.2d 1073, 1074 (3d Cir. 1990).
does not have a duty to defend Montville from Child M's
claims under the AA policy. The Prior Known Acts exclusion to
the AA policy denies coverage for claims arising from
"abusive acts" when the insured knew about the
"abusive acts" prior to the policy's effective
date.Child M's complaint sufficiently
alleges that Montville knew that Fennes had engaged in
"abusive acts" during his tenure at Montville.
Montville's liability is alleged to arise from, or to be
attributable to, in whole or in part, its knowledge of those
earlier abusive acts. Allegations, of course, are not proof,
but in general the duty to defend is triggered by the nature
of the allegations. Because prior known acts are alleged, the
Prior Known Acts exclusion negates Zurich's duty to
defend under the AA policy.
ambiguities exist in a complaint, policy, or exclusionary
clause, those ambiguities are resolved in favor of insurance
coverage. However, if a straightforward reading of the
complaint and policy, including exclusions, denies coverage,
the court will apply the clear meaning of the text. The court
will not engage in a strained construction or indulge a
far-fetched interpretation of a policy to find coverage.
Zurich to have a duty to defend, the court must find that (1)
Child M's allegations activate the AA policy coverage for
suits arising from "abusive acts" and that
(2) the Prior Known Acts exclusion does not negate that
coverage under the circumstances of this case. Subsection
II.A outlines the well-established principles that guide the
duty-to-defend analysis. Subsection II.B discusses the
applicability of the AA policy to Child M's allegations.
Subsection II.C addresses the Prior Known Acts exclusion to
the AA policy.