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Villa v. Short

195 N.J. 15, 947 A.2d 1217 (2008)

HOMEOWNERS INSURANCE — Homeowner’s policy language excluding coverage for the “intentional or criminal acts of an insured person” operates to deny coverage for all insureds under the policy, and not merely for the insured who committed the intentional or criminal act.

A woman sued her grandparents for the negligent supervision of her uncle who allegedly molested the complainant while both lived together under her grandparents’ care. The grandparents’ homeowner’s insurance carrier refused to defend and indemnify the grandparents based upon a policy coverage exclusion for intentional and criminal acts. The grandfather (the grandmother having died) sought a declaratory judgment that coverage was available. The lower court concluded that the homeowner’s policy did not afford coverage because of the intentional acts exclusion and dismissed the grandfather’s claims. The Appellate Division affirmed, holding that because the uncle was an insured person under the policy and the losses arose from his intentional or criminal acts, the policy denied coverage for all insureds, including the grandparents. The Supreme Court of New Jersey agreed to hear the grandfather’s appeal.

The Court held that a homeowner’s policy language excluding coverage for the “intentional or criminal acts of an insured person” operated to deny coverage for all insureds under the policy, and not merely for the insured who committed the intentional or criminal act. The Court found the language in the exclusion sufficiently unambiguous to operate in this fashion. It pointed to Appellate Division decisions holding that the words “an insured” are synonymous with “any insured,” and therefore the acts of one insured person were sufficient to disqualify other persons from coverage. The Court distinguished policies that use the language “the insured,” declaring that this phraseology would appear more ambiguous and would arguably be more restrictive as to excluding coverage.


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