Recently, in a major environmental insurance coverage claim, I had a carrier refuse to provide coverage based on something that it described as the “intentional acts” defense. Since all “acts” are intentional, an “intentional acts” defense would mean that liability insurance coverage does not exist – for anything. Intentional harm, of course, is generally not covered. That’s not the same thing – one is a cause, and the other is an effect.
The intentional harm defense was spelled out by the New Jersey Supreme Court in Voorhees v. Preferred Mutual Insurance Co., 128 N.J. 165 (1992), and SL Industries Inc. v. American Motorists Insurance Co. , 128 N.J. 188 (1992). In SL Industries, for example, the Court said that if the wrongdoer subjectively intends to cause some sort of injury, that intent will generally preclude coverage, unless the extent of the injury was improbable. If there is no intent to cause the improbable injury, the injury is deemed accidental and coverage must be provided. The SL Court elaborated that “[a]bsent exceptional circumstances that objectively establish the insured’s intent to injure,” involving acts that are particularly reprehensible, such as sexual abuse of children in a day care center, “we will look to the insured’s subjective intent to determine intent to injure.”
Which brings us to the strange case of Joshua Thomas. Joshua is a diagnosed paranoid schizophrenic. He got into a heated argument with his parents over whether he was taking his meds or not, and then jumped into a car. While going 65 miles per hour in a 50 mile per hour zone, he apparently saw a car coming in the opposite direction, and he intentionally let go of the steering wheel. He crossed the center line and plowed into the other car, seriously injuring William Hammer. He told the state trooper that he “wanted to hit the other car” and that he “wanted to end it all” to get back at his parents. Later he recanted these statements, signing an affidavit in which he claimed not to remember the statements he made to the trooper, and contending that he did not intend to hurt Hammer, only himself.
Question: Does Joshua lose his liability coverage because he intentionally caused harm? In affirming summary judgment for the carrier, the Appellate Division says yes: “By letting go of the wheel only after he saw the oncoming car, as opposed to driving off the road at any time before, Thomas clearly manifested an intention to injure the other motorist in the car. NJM has sufficiently demonstrated that Thomas harbored a subjective intent to cause some injury and that Hammer’s injury was an inherently probable consequence of Thomas’ conduct.”
In disregarding Joshua’s affidavit, the Court said: “Thomas’ concluding statement in his affidavit that he ‘did not intentionally injure [ ] Hammer’ and that Hammer’s ‘injuries . . . were the unintended consequences of [his] careless driving’ was the first time Thomas ever stated that he had no intention to injure Hammer. These statements are self-serving bare assertions contained in an affidavit submitted in connection with a summary judgment motion and framed in legal language. Under the circumstances of this case, these statements fail to create a genuine issue of fact.”
But from an insurance perspective, is the Court’s decision supportable? Hard to say. For one thing, how can a Court so breezily conclude that Joshua intended to cause harm to Hammer, when apparently Joshua was not properly taking the drugs that had been prescribed to control his mental condition? For another, isn’t Joshua at least entitled to a trial on the question of whether he intended to cause harm, since he submitted a sworn statement (“self-serving and bare” or not) that he doesn’t remember talking with the trooper, and did not intend to injure Hammer, only himself? Finally, the Court refers to the incident as an “automobile accident.” If this was an “accident,” how could the harm have been intentional?
These are not easy questions to answer. The facts of the case are horrendous, and no one wants to reward a person for nearly killing an innocent bystander. But if the real purpose of insurance is to insure, then maybe Joshua should have been given his day in court, instead of having potential factual issues decided against him on a summary judgment motion.
The case is Hammer v. Thomas, and the full decision can be seen here.