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Voorhees v. Preferred Mutual Insurance Co.3/20/1991
lly disagree with my colleagues that the term "bodily injury" as used in this homeowner's policy "encompasses the mental and psychological sequelae resulting from the torts of outrage and negligent infliction of emotional distress and therefore the insurer had a duty to defend." In my view, there was no "accident" or "occurrence" under the coverage provisions of the policy and, therefore, Preferred Mutual Insurance Company had no duty to defend. I further differ with the conclusion that " iewing the policy language from the perspective of the average insurance purchaser's reasonable expectations, . . . the phrase 'bodily injury' in the insuring agreement included claims for emotional distress. Wolfe v. State Farm Ins. Co., 224 N.J. Super. [348, 353, 540 A.2d 871 (App.Div.1988), certif. denied, 111 N.J. 654, 546 A.2d 562 (1988)]." Initially, there can be no question but that there is a "lengthening line of cases which has recognized that emotional distress is just as real as physical pain," as set forth in the case cited in the maj. opinion at 571, but the existence of mental anguish and emotional distress as a tort concept giving rise to liability for a wrongful act is irrelevant to the issue before us -- the construction of the terms and conditions of an insurance policy. It goes without saying that there must be an underlying wrongful act to establish liability but the question here is whether a wrongful act involving purely mental anguish and emotional distress is an "accident" or "occurrence" causing "bodily harm" within the coverage of the insurance policy in this matter. I would hold that there is no coverage under the facts and circumstances presented here.
Under the pertinent coverage clause, defendant promised to pay all sums recovered against plaintiff "because of bodily injury. . . caused by an occurrence to which this coverage applies." (Emphasis in original.) "Occurrence" is defined in pertinent part as "an accident." The duty-to-defend clause provides that Preferred "will defend any suit seeking damages, provided the suit resulted from bodily injury. . . not excluded under this coverage." (Emphasis in original.) My colleagues construe this language to mean that the "duty-to-defend clause" is broader than the indemnification provision in that it does not require the "bodily injury" to be caused by an "occurrence." It seems to me that it would be difficult, if not impossible, to have damages without an "occurrence" or "accident." As noted in Burd v. Sussex Mutual Insurance Company, 56 N.J. 383, 388-89, 267 A.2d 7 (1970), " he sense of the covenant is to defend suits involving claims which the carrier would have to pay if the claimant prevailed in the accident. The covenant to defend is thus identified with the covenant to pay." (Emphasis added.) A requirement that a loss be accidental in some sense in order to qualify as the occasion for liability is implicit.
Nor do I concur that the doctrine of "reasonable expectation" applies under the terms of the policy of insurance at issue. Our courts have endorsed the principle of "reasonable expectations" of the insured to render a "fair interpretation" of the boundaries of insurance coverage. DiOrio v. New Jersey Manufacturers Ins. Co., 79 N.J. 257, 269, 398 A.2d 1274 (1979). Under the doctrine, the insured's reasonable expectations are brought to bear on misleading terms and conditions of insurance contracts and genuine ambiguities are resolved against the insurer. Id. In applying this principle, an objectively reasonable interpretation of the average policyholder is accepted
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