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Voorhees v. Preferred Mutual Insurance Co.3/20/1991
ted that Sisto's complaint sounded in defamation and that the damage to her reputation claimed did not constitute "bodily injury" under the policy. In a subsequent letter, defendant added that Sisto's claim fell within the policy's exclusion for intentional acts. Voorhees retained an attorney and ultimately settled the Sisto claim for the sum of $750. However, extensive discovery proceedings had occurred prior to the settlement. In the course of these proceedings, Voorhees' attorney had received a report from Sisto's psychiatrist, indicating that Sisto had experienced various physical symptoms as the result of the emotional distress allegedly caused by Voorhees'
conduct, including headaches, nausea and stomach and body pains. According to the psychiatrist, these physical effects were consistent with Sisto's subjective complaints and were not idiosyncratic.
Following the settlement of Sisto's suit, Voorhees instituted this action seeking a declaratory judgment that Preferred was responsible for reimbursement of all defense costs, approximately $14,000. Cross-motions for summary judgment were filed. The Law Division judge rendered an oral opinion, finding that although Sisto's claim did not fall within the policy exclusion for intentional acts, the complaint alleged defamation, a cause of action not covered under the insuring agreement. The judge granted summary judgment in Preferred's favor and this appeal followed.
II.
We commence our analysis with the well-settled principle that an insurer's duty to defend an action against the insured is measured by the allegations contained in the complainant's pleadings. Ohio Cas. Ins. Co. v. Flanagin, 44 N.J. 504, 512, 210 A.2d 221 (1965); Danek v. Hommer, 28 N.J. Super. 68, 77, 100 A.2d 198 (App.Div.1953), certif. granted 14 N.J. 465, 102 A.2d 693 (1954), aff'd 15 N.J. 573, 105 A.2d 677 (1954); 8 Appleman, Insurance Law and Practice (Berdal ed. 1979), § 4683 at 42. The duty to defend arises when the complaint states a claim constituting a risk falling within the purview of the policy language. Danek v. Hommer, 28 N.J. Super. at 77, 100 A.2d 198. If the pleadings state facts bringing the injury within the coverage of the policy, the insurer must defend regardless of the insured's ultimate liability to the complainant. 8 Appleman, Insurance Law and Practice, supra, § 4683 at 42. The nature of the damage claim, rather than the actual details of the accident or the ultimate liability of the insured, determines whether the insurer is obliged to defend. Ohio Cas. Ins. Co. v. Flanagin, 44 N.J. at 512, 210 A.2d 221; see also
Hackensack Water Co. v. General Acc. Fire & Life Assur. Corp., 84 N.J. Super. 479, 482-483, 202 A.2d 706 (App.Div.1964); Van Der Veen v. Bankers Indemnity Ins. Co., 30 N.J. Super. 211, 217, 103 A.2d 900 (App.Div.1954).
Applying these principles, we first look to the policy language. The standard form policy provides that Preferred will pay all sums recovered against the insured "because of bodily injury . . . caused by an occurrence." The word "occurrence" is defined in pertinent part as "an accident." "Bodily injury" means "bodily harm, sickness or disease . . . ." The duty to defend clause is broader than the indemnification provision in that it does not require the "bodily injury" be caused by an "occur
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