Case Update: New Jersey August 2007
LIABILITY INSURANCE — INTENTIONAL ACTS — CARRIER–ASSIGNED COUNSEL
The Appellate Division revisited the thorny issue of carrier-funded representation of insureds accused of both negligent and intentional acts in New Jersey Manufacturers v. Vizciano. In this case a trial judge effectively ignored Burd v. Sussex Mutual and required the liability carrier in this bar fight case to defend the alleged assailant on all Counts of the Complaint, not only the covered negligence Counts. Accepting the matter on interlocutory appeal, the Appellate Division reversed and remanded with the express direction that NJM was well within its rights to retain counsel to defend its insured only on the covered claims.
The insured contended that he was assaulted by the plaintiff and acted solely in self-defense. If the jury were to accept this version, the Court observed, it would likely return a verdict in the insured’s favor and NJM would be obligated to reimburse him for all costs of his defense. (This result would be likely because expenses incurred to defend the assault count likely could not be separated from those incurred to defend the negligence count). On the other hand, if the jury rejects the insured’s version and finds that he intentionally assaulted the plaintiff then NJM would have no obligation to reimburse him for defense of the intentional tort claim. Finally, if the jury were to return a verdict for the plaintiff solely on the claim of negligence, NJM likely would be required to reimburse its insured for both his defense costs and the amounts of the judgment. [MORE]