My Spouse Has Burned My House Down, Am I Covered? Part 4, New Jersey

Part four of my series covering the Intentional Acts Exclusion brings us to my home state of New Jersey. In New Jersey, the Supreme Court has ruled on the issue of whether the intentional acts exclusion is enforceable when the actor committed an act while being insane.¹

In Ruvolo v. American Casualty Company, the insured filed a declaratory action against its insurer that they should defend him for the lawsuit filed against him when he shot his colleague. The insured, Dr. Ruvolo, purchased an insurance policy from defendant under which the company agreed to pay all sums which he ‘shall become legally obligated to pay as damages’ because of the death of any person resulting from (his) ‘activities.’ Essentially this was malpractice insurance. The policy required the insurer to defend any damage suit brought against Ruvolo. On June 6, 1960, Ruvolo shot his associate Dr. Annunziatio La Face. Ruvolo was examined by two psychiatrists who certified he was insane. The policy had an exclusion that stated: “This policy does not apply…to death caused intentionally by or at the direction of the insured.”

American alleged the claim was excluded from policy coverage because the death had been caused by the insured’s intentional act. Both psychiatrists that examined Ruvolo diagnosed him with dementia and that the condition was gradual in onset.

The court noted:

In applying the exclusory provision, however, whether in an life, accident, liability or fire policy, it has come to be commonly accepted there where the death or loss involved, be it of the insured or caused by the insured, is the product of an insane act, recovery is not barred.²

The court noted that “the critical, or more precise, problem is the nature or extent of the mental incapacity necessary to transmute the character of the act involved form the intentional to insane.”³ In other words, how insane do you have to be to be incapable of forming intent?

The court held that if the insured was suffering from a derangement of his intellect which deprived him of the capacity to govern his conduct in accordance with reason, and while in that condition acting on an irrational impulse he [committed an act], his act cannot be treated as ‘intentional’ within the connotation of defendant’s insurance contract.⁴

The court then remanded the decision back to the trial court stating intent and mental capabilities is a factual determination to be made by the trial court and born out in factual and expert testimony.

I leave you with one of my favorite quotes from the late, greatest of all-time, Muhammad Ali:

“It isn’t the mountains ahead to climb that wear you out; it’s the pebble in your shoe.”

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¹ Ruvolo v. American Cas. Co., 39 N.J. 490 (1963). (The case involved a liability policy, although you can make the parallel to the intentional acts exclusion in a property insurance policy.)
² See Hier v. Farmers Mut. Fire Ins. Co., 104 Mont. 471, 67 P.2d 831, 110 A.L.R. 1051 (Sup.Ct.1937); Provident Life & Accident Ins. Co. v. McWilliams, 146 Miss. 298, 112 So. 483 (Sup.Ct.1927); Markland v. Clover Leaf Casualty Co., 209 S.W. 602 (Mo.Ct.App.1919); Corley v. Travelers’ Protective Ass’n, 105 F. 854 (6 Cir., 1900); Berger v. Pacific Mut. Life Ins. Co., 88 F. 241 (C.C.Mo.1898); Van Zandt v. Mutual Benefit Life Insurance Co., 55 N.Y. 169; 14 Am.Rep. 215 (Ct.App.1873); Annotation, 110 A.L.R. 1060 (1937); 1 Appleman, supra, p. 590, n. 7; Couch, supra, s 41.667; 29A Am.Jur., supra, ss 1199, 1304.
³ Id. at 496.
⁴ Id. at 498.