Mazzilli v. Accident & Cas. Ins. Co. of Winterthur, Switzerland, A--79

• Decision Date: 17 March 1958
• Docket Number: No. A--79,A--79
• Citation: 139 A.2d 741,26 N.J. 307
• Parties: Louis MAZZILLI, Plaintiff-Appellant, v. ACCIDENT AND CASUALTY INSURANCE COMPANY OF WINTERTHUR, SWITZERLAND, Defendant-Respondent.
• Court: New Jersey Supreme Court

Page 307

26 N.J. 307

139 A.2d 741

Louis MAZZILLI, Plaintiff-Appellant, v. ACCIDENT AND CASUALTY INSURANCE COMPANY OF WINTERTHUR, SWITZERLAND, Defendant-Respondent.

No. A--79.

Supreme Court of New Jersey.

Argued Feb. 3, 1958.

Decided March 17, 1958.

Robert C. Gruhin, Jersey City, for appellant.

Milton A. Dauber, Jersey City, for respondent (Carpenter, Bennett, Beggans & Morrissey, Jersey City, Attorneys).

The opinion of the court was delivered by

PROCTOR, J.

This is an appeal from a judgment of the Appellate Division which reversed the trial court and directed the entry of summary judgment in defendant's favor upon the ground that the plaintiff was collaterally estopped by a prior judgment from showing that Frances Selger was an 'Insured' under personal liability policy issued by the defendant insurance company to her husband, Adam Selger. Mazzilli v. Accident & Casualty Ins. Co., etc., 45 N.J.Super. 137, 131 A.2d 546 (App.Div.1957). We granted plaintiff's petition for certification. 24 N.J. 54, 134 A.2d 833 (1957).

On April 21, 1949 the plaintiff was injured when Kenneth Selger, the nine-year-old son of Adam and Frances Selger, fired a shotgun at him from a window of his mother's house. The plaintiff instituted a personal injury action against Kenneth and both parents. It was established at the trial of that action that on the date the plaintiff was injured the elder Selgers were living in a state of separation which had commenced in 1945, each occupying separate residences located about 200 feet apart upon a three-acre tract owned by a corporation controlled by Adam Selger. It was also established that a separate maintenance action instituted by Frances for support of herself and Kenneth, who was in her custody, was then pending in the Chancery Division and that an interlocutory order had been entered in 1948 which required Adam to pay $35 a week for their support and also to pay the rent and cost of heating fuel for Frances' home. The trial court dismissed the complaint as to Adam and Frances, but the plaintiff recovered a judgment of $20,000 for compensatory damages and $5,000 for punitive damages against Kenneth. The plaintiff appealed from the judgment in favor of Adam and Frances. The infant defendant, Kenneth, cross-appealed from the denial of his motion to dismiss the punitive damage count against him. The judgments were affirmed by the Appellate Division. Mazzilli v. Selger, 23 N.J.Super. 496, 93 A.2d 216 (1952). In its opinion the Appellate Division held that there was insufficient evidence of any negligence on the part of Adam and Frances, and further held that the amount of punitive damages against Kenneth was justified since there was sufficient evidence to support the jury's finding that Kenneth's act was intentional. On appeal to this court the judgment of dismissal in favor of Adam was affirmed on the ground there was no evidence that he had access to his wife's home or that he had knowledge of the existence of the shotgun and shells before the occurrence. However, the judgment was reversed as to Frances and a new trial was ordered to determine whether she had failed to exercise due care in permitting the gun and shells to be available in Kenneth's room. Mazzilli v. Selger, 13 N.J. 296, 99 A.2d 417 (1953). Kenneth did not file an appeal.

Following the affirmance by the Appellate Division, but before the appeal to this court had been determined, the plaintiff, on January 16, 1953, instituted an action against the present defendant on the personal liability policy which it had issued to Adam Selger. The plaintiff's complaint in that action alleged, Inter alia that Kenneth Selger 'resided with Adam Selger and was a resident of the household of the said Adam Selger'; that the defendant had issued a personal liability policy to Adam; that the policy was in effect at the time the plaintiff was injured; that the policy contained the following provision:

'Definition of Insured: The unqualified word 'Insured' includes the Named Insured and, if residents of the household, his spouse and relatives and wards of either * * *.';

and that 'Kenneth Selger as well as the defendant, Adam Selger, was covered in all respects under the said policy of insurance.'

The defendant filed a notice of motion for summary judgment returnable on February 20, 1953. The affidavit executed by the defendant's attorney in support of the motion referred to the prior tort action and incorporated the opinion by the Appellate Division. It further recited that the provisions of the policy excluded from coverage any liability arising out of injury caused intentionally by or at the direction of the insured; that since Kenneth's act was found by the Appellate Division to have been intentional it was not covered by the policy; that Adam and his wife were separated at the time of the occurrence in question and lived in separate dwellings and that Kenneth resided with his mother; that 'by reason of said separate residences' and by reason of the separation of Adam and Frances 'Kenneth was not a member of the household of Adam Selger.' The plaintiff filed no answering affidavit. The disposition of the motion was postponed to await the outcome of the appeal which was pending before this court. That appeal, as mentioned above, resulted in an affirmance of the judgment in favor of Adam and the granting of a new trial against Frances. Upon the retrial on the issue of Frances' liability, the plaintiff recovered a judgment against her for $10,000, which was entered on February 16, 1955.

On March 25, 1955 the defendant's long pending motion for summary judgment was argued, and on March 31, 1955 judgment was entered granting the motion. The trial court in reaching this decision considered the provisions of the policy pertaining to the definition of 'Insured' and the following clauses limiting coverage to accidental injuries:

'Occurrence. 'Occurrence' means an accident or a continuous or repeated exposure to conditions, which results in injury during the Policy Period, providing the injury is accidentally caused.'

'Assault and Battery. Assault and Battery shall be deemed an accident unless committed by or at the direction of the assured.'

The trial court made two specific findings: (1) that 'Kenneth Selger was not a resident of the household of the assured, his father,' and hence was not an 'Insured'; and (2) if it be assumed that Kenneth was a resident of the Adam Selger household, and, thus, an insured, his act was willful and malicious and therefore it was not an accident within the terms of the policy. The plaintiff did not appeal from this judgment.

On August 22, 1956 the plaintiff instituted the present action against the defendant to recover the amount of the judgment obtained against Frances on the ground that she was an 'Insured' covered by the policy. The defendant moved for summary judgment, asserting that the judgment in the prior suit between the same parties had conclusively determined that Frances was not a resident of Adam's household and, therefore, not an 'Insured' within the terms of the policy. The defendant submitted an affidavit by its attorney in support of the motion, which set forth a history of the prior litigation. The affidavit submitted by the plaintiff's attorney in opposition to the motion stated that the present action was based upon a different cause of action than that adjudicated in the prior litigation between the parties; that the household of Adam Selger consisted of premises on three acres of ground all one tract, upon which not only he, but his wife and son resided; and that an issue of fact existed as to the relationship between Adam and Frances Selger. The motion was argued before the same trial judge who had granted the defendant's motion for summary judgment in the prior action between the parties. The trial court denied the defendant's motion and the defendant appealed to the Appellate Division. The Appellate Division reversed the judgment and directed the entry of summary judgment in the defendant's favor, holding that the plaintiff was collaterally estopped from asserting that Frances was covered under the defendant's liability policy. The court concluded that the primary basis for the trial court's granting of summary judgment in the prior action between the parties was the finding that Kenneth was not a resident of Adam's household, and that the trial court's second finding that Kenneth's act was intentional and thus not covered by the policy was only an alternative determination. The court then stated (45 N.J.Super. 137, 131 A.2d 549):

'As to Frances, it is undisputed that at the time of the injury she occupied the same status as Kenneth, since she and her minor son were living together, apart from Adam. It necessarily follows that since Kenneth was held in the prior action not to be a 'resident of the household,' she, too, was not, within the intendment of the policy. Thus, Kenneth having been ruled not covered under the liability policy, neither was Frances.'

Plaintiff's principal contention is that the Appellate Division improperly applied the doctrine of collateral estoppel.

The doctrine of collateral estoppel or estoppel by judgment is an extension of the principle of Res adjudicata, but there is a fundamental distinction between the two principles which must be borne in mind. The distinction is stated in the much-cited case of City of Paterson v. Baker,51 N.J.Eq. 49, at page 53, 26 A. 324, at page 325 (Ch.1893), wherein the court said:

'There is a plain difference, resting on obvious considerations of justice, as was held in Cromwell v. Sac County, 94 U.S. 351, 24 L.Ed. 195, and again in Bissell v. Spring Valley Township, supra (124 U.S. 225 8 S.Ct. 495, 31 L.Ed. 411), between the effect of a judgment, as a final and conclusive determination of the rights of the parties, when it is set up in a second action resting on the same claim or demand on which the first was...