Citation Numbers: 210 N.J. 512, 46 A.3d 525
Judges: Patterson
Filed Date: 6/28/2012
Status: Precedential
Modified Date: 7/25/2022
delivered the opinion of the Court.
This insurance coverage dispute requires the Court to construe two insurance policies in litigation arising from the illegal harvesting of human remains. Plaintiffs Memorial Properties, LLC (Memorial) and Mount Hebron Cemetery Association (Mt. He-bron) are respectively the manager and owner of Liberty Grove Memorial Gardens (Liberty Grove), a New Jersey cemetery and crematory. Mt. Hebron was sued in 2007 and 2008 in seven lawsuits in the Superior Court of New Jersey and the Supreme Court of New York by family members of decedents whose remains were sent by funeral directors to Liberty Grove for cremation in 2003, 2004 and 2005. The New Jersey and New York plaintiffs alleged that prior to being sent to Liberty Grove, the decedents’ bodies were unlawfully dissected, and that tissue, bone and organs were removed for commercial sale. The families contend that they did not discover the illegal harvesting scheme until 2006, when law enforcement officials who investigated and prosecuted the perpetrators advised them that their relatives’ body parts had been illegally harvested.
Memorial and Mt. Hebron contend that they received the decedents’ remains in closed containers and were unaware that the
This appeal arises from Memorial’s and Mt. Hebron’s pursuit of a defense and indemnification with respect to the New Jersey and New York litigation, under two insurance policies. The first policy, issued by Assurance Company of America (Assurance), provided coverage for the year 2003 for claims arising from damage to human remains and bodily injury, including mental anguish. The second, issued by Maryland Casualty Company (Maryland), provided analogous coverage for the year 2006, but contained an “improper handling” exclusionary clause, barring coverage for bodily injury or property damage arising from specified acts and omissions including “[fjailure to bury, cremate or properly dispose of a ‘deceased body.’” The insureds sought a declaratory judgment requiring Assurance and Maryland to defend and indemnify them in the New Jersey and New York lawsuits. The trial court granted summary judgment in favor of the defendant insurers, holding that neither insurance policy provided the coverage sought, and the Appellate Division affirmed.
We granted certification and now affirm. We hold that neither policy covers the claims asserted in the New Jersey and New York litigation against Memorial and Mt. Hebron. The Assurance policy does not cover the claims at issue because the New Jersey and New York plaintiffs seek damages for emotional distress resulting from their discovery in 2006 that their relatives’ body parts had been illegally harvested. Accordingly, the relevant “occurrence” took place in 2006, outside of the policy period during which Assurance provided coverage to Memorial and Mt. Hebron. Additionally, the Maryland policy, which did provide coverage for 2006, included an “improper handling” exclusionary clause that clearly encompassed the relevant claims. Accordingly, the deelar-
I.
The medical procedure known as allograft—the harvesting of human tissue, bone and organs from human bodies for transplant into living patients—may be conducted lawfully in New Jersey pursuant to the Revised Uniform Anatomical Gift Act, N.J.S.A. 26:6-77 to -96, and, prior to 2008, pursuant to the Uniform Anatomical Gift Act, N.J.S.A. 26:6-57 to -65 (repealed 2008).
According to complaints filed by New Jersey and New York families of decedents whose remains were harvested, Michael Mastromarino, a New Jersey dentist, and Joseph Nicelli, a New Jersey “master embalmer,” developed their plan to illegally obtain and sell body parts in about 2000. The plaintiffs allege that Mastromarino, Nicelli and their business, Biomedical Tissue Services, Ltd. (BMS), worked in conjunction with funeral homes and crematories to obtain access to human remains in those entities’ custody. The families allege that following the deaths of them relatives on various dates in 2008, 2004 and 2005, Mastromarino and Nicelli extracted tissue, bones and organs from the remains without authorization, sometimes replacing harvested bone with polyvinyl chloride (PVC) piping so that the bodies would appear intact. They contend that Mastromarino and Nicelli falsified decedents’ medical and funeral records to conceal the illegal
Memorial and Mt. Hebron consistently have denied involvement in the harvesting scheme. Their representatives certified that, when they received bodies from funeral directors for cremation, the remains were already in sealed containers that were not opened by Memorial and Mt. Hebron prior to cremation, and that documentation accompanying the remains appeared proper. According to Memorial and Mt. Hebron, they first learned of the illegal harvesting when they were contacted by New York law enforcement authorities in 2005. They represented that they fully cooperated with law enforcement, and they were never charged with illegal activity in the criminal investigation of Mastromarino, Nieelli and the funeral directors alleged to have provided them with human remains.
Mt. Hebron, doing business as Liberty Grove, was named as a defendant in seven complaints, three filed in New Jersey and four in New York, along with Mastromarino, Nieelli, BMS and various funeral directors. The claims asserted against Liberty Grove in two of the three New Jersey cases were dismissed early in the litigation. In the remaining New Jersey case, brought by the family of a decedent who died in 2003, the plaintiffs filed a complaint against Liberty Grove alleging civil conspiracy, negligence, negligent infliction of emotional distress, breach of fiduciary duty, a violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -195, intentional and negligent misrepresentation, and common law fraud, and sought punitive damages. The New York complaints, brought by families of decedents who died in 2003, 2004 and 2005, allege a “common undertaking” by all defendants. The plaintiffs sought to recover for negligence, intentional and
In accordance with an Insuring Agreement that governed the Assurance and Maryland insurance policies, both policies provided coverage for “bodily injury” and “property damage.”
(1) bodily injury (including mental anguish) or property damage to which this insurance applies arising out of any malpractice, error or mistake committed by your cemetery operations.
(2) mental anguish arising out of the performance or non-performance of any contract made in the usual course of your cemetery operations for the care, burial or other disposition of a deceased human body, the conduct of memorial services or the transportation of a deceased human body by another, excluding, however, any specific agreement to pay for such mental anguish.
(3) property damage to deceased human bodies, the clothing or other personal effects or cremated remains, or to urns, caskets, cases, crypts, mausoleums or other property used for the care and burial of a deceased human body, owned by others and in your care, custody or control for the purpose of caring for or bulling of a deceased human body.
The definition of “deceased human body” in the Assurance policy included “ashes of a deceased human body ... and any part of a human body severed therefrom.”
During the policy period of the Maryland policy, December 23, 2005, to December 23, 2006, all of the New Jersey and New York
(1) Failure to bury, cremate or properly dispose of a “deceased body” by any insured or anyone for whom the insured is legally responsible;
(2) Disarticulation of any part or parts from a “deceased body” by any insured or anyone for whom the insured is legally responsible;
(3) Distribution, sale, loaning, donating or giving away any part or parts of a “deceased body” by any insured or anyone for whom the insured is legally responsible;
(4) Any criminal act or other act prohibited by any law or ordinance committed by any insured or anyone for whom the insured is legally responsible regardless of whether there has been a criminal conviction or other adjudication or administrative ruling.
In 2008, Memorial and Mt. Hebron demanded that Assurance and Maryland defend and indemnify them in several of the New York and New Jersey cases. Assurance declined coverage on the ground that the occurrences were outside of the policy period, invoking plaintiffs’ claims that they learned of the harvesting scheme in 2006. Maryland declined coverage, citing the “improper handling” exclusionary clause in its 2006 policy. The coverage dispute between Memorial and Mt. Hebron and the insurers gave rise to this litigation.
II.
Memorial and Mt. Hebron filed a declaratory judgment action on May 14, 2008, naming as defendants Assurance, Maryland and Zurich North American Insurance Company (Zurich), and demanding defense and indemnification.
Memorial and Mt. Hebron filed a second motion for summary judgment, and filed a Second Amended Complaint in the trial court seeking a declaratory judgment ordering Maryland to defend and indemnify them in all seven of the family members’ complaints pending in the courts of New Jersey and New York. Defendants cross-moved for summary judgment. In the cross-motions, the parties disputed the import of the “improper handling” exclusionary clause language in the Cemetery Professional Liability endorsement issued by Maryland for the 2006 policy period. Memorial and Mt. Hebron argued that the negligence claims asserted in the underlying litigation fell outside of the “improper handling” exclusionary clause, and that Maryland was therefore required to defend and indemnify Memorial and Mt. Hebron in all seven eases filed in New Jersey and New York. Maryland and the other insurers argued that the “improper handling” exclusionary clause encompassed all of the allegations against Memorial and Mt. Hebron in the seven complaints.
The trial court agreed with Maryland, ruling that although Memorial and Mt. Hebron were not alleged to have conducted the illegal harvesting, they were alleged to have “negligently cared for
An Appellate Division panel affirmed both of the trial court’s orders granting the summary judgment motions filed by Assurance and Maryland. The panel held that Memorial and Mt. Hebron were not covered by the Assurance policy, because the “occurrence” for purposes of the policy “is not the time the wrongful act was committed but the time when the complaining party was actually damaged.” The panel construed the claims of the decedents’ family members to be rooted in “the harm to ‘the personal feelings of the survivors,”’ and accordingly concluded that the “occurrence” took place in 2006-outside of the policy period governing the Assurance policy.
The Appellate Division panel also affirmed the trial court’s grant of summary judgment with respect to the Maryland policy. It found the New Jersey and New York claims brought by the family members of decedents to “stem[j directly” from conduct described in the “improper handling” exclusionary clause in the Maryland policy, and that the trial court properly held that Memorial and Mt. Hebron were not covered by the Maryland policy. We granted certification, 207 N.J. 188, 23 A.3d 413 (2011).
III.
Memorial and Mt. Hebron contend that the Assurance policy requires Assurance to defend and indemnify them for claims asserted by the family members of decedents whose remains were illegally harvested in 2003. They contend that when the remains of the decedents were tampered with that year, both the acts giving rise to liability and the consequent damage occurred. Memorial and Mt. Hebron argue that any claim by the New
Assurance and Maryland argue that the New Jersey and New York claims sought damages for emotional distress, not for property damage. They contend that the operative “occurrence” was the discovery of the illegal harvesting of body parts in 2006, not the actual harvesting in 2003, and that the allegations arose from an “occurrence” outside the policy period of the Assurance coverage. Assurance and Maryland claim that the “improper handling” exclusionary clause in the Maryland policy includes both negligence and non-negligence claims asserted against Mt. Hebron and Liberty Grove. They claim that because all of the New Jersey and New York plaintiffs’ claims are premised on a “failure to bury, cremate or properly dispose of a ‘deceased body,’ ” the Appellate Division correctly applied that exclusionary clause to the entire litigation brought by the families of the affected decedents.
IV.
Reviewing the trial court’s grant of summary judgment, we “ ‘employ the same standard [of review] that governs the trial court.’ ” Henry v. N.J. Dep’t of Human Servs., 204 N.J. 320, 330, 9 A.3d 882 (2010) (quoting Busciglio v. DellaFave, 366 N.J.Super. 135, 139, 840 A.2d 897 (App.Div.2004)). We must view the evidence in the light most favorable to the non-moving party and analyze whether the moving party was entitled to judgment as a matter of law. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523, 666 A.2d 146 (1995).
We construe the Assurance policy in accordance with those principles.
Other eases interpreting the definition of “occurrence,” analogous to the definition in the Assurance policy at issue here, have similarly determined that an “occurrence” takes place when the
In the sole New Jersey case filed against Mt. Hebron in which the harvesting occurred in 2003, the decedent’s surviving spouse seeks damages for “severe pain and suffering, severe emotional distress and harm, [and] financial or economic loss,” including lost wages. Her alleged damages derive from her distress upon learning of the unauthorized harvesting of her husband’s tissue, bones and organs, and not from a purported cause of action based on property damage to her decedent’s remains. Accordingly, in the New Jersey case in which the harvesting took place in 2003, the “occurrence” was the plaintiff-spouse’s alleged emotional distress upon discovery of the harvesting scheme in a 2006 conversation with law enforcement, and her claim falls outside of the policy period set forth in the Assurance policy.
Even when a survivor is recognized to have a quasi-property right in the disposition of a decedent’s remains, the damages available for a violation of that right derive from the wrongful infliction of emotional harm. See Strachan v. John F. Kennedy Mem’l Hosp., 109 N.J. 523, 531, 538 A.2d 346 (1988) (recognizing quasi-property right to proper burial, and allowing for recovery of damages based on emotional distress); Spiegel v. Evergreen Cemetery Co., 117 N.J.L. 90, 93, 186 A. 585 (Sup.Ct. 1936) (recognizing right to bury dead as quasi-property right, and
The claims brought by two New York families whose decedents’ remains were illegally dissected in 2003 also fall outside the Assurance policy period. The damages claimed are described only generally in the families’ complaints, but they would similarly derive from the survivors’ belated discovery, in 2006, of the harvesting activity that had occurred years before, and their emotional distress as a result of that discovery. Under New York law, the family of a deceased person whose remains are mishandled can assert a cause of action for emotional distress. See, e.g., Dixon v. City of New York, 76 A.D.3d 1043, 908 N.Y.S.2d 433, 433 (2010). New York also recognizes a “right of sepulcher,” derived from “[t]he ancient concept that every person is entitled to a proper burial.” Melfi v. Mount Sinai Hosp., 64 A.D.3d 26, 877 N.Y.S.2d 300, 305 (2009). As one court explained:
[W]e find that for a right of sepulcher claim to accrue (1) there must be interference with the next of kin’s immediate possession of decedent’s body and (2) the interference has caused mental anguish, which is generally presumed. Interference can arise either by unauthorized autopsy or by disposing of the remains inadvertently or, as in this case, by failure to notify the next of kin of the death. The next of kin’s mental anguish in these situations is then generally presumed but, in any event, cannot be felt until the next of kin is aware of the interference with his/her right of possession of the loved one’s body for burial.
[Id. at 309 (internal citations omitted).]
Like emotional distress damages, damages for violation of the right of sepulcher are rooted in the harm suffered by a family member who becomes aware that his or her decedent’s remains have been tampered with or disposed of without permission.
Accordingly, the “occurrence” relating to the New Jersey and New York plaintiffs’ causes of action took place when they learned of the harvesting of their decedents’ body parts in 2006, not in 2003 when that harvesting took place. The trial court properly determined that Memorial and Mt. Hebron were not entitled to coverage under the Assurance policy.
The Maryland policy, in effect in 2006, raises a separate issue. Its exclusionary clause disclaimed coverage for claims based upon such activities conducted “by any insured or anyone for whom the insured is legally responsible” including “disarticulation” of body parts from a deceased body, “distribution, sale, loaning, donating or giving away” parts of a deceased body, and any criminal act. The parties dispute the impact of the exclusionary clause upon the claims at issue here.
Exclusionary clauses are presumed valid if they are “‘specific, plain, clear, prominent and not contrary to public policy.’ ” Princeton Ins. Co. v. Chunmuang, 151 N.J. 80, 95, 698 A.2d 9 (1997) (quoting Doto, supra, 140 N.J. at 559, 659 A.2d 1371). They are typically construed narrowly with the onus “ ‘on the insurer to bring the case within the exclusion.’ ” Flomerfelt, supra, 202 N.J. at 442, 997 A.2d 991 (quoting Am. Motorists Ins. Co. v. L-C-A Sales Co., 155 N.J. 29, 41, 713 A.2d 1007 (1998)). If the terms used in an exclusionary clause are ambiguous, “courts apply the meaning that supports coverage rather than the one that limits it.” Ibid. However, “[i]f the words used in an exclusionary clause are clear and unambiguous, ‘a court should not engage in a strained construction to support the imposition of liability.’ ” Ibid. (quoting Longobardi v. Chubb Ins. Co. of N.J., 121 N.J. 530, 537, 582 A.2d 1257 (1990)); see also Cobra Prods., Inc. v. Fed. Ins. Co., 317 N.J.Super. 392, 400-01, 722 A.2d 545 (App.Div.1998) (noting that not every “far-fetched interpretation of a policy will be sufficient to create an ambiguity requiring coverage” (quotation omitted)), certif. denied, 160 N.J. 89, 733 A.2d 494 (1999).
The exclusionary clause in this case plainly encompasses all of the claims asserted against Memorial and Mt. Hebron. The conduct of which Mt. Hebron and Liberty Grove are accused— participation in a common undertaking to dissect and remove body parts from the decedents without legal authorization—falls squarely within the parameters of the clause. Notwithstanding the assertion by Memorial and Mt. Hebron that an unspecified
Memorial and Mt. Hebron contend that Maryland has a duty to defend both “covered and excluded theories of recovery.” The duty to defend and the duty to indemnify are distinct; an insurance company’s duty to defend “is neither identical nor coextensive” with its duty to indemnify. Flomerfelt, supra, 202 N.J. at 444, 997 A.2d 991. The duty to defend “comes into being when the complaint states a claim constituting a risk insured against.” Voorhees, supra, 128 N.J. at 173, 607 A.2d 1255 (quoting Danek v. Hommer, 28 N.J.Super. 68, 77, 100 A.2d 198 (App.Div.1953), aff'd o.b., 15 N.J. 573, 105 A.2d 677 (1954)). Even if the allegations, tested in discovery and at trial, turn out to be “groundless, false or fraudulent,” the insurer has a duty to defend. Ohio Cas. Ins. Co. v. Flanagin, 44 N.J. 504, 512, 210 A.2d 221 (1965). The duty to defend would thus be triggered by the presence of a covered claim in a complaint filed against the insured.
There is no such covered claim in this ease. The New Jersey and New York complaints allege that Mt. Hebron and Liberty Grove (1) knowingly allowed Mastromarino and others to have access to the decedents’ remains; and (2) were negligent in their care of the decedents’ remains, thus permitting those individuals to gain access to the remains. The first of those theories alleges an active role by Memorial and Mt. Hebron in the harvesting scheme, and therefore falls squarely within the parameters of the exclusionary clause. That cause of action is plainly excluded from coverage under the Maryland policy.
The second theory is similarly included within the exclusionary clause. Failure to take reasonable care to ensure that the decedents’ remains stayed intact until cremation, if proven, would
VI.
The trial court and Appellate Division properly held that neither the Assurance policy nor the Maryland policy requires the insurer to defend or indemnify Memorial and Mt. Hebron. The judgment of the Appellate Division is affirmed.
Chief Justice RABNER and Justices LaVECCHIA, ALBIN, and HOENS; and Judge WEFING (temporarily assigned) join in Justice PATTERSON’S opinion.
For affirmance—Chief Justice RABNER and Justices LaVECCHIA, ALBIN, HOENS, PATTERSON and Judge WEFING (temporarily assigned)—6.
Opposed—None.
The Revised Uniform Anatomical Gift Act sets forth the method by which a donor can make an "anatomical gift." N.J.S.A. 26:6-81. In cases in which a donor has not done so, the Act identifies the class of persons who can make an "anatomical gift" of the donor's remains. N.J.S.A. 26:6-85(a)(l). N.J.S.A. 26:6-58.5 was the sole provision of the Uniform Anatomical Gift Act that was amended and not repealed. L. 2008, c. 50, § 23.
Mastromarino pled guilty in New York and Pennsylvania and Nieelli pled guilty in New York to several crimes related to the body parts harvesting scheme. They were sentenced to prison terms.
Memorial is a named insured in the Assurance and Maryland policies, and the Mt. Hebron/Liberty Grove cemetery property is identified as a covered property in both policies.
In the answer filed on behalf of Assurance, Maryland and Zurich, their counsel identified Zurich as “merely a trade style that has been employed by [Maryland]." That assertion has not been disputed by Memorial or Mt. Hebron.
The parties acknowledge that New Jersey law governs the case.