Ambassador Insurance Co. v. Montes

Joseph Satkin (defendant) owned a wooden two-and-a-half-story duplex four-family house that was slated to be demolished due to its dangerous condition. Satkin had a general liability insurance policy with Ambassador Insurance Company (Ambassador) (plaintiff). Seeking to fraudulently recover under the policy, Satkin started a fire under the main stairwell of the home at 3 a.m., causing the death of four of the 11 to 14 residents. Satkin was tried and convicted of arson and felony murder. Rafael Montes (defendant) sued Satkin on behalf of the estate of Marilyn Ortega Perez, an infant who died in the fire. Ambassador refused to defend Satkin and sought a declaratory judgment releasing it from coverage. The policy, as introduced into evidence and relied upon by the supreme court, covered liability from an occurrence and had no exclusion for intentional acts. However, the definition section of the plan, which was submitted at oral argument before the supreme court, defined occurrence as an accident resulting in bodily injury that the insured neither expected nor intended. The trial court found in favor of Ambassador because it was reasonable to expect that people would be injured in the fire Satkin intentionally set. The appellate court reversed, noting that the policy did not exclude coverage for the consequences of intentional wrongdoing, but public policy prevented coverage for civil liability of one’s intentional wrongdoing. Applying tort definitions of intent, the appellate court found Satkin did not intend to kill anyone nor was it substantially certain to occur and therefore coverage was not excluded. The New Jersey Supreme Court granted certification.