Razor Wound Was Not Intentional Act And Arose Out Of “Use” Of Car

“Moral hazard” is a buzz-phrase of Law and Economics theory that describes what is believed to be a tendency for people to act more recklessly when they think they are covered by insurance. “Strategic behavior” is a close cousin, where people save themselves time or money by acting dangerously, figuring other people will be careful enough to keep everyone out of trouble.
In Higueros v. Caporaso, 2006 WL 156907 (N.J.Super.L. January 18, 2006), one suspects these theories, founded as they are on rationalism, are somewhat lacking to explain why the following happened. A Mr. Caporaso came back to a gas station to complete an inspection of his car. He was billed $9 for this last piece of the inspection. He objected, saying he had been told he would owe nothing. Mr. Gervasio, the owner of the station, then said he would remove the inspection sticker if payment was not made. Caporaso said to let his car be. Then Mr. Higueros, an employee of the station, came up and joined in the opinion that the sticker must be removed. Unfortunately, he was holding a razor scraper, and made a move toward the sticker with it. Mr. Caporaso tried to stop him, and in the ensuing scuffle Higueros wound up with a slashed abdomen. Higueros sued Caporaso, who then sued the gas station and Caporaso’s auto insurer, who denied coverage.
The court held that the insurer, National Continental, had a duty to defend and indemnify Caporaso. The insurer argued two reasons for non-coverage: the injury did not arise out of operation or use of the auto, and it was excluded by the intentional acts exclusion. The court found that the fight didn’t constitute operation of the car, but it did stem from the use of the car. The court also disagreed with the insurer about the intentional act exclusion. Although Caporaso intended to stop Higueros, he did not intend to cut him with a razor blade, because it was Higueros who actually held the razor scraper.

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Filed under Duty to Defend, Duty to Indemnify

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