North Plainfield Bd. of Educ. v. Zurich American Ins. Co., No. 05-4398 (MLC), 2008 WL 2074013 (D.N.J. May 15, 2008)
Few courts have found what one court recently mischaracterized as the “knowing violation of rights of another” exclusion bars even a defense for otherwise potentially covered claims. The court found this exclusion evidenced an additional reason for not finding a defense due.
The court reasoned:
The “knowing violation of rights of another” exclusion states that Coverage B does not apply to “‘[p]ersonal and advertising injury’ caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict ‘personal and advertising injury’”. (Id.) To state a claim for tortious interference with prospective economic advantage, the plaintiff must show not only that he or she had a reasonable expectation of economic advantage, but also that the defendant acted with “malice”, which is defined as intentionally inflicting harm without justification or excuse. . . . See Printing Mart-Morristown, 563 A.2d at 37. . . . ([A]sserting that the Board (1) “willfully published statements”, (2) intended to blacken D & D's reputation, (3) “intentionally and deliberately interfered” with D & D's contracts, subcontracts, and relationship with the Surety, and intentionally interfered with D & D's prospective economic advantage).
Id. at *22.
The court presumes that all facts precisely asserted could only create liability in a manner which would involve the intent to inflict harm without justification or excuse. It is not evident, however, from the case cited under New Jersey law, that malice, as defined therein, is an essential element for recovery under an interference with prospective economic advantage count. It appears, rather, to be an added element which could enhance the damage award. Nor does the court look at other fact allegations which are sufficient to create liability under that count which would not require an intent to harm.
