Insurer Faces Suit Over Boys ‘Engulfed’ by Fire

(CN) - An insurance company must defend a building against a lawsuit filed by two mothers whose sons were "engulfed by a fireball," the New Jersey Supreme Court ruled.

Moustafa Abouzaid and two other boys, Omar and Tarek Osman, were playing in the Abouzaid family's Bayonne, N.J., apartment when an oven pilot light ignited liquid paint thinner on the floor, causing a fire that trapped the boys.

"The mothers heard the explosion and saw their sons 'engulfed by a fireball,'" according to the ruling. "The flames injured the boys, but did not physically injure the women."

After the parents sued the building and its owners for negligent infliction of emotional distress, the building owners forwarded the complaint to their insurance company, Greater New York Mutual Insurance, and later filed a third-party complaint.

Eventually, the trial court granted the building's motion for summary judgment on the issue of coverage, declaring that the parents' complaint triggered Greater New York 's duty to defend and awarding the building more than $38,000 in fees and costs.

The appellate division reversed the decision regarding defense and counsel fees, and it directed the trial court to dismiss the third-party complaint with prejudice.

On June 21, the New Jersey Supreme Court reinstated the lower court's ruling.

"Because a Portee claim may, but need not, involve physical sequelae, such a claim is potentially, but not necessarily, covered by a 'bodily injury' provision," Justice Virginia Long wrote for unanimous court, referring to the 1980 case of Portee v. Jaffee, which established the elements of emotional distress based on witnessing an injury to a family member.

"In such circumstances, the burden of defense must be borne by the insurer until the question of physical injury clearly drops out of the case," Long added.

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