Assault and/or Battery Exclusions - Is the Chain of Events "Immediate and Direct?"

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Any regular reader has seen a number of articles here regarding assault and/or battery exclusions of insurance policies. These exclusions are commonly part of commercial general liability (“CGL”) and liquor liability coverages.

Any regular reader has seen a number of articles here regarding assault and/or battery exclusions of insurance policies. These exclusions are commonly part of commercial general liability (“CGL”) and liquor liability coverages. The United States District Court again analyzed such an exclusion with a particular focus on the relationship between the assault and battery and the ultimate injury. Scottsdale Insurance Company v. GS Thadius LLC d/b/a The Bar, et al 2018 WL 3222998 (July 2, 2018).

Not surprisingly, the cases resulting in the court’s interpretation of assault and/or battery exclusions are commonly those wherein an insurer seeks a declaratory judgment that it has no duty to defend or indemnity an insured in an underlying case based on the exclusion. And, the underlying cases often arise from unfortunate events leading to tragic results. Thadius is no different. Here, there was a fight in the parking lot of the Sandy Monkey, one of the bar Defendants in this action. Michael Jason Dunn, the decedent, tried to act as a peacemaker and was knocked unconscious, left motionless in the parking lot. Janelle Castillo, who had allegedly been drinking heavily at Defendants’ bars prior to the incident, was sitting in her SUV while the battle ensued. Castillo’s boyfriend, a direct participant in the fight, got into her SUV, and as she drove them away from the fight, she drove over decedent, causing severe injuries that lead to his death. The decedent’s estate brought an action in State Court against Castillo and the bars alleging, among other things, wrongful death, survival and dram shop liability. Scottsdale brought this declaratory judgment action in District Court and following hearings on cross motions summary judgment, the court found Scottsdale had no duty to defend, and thus no duty to indemnify, based upon the assault and/or battery exclusions of the policies it issued to the Sandy Monkey and The Bar.

The court engaged in a thorough examination of the law applicable to the policies in question. Adhering to well established precedent, the court, articulating that insurance policies are subject to the general rules of contract construction, reminded that policies are to be liberally construed in favor of the insured and strictly against the insurer. The court also remained mindful that an insurer’s duty to defend is triggered by any substantive claim alleged in the underlying complaint that creates even the possibility of coverage.            

The exclusions at issue, standard to policies, read in part, as follows:

                             This insurance does not apply to “injury,” “bodily

                             injury,”….arising from: 1. Assault and/or Battery

                             committed by any insured, any employee/”employee”

                             of any insured, or any other person: 2. The attempt

                             or failure to suppress or prevent Assault and/or Battery

                             by any person in 1. above; 3. The selling, serving or

                             furnishing of alcoholic beverages which results in an

                             Assault and/or Battery.

With the underlying complaint in focus, the court turned to the motions for summary judgment that centered around the phrase “arising from” as used in the exclusions.

“Arising from” was not defined in the policies. Thus, it must be defined pursuant to the usual understanding of the term by the ordinary person. Looking to an earlier interpretation of the similar phrase ‘arising out of’ by the South Carolina Supreme Court, the court applied the same construction, concluding it equates to ‘caused by.’ The applicability of the language was complicated here because, arguably, there was more than one cause of decedent’s injuries. This lead the court to its next step of examining the relationship between the assault and battery and those injuries. 

The court turned again to the underlying complaint, as a result of which it could not ignore the original brawl. As a result, the court then had to determine whether there was an “immediate and direct” link between the initial assault and decedent’s injuries. The complaint alleged Castillo was driving away from the fight with her boyfriend, who had been a direct participant. Consequently, the complaint established decedent’s injuries resulted from him being knocked unconscious as a result of the fight, Castillo ran over him while fleeing from the fight, at the direction of and with her boyfriend who was a direct participant in the fight. While there was no argument that Castillo’s conduct or state of mind rose to the level of assault and/or battery, her actions were not isolated nor independent of the brawl that led to decedent being knocked unconscious. Instead, the well plead allegations of the complaint demonstrated Castillo’s involvement, in some manner, in the fight, thereby establishing an immediate and direct relationship between the assault and battery and the ultimate injury to decedent. The court concluded decedent’s injuries resulted from an assault and/or battery as contemplated in the policy exclusion.

Assault and/or battery exclusions, by their nature, are often examined in light of events just as unfortunate as here. Despite the often tragic results, however, the court is limited to the interpretation of the contract between the insured and the insurer, regardless of its ‘wisdom or folly.’ Citing to other cases in this jurisdiction as well as a case from another district found persuasive by the court, the applicability of assault and/or battery exclusions continues to lean toward a ‘but for’ standard. If an assault and/or battery triggered the sequence of events that ultimately led to injury, the typical exclusion will likely be determined applicable.

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Cheryl D. Shoun is a trial attorney and certified mediator whose experience includes construction law, insurance defense, personal injury defense, employment litigation and medical malpractice. As a frequent writer, she serves as editor for Nexsen Pruet's TIPS: Torts, Insurance and Products Blog.