Analyzing an Assault or Battery Insurance Exclusion

Whether the assault or battery insurance exclusion applies depends upon the facts surrounding the injury rather than upon the theory of liability.

By Laurel E. Stevenson

Increasingly, attorneys for plaintiffs and defendants have to address insurance coverage issues when representing clients in a personal injury case. This article focuses on one coverage issue, the assault or battery exclusion, which often is found in commercial general liability policies insuring establishments such as restaurants, taverns, motels, theaters and schools. The Wisconsin Court of Appeals first approved the use of the assault and battery exclusion in 1994,¹ and the appellate court recently expanded the exclusion's application where it is alleged that an entity violated the safe place statute.²

In evaluating whether the assault or battery exclusion applies, attorneys must focus upon the facts surrounding the injury rather than upon the theory of liability. Even if the complaint does not allege assault or battery, the exclusion may apply.

Trigger of Coverage

In determining whether a claim will be covered or excluded under a commercial general liability policy, certain policy terms must be applied to the facts of the situation. The standard commercial general liability form obligates the insurer to pay sums that "the insured becomes legally obligated to pay because of 'bodily injury' or 'property damage' to which this insurance applies." In situations where it is alleged that a person was injured at the hands of another, insurers may take the position that they are relieved of any duty to defend or indemnify the insured because the assault or battery exclusion applies. Appellate courts nationwide have upheld the use of an assault or battery exclusion in two primary situations: when an employee causes injury to a patron ³; and when a patron is assaulted by another patron or a nonemployee.⁴

To avoid the application of the assault or battery exclusion, attorneys may assert claims of negligent hiring, training and supervision instead of an intentional tort claim. A claim of negligence is not a trigger of coverage under a commercial general liability policy, and the standard policy does not use the word "negligence." The standard policy states that the injury must be caused by an "occurrence," which is defined as an "accident, including continuous or repeated exposure to substantially the same general harmful conditions." In Bertler v. Employers Ins. of Wausau the court stated: "The coverage granted an insured under forms of public liability insurance depends on the insuring agreements, exclusions and conditions of the policy purchased by him, but it may well not be coextensive with his legal liability to respond to damages on every occasion." ⁵Several courts have held that the assault or battery exclusion precludes claims for negligent hiring, training and supervision claims asserted against the entity or employer.⁶

Focus on the Facts

In evaluating whether the assault or battery exclusion applies, attorneys must focus upon the facts surrounding the injury rather than upon the theory of liability. ⁷ Even if the complaint does not allege assault or battery, the exclusion may apply. For example, suppose a patron is knocked off a chair in a tavern and sues the tavern on the basis that it was negligent in failing to secure the patron's safety. Although the complaint does not allege that the patron was assaulted or battered, the assault or battery exclusion could operate to bar coverage for this claim.

In the Wisconsin case of Berg v. Schultz, Berg was assaulted by another patron at Schultz's bar. Berg sued Schultz, claiming that Schultz breached his duty to protect him. Schultz had a commercial general liability policy with Summit Fidelity that included the following endorsement:

• This insurance does not apply to 'bodily injury' or 'property damage' or 'personal injury' arising out of Assault and/or Battery.
  
  
• Definition: Assault: An apparently violent attempt or willful offer with force or violence to do hurt to another without the actual doing of the hurt threatened.
  
  
• Battery: The act of battering or beating.
  
  
• Assault & Battery: Shall be deemed to include the forcible ejection or exclusion or attempt thereof of any person or persons from the premises by the Named Insured, their employees or agents.⁸

The Berg court concluded that the assault or battery exclusion was unambiguous and applied to "any damages arising out of assault or battery committed by anyone." ⁹ The court held that the exclusion applied to plaintiff's claim of negligence, noting that the focus must be "on the incident or injury that gives rise to the claim, not the plaintiff's theory of recovery."¹⁰

The Berg court also addressed the argument that the assault or battery exclusion applied only to incidents by the named insured and its employees, and not to incidents between patrons. The court rejected that argument, stating:

"The parties both contracted to this insurance policy with this exclusion clearly defined. We will not rewrite this insurance contract to insure a risk that was not intended by the parties and that would have an unreasonable result." ¹¹

In reaching its decision in Berg, the court of appeals cited with approval the seminal case of St. Paul Surplus Lines Ins. Co. v. Dixon's. In St. Paul Gaylord Dean was beaten violently by unknown assailants in the parking lot of Dixon's, a tavern. Dean lapsed into a coma and eventually died. Dean's estate sued Dixon's for assault and battery and negligence. St. Paul commenced a declaratory judgment action contending the policy excluded coverage. The court rejected the argument that a question of fact existed, stating:

"Although the complaint charges Dixon's with negligence, [plaintiff's] injuries were caused directly by an assault and battery - he was struck from behind. The mere fact that Dixon's may have been negligent in allowing the assault and battery to occur does not avoid the effect of that exclusion."¹²

Courts in Minnesota and Iowa also have approved the use of an assault or battery exclusion. In Roloff v. Taste of Minnesota the Minnesota Court of Appeals concluded an assault or battery exclusion excluded coverage for a patron's claim that festival sponsors were negligent in providing security at a food festival. ¹³ The assault and battery exclusion at issue in Roloff stated, in part: "No coverage shall apply under this policy for any claim, demand or suit based on assault or battery."¹⁴ The Minnesota Court of Appeals chose not to distinguish between exclusion clauses using "based on" language and those using "arising out of" language stating: "The assault and battery exclusion unambiguously excludes coverage when a claim is causally related to an assault or battery." ¹⁵

The Iowa Supreme Court considered the applicability of an assault or battery exclusion in a case brought by a restaurant and lounge patron who was struck in the face with a glass beer pitcher.¹⁶ In concluding there was no coverage for the patron's claims of negligent hiring, training and supervision, and negligent use of glass pitchers, the court stated: "Although we require a narrow or restrictive construction of exclusion clauses in insurance policies, the claims against the Fieldhouse are clearly causally connected to the assault, thus triggering the exclusion." ¹⁷

Safe Place Violations

In Gilmore v. Westerman the Wisconsin Court of Appeals recently approved an insurance company's argument that not only does the assault or battery exclusion bar claims for negligence it also bars claims under the safe place statute. ¹⁸ Although the case was not published and cannot be cited as precedent, it is instructive on issues of coverage. The safe place statute, Wisconsin Statutes section 101.11(1), requires employers and owners of public buildings to use reasonable measures to keep the premises safe for employees and frequenters.

Gilmore was injured when he fell from the tavern's fire escape after a patron pushed him out the door. Gilmore sued the tavern owner, alleging that he and his agents were negligent for failing to protect him, and asserting that the railings on the fire escape did not meet building standards. There was no dispute that the railings failed to comply with the building codes, but whether the failure was the cause of Gilmore's injuries was disputed.

The trial court concluded that there was no coverage for Gilmore's claim of negligence, but there was coverage for his claim under the safe place statute. In finding there was no coverage for Gilmore's negligence claim, the trial court cited Berg v. Schultz. In finding coverage for Gilmore's safe place violation claim, the court said that because the jury found the tavern owner negligent in failing to keep the premises safe, there were two "concurrent causes" of Gilmore's injuries: the assault or battery and the violation of the safe place statute.

The Wisconsin Court of Appeals overturned the trial court's determination of coverage for the safe place violation, citing Smith v. State Farm Fire & Casualty Co. ¹⁹ In Smith an intoxicated snowmobile driver lost control, resulting in the death of a minor passenger. The driver's homeowner's policy excluded coverage for bodily injury arising out of the snowmobile's operation off an insured location. The child's mother argued that there was coverage for the driver's negligence in being intoxicated and in failing to put a helmet on the child because they were independent concurrent causes of the accident. The court of appeals rejected that argument, concluding that there would have been no injury without the operation of the snowmobile. Likewise, Gilmore would not have suffered injury had a patron not shoved him onto the fire escape. Thus, the safe place violation was not the concurrent cause of Gilmore's injuries.

Distinguishing the Expected or Intended Injury Exclusion

The standard commercial general liability form contains the following exclusion:

"This insurance does not apply to:

"a. Expected or Intended Injury

"'Bodily injury' or 'property damage' expected or intended from the standpoint of the insured. This exclusion does not apply to 'bodily injury' resulting from the use of reasonable force to protect persons or property."

In Pachuki v. Republic Ins. Co. the court said that there is no coverage under a commercial general liability policy if an insured acts with an intent or expectation that bodily injury will result, even though the resultant bodily injury is different in character or magnitude from that which was intended. ²⁰ Although Wisconsin courts have recognized intent as a matter of law in a few cases, no "bright-line" test applies. ²¹

When it is claimed that an employee was acting in self-defense in removing or striking a patron, there may be an assertion that the exception to the expected or intended injury exclusion brings the claim within coverage. The expected or intended injury exclusion does not apply to injuries inflicted in the course of a person using reasonable force to protect persons or property. Such exception does not appear in the assault or battery exclusion, though. In order to exclude coverage for injuries inflicted by someone acting in self-defense, an assault or battery exclusion may contain the following language:

"For purposes of this insurance, this term [assault and battery] includes assault and battery and specifically includes the ejection or exclusion with force or violence, or attempt thereof, of any person from the premises by the insured and his/her/its employees or agents."

Insurance companies recognize that certain establishments, particularly those selling alcohol, present a greater risk of altercations. To reduce the risk of exposure to claims and still be able to afford liability coverage for other actions, the assault or battery exclusion may eliminate coverage for injuries inflicted while a bouncer is ejecting someone from a bar, or for injuries sustained when a hotel owner removes someone from the premises.

Other Coverage Issues

Another issue that may arise when coverage is contested is that the exclusion relied upon by the insurer is ambiguous. Wisconsin courts have not found standard form insurance contracts unconscionable, but instead have applied general contract principles in construing insurance policies. ²² If an exclusionary clause is ambiguous, then it is to be strictly construed against the insurer. ²³ An unambiguous exclusion is interpreted as how it would be understood by "a reasonable person in the position of an insured." ²⁴ In defending a claim of ambiguity, an insurer may claim that because the form in question was approved by the Commissioner of Insurance, the court should conclude that it is not ambiguous. Section 631.20 of the Wisconsin Statutes requires most insurers to file their insurance forms for approval with the commissioner prior to use. There are several grounds on which a form may be disapproved, including that the language is "unnecessarily verbose or complex," or that the "benefits are too restricted to achieve the purposes for which the policy is sold."²⁵ Arguably, the commissioner's approval of an assault or battery exclusion shows that the commissioner did not find the form to be ambiguous or prejudicial.

An additional claim that an insured may make in a coverage dispute is that the exclusion violates the insured's reasonable expectations. In Shelly v. Moir the Wisconsin Court of Appeals addressed the issue of reasonable expectations, stating: "The intended role of the coverage should be kept in mind when construing policy language; the nature and purpose of the policy as a whole has an obvious bearing on the insured's reasonable expectations as to scope of coverage and on whether the risk involved was, or should have been, contemplated by the insurer in computing its rates." ²⁶ The Minnesota courts have not applied the reasonable expectations doctrine in the same manner as Wisconsin courts, but the Minnesota Court of Appeals considered the reasonable expectations doctrine in at least two cases involving an assault or battery exclusion. The Minnesota Court of Appeals refused to apply the doctrine of reasonable expectations in a 1987 case involving the interpretation of an assault or battery exclusion. ²⁷ More recently, the Minnesota court concluded that a trial court did not err in refusing to apply the doctrine in a case involving the assault or battery exclusion. ²⁸

Coverage Actions

There are numerous ways that an insurance company, a claimant or an insured may respond to the potential application of an assault or battery exclusion. Although this article does not address variations of the duty to defend or indemnify, attorneys should familiarize themselves with the fundamentals of coverage actions.

Laurel E. Stevenson, University of Missouri-Columbia 1989, is legal counsel for Capitol Indemnity Corp., a commercial lines insurance company in Madison, where she handles coverage and liability cases, employment issues and legislative and corporate matters. She is licensed to practice in Wisconsin, Iowa and Missouri.

In Wisconsin the duty of the insurance company to provide a defense to the insured is determined by the complaint, not extrinsic evidence. ²⁹ The insurer may conclude that the allegations in the complaint do not come within coverage, and will send the insured a letter disclaiming any duty to defend or indemnify. If coverage is questionable, the insurer may send the insured a reservation of rights letter under which the insurer provides a defense but reserves its right to disclaim coverage in whole or in part at a later time. In many cases involving a personal injury claim, the claimant will sue both the insured and the insurer because Wisconsin is a direct action state. When this occurs, the insurer may move to bifurcate the coverage issue, and the claimant's attorney may have to respond to two proceedings if the underlying case is not stayed or coverage is found. If the claimant only sues the insured, then the claimant's attorney may have to respond to a motion to intervene or to a declaratory judgment action. ³⁰

Conclusion

Although theories of liability are important when it comes to determining recovery for liability, such theories do not guarantee insurance coverage. Gilmore reinforces the holding of Berg v. Schultz that review of a coverage issue should be determined by the facts, not the theory of liability.

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Endnotes

¹ Berg v. Schultz, 190 Wis. 2d 190, 526 N.W.2d 781 (Ct. App. 1994).

² Gilmore v. Westerman, No. 95-1142 (Wis. Ct. App., Feb. 22, 1996).

³ Sphere Drake Ins. Co. v. Ross, 80 Ohio App. 506, 609 N.E.2d 1284 (1992); Sphere Drake Ins. Co. v. P.B.L. Entertainment Inc., 30 F.3d 21 (2d Cir. 1994); U.S. Underwriters Ins. Co. v. Val-Blue Corp., 85 N.Y.2d 821, 623 N.Y.S. 834 (N.Y. App. 1995).

⁴ Dynamic Cleaning v. First Fin. Ins. Co., 208 Ga. App. 184, 530 S.E.2d 33 (Ga. App. 1993); Essex Ins. Co. v. Fieldhouse Inc., 506 N.W.2d 772 (Iowa 1993); St. Paul Surplus Lines Ins. Co. v. 1401 Dixon's, 582 F. Supp. 865 (1984); Britamco Underwriters v. J.O.C. Enter. Inc., 252 Ill. App. 3d 96, 623 N.E.2d 1036 (1993).

⁵ Bertler v. Employers Ins. of Wausau, 86 Wis. 2d 13, 18, 271 N.W.2d 603 (1978).

⁶ Hernandez v. First Fin. Ins. Co., 106 Nev. 900, 802 P.2d 1278 (Nev. 1990); Sphere Drake Ins. Co. v. P.B.L. Entertainment Inc., 30 F.2d 31; U.S. Underwriters Ins. Co., 85 N.Y.2d 821.

⁷ Berg v. Schultz, 190 Wis. 2d 190, 526 N.W.2d 781.

⁸ Id. at 175, 526 N.W.2d at 782.

⁹ Id. at 179, 526 N.W.2d at 784.

¹⁰ Id. at 177, 526 N.W.2d at 783.

¹¹ Id. at 180, 526 N.W.2d at 785 (citation omitted).

¹² St. Paul Surplus Lines Inc., 582 F. Supp. at 867.

¹³ Roloff v. Taste of Minnesota, 488 N.W.2d 325 (Minn. App. 1992).

¹⁴ Id. at 326.

¹⁵ Id.

¹⁶ Essex Ins. Co. v. Fieldhouse Inc., 506 N.W.2d 772 (Iowa 1993).

¹⁷ Id. at 776.

¹⁸ Gilmore v. Westerman, No. 95-1142.

¹⁹ Smith v. State Farm Fire & Cas. Co., 192 Wis. 2d 322, 531 N.W.2d 376 (Ct. App. 1995).

²⁰ Pachuki v. Republic Ins. Co., 89 Wis. 2d 703, 278 N.W.2d 898 (Wis. 1975).

²¹ K.A.G. v. Sanford, 148 Wis. 2d 158, 165, 434 N.W.2d 790, 793 (Ct. App. 1988).

²² See Kremers Urban Co. v. American Importers Ins., 119 Wis. 2d 722, 351 N.W.2d 156 (1984); Kennedy v. Washington Nat'l Ins. Co., 136 Wis. 2d 425, 401 N.W.2d 842 (Ct. App. 1986).

²³ Limpert v. Smith, 56 Wis. 2d 932, 203 N.W.2d 29 (Wis. 1973).

²⁴ Parks v. Waffle, 138 Wis. 2d 70, 75, 405 N.W.2d 690, 692 (Ct. App. 1987).

²⁵ Wis. Stat. 631.20(2)1. and 3.

²⁶ Shelly v. Moir, 138 Wis. 2d 218, 221, 405 N.W.2d 737, 739 (Ct. App. 1987).

²⁷ Ross v. Minneapolis, 408 N.W.2d 910, rev. denied (Minn. App. 1987).

²⁸ Kabanuk Diversified Inv. Inc. v. Credit Gen. Ins. Co., 553 N.W.2d 65 (Minn. App. 1996).

²⁹ Grube v. Daun, 173 Wis. 2d 30, 496 N.W.2d 106 (Ct. App. 1992).

³⁰ Fire Ins. Exchange v. Basten, 195 Wis. 2d 260, 536 N.W.2d 150 (Ct. App. 1995), rev'd, 202 Wis. 2d 246, 549 N.W.2d 690 (Wis. 1996). The supreme court agreed with a ruling by the court of appeals that if insurance coverage is at issue and an interested party has not been named in the underlying suit, then coverage may be determined by either a bifurcated trial or a separate declaratory judgment action.

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