Vol. 70, No. 6, June
1997
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.
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. |