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.
![](/SiteCollectionImages/WisconsinLawyer/1997/06/laurel.gif) |
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.
Wisconsin Lawyer