A Minnesota appeals court ruled that an assault was an intentional act, and thus excluded under a commercial general liability policy, in The Travelers Indemnity Co. v. Bloomington Steel & Supply Co., No. A04-1713, 2005 WL 1021654 (Minn. App. May 3, 2005).

 

The company where Jose Padilla worked shared space with Bloomington Steel, which was wholly owned by Cecil Reiners. Reiners and Padilla got into an argument, and Reiners was charged with first-degree assault after striking Padilla on the head with a two-by-four.

 

Padilla sued Bloomington and Reiners for assault and battery, respondeat superior, and negligent supervision and retention. Bloominton's CGL insurers, Travelers and Charter Oak Fire Insurance Company, defended Bloomington but reserved the right to deny coverage. The insurers sought a declaratory judgment stating that they had no obligation to provide coverage.

 

Bloomington's general liability and umbrella policies contained an exclusion for bodily injury that is “expected or intended from the standpoint of the insured.” The lower court used the following test to determine whether Reiners's actions were expected from Bloomington's standpoint.

 

For the purposes of an exclusionary clause in an insurance policy the word “expected” denotes that the actor knew or should have known that there was a substantial probability that certain consequences will result from his actions. Am. Family Mut. Ins. Co. v. M.B., 563 N.W.2d 326 (Minn. App. 1997).

 

Because Reiners had a history of violence on the job, including Padilla's allegations that Reiners was violent towards other employees and caused property damage, the lower court found that “Bloomington Steel knew or should have known that an assault was highly likely.”

 

The lower court further stated that “knowledge on the part of a company's sole owner, director, and operator of his own violent tendencies makes his own assault 'expected' under the Insurance Policy exclusion.”

 

The appeals court agreed. It also said that, given Reiners's long history of violent behavior, “Bloomington Steel's ongoing placement of Reiners in situations where that violence could be triggered was 'reckless.'” Thus, from the standpoint of Bloomington, and applying Minnesota law, the court said that the assault on Padilla was an expected act and that the insurers were not required to provide coverage.