White Pine denied coverage based on the policy's assault and battery exclusion.

The insurer asked a federal district court in Pennsylvania to declare that it had no duty to defend or indemnify Bala.

White Pine moved for summary judgment. White Pine relied on the assault and battery exclusion in its policy to argue that it did not owe a duty to defend Bala because the facts alleged and the claims pleaded against it fell within the exclusion.

For its part, Bala disagreed and argued that at least some of the claims or theories of liability alleged against it, such as negligence, fell outside the exclusion and within the four corners of the policy's scope of coverage.

The White Pine Policy

The White Pine policy provided:

This insurance does not apply to "bodily injury" . . . arising out of or resulting from:

1. "Assault", "Battery", or "Assault and Battery" committed by any person;

2. The failure to suppress or prevent "Assault", "Battery", or "Assault and Battery" by any person;

3. The failure to provide an environment safe from "Assault", "Battery", or "Assault and Battery":

4. The failure to warn of the dangers of the environment which could contribute to "Assault", "Battery", or "Assault and Battery";

5. "Assault", "Battery", or "Assault and Battery" arising out of the negligent hiring, supervision, or training of any person;

6. The use of any force to protect persons or property whether or not the "bodily injury" or "property damage" or "personal and advertising injury" was intended from the standpoint of the insured or committed by or at the direction of the insured. 

The policy also stated:

"Assault" means:

a. an act creating an apprehension in another of immediate harmful or offensive contact, or

b. an attempt to commit a "Battery".

"Battery" means an act which brings about harmful or offensive contact to another or anything connected to another.

"Assault and Battery" means the combination of an "Assault" and a "Battery." 

The district court granted the motion.

In its decision, the district court found that the assault and battery exclusion was "unambiguous" and excluded coverage "not only for claims arising directly out of an assault and/or battery," but also for claims premised on an insured's "failure to suppress or prevent" such an assault or battery or "failure to provide an environment safe from" an assault or battery.

Moreover, the district court continued, the exclusion also expressly excluded coverage for an action alleging an assault and battery "arising out of the negligent hiring, supervision, or training of any person."

The district court acknowledged that Mr. Smithwick's lawsuit "artfully" had not specifically asserted that his injury had been the result of an assault and battery. The district court added, however, that the complaint asserted that Mr. Smithwick had been "shot by an unknown person" while he was in Bala's rear parking lot and that Mr. Smithwick's injuries had been "negligently caused by [Bala's] actions and/or inactions."

According to the district court, Mr. Smithwick's references to and characterization of his claims as negligence did not render the assault and battery exclusion inapplicable. It was the "factual allegations" that created a duty to defend, not the recitation of any magical language related to concepts of negligence.

In any event, the district court concluded, all of Mr. Smithwick's allegations against Bala went to Bala's alleged acts or omissions in failing to prevent or suppress the shooting (an assault) that had occurred, allegations that "clearly" fell within the portion of the assault and battery exclusion that expressly precluded coverage for the insureds' alleged "failure to suppress or prevent" an assault or "failure to provide an environment safe from" assault.

Accordingly, the district court concluded, applying the assault and battery exclusion to the allegations in Mr. Smithwick's lawsuit against Bala, the exclusion applied and White Pine did not have a duty to defend or indemnify Bala.

The case is White Pine Ins. Co. v. Bala Inn, Inc., No. 17-2789 (E.D. Pa. March 2, 2018).

FC&S Legal Comment

Other courts applying Pennsylvania law also have held that an insurer did not have a duty to defend an insured based on an assault and battery exclusion even if the third-party complaint included claims of negligence in failing to prevent the underlying assault and battery. See, e.g., Markel Int'l Ins. Co. v. 2421 Salam, Inc., Nos. 08-1052, 08-2484 (E.D. Pa. Mar. 31, 2009) (collecting cases); Essex Ins. Co. v. Quick Stop mart, Inc., No. 07-CV-1909 (E.D. Pa. Mar. 16, 2009); Alea London Ltd. v. 65 Bog Inc., No. 05-1046 (E.D. Pa. Apr. 19, 2006); Market Int'l Ins.Co. v. Banks Mgmt. Co., No. 04-CV-1549 (E.D. Pa. July 6, 2005); Cho, 917 F. Supp. 353 ("That [defendant] may have been negligent in not preventing the injuries does not take this case out of the assault and battery exclusion."); Terra Nova Ins. Co. v. Thee Kandy Store, Inc., 679 F. Supp. 476 (E.D. Pa. 1988) ("Although [the plaintiff] claims that the defendants in his Common Pleas action were negligent in preventing the assault and battery, this allegation is not sufficient to avoid a properly executed assault and battery exclusion. Regardless of the language of the allegations, the original cause of the harm arose from an alleged assault and battery."); St. Paul Surplus Lines Ins. Co. v. 1401 Dixon's Inc., 582 F. Supp. 865 (E.D. Pa. 1984).

For example, in Alea London Limited v. 65 Bog Inc., the district court granted an insurer's motion for judgment on the pleadings in a declaratory judgment action because it found that the relevant policy's assault and battery exclusion unambiguously precluded coverage in the underlying tort lawsuit.

In the underlying suit, which related to a shooting by an assailant at a tavern, the insured tavern owner was accused of many forms of negligence: failure to properly supervise the premises; failure to supervise or adequately regulate the conduct of individuals present; failure to warn of the presence of dangerous individuals; failure to post sufficient security personnel; failure to enforce policies regarding the physical removal of dangerous individuals; and failure to provide adequate security.

The district court found that these allegations claimed acts or omissions by the insured tavern owner in failing to prevent or suppress the assault that formed the basis of the underlying lawsuit. The district court concluded that policy language excluding "any act or omission in connection with prevention or suppression of an assault and battery, committed by any insured or an employee or agent of the insured" covered allegations that the insured was negligent for failing to suppress or prevent the assault.

The district court ruled, therefore, that the insurer had no duty to defend or indemnify the insured in the underlying action, and granted judgment for the insurer.