A federal district court ruled that the corporate owner of a 7-Eleven is not owed a defense under either its CGL or its Liquor Liability policies in a lawsuit filed by a patron who was struck repeatedly by an employee while attempting to steal a beer. The case is RDY Store Inc. v. Westchester Surplus Lines Ins. Co., 2024 U.S. Dist. LEXIS 15348 (S.D. Fla. 2024).
The Underlying Incident
Alfredo Cardenas attempted to steal a beer from a 7-Eleven store in Florida. The employee on duty asked him to return the drink, but Cardenas refused, touching the employee’s face without permission. Fearing for his safety, the employee struck the back of Cardenas’s head with his fist as the man exited, and he continued to hit Cardenas until he fell unconscious. Cardenas later sued RDY Store Inc., the company that owned and operated the 7-Eleven, for “negligent hiring, training, and retention of the employee.”
The Insurance Policies
RDY had two insurance policies in effect when Cardenas filed suit: a CGL policy issued by Westchester Surplus Lines Insurance, and a liquor liability policy from Illinois Union Insurance. RDY requested a defense from both Westchester and Illinois Union (collectively, the Insurers), but both requests were denied. Westchester asserted a policy exclusion for assault or battery by an employee, and Illinois Union argued RDY’s claim wasn’t within the scope of liquor liability coverage.
RDY filed suit against the insurers and requested a judicial declaration that Westchester and Illinois Union were both obligated to provide a defense against Cardenas’s lawsuit. The insurers each filed a motion for summary judgment.
The Assault and Battery Exclusion
Westchester pointed to an exclusion in the CGL policy it had issued to RDY that expressly precluded “coverage for "bodily injury . . . arising out of assault or battery . . . by . . . any employee” (internal punctuation omitted). The policy stated that “assault” referred to “any attempted, threatened, intentional or voluntary act, whether or not provoked, which places another person in reasonable apprehension of immediate harmful or offensive contact or injury,” while “battery,” on the other hand, indicated an instance of assault that had actually involved “physical contact.”
According to the Insurers, the employee’s physical act of punching Cardenas in the head constituted “assault and battery.” Since there was no question of the employee’s employment status with RDY, the conduct fell squarely within the “assault and battery” exclusion, which precluded coverage for the suit.
RDY pointed to other cases where judges “have refused to apply assault and battery exclusions where the underlying complaints failed to allege intent.” The holdings of these cases, however, did not extend as far as RDY believed. Each one was based on a specific set of facts that included no allegations of intent whatsoever. The insurers also pointed out that the policies at issue in those specific cases had “incorporated more stringent state law definitions of ‘assault’ and ‘battery.’” The intent that mattered was the employee’s intent to make contact with Cardenas, “regardless of whether he intended to harm [him].”
RDY disagreed, and argued that, based on the plain language of the allegations in Cardenas’s suit, the assault and battery exclusion was inapplicable. Nowhere in the complaint was there a reference to the employee’s actual intent to hit Cardenas; it only stated that the employee had hit him “multiple times.” Since the Cardenas complaint did not specify intent on the part of the employee, it “[left] open the possibility that the employee struck Cardenas unintentionally or involuntarily, without intending to make contact at all” (emphasis added). If the employee had struck Cardenas unintentionally, then it may have led to a covered claim, and the insurers would likely be obligated to defend RDY. The judge acknowledged this fact, but also noted there was more to the story.
In the insurers’ earlier filings, they had included both an Incident Report submitted by RDY and an Arrest Affidavit related to the shoplifting incident. When determining the merits of a motion for summary judgment, judges may typically consider only the four corners of the complaint and the four corners of the insurance policy at issue, a theory commonly known as the “Eight Corners Rule.” However, there is a special exception for undisputed facts that, “had they been pled in the complaint…clearly would have placed the claims outside the scope of coverage” (emphasis added). The facts in the Report and Affidavit were not disputed by either party; they confirmed that the employee had confronted Cardenas before hitting the back of his head and continuing to hit him until he fell unconscious.
The policy definition for assault stated that it included “attempted, threatened, intentional or voluntary acts” (emphasis added) that made another person reasonably believe “harmful or offensive contact” was imminent. The bolded language indicated the intent to encompass “all offensive contact — other than completely involuntary acts” in the definition of “assault.” With this definition in mind, the employee’s alleged “intent” to hit Cardenas was evident from the Incident Report and Arrest Affidavit submitted by the insurers. These documents, as the court put it, “remove[d] any doubt as to whether [RDY’s] employee acted with intention.” Therefore, the employee’s actions fell within the “assault or battery” exclusion, and coverage was precluded for RDY against Cardenas’s lawsuit.
Even then, RDY argued, the employee was acting in self-defense; and when someone acts in self-defense, their “actions [are] neither ‘intentional’ nor ‘voluntary,’” thereby removing the barrier of the “assault or battery” exclusion. In Engle v. Isaac, 456 U.S. 107 (1982), the U.S. Supreme Court determined there was a viable claim that it was necessary for “the State to disprove self-defense where a crime requires a ‘voluntary’ mens rea” (italics original, bold added).
This argument fell short of convincing. First, the court said, the holding in Engle was irrelevant to determining a person’s intent in the context of private insurance. Second of all, there was an established precedent in Florida that “self-defense [was] not an exception to [an] intentional acts exclusion” (quoting State Farm Fire & Cas. Co. v. Marshall, 554 So. 2d 504 (Fla. 1989)). As the Fourth District Court of Appeals found in State Farm Fire & Cas. Co. v. Caldwell, 630 So. 2d 668 (Fla. Dist. Ct. App. 1994), “if one accepts the notion at all that it is reasonably necessary to strike an aggressor with force enough to break a nose and cheekbone, it is hardly acceptable to contend that an injury to the aggressor is not intended.” Even if RDY was correct, and the employee had only been defending himself, he still hit Cardenas so many times and with such force that Cardenas fell unconscious, an act that fell squarely within the CGL policy’s assault or battery exclusion.
What About Liquor Liability?
Since coverage from the CGL policy was excluded, RDY claimed its liquor liability policy from Illinois Union provided coverage because the employee’s alleged assault of Cardenas was “the direct result of selling, serving or furnishing of [an] alcoholic beverage”: Cardenas was in the process of stealing an alcoholic beverage–beer–from the 7-Eleven when the alleged assault occurred.
This argument, like those before it, was not persuasive. The insurers countered, and the court agreed, that the claims in Cardenas’s complaint “[were] not based on or tied to the particular item he may have been shopping for” when the employee hit him. If it had been a bag of chips or a can of soda in Cardenas’s hand instead of a bottle of beer, the analysis would be the same. The underlying suit had to be based on RDY’s potential liability for “selling, serving or furnishing [an] alcoholic beverage.”
The underlying lawsuit alleged RDY had been “negligent [in] hiring, training, and retain[ing]...[the] employee” (emphasis added). In order for a claim to fall within the scope of liquor liability coverage, it was necessary for the underlying suit to “allege facts that fairly and potentially bring the suit within policy coverage" (internal punctuation omitted). RDY’s argument did not do so and “attempt[ed] to stretch the Cardenas Complaint's allegations to include omitted, unsupported, or potential facts” in order to trigger coverage. Alcohol was not part of the underlying complaint’s theory of liability, so the liquor liability policy was inapplicable.
Conclusion
After reviewing the Incident Report and Arrest Affidavit, it was clear that, even if the employee had not intended harm to Cardenas, he had acted with the intent necessary to trigger application of the assault or battery exclusion. The liquor liability policy was wholly inapplicable because the underlying complaint made allegations that did not include liability based on the “selling, serving or furnishing [an] alcoholic beverage.”
The insurers’ motions for summary judgment were granted.
Editor’s Note: In this case, the employee’s “intent” to strike Cardenas may be interpreted as “hitting him on purpose.” It did not matter whether or not the employee feared for his own safety, or even whether the employee intended to cause harm. All that mattered, for the purpose of determining the applicability of the assault or battery exclusion in the CGL policy, was that the employee hit him “on purpose.”