An Insurance Company May Limit Coverage in any Manner
Alcoholic beverages tend to have an effect on the ability of those who consume it to lose their ability to control their tempers. People who work in bars to protect the patrons – called “bouncers” – face abuse from intoxicated patrons and have been known to lose their temper and causing injury to the patron while evicting him or her from the bar. Insurers, as a result of the known risk, are usually unwilling to insure a bar against the risks of loss as a result of an assault or battery. The language of the exclusions for such injuries are ubiquitous and have be interpreted by courts across the country to eliminate insurance coverage for the bar or its employees against charges of injury caused by an assault or a battery.
In Juan Mendez v. Evan Vincent, C.B., LLC, D/B/A Reggie’s And ABC Insurance Company, Court of Appeal of Louisiana, 2017 WL 1386397, NUMBER 2016 CA 1358 (APRIL 18, 2017) Menendez was thrown out of Reggie’s and injured. Because Louisiana law allows it he also sued the insurer for the bouncer and the bar. The insurer claimed it had no obligation to defend or indemnify the bar and its employee because of its policy wording excluding such losses.
Insurance covering such risks is available but at a fairly high premium. When a bar refuses to pay the extra cost of assault and battery coverage it gambles that it will not need it and will find itself uninsured if its employee injures a patron or other person.
Plaintiff, Juan Mendez, was involved in an altercation with Evan Vincent at Reggie’s, a bar located in Baton Rouge, Louisina. Vincent picked plaintiff up in the parking lot and forced him to the ground, injuring plaintiff. Police and paramedics arrived and charges were filed against Vincent who, however, was never prosecuted for the charges.
Plaintiff sued. In response the insurer defendant, Century, filed an answer and a motion for summary judgment. In its motion for summary judgment, Century contended that the altercation that occurred between plaintiff and Vincent was excluded from coverage under the assault-and-battery endorsement exclusion in the policy that Century had issued to Reggie’s.
Following a hearing on May 16, 2016, the trial court granted summary judgment in favor of Century, finding that the policy’s assault-and-battery exclusion precluded coverage for any damages arising from this incident.
An insurance policy is an agreement between the parties and should be construed according to general rules of contract interpretation as set forth in the Louisiana Civil Code. An insurance company may limit coverage in any manner, as long as the limitations do not conflict with statutory provisions or public policy.
The exclusionary provisions of an insurance contract are strictly construed against the insurer, and any ambiguity in the exclusion is construed in favor of the insured. The rules of construction, however, do not authorize a perversion of the words or the exercise of inventive powers to create an ambiguity where none exists or the making of a new contract when the terms express with sufficient clarity the parties’ intent.
The assault-and-battery exclusion, which is part of an endorsement to the Century CGL policy, provides: “1. This insurance does not apply to “bodily injury”, “property damage”, or “personal and advertising injury” arising out of or resulting from: ¶ (a) any actual, threatened or alleged assault or battery; ¶ (b)the failure of any insured or anyone else for whom any insured is or could be held legally liable to prevent or suppress any assault or battery; ¶ (c) the failure of any insured or anyone else for whom any insured is or could be held legally liable to render or secure medical treatment necessitated by any assault or battery…”
Plaintiff contends that the exclusion is ambiguous in that the exclusion does not specify that an assault or battery is excluded from coverage when it results from “the reasonable use of force to protect persons or property.” Plaintiff cited to another exclusion that provided: “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 Mattingly v. Sportsline, Inc., 98-230 (La. App. 5th Cir. 10/28/98), 720 So.2d 1227, 98-2938 (La. 1/29/99), 736 So. 2d 830, the plaintiff made an argument in favor of insurance coverage identical to the argument made by plaintiff which the court rejected (and the Louisiana Supreme Court denied writs).
The Court of Appeal found no merit to plaintiff’s arguments that coverage may exist if a trier of fact finds that Vincent was using reasonable force to protect the bar and its patrons when plaintiff was injured.
Applying plaintiff’s interpretation of the policy, and specifically the assault-and-battery exclusion, would allow a perversion of the words of the policy so as to create ambiguity where none exists.
Liability insurance companies issue contracts that promise to defend or indemnify the insured against contingent or unknown risks of accidental loss. An assault or a batter can never be “accidental” nor could such actions fit within the definition of “occurrence” in a CGL policy. Regardless of the creativity of Plaintiff’s counsel it was properly unable to create an ambiguity and find coverage for Vincent’s battery on the Plaintiff. The Plaintiff is not without a remedy, he may proceed against Vincent and Reggies who will now understand that it was better to pay for the coverage eliminating the exclusion.
This article and all of the blog posts on this site digests and summarize cases published by courts of the various states and the United States. The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 49 years in the insurance business.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Look to National Underwriter Company for the new Zalma Insurance Claims Library, at www.nationalunderwriter.com/ZalmaLibrary The new books are Insurance Law, Mold Claims Coverage Guide, Construction Defects Coverage Guide and Insurance Claims: A Comprehensive Guide
The American Bar Association, Tort & Insurance Practice Section has published Mr. Zalma’s book “The Insurance Fraud Deskbook” available at http://shop.americanbar.org/eBus/Store/ProductDetails.aspx?productId=214624, or 800-285-2221 which is presently available and “Diminution of Value Damages” available at http://shop.americanbar.org/eBus/Store/ProductDetails.aspx?productId=203226972
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