Bar To Coverage! Assault & Battery Exclusion Upheld On Appeal NY)
Can a premises liability cause of action in a complaint based upon a shove down the stairs overcome an assault and battery insurance exclusion? In NHJB Inc v. Utica First Insurance Company, New York’s Appellate Division, Fourth Department heard argument over whether insurance coverage was properly denied when the policy involved an assault and battery exclusion but Plaintiff’s claim also included a premises liability cause of action. Here, a nightclub owner got into a physical confrontation with a patron that allegedly ended with the patron being pushed down a set of stairs by the nightclub owner. The patron later died from his injuries. The nightclub sought coverage from their insurer for the litigation brought by the decedent’s estate. The nightclub’s insurance provider disclaimed coverage based on the assault and battery exclusion within the policy. The nightclub then sued the provider for wrongful denial.
Plaintiff moved for summary judgement, seeking a declaration that the insurance company was required to defend and indemnify the nightclub in the underlying litigation, while the insurance company cross moved to dismiss Plaintiff’s complaint. The trial court ruled in favor of Plaintiff and required the insurance company to defend Plaintiff at least through the completion of discovery.
On appeal, the Court reversed and ruled that while Plaintiff’s 27th cause of action was based on premises liability, “all of the claims against plaintiffs in the underlying action are ‘based on’ or ‘arise out’ of the bar manager’s assault” and that there would be no cause of action without the owner’s alleged assault and battery. Importantly, the Court also held that a determination on this issue did not need to wait until the close of discovery because whether an exclusion applies depends on the facts plead in the complaint, not its conclusory assertions. “Even if it were learned during discovery that there was a defect with respect to the stairs, the fact remains that, but for the bar manager’s assault, decedent would not have fallen down the stairs.”
The Court finally clarified that just because the Court had earlier ruled that there were sufficient facts plead for the premises liability claim to survive a motion to dismiss, holding that coverage did not apply was not contradictory. “There is a distinction between the ultimate liability of the insured and the insured’s right to coverage based on the language of the insurance policy.”
This case is a reminder that it is not the conclusory allegations or the titling of a cause of action that ultimately determines whether insurance coverage applies, but the underlying plead facts that allegedly give rise to those claims.
Special thanks to Ryan Geib for his contribution to this post. If you have any questions, kindly contact Thomas Bracken.