McAllister v. Agora Syndicate, Inc.
| Decision Date | 30 October 2000 |
| Docket Number | No. 45597-4-I.,45597-4-I. |
| Citation | 11 P.3d 859,103 Wash.App. 106 |
| Parties | Grant E. McALLISTER, Appellant, v. AGORA SYNDICATE, INC., an Illinois corporation, a foreign insurer, Respondent. |
| Court | Washington Court of Appeals |
Heidi Nuss Imhof, Erik Francis Ladenburg, Krilich La Porte West & Lockner PS, Tacoma, for Appellant.
Jerret E. Sale, Elizabeth Curie Kim, Bullivant Houser Bailey P.C., Seattle, for Respondent.
This case involves the interpretation and application of an assault and battery exclusion in a commercial general liability insurance policy issued by respondent Agora Syndicate, Inc. to Entertainment Unlimited, Inc., (d/b/a DV8 Nightclub). Appellant Grant McAllister was injured in an altercation with another patron at DV8 and subsequently filed suit against his assailant and Entertainment Unlimited. Entertainment Unlimited executed an admission of liability and entered into a settlement agreement with McAllister in which it assigned to him its rights under the Agora policy. Agora denied coverage of the claim on the ground that it fell under the policy's assault and battery exclusion. Although McAllister's claim alleged Entertainment Unlimited's negligence, the underlying occurrence was the assault and battery. Because the assault and battery exclusion applied to claims "based on assault and/or battery," the trial court's dismissal of the claim is affirmed.
On an evening in May 1996, Grant McAllister and two friends went to the DV8 Nightclub. Earlier that evening, one of the men accompanying McAllister had been removed from the club following an altercation with another patron—Michael Fuller. DV8 staff allowed both Fuller and McAllister's friend to reenter the club. Fuller confronted McAllister and began yelling at him. McAllister's friends informed DV8 security personnel of the ensuing melee, but they failed to take any action. Following a lengthy verbal tirade, Fuller struck McAllister in the face, fracturing his left orbital lobe and rendering him unconscious. Fuller was arrested, taken to jail, and subsequently convicted of assault.
McAllister filed suit against Entertainment Unlimited in January 1997. Agora Syndicate, Inc., denied coverage of the claim on the ground that it fell within the assault and battery exclusion in Entertainment Unlimited's policy. Pursuant to a settlement agreement, Entertainment Unlimited assigned to McAllister its rights under the insurance contract and executed an admission of liability.
McAllister commenced a declaratory action against Agora, and both parties filed motions for summary judgment. The trial court granted Agora's motion for summary judgment and denied McAllister's motion. Specifically, the court held: (1) McAllister's claims against Agora were excluded by the assault and battery exclusion contained in the policy issued by Agora to Entertainment Unlimited; (2) Agora had no duty to defend or indemnify Entertainment Unlimited against McAllister's claims; and (3) all of McAllister's other claims against Agora were dismissed with prejudice.1
The policy issued by Agora to Entertainment Unlimited covers bodily injury and property damage that is caused by an "occurrence" that takes place in the coverage territory.2 The policy also includes an endorsement entitled "Assault and Battery Exclusion" that reads: "It is agreed that no coverage shall apply under this policy for any claim, demand or suit based on assault and/or battery, and assault and/or battery shall not be deemed an occurrence, whether or not committed by or at the direction of the insured." Agora based its denial of Entertainment Unlimited's claim on this provision.
McAllister argues that the denial of the claim was inappropriate because it was based on alleged negligence and thus did not fall under the assault and battery exclusion. He proposes that the exclusion should be read to cover only intentional acts of the club's employees.3 McAllister concludes that the endorsement is at best ambiguous in its application to a negligence claim against the insured.
Language in an insurance policy that is susceptible of two different but reasonable interpretations is ambiguous and must be liberally construed in favor of the insured. Teague Motor Co. v. Federated Serv. Ins. Co., 73 Wash.App. 479, 482, 869 P.2d 1130 (1994). In addition, exclusionary clauses should be construed against the insurer with special strictness. Tewell, Thorpe, & Findlay, Inc. v. Continental Cas. Co., 64 Wash.App. 571, 575, 825 P.2d 724 (1992). But a court may not give an insurance contract a "`strained or forced construction which would lead to an extension or restriction of the policy beyond what is fairly within its terms....'" Tewell, 64 Wash.App. at 576,825 P.2d 724 (quoting Morgan v. Prudential Ins. Co. of Am., 86 Wash.2d 432, 434, 545 P.2d 1193 (1976)). Similarly, the rule that ambiguous contract language is to be construed in favor of the insured and most strongly against the insurer should not be permitted to have the effect of making a plain agreement ambiguous. West Am. Ins. Co. v. State Farm Mut. Auto. Ins. Co., 80 Wash.2d 38, 44, 491 P.2d 641 (1971).
Agora argues that the exclusion is unambiguous and precludes coverage in this case. Although the interpretation of an assault and battery exclusion is an issue of first impression in Washington, Agora points to several cases from other jurisdictions in which courts found nearly identical assault and battery exclusions to be applicable to claims similar to McAllister's.4 We find the...
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