Britamco Underwriters, Inc. v. Stokes

• Citation: 881 F. Supp. 196
• Decision Date: 05 April 1995
• Docket Number: Civ. A. No. 94-6994.
• Parties: BRITAMCO UNDERWRITERS, INC., Plaintiff, v. John J. STOKES, Jr., Jack Stokes' Old Ale House II, and Dennis Barton, Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

881 F. Supp. 196

BRITAMCO UNDERWRITERS, INC., Plaintiff, v. John J. STOKES, Jr., Jack Stokes' Old Ale House II, and Dennis Barton, Defendants.

Civ. A. No. 94-6994.

United States District Court, E.D. Pennsylvania.

April 5, 1995.

R. Bruce Morrison, Conrad J.J. Radcliffe, Audrey J. Copeland, Marshall, Dennehey, Warner, Coleman and Goggin, Philadelphia, PA, for Britamco Underwriters, Inc.

William M. Connor, David S. Senoff, Billet and Connor, Philadelphia, PA, for John J. Stokes, Jr., Jack Stokes' Old Ale House, II.

Philip L. Blackman, Stacey L. Schwartz, Schwartz & Blackman, Philadelphia, PA, for Dennis Barton.

ORDER & MEMORANDUM

KATZ, District Judge.

AND NOW, this 5th day of April, 1995, upon consideration of the Motion Of Plaintiff Britamco Underwriters, Inc. For Judgment On The Pleadings And To Dismiss Counterclaim and the defendants' respective responses, it is hereby ORDERED that plaintiff's Motion is GRANTED.¹

I. BACKGROUND

Britamco Underwriters, Inc. ("Britamco"), initiated this declaratory judgment action Pursuant to 42 Pa.C.S.A. § 7532, et seq., seeking a declaration that it has no duty to defend or indemnify its insureds in a state court action brought by Dennis Barton against John J. Stokes, Jr. and his establishment, Jack Stokes' Old Ale House II (the "Ale House").² In the state court action, Barton seeks damages for injuries resulting from an alleged assault and battery by the Ale House's "bouncer/doorman." Pl.'s Mot. Ex.E. Britamco contends that Barton's claims are not covered by the insurance policy at issue (the "Policy") for two reasons. Britamco's first contention is that the assault and battery out of which Barton's claims arise is not an "occurrence," as that term is defined in the Policy and, accordingly, injuries arising therefrom are not covered by the Policy. See Terra Nova Ins. Co., Ltd. v. North Carolina Ted, Inc., 715 F.Supp. 688, 691-92 (E.D.Pa.1989) (citing Gene's Restaurant, Inc. v. Nationwide Ins. Co., 519 Pa. 306, 548 A.2d 246 (1988)); Terra Nova Ins. Co., Ltd. v. Thee Kandy Store, Inc., 679 F.Supp. 476 (E.D.Pa.1988). Britamco's second contention is that Barton's claims are expressly excluded from coverage under the language of the Policy's assault and battery exclusion. See Britamco Underwriters, Inc. v. Grzeskiewicz, 433 Pa.Super. 55, 639 A.2d 1208, 1211-12 (1994).

II. ANALYSIS

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party has the burden of demonstrating the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986).³

A. The Duty to Defend

Britamco seeks discharge of both its duty to defend and its duty to indemnify.⁴ The duty to defend is a distinct obligation separate and apart from the duty to indemnify. Erie Ins. Exchange v. Transamerica Ins. Co., 516 Pa. 574, 582, 533 A.2d 1363, 1368 (1987). The duty to defend arises whenever claims asserted by the injured party potentially come within the coverage of the policy, Gedeon v. State Farm Mutual Automobile Ins. Co., 410 Pa. 55, 56, 188 A.2d 320, 321 (1963), while the duty to indemnify arises only when the insured is determined to be liable for damages within the coverage of the policy. See, e.g., Employers Reinsurance Corp. v. Sarris, 746 F.Supp. 560, 566-568 (E.D.Pa.1990). It follows then, that when the claims in the underlying action have not been adjudicated, the court entertaining the declaratory judgment action must focus on whether the underlying claims could potentially come within the coverage of the policy. Air Products and Chemicals, Inc. v. Hartford Accident and Indemnity Co., 25 F.3d 177, 179 (3d Cir.1994).⁵ If there is a possibility that any⁶ of the underlying claims could be covered by the policy at issue, the insurer is obliged to provide a defense at least until such time as those facts are determined, and the claim is narrowed to one patently outside of coverage. C. Raymond Davis & Sons, Inc. v. Liberty Mut. Ins. Co., 467 F.Supp. 17, 19 (E.D.Pa.1979). On the other hand, if there is no possibility that any of the underlying claims could be covered by the policy at issue, judgment in the insurer's favor with regard to the duty to defend and indemnification is appropriate. See, e.g., Germantown Ins. Co. v. Martin, 407 Pa.Super. 326, 595 A.2d 1172 (1991), alloc. denied, 531 Pa. 646, 612 A.2d 985 (1992). Therefore, the operative question is whether the allegations in the complaint could potentially fall within the coverage of the policy. Gedeon 410 Pa. at 56, 188 A.2d at 321; Air Products, 25 F.3d at 179.⁷

B. The Policy's Terms

The insurance policy at issue between Britamco and the Ale House contains the following provision and definition:

The Company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of:

A. bodily injury or

B. property damage

to which this insurance applies caused by an occurrence....

"occurrence" means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.

Pl.'s Mot.Ex. B at 000033, 000013 (emphasis original). The Policy also contains the following exclusion:

Actions and proceedings to recover damages for bodily injuries or property damage arising from the following are excluded from coverage, and the Company is under no duty to defend or to indemnify and insured in any action or proceeding alleging such damages:

1. Assault and Battery or any act or omission in connection with the prevention or suppression of such acts;

2. Harmful or offensive contact between or among two or more persons;

3. Apprehension of harmful or offensive contact between or among two or more persons; or

4. Threats by words or deeds.

Regardless of degree of culpability or intent and without regard to:

A. Whether the acts are alleged to be by or at the instruction or at the direction of the insured ...

B. The alleged failure of the insured, or his officers, employees, agents or servants, in the hiring, supervision, retention or control of any person, whether or not an officer, employee, agent or servant of the insured; or

C. The alleged failure of the insured or his officers, employees, agents or servants to attempt to prevent, bar or halt any such conduct.

Pl.'s Mot.Ex. B.

C. The Underlying Claims

In the underlying state court action, Barton makes the following allegations:

9. ... Plaintiff sustained serious and permanent injuries as more fully set forth hereinafter when he was placed in imminent apprehension of being hit and pushed and was violently hit, struck, pushed and thrown by the bouncer/doorman at the bar/tavern, who was employed by the Defendants and who was acting within the scope of his authority and within the course of his employment.

10. This conduct by Defendants' employee as stated hereinbefore constituted an assault and battery to Plaintiff for which Defendants are responsible ...

19 Plaintiff avers that Defendants were careless, reckless and negligent ... as follows inter alia:

(a) failing to fully and properly instruct their employees agents and/or servants including, but not limited to, the bouncer involved in this incident in how to behave and perform the duties of their employment ...

(b) failing to provide adequate security to protect the safety and health of those patrons ...

(c) failing to intervene with or halt the actions of their servants, workmen and/or employees which did result in injury to the plaintiff

(d) failing to instruct their employees including, but not limited to the bouncer involved in the incident not to assault and batter persons ...

(e) failing to prevent the incident in question;

(f) failing to properly and adequately hire, train, supervise and/or control their employees, servants and/or agents ...

(g) failing to maintain proper control over its employees ...

(h) failing to warn plaintiff; and

(i) otherwise failing to exercise due care under the circumstances.

Compl. at 3, 5-6. Stated succinctly, Barton seeks recovery from the insureds for their employee's intentional tort on the alternate grounds of (a) respondeat superior, and (b) the insureds' negligent, reckless and/or careless failure to prevent or stop their employee's assault and battery.

D. Duty to Defend Assault and Battery Claims

Virtually all Pennsylvania courts that have considered the issues presented here in the context of similar policy provisions and claims have determined that an insurer does not owe its insured restaurant/bar a defense or indemnification. See, e.g., North Carolina Ted, Inc., 715 F.Supp. 688, 691-92 (E.D.Pa. 1989) (citing Gene's Restaurant, Inc. v. Nationwide Ins. Co., 519 Pa. 306, 548 A.2d 246 (1988)); Thee Kandy Store, Inc., 679 F.Supp. 476 (E.D.Pa.1988); Grzeskiewicz, 433 Pa.Super. 55, 639 A.2d 1208, 1211-12 (1994). These cases have embraced the arguments that: (a) an assault and battery is an intentional tort and, therefore, damage caused by such conduct is not within the scope of a policy that covers "occurrences" or accidents; and (b) assault and battery exclusions that unambiguously exclude coverage for claims alleging a negligent/reckless failure to prevent/stop an assault and battery preclude coverage for the intentionally tortious acts of bar/restaurant employees and patrons. Id.

The first argument holds water in this instance. In Gene's Restaurant, a case where a patron sought damages from a restaurant for injuries resulting from an assault and battery committed in the restaurant, the Pennsylvania Supreme Court examined the same definition of the term "occurrence" that is at issue here and concluded:

Under this

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