Pickett ex rel. Estate v. Moore's Lounge

• Decision Date: 25 August 2020
• Docket Number: DOCKET NO. A-2330-17T2
• Citation: 237 A.3d 369,464 N.J.Super. 549
• Parties: Nicole PICKETT, ON BEHALF OF the ESTATE OF Roger Waddell PICKETT, II, Plaintiff, v. MOORE'S LOUNGE (also known as Bill and Ruth's) and James D. Corley, Jr., Defendants, and Emro, Inc., Defendant/Third-Party Plaintiff-Appellant, v. Northfield Insurance Company, Third-Party Defendant-Respondent, and Petrocci Agency, LLC, Third-Party Defendant.
• Court: New Jersey Superior Court — Appellate Division

464 N.J.Super. 549

237 A.3d 369

Nicole PICKETT, ON BEHALF OF the ESTATE OF Roger Waddell PICKETT, II, Plaintiff,

v.MOORE'S LOUNGE (also known as Bill and Ruth's) and James D. Corley, Jr., Defendants,andEmro, Inc., Defendant/Third-Party Plaintiff-Appellant,

v.Northfield Insurance Company¹ , Third-Party Defendant-Respondent,andPetrocci Agency, LLC, Third-Party Defendant.

DOCKET NO. A-2330-17T2

Superior Court of New Jersey, Appellate Division.

Argued October 29, 2019

Decided August 25, 2020

Jonathan Michael Ettman argued the cause for appellant (Feitlin, Youngman, Karas & Gerson, LLC, attorneys; Frederick Evan Gerson, on the briefs).

Francis E. Borowsky, Jr., argued the cause for respondent (Borowsky & Borowsky, LLC, attorneys; Francis E. Borowsky, Jr., of counsel and on the brief; Adam K. Gallagher, on the brief).

Before Judges Messano, Ostrer and Vernoia.

The opinion of the court was delivered by

OSTRER, J.A.D.

This insurance coverage case requires us to interpret the assault-or-battery exclusion in a tavern's commercial general liability policy. In excluding damage claims "arising out of any act of ‘assault’ or ‘battery’ committed by any person," the exclusion expressly encompasses claims "arising out of ... any act or omission in connection with the prevention or suppression of such ‘assault’ or ‘battery.’ " The estate of Roger Pickett, a tavern patron, sued the tavern owner, EMRO, Inc., for damages after a tavern invitee fatally shot Pickett following a verbal argument. The estate alleged EMRO negligently permitted the shooter to enter the tavern armed, remain there, and then intentionally shoot Pickett. EMRO and its insurance producer, whom EMRO sued for failing to procure adequate coverage, settled with the estate. Then, EMRO sought indemnification from its insurer, Northfield Insurance Co., for its settlement share and defense costs. In denying coverage, Northfield invoked the assault-or-battery exclusion. Then followed EMRO's action against Northfield, the court's summary judgment dismissal, and the present appeal. As we conclude that the exclusion unambiguously bars EMRO's indemnification claim, we affirm.

I.

Early on New Year's Day, Pickett and James D. Corley got into an argument in Moore's Lounge in Jersey City. As Pickett turned to walk away, Corley shot him three times, killing him. Corley was convicted of aggravated manslaughter, N.J.S.A. 2C:11-4(a)(1), and is currently incarcerated.

Pickett's estate alleged the tavern's staff subjected Pickett and other customers to a weapons search before they entered, but Corley, a retired police officer and a regular customer, was allowed to enter with a concealed weapon. The estate also alleged that the staff continued to serve Corley after he had already consumed excessive amounts of alcohol and displayed signs of intoxication.

The estate's seven-count complaint against Corley and EMRO² included a wrongful death count against all defendants, based on defendants' "actions and/or negligence"; an assault and battery claim against Corley, for intentionally shooting Pickett; and a claim against EMRO for violating the Licensed Alcoholic Beverage Server Fair Liability Act, N.J.S.A. 2A:22A-2, for serving Corley alcohol despite his excessive consumption and visible intoxication.

The remaining four counts alleged EMRO's negligence. In three of those counts, the estate alleged EMRO negligently managed its employees whose incompetence and unfitness caused Pickett's death. One count pertained to negligent hiring; another to training, supervision and oversight; and a third to retention. The estate also alleged generally that EMRO negligently failed to ensure that Pickett, as a business invitee, was free from reasonably foreseeable criminal activity.

EMRO sought a defense and indemnification from Northfield. EMRO had provided Northfield with a notice of claim shortly after the shooting. As it did in response to the notice, Northfield invoked the policy's assault-or-battery exclusion and denied EMRO's request for coverage.³ A policy endorsement entitled "EXCLUSION - ASSAULT OR BATTERY, " under the heading "PROVISIONS ," states:

1. The following exclusion is added to Paragraph 2., Exclusions, of SECTION I – COVERAGES – COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY:

Assault Or Battery

"Bodily injury" or "property damage" arising out of any act of "assault" or "battery" committed by any person, including any act or omission in connection with the prevention or suppression of such "assault" or "battery".

....

3. The following is added to the DEFINITIONS Section:

"Assault" means any attempt or threat to inflict injury to another, including any conduct that would reasonably place another in apprehension of such injury.

"Battery" means any intentional, reckless or offensive physical contact with, or any use of force against, a person without his or her consent that inflicts some injury, regardless of whether the resulting injury inflicted is intended or expected.

Along with its answer to the estate's complaint, EMRO filed its third-party complaint against Northfield for coverage.⁴ EMRO also sued its "agent/broker" for damages caused by its negligence and breach of promise to procure adequate coverage.⁵

In their settlement with the estate, EMRO and the insurance producer agreed to pay $50,000 and $100,000 respectively. The settlement expressly provided that Northfield was not a party to the settlement, and EMRO reserved its rights to proceed against it. EMRO thereafter moved for summary judgment against Northfield, seeking indemnification of its $50,000 settlement, plus $45,251.77 in defense fees and costs. Northfield cross-moved for summary judgment.

In granting summary judgment to Northfield, the trial court held that the assault-or-battery exclusion barred EMRO's claim, because the estate sought damages for bodily injury arising out of Corley's assault or battery of Pickett, and the estate's negligence-based claims referred to, as the policy stated, "any act or omission in connection with the prevention or suppression of such ‘assault’ or ‘battery.’ " The court analyzed two cases involving different versions of assault-or-battery exclusions: Stafford v. T.H.E. Insurance Co., 309 N.J. Super. 97, 706 A.2d 785 (App. Div. 1998), holding the exclusion barred the insured's claim, and L.C.S. Inc. v. Lexington Insurance Co., 371 N.J. Super. 482, 853 A.2d 974 (App. Div. 2004), reaching the opposite result. We discuss the two cases at length below.

The trial court also noted that EMRO did not contest that the liquor exclusion applied to the estate's claim under the Licensed Alcoholic Beverage Service Fair Liability Act and its allegation that EMRO furnished alcoholic beverages to Corley after he was already under the influence. Therefore, the court also granted summary judgment "as to the liquor liability exception."

On appeal, EMRO contends the trial court misapplied Stafford and L.C.S., and the assault-or-battery exclusion does not apply to the estate's negligence-based claims, because the policy is ambiguous and does not expressly exclude claims based on negligent hiring, training and retention.

II.

This appeal turns on a purely legal question: our interpretation of the Northfield policy. See Abboud v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa., 450 N.J. Super. 400, 406, 163 A.3d 353 (App. Div. 2017) (stating "[i]nterpretation of an insurance policy ... present[s] a legal question, which we review de novo"). As the record discloses no genuine issue of material fact, our resolution of that question will determine whether Northfield was entitled to summary judgment. See Templo Fuente de Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa., 224 N.J. 189, 199, 129 A.3d 1069 (2016) (stating that a movant is entitled to summary judgment if the record discloses no genuine issue of material fact and "the moving party is entitled to a judgment or order as a matter of law"). We consider these issues do novo. Ibid.

The principles governing our interpretative task are well-settled. "If the plain language of the policy is unambiguous, we will not engage in a strained construction to support the imposition of liability or write a better policy for the insured than the one purchased." Id. at 200, 129 A.3d 1069 (internal quotation marks and citations omitted). A provision is ambiguous if it is "subject to more than one reasonable interpretation," and "[o]nly where there is genuine ambiguity, that is, where the phrasing of the policy is so confusing that the average policyholder cannot make out the boundaries of coverage, should the reviewing court read the policy in favor of the insured." Ibid. (internal quotation marks and citations omitted). "Consistent with these rules, our courts will enforce exclusionary clauses if ‘specific, plain, clear, prominent, and not contrary to public policy,’ notwithstanding that exclusions generally ‘must be narrowly construed,’ and the insurer bears the burden to demonstrate they apply." Abboud, 450 N.J. Super. at 407, 163 A.3d 353 (quoting Flomerfelt v. Cardiello, 202 N.J. 432, 441-42, 997 A.2d 991 (2010) ).

Turning to the policy terms, the assault-or-battery exclusion bars claims against the insured for bodily injury that arise out of an assault or battery. The estate alleged that Corley intentionally shot Pickett. The estate thereby alleged a "battery," because the policy defines "battery" as an "intentional, reckless or offensive ... use of force against, a person without his ... consent that inflicts some injury." Although Corley was convicted of recklessly causing Pickett's death, see N.J.S.A. 2C:11-4(a)(1), his recklessness also satisfies the policy's "battery" definition.

We need not decide whether excluding bodily injury claims "arising out of any act of ‘assault’ or ‘battery’ " would alone suffice to bar EMRO's claim for a defense and indemnification of the estate's negligence-based claims. That is because the exclusion of claims arising out of an assault...