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Assault or Battery Exclusion Bars Claim Against Insurance Company for Tavern’s Defense and Indemnification as to Lawsuit Involving Fatal Shooting of Patron

By on August 28, 2020 in Negligence with 0 Comments

In the published Appellate Division decision, Pickett v. Moore’s Lounge, 2020 N.J. Super. LEXIS 208 (App. Div. August 25, 2020), the Court was asked to decide whether insurance coverage existed as to the defendant tavern to cover the lawsuit against it for the fatal shooting of one its patrons. The tavern’s insurance company, Northfield Insurance Company (“Northfield”), contended that the assault or battery exclusion in its policy was broad enough to bar all claims that were brought by the estate of the deceased patron against the tavern.

Roger Pickett (“Pickett”) and James Corley (“Corley”) got into an argument at the tavern, Moore’s Lounge, on New Year’s Day. As Pickett walked away, Corley shot and killed him. Pickett’s estate claimed that the tavern had searched Pickett and other customers for weapons before they entered but Corley, as a retired police officer and a regular customer, was allowed to enter with a concealed weapon. Further, the estate alleged that the tavern’s staff continued to serve Corley even after he showed signs of intoxication after consuming excessive amounts of alcohol.

The estate sued the tavern EMRO (Moore’s Lounge was its common name), claiming that EMRO negligently managed its employees “whose incompetence and unfitness caused Pickett’s death.” The complaint included a claim for negligent hiring; training, supervision and oversight; and retention. The estate also alleged generally that EMRO was negligent for failing to ensure that Pickett, as its business invitee, was free from “reasonably foreseeable criminal activity.”

EMRO sought a defense and indemnification for this lawsuit from Northfield, which invoked the assault or battery exclusion to deny EMRO’s request for coverage. The assault or battery exclusion was defined as:

“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.”

EMRO filed a third party complaint against Northfield for coverage. It ended up settling with the plaintiff and reserved its rights to pursue its claim against Northfield. EMRO filed a motion for summary judgment against Northfield, requesting indemnification as to the settlement plus attorney’s fees incurred in the defense of the lawsuit. Northfield cross-moved for summary judgment, claiming that the assault or battery exclusion barred coverage for the estate’s claim against EMRO.

The trial court judge agreed with Northfield’s position, finding that this exclusion barred coverage under Northfield’s policy. In this published decision, the Appellate Division affirmed the trial court’s decision.

The Court noted that while exclusionary clauses in an insurance policy must be narrowly construed, they will be enforced if they are “specific, plain, clear, prominent, and not contrary to public policy.” Here, the Appellate Division found that the assault or battery exclusion not only barred bodily injury claims “arising out of” assault or battery but also “include[es] any act or omission in connection with the prevention or suppression” of such assault or battery. Thus, the Court found that this exclusion plainly encompassed the estate’s allegation “that EMRO negligently failed to exercise reasonable care to assure the tavern was a safe place.”

And, this exclusion also embraced the estate’s claim of negligence against the tavern as for the negligent personnel management as to the hiring, training, and retention of employees, claiming that EMRO’s staff did nothing to prevent Corley from shooting Pickett. The estate had alleged that the staff “allowed Corley to enter with a gun, allowed him to retain the gun throughout the evening as he became more intoxicated, and did not intervene when he began arguing with Pickett.”

Thus, the Appellate Division found that this exclusion was broad enough to exclude all claims under the Northfield policy that had been alleged against EMRO. The Court agreed that this exclusion precluded EMRO’s claim against Northfield for indemnification of its defense costs and the settlement it paid to the estate.

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Betsy G. Ramos

About the Author

About the Author:

Ms. Ramos is an Executive Committee Member and Co-Chair of the Litigation Department at Capehart Scatchard, P.A. located in Mount Laurel, New Jersey. She is an experienced litigator with over 25 years experience handling diverse matters. Practice areas include tort defense, business litigation, estate litigation, tort claims and civil rights defense, construction litigation, insurance coverage, employment litigation, shareholder disputes, and general litigation.

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