Insurance Law Alert: Indirect Contact Bars Coverage Under Assault and Battery Exclusion

In Mt. Vernon Fire Ins. v. Oxnard Hospitality, etc. (No. B244569, filed 9/16/13), a California appeals court held that an assault and battery exclusion did not require actually body-on-body physical contact, but would bar coverage for a claimant’s injuries suffered as a result of being doused with alcohol and set on fire.

In Mt. Vernon, the plaintiff was a nightclub dancer injured on her employer’s premises when a patron threw flammable liquid on her and set her on fire. The assailant, another woman who had apparently been turned down for a job at the club, was convicted of mayhem and sentenced to life in prison. The dancer sued the employer for negligent failure to provide adequate security. The employer stipulated to a judgment of $10 million and assigned its rights against Mt. Vernon, the club’s insurer.

Mt. Vernon filed an action for declaratory relief, seeking a finding of non-coverage based on an assault and battery exclusion that barred coverage for “all ‘bodily injury’… arising out of ‘assault’ or ‘battery’ … including but not limited to ‘assault’ or ‘battery’ arising out of or caused in whole or in part by negligence…. [¶] ‘Battery’ means negligent or intentional wrongful physical contact with another without consent that results in physical or emotional injury.”

The dancer argued that the exclusion’s definition of battery required actual “body-to-body” physical contact. She also argued that “physical contact” means “actual physical touching between one person and another” and she cited a dictionary “definition of ‘physical’ [as] ‘of or relating to the body[]'” and “‘contact’ [as] ‘a touching or meeting of bodies.'”

In a footnote, the court stated that operation of the exclusion did not hinge on a claim of assault and battery, but would also encompass the negligence claim against the employer because the exclusion barred assault and battery “arising out of or caused in whole or in part by negligence.” According to the court: “This language clearly defeats any argument that the exclusion has no application because Busby’s theory of recovery is in negligence. ‘[A]ny claim based on assault and battery irrespective of the legal theory asserted against the insured’ activates the exclusion.” (Quoting Century Transit Systems, Inc. v. American Empire Surplus Lines Ins. Co. (1996) 42 Cal.App.4th 121, 127.)

The Mt. Vernon court then disagreed that body-on-body contact was required, noting that the tort of battery is generally not limited to direct body-to-body contact. The court cited commentary to the Restatement Second of Torts stating that the “[m]eaning of ‘contact with another’s person'” does not require that one “should bring any part of his own body in contact with another’s person…. [One] is liable [for battery] in this Section if [one] throws a substance, such as water, upon the other.” (Rest.2d Torts § 18, com. c.) The Mt. Vernon court also cited Century Transit, where the court had effectively applied the rule in finding coverage barred when the insured’s employee struck demonstrators with a flashlight, and no direct body-to-body contact occurred.

The Mt. Vernon court went so far as to cite the physical contact rule applicable to uninsured motorist (UM) coverage for hit-and-run accidents, under which a chain reaction initiated by the hit-and-run driver qualifies as physical contact triggering UM coverage. The Mt. Vernon court also rejected an ambiguity argument and found its holding consistent with other jurisdictions considering application of assault and battery exclusions.

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September 17, 2013