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Another Assault – Another Exclusion

August 15, 2017

2017 is steadily becoming the year of the assault in South Carolina. Founders Insurance Company v. John Hamilton a/k/a Jim Hamilton, individually and d/b/a Aces High Club, Aces High Club and Kenneth Weatherford, 2017 WL 3415074, (August 9, 2017) offers us yet another look at a policy exclusion for an assault and/or battery.  

In Founders, an insurer once again sought a determination that there was no duty to indemnify under its liquor liability policy due to its exclusion for injuries arising from an assault and/or battery or arising from the selling or serving of alcoholic beverages, which results in an assault, and/or battery.   

Here, Weatherford filed an action in state court against these Defendants and others, alleging Aces High served an excessive amount of alcohol to one of its patrons. After leaving Aces High, the patron visited another bar where he consumed more alcohol then initiated a verbal confrontation with Weatherford. As Weatherford was allegedly trying to leave the second bar, the over-served patron followed him outside and shot him. In support of its motion for summary judgment, Founders denied it had any obligation to indemnify Aces High, arguing all of the damages sought by Weatherford resulted from the alleged assault and battery committed by the intoxicated patron.

SC courts have repeatedly found assault and battery exclusions enforceable. Here, Defendants argued that Founder’s motion for summary judgment should be denied because the underlying suit includes other causes of action that are not excluded, but rather fall within coverage, including dram shop liability. In support of their position, Defendants asserted liability is assigned to those who violate statutes prohibiting the knowing sale of beer or wine to an intoxicated person in order to hold persons who profit from providing alcohol liable for the actions of those to whom they provide it. Defendants further argued that policies like the one in question exist to provide liquor liability protection for torts committed by patrons who, because they are intoxicated, cause injury to others. Defendants contend Founders’ interpretation of the assault and battery exclusion would violate public policy because every physical injury resulting from the sale, service or furnishing of alcohol would be excluded from a policy intended to provide liquor liability protection. 

The court rejected Defendants’ argument. Faced with ample authority that claims arising from assault and battery, even if couched in terms of negligence, fall squarely within the confines of an assault and battery exclusion, the court granted Founders’ motion for summary judgment. Finding Weatherford’s injuries arose from being shot, which can only serve as an assault and battery, the court determined the assault and battery policy exclusion unambiguously applied and Founders had no duty to defend or indemnify.

The court’s ruling here is of little surprise, but may provide an interesting glimpse into what may be a growing trend of the court. In February 2017, the court denied an unopposed motion for summary judgment on behalf of an insurer seeking a determination it had no coverage for a shooting in a nightclub, as we reported in When an Assault is not an AssaultThere, the court determined because the underlying action alleged only negligence without allegations of intentional acts, it lacked sufficient basis to grant the insurer’s motion as to its duty to defend. There, the court had no facts outside of the complaint.  

In June 2017, the plaintiff in the underlying action alleged injuries resulting from a nightclub’s negligence. The court had information outside the complaint, including corroborated testimony that the plaintiff’s injuries arose from an attack by the club’s bouncer, as detailed in When an Assault Really is an AssaultThe court recognized even if the club was negligent, and that negligence was a proximate cause of the plaintiff’s injuries, the injuries nonetheless arose from a battery, triggering the applicable policy sublimit.

Generally, coverage questions are determined by the allegations of the complaint. However, in this third coverage opinion, the court may be signaling an increasing likelihood that it will analyze an insurer’s duty upon the substance of the complaint’s allegations and not the specifically identified causes of action.   

Cheryl D. Shoun is a trial attorney and certified mediator whose experience includes construction law, insurance defense, personal injury defense, employment litigation and medical malpractice.