Assault & Battery Exclusion Held to Apply to Stabbing Incident Outside Insured's Deli

CGL – ASSAULT & BATTERY EXCLUSION – "BUT FOR" TEST
Tower Ins. Co. of New York v. Duarte
(Sup. Ct., New York Co., decided 12/19/2008)

Alvarado, an alleged patron of Duarte’s delicatessen, assaulted and stabbed Salguero, another patron, on the sidewalk in front of the delicatessen. Salguero died of his injuries, and Alvarado was found guilty of assault and incarcerated.

Tower insured Duarte under a CGL policy that included an "Assault and Battery Exclusion" endorsement, which provided:

1. This insurance does not apply to Bodily Injury or Property Damage arising from, due to or caused by:

a. Assault and/or Battery committed by any insured, any employee of any insured, any patron or customer of the insured, or any other person; or

b. The failure to suppress of prevent any Assault and/or Battery or any act or omission in connection with any Assault and/or Battery; or

c. The negligent hiring, supervision or training of any employee or agent of the insured with respect to the events described in a. or b. above.

Salguero's widow commenced a wrongful death action against Alvarado and Duarte. The cause of action against Duarte alleged “negligence . . . in the ownership, operation and control of [the premises],” including “failing to maintain order within the . . . premises; in serving alcohol to person’s intoxicated, or likely to become intoxicated, including . . . Alvarado[.]”

Tower denied coverage to Duarte based on the Assault and Battery Exclusion, commenced this declaratory judgment action, and moved for summary judgment. Duarte defaulted, but Salguero's widow opposed Tower's motion, arguing: (1) that there were questions of fact regarding the underlying incident that had to be developed in discovery; (2) that the assault and battery exclusion applied to policies with liquor liability coverage and thus, was inapplicable here because Duarte's policy excluded liquor liability coverage; and (3) that the policy exclusion was not applicable to Duarte’s negligence in regard to the underlying incident.

New York County Supreme Court Justice Milton Tingling granted Tower's motion and declared that Tower was not obligated to defend or indemnify Duarte in the underlying wrongful death action, holding:

In Mt. Vernon Fire Ins. Co. v. Creative Hous. Ltd., 88 N.Y.2d 347 (1996), the Court of Appeals held that, as to assault and battery exclusions, even when the theory of recovery pleaded is the insured’s negligence, if the negligence cause of action would not exist “but for” the assault, then coverage under the policy for the alleged negligence is excluded. (See also, McGinley v. Odyssey Re [London], 15 A.D.3d 2 18 [1st Dept 2005]; Tower Ins. Co. of New York v. Old Northern Blvd. Restaurant Corp., 245 A.D.2d 24 1 [1st Dept 1997]).

Here, Ruiz alleges in the underlying action that her decedent was assaulted by a third party. In the cause of action against Duarte she alleges that Duarte is liable for her decedent’s injuries and death because of Duarte’s alleged negligence in: 1) failing to maintain adequate security on the premises; 2) serving alcohol to persons likely to become intoxicated, including Alvarado and 3) allowing a disturbance on the premises. Here, as in Creative Housing, the negligence cause of action against would not exist “but for” the assault and therefore, the assault and battery exclusion applies to the cause of action against Duarte in the underlying action.