Essex Insurance Company v. Oli-Car, Inc., et al., 2007 U.S. Dist. LEXIS 68861 (W.D. Pa., September 18, 2007)

Summary

The Honorable Joy Flowers Conti of the United States District Court for the Western District of Pennsylvania, recently determined that Essex Insurance Company did not have a duty to defend its insureds in underlying state court actions wherein it was alleged that Plaintiff sustained injuries, as the result of an assault and/or battery. The Court agreed that the ASSAULT AND/OR BATTERY EXCLUSION in Essex's policy was clear and unambiguous and precluded coverage for the claims made by Plaintiff.

Defendants argued against application of the Exclusion, but also argued that the Court should not exercise jurisdiction over the Declaratory Judgment Action because there was an unsettled issue of state law. The Court, in its discretion, decided to retain jurisdiction over the Declaratory Judgment Action. Furthermore, the Court held that Plaintiff's Motion for Judgment on the Pleadings should be granted because the insurance policy at issue excluded coverage for bodily injury sustained as the result of an assault and/or battery, and it excluded coverage for any act or omission in connection with the prevention or suppression of an assault and/or battery.

The Litigation

On or about March 18, 2005, Brandon Mallick ("Mallick") filed suit against Brass Saddle, Inc., and El-Do, Inc., in the Court of Common Pleas of Westmoreland County. On or about September 20, 2005, Brandon Mallick filed a Complaint against Oli-Car, Inc.. These two cases were consolidated by the state trial court.

In the underlying lawsuits, Mallick sought monetary damages for injuries sustained as a result of an "assault and battery" that occurred on November 29, 2003, in the parking lot of the premises that Oli-Car leased from the other entities (Brass Saddle and El-Do). Essex denied coverage for the claims in the underlying lawsuits based upon, inter alia, the assault and/or battery and negligent hiring, training, placement and supervision exclusions, contained in the Essex Policy. Essex then filed its Declaratory Judgment Action, wherein Essex took the position that the terms, conditions and exclusions contained in the Essex policy and the allegations in the underlying lawsuits were not in dispute. As only an issue of law remained, the issues were ripe for adjudication by way of a Motion for Judgment on the Pleadings.

In that Motion, Essex argued that the exclusions and conditions contained in its Policy clearly and unambiguously applied so as to preclude coverage for the claims set forth in the underlying lawsuits. Therefore, Essex had no duty to defend, and no duty to indemnify. Judge Conti agreed.

The Decision

As noted by the Court, Essex sought a Declaratory Judgment to the effect that it did not have a duty to defend and indemnify the state court defendants under its insurance policy. Essex asserted that Mallick's injuries resulted from an assault and battery perpetrated by an unknown assailant. Essex further argued that the assault and battery, or any acts or omissions in connection with the prevention or suppression of an assault and battery (as alleged by Mallick) were excluded from coverage. Defendants, on the other hand, argued that the Court should not exercise jurisdiction because there was an unresolved state law issue. The Court disagreed.

In support of its decision to exercise jurisdiction over the Declaratory Judgment Action, the Court considered Donegal Mutual Insurance Co. v. Baumhammers, 893 A.2d 797 (Pa. Super.Ct. 2006), QBE Insurance Corp. v. M&S Landis Corp., 915 A.2d 1222 (Pa. Super.Ct. 2007) and Alea London, Ltd. v. El Pailon, Inc., 2007 U.S. Dist. LEXIS 17736 (No. 05-4902; E.D. Pa. March 13, 2007). As set forth in detail on the record, the Court distinguished each of the foregoing. The Court, furthermore, noted its reliance on Acceptance Insurance Co. v. Seybert, 757 A.2d 380 (Pa. Super.Ct. 2000), in finding that the issues presented were previously addressed by the Superior Court of Pennsylvania. In so finding, the Court reasoned that there was no issue of unsettled law and as such, it could exercise its discretion to consider the issues before it.

The parties also vigorously contested whether the assault and battery exclusion applied to the facts presented in Mallick's underlying state court complaints. In finding for Essex, the Court reviewed the factual allegations set forth in the complaints. Those allegations contained facts relating only to an assault and battery, and omissions in connection with the prevention of the assault and battery. Therefore, the "face of the Complaint" showed the assault and battery exclusion was applicable.

As noted by Judge Conti, in Acceptance Insurance Co. v. Seybert, 757 A.2d 380 (Pa. Super.Ct. 2000), the Superior Court of Pennsylvania considered language nearly identical to the assault and battery exclusion at issue here, and found that there was no duty to defend. As set forth fully on the record, the Court found that, based upon the clear language of the assault and battery exclusion in Essex's Policy, the conduct outlined in the underlying state court complaints was excluded from coverage. Accordingly, viewing the facts presented in the pleadings and the inferences drawn from them in the light most favorable to Defendants, the Court found that no material issue of fact remained to be resolved, and Essex was entitled to judgment as a matter of law.

For additional information or a copy of this Opinion, please contact Sheila E. O'Donnell, Wright & O'Donnell, P.C., directly at (610) 940-4092.

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