Assault & Battery Exclusion Upheld: Court Agrees Alea Has No Duty to Defend or Indemnify Insureds in Underlying Action

Alea London Limited v. Woodlake Management, et al., 333 F. Supp. 2d 352 (E.D. Pa. 2004), affirmed 435 F.3d 431 (3d Cir. 2006)


The underlying action arose from an incident on July 13, 2005, when the underlying Plaintiff was shot multiple times by an unknown assailant on the property owned by Alea’s insureds. Plaintiffs allege in the underlying action that the insureds’ negligence enabled the shooting to occur and/or failed to prevent it. Specifically, the allegations of negligence pertained to the maintenance, or lack thereof, of a security device/lock. Alea had issued a Commercial General Liability Policy to the insureds, which included an assault and battery exclusion. Relying on that exclusion, Alea sought declaratory relief that it had no duty to defend or indemnify the insureds in connection with the claims asserted in the underlying action.

The Litigation

The Declaratory Judgment Complaint on behalf of Alea was filed in federal court based on diversity. In response to the Complaint, relying on QBE Insurance Company v. M&S Landis Corp., p/d/b/a Fat Daddy’s, 915 A.2d 1222 (Pa. Super. Ct. 2007), the insureds argued that the allegations of negligence in the underlying case were sufficient to impose a duty to defend on Alea.

At the close of the pleadings, the insureds filed a Motion for Stay, arguing that a factual determination of the cause of the injury in the underlying action had to be made before the Court could issue a declaratory judgment regarding Alea’s duties to defend and indemnify. Wright & O’Donnell, P.C., on behalf of Alea, opposed that Motion, and filed a Cross Motion for Judgment on the Pleadings. As discussed below, on January 13, 2009, the Court granted Alea’s Motion. The insureds appealed to the Third Circuit.

The Decision

In her well-reasoned opinion, Judge Brody agreed with Alea’s argument distinguishing QBE Insurance Corp. v. M&S Landis Corp., t/d/b/a Fat Daddy’s, 2007 Pa. Super. 12 (Pa. Super. Ct. 2007) from the instant matter. She recognized that the underlying action did not contain any allegations that the insureds’ negligence directly caused harm other than the shooting. “According to the complaint, all of the alleged injuries were caused by the shooting.” As such, the case was analogous to Acceptance Insurance Company v. Seybert, 757 A.2d 380. (Pa. Super. Ct. 2000). In Seybert, the underlying allegations were that Seybert suffered injuries when he was violently attacked by five individuals in the parking lot of a hotel. There were no allegations that Seybert’s injuries resulted from anything other than an assault.

Judge Brody specifically held that the Abdulahs’ allegations fit squarely into Alea’s Policy’s exclusion as errors or omissions relating to an assault or battery. Her opinion concludes, “I find that the plain, unambiguous language of the assault and battery exclusion excludes coverage for these allegations and therefore Alea does not have a duty to defend or indemnify the moving defendant in the lawsuit filed by the Abdulahs.”

For additional information, or copy of this Opinion, please contact Law Wright at Wright & O’Donnell, P.C., directly at 610-940-4092.