Fed. PA / “Arising Out Of” Interpreted Broadly

No Coverage for Parking Lot Shooting

No defense or indemnity obligations for negligence claims related to parking lot shooting due to exclusion for injuries “arising out of” “assault,” “battery”, or “physical altercation.”

The United States District Court for the Eastern District of Pennsylvania, applying Pennsylvania law, held that an insurer had no duty to defend or indemnify a policyholder in an underlying negligence action which stemmed from a shooting because the policy excluded coverage for personal injuries arising out of an “assault,” “battery,” or “physical altercation.”  

Vincent Smithwick was shot in the parking lot of a bar.  He sued alleging that the defendants’ negligence and recklessness – specifically their failure to take reasonable security measures – caused Smithwick’s injuries.  According to Smithwick, the parking lot had previously been the location of prior violence and criminal acts, including a shooting, and the Defendants had or should have had knowledge of prior incidents of violence and criminal acts on the parking lot in the immediate vicinity of the bar/nightclub.  The complaint included three counts: (1) negligent security, (2) negligence, and (3) negligent infliction of emotional distress.  

Great Lakes Insurance SE (“Great Lakes”) issued a Commercial General Liability policy to Robert Mazer, one of the defendants.  The policy covered “bodily damage” caused by an “occurrence,” which the policy defines as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”  The policy, however, excluded coverage for personal injuries arising out of an “assault,” “battery,” or “physical altercation.”  

According to the District Court, the policy’s exclusion applied to the facts at hand, and thus, Great Lakes owed no duty to defend Mazer against the claims made by Smithwick.  The exclusionary language of the policy was broad. It excluded coverage arising out of an “assault”, “battery”, or “physical altercation.”  The exclusion applied “whether or not caused by or arising out of negligence, reckless, or wanton conduct by an insured, an insured’s employees, patrons, or other persons” and applied “whether or not caused by or arising out of an insured’s failure to properly supervise or keep an insured’s premises in a safe condition.”  According to the District Court, “the fact that the exclusion covers acts and omissions in connection with the prevention of an assault or battery means that Great Lakes is not obligated to defend its insured from allegations that the insured’s failure to take certain precautions resulted in Smithwick’s injuries.” The District Court did not find that Smithwick’s “artful pleading” overcame the exclusionary language of the policy.  “The factual allegations in the [Smithwick] complaint clearly demonstrate that the but for cause of Smithwick’s injuries was the shooting, not the lack of security at the parking lot or the failure to prevent the shooting.” The District Court held that Great Lakes had no duty to defend or indemnify its insured in the Smithwick litigation. Great Lakes Ins. SE v. Vincent Smithwick, Case No. 18-4797 (E.D. Penn. Oct. 2, 2019).