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January 04, 2024
No Right to Indemnity After Policy Limit Exhausted

Insurer has no Obligation to Pay More than an Aggregate Limit of Liability

Barry Zalma
Jan 4, 2024

Read the full article at https://lnkd.in/gxQEHguD and see the full video at https://lnkd.in/gD59xWr6 and at https://lnkd.in/ge4fgKEu and at https://zalma.com/blog plus more than 4700 posts.

Post 4702

Denis Mucha sustained injuries after he was assaulted by employees at defendant MDF 92 River Street, LLC d/b/a Wild Moose Saloon and The Birch (MDF) (the bar) in Hoboken, New Jersey while a patron. Plaintiff Watford Specialty Insurance Company (Watford) insured MDF. Watford filed a declaratory judgment action seeking a declaration that its obligation to provide insurance coverage to MDF arising out of Mucha’s lawsuit were satisfied under its endorsement for assault and battery claims, and Watford’s $1,000,000 limit of liability had been exhausted.

In Watford Specialty Insurance Company v. MDF 92 River Street, LLC, d/b/a Wild Moose Saloon & The Birch, and Matthew Garcia and Dashon Brown, Defendants, And Denis Mucha, No. A-3505-21, Superior Court of New Jersey, Appellate Division (December 22, 2023)

Mucha appealed from two Law Division orders entered on June 21, 2022, denying his motion for summary judgment and granting Watford’s cross-motion for a declaratory judgment barring coverage beyond the $192,325.51 amount that was already paid to Mucha and that exhausted Watford’s aggregate policy limit.

Mucha alleged defendants Matthew Garcia and Dashon Brown, bouncers at the bar, negligently assaulted him resulting in “severe and permanent” injuries. Mucha alleged Garcia’s and Brown’s conduct was “intentional but having unintended results,” and was “malicious, wanton, and reckless.” In his complaint, Mucha also alleged MDF “recklessly, carelessly, and/or negligently fail[ed] to properly hire, retain, train and/or supervise competent security,” resulting in his injuries.

THE POLICY

Watford issued a Commercial General Liability Policy (the Policy) to MDF. The Policy provided coverage up to $1,000,000 per occurrence and in the aggregate. There were five losses during the relevant Policy period, including Mucha’s claim.

Watford advised its insured MDF regarding Mucha’s claim, advising there was a sublimit of coverage for assault or battery related claims up to $1,000,000 per occurrence and in the aggregate. Watford advised Mucha’s counsel that there were five losses during the Policy period, including Mucha’s claim. The letter advised that as of December 18, 2020, the four other losses were resolved for a total pay-out of $799,920.53, leaving a remainder of $200,079.47 on the Policy’s eroding limits.

The trial court found that the facts of this case were more in line with that of an assault than wrongful eviction, considering that the arbitrator found that Mucha was grabbed and pulled down the stairs by a “security employee.”

ANALYSIS

When interpreting insurance contracts, appellate courts first examine the plain language of the policy and, if the terms are clear, they are to be given their plain, ordinary meaning.

Mucha, a business invitee, was forcefully removed from the bar as found by the arbitrator. The arbitrator’s determination that a security officer “grabbed [Mucha] and pulled him toward the stairs and then threw him down the stairs” resulting in personal injury describes “events more in line with that of assault then wrongful eviction.”

Watford has consistently maintained that Mucha’s claim arose out of an alleged assault perpetrated by MDF’s employees. Watford was not a party in the underlying lawsuit and could not file a trial de novo from the arbitrator’s award. Moreover, Watford has always asserted it was only responsible for the remaining portion of the $1,000,000 policy limit in it defense of MDF.

The arbitration award in favor of Mucha did not bar Watford’s amended declaratory judgment action seeking to limit its responsibility to the remainder of the aggregate policy limits.

The allegations in the amended complaint in the Mucha lawsuit-whether phrased as negligent assault or wrongful eviction-all arise out of the assault of Mucha by MDF employees.

Since the Assault and Battery Exclusion precludes coverage for any “bodily injury” claim “directly or indirectly” “arising out of” an “assault” or “battery,” the exclusion applies, barring coverage in excess of the aggregate limit.

The Court of Appeal concluded that the trial court’s decision was correct when if awarded Watford summary judgment.

ZALMA OPINION

Watford lived up to its mistake to insure the bar against assault and battery and paid out its policy limit of $1,000,000 to five different victims of the insured’s bouncers. Adding insult to the injury, Mr. Mucha tried to get around the assault and battery limit by claiming he was wrongfully evicted from the premises to obtain access to a different policy limit. The trial failed since throwing him down a flight of stairs was a clear battery and fit within the limit.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.

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00:08:42
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Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.

In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.

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Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....

00:07:02
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The Clear Language Of The Insurance Contract Controls

Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104

Read the full article at https://lnkd.in/gbcTYSNa, see the full video at https://lnkd.in/ggmDyTnT and at https://lnkd.in/gZ-uZPh7, and at https://zalma.com/blog plus more than 5100 posts.

Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy

In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.

The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
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00:08:22
June 20, 2025
Four Corners of Suit Allows Refusal to Defend

Exclusion Establishes that There is No Duty to Defend Off Site Injuries

Post 5103

Read the full article at https://lnkd.in/geje73Gh, see the full video at https://lnkd.in/gnQp4X-f and at https://lnkd.in/gPPrB47p, and at https://zalma.com/blog plus more than 5100 posts.

Attack by Vicious Dog Excluded

In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)

Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that

1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.

Presently before the Court are two ...

00:08:29
May 15, 2025
Zalma's Insurance Fraud Letter - May 15, 2025

ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional

See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.

Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:

Health Care Fraud Trial Results in Murder for Hire of Witness

To Avoid Conviction for Insurance Fraud Defendants Murder Witness

In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...

May 15, 2025
CGL Is Not a Medical Malpractice Policy

Professional Health Care Services Exclusion Effective

Post 5073

See the full video at https://lnkd.in/g-f6Tjm5 and at https://lnkd.in/gx3agRzi, and at https://zalma.com/blog plus more than 5050 posts.

This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.

In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:

Insurance Coverage Dispute:

Travelers issued a Commercial General Liability ...

April 30, 2025
The Devil’s in The Details

A Heads I Win, Tails You Lose Story
Post 5062

Posted on April 30, 2025 by Barry Zalma

"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime."

Immigrant Criminals Attempt to Profit From Insurance Fraud

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The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...

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