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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Notice of Claim Later than 60 Days After Expiration is Too Late
Post 5089
Injury at Massage Causes Suit Against Therapist
Read the full article at https://lnkd.in/gziRzFV8, see the full video at https://lnkd.in/gF4aYrQ2 and at https://lnkd.in/gqShuGs9, and at https://zalma.com/blog plus more than 5050 posts.
Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.
In Mluxe Williamsburg, LLC v. Hiscox Insurance Company, Inc., et al., No. 4:25-cv-00002, United States District Court, E.D. Missouri, Eastern Division (May 22, 2025) the trial court’s judgment was affirmed.
FACTUAL BACKGROUND
Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious ...
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Posted on June 2, 2025 by Barry Zalma
Post 5087
See the full video at and at
Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf
Zalma’s Insurance Fraud Letter – June 1, 2025
See the full video at https://lnkd.in/gw-Hgww9 and at https://lnkd.in/gF8QAq4d, and at https://zalma.com/blog plus more than 5050 posts.
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF
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 ...
No Coverage if Home Vacant for More Than 60 Days
Failure to Respond To Counterclaim is an Admission of All Allegations
Post 5085
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In Nationwide Mutual Insurance Company v. Rebecca Massey, Civil Action No. 2:25-cv-00124, United States District Court, S.D. West Virginia, Charleston Division (May 22, 2025) Defendant Nationwide Mutual Insurance Company's (“Nationwide”) motion for Default Judgment against Plaintiff Rebecca Massey (“Plaintiff”) for failure to respond to a counterclaim and because the claim was excluded by the policy.
BACKGROUND
On February 26, 2022, Plaintiff's home was destroyed by a fire. At the time of this accident, Plaintiff had a home insurance policy with Nationwide. Plaintiff reported the fire loss to Nationwide, which refused to pay for the damages under the policy because the home had been vacant for more than 60 days.
Plaintiff filed suit ...
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 ...
Professional Health Care Services Exclusion Effective
Post 5073
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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 ...
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
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
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...
