Insurer has no Obligation to Pay More than an Aggregate Limit of Liability
Barry Zalma
Jan 4, 2024
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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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Concealing a Weapon Used in a Murder is an Intentional & Criminal Act
Post 5002
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In Howard I. Rosenberg; Kimberly L. Rosenberg v. Chubb Indemnity Insurance Company Howard I. Rosenberg; Kimberly L. Rosenberg; Kimberly L. Rosenberg; Howard I. Rosenberg v. Hudson Insurance Company, No. 22-3275, United States Court of Appeals, Third Circuit (February 11, 2025) the Third Circuit resolved whether the insurers owed a defense for murder and acts performed to hide the fact of a murder and the murder weapon.
FACTUAL BACKGROUND
Adam Rosenberg and Christian Moore-Rouse befriended one another while they were students at the Community College of Allegheny County. On December 21, 2019, however, while at his parents’ house, Adam shot twenty-two-year-old Christian in the back of the head with a nine-millimeter Ruger SR9C handgun. Adam then dragged...
Renewal Notices Sent Electronically Are Legal, Approved by the State and Effective
Post 5000
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Washington state law allows insurers to deliver insurance notices and documents electronically if the party has affirmatively consented to that method of delivery and has not withdrawn the consent. The Plaintiffs argued that the terms and conditions statement was not “conspicuous” because it was hidden behind a hyperlink included in a single line of small text. The court found that the statement was sufficiently conspicuous as it was bolded and set off from the surrounding text in bright blue text.
In James Hughes et al. v. American Strategic Insurance Corp et al., No. 3:24-cv-05114-DGE, United States District Court (February 14, 2025) the USDC resolved the dispute.
The court’s reasoning focused on two main points:
1 whether the ...
Rescission in Michigan Requires Preprocurement Fraud
Post 4999
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Lie About Where Vehicle Was Garaged After Policy Inception Not Basis for Rescission
This appeal turns on whether fraud occurred in relation to an April 26, 2018 renewal contract for a policy of insurance under the no-fault act issued by plaintiff, Encompass Indemnity Company (“Encompass”).
In Samuel Tourkow, by David Tourkow v. Michael Thomas Fox, and Sweet Insurance Agency, formerly known as Verbiest Insurance Agency, Inc., Third-Party Defendant-Appellee. Encompass Indemnity Company, et al, Nos. 367494, 367512, Court of Appeals of Michigan (February 12, 2025) resolved the claims.
The plaintiff, Encompass Indemnity Company, issued a no-fault insurance policy to Jon and Joyce Fox, with Michael Fox added as an additional insured. The dispute centers on whether fraud occurred in...
Insurance Fraud Leads to Violent Crime
Post 4990
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CRIMINAL CONDUCT NEVER GETS BETTER
In The People v. Dennis Lee Givens, B330497, California Court of Appeals, Second District, Eighth Division (February 3, 2025) Givens appealed to reverse his conviction for human trafficking and sought an order for a new trial.
FACTS
In September 2020, Givens matched with J.C. on the dating app “Tagged.” J.C., who was 20 years old at the time, had known Givens since childhood because their mothers were best friends. After matching, J.C. and Givens saw each other daily, and J.C. began working as a prostitute under Givens’s direction.
Givens set quotas for J.C., took her earnings, and threatened her when she failed to meet his demands. In February 2022, J.C. confided in her mother who then contacted the Los Angeles Police Department. The police ...
Police Officer’s Involvement in Insurance Fraud Results in Jail
Post 4989
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Von Harris was convicted of bribery, forgery, and insurance fraud. He appealed his conviction and sentence. His appeal was denied, and the Court of Appeals upheld the conviction.
In State Of Ohio v. Von Harris, 2025-Ohio-279, No. 113618, Court of Appeals of Ohio, Eighth District (January 30, 2025) the Court of Appeals affirmed the conviction.
FACTUAL BACKGROUND
On January 23, 2024, the trial court sentenced Harris. The trial court sentenced Harris to six months in the county jail on Count 15; 12 months in prison on Counts 6, 8, 11, and 13; and 24 months in prison on Counts 5 and 10, with all counts running concurrent to one another for a total of 24 months in prison. The jury found Harris guilty based on his involvement in facilitating payments to an East Cleveland ...
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To Dispute an Arbitration Finding Party Must File Dispute Within 20 Days
Post 4988
EXCUSABLE NEGLECT SUFFICIENT TO DISPUTE ARBITRATION LATE
In Howard Roy Housen and Valerie Housen v. Universal Property & Casualty Insurance Company, No. 4D2023-2720, Florida Court of Appeals, Fourth District (January 22, 2025) the Housens appealed a final judgment in their breach of contract action.
FACTS
The Housens filed an insurance claim with Universal, which was denied, leading them to file a breach of contract action. The parties agreed to non-binding arbitration which resulted in an award not
favorable to the Housens. However, the Housens failed to file a notice of rejection of the arbitration decision within the required 20 days. Instead, they filed a motion for a new trial 29 days after the arbitrator’s decision, citing a clerical error for the delay.
The circuit court ...
