In Scaglione v. Acceptance Indemnity Insurance Co., the Eighth Circuit Court of Appeals affirmed a district court order holding that an assault and battery exclusion in a commercial general liability policy barred coverage for the insured bar owner with respect to an equitable garnishment action brought by a bar patron who was hit by a stray bullet during a dispute between two other patrons.
In the underlying action, Sominkcole Conner, the victim of a shooting at Voce Bar, sued the bar’s owner, Steven Scaglione, after she allegedly suffered injuries due to insufficient security measures at the bar. In response, Scaglione tendered Conner’s action under his commercial general liability policy issued by Acceptance Indemnity Insurance. Acceptance, in turn, denied coverage and refused to defend or indemnify him in connection with Conner’s claims. Ultimately, the case was resolved through arbitration, with the arbitrator entering an award of $2.5 million in Conner’s favor.
Conner subsequently filed an equitable garnishment action against Scaglione and Acceptance to collect on the arbitration award. Acceptance thereafter removed the case to the U.S. District Court for the Eastern District of Missouri. Scaglione, via cross-claims, alleged that Acceptance acted in bad faith and breached its fiduciary duty in refusing to defend and settle the underlying action. Acceptance moved to dismiss all claims against it, citing an exclusion in the commercial general liability policy for claims arising from alleged assault and battery. The exclusion stated specifically that the policy did not apply to:
- Any claims arising out of Assault and/or Battery, including actual or alleged Sexual Assault and/or Sexual Battery; or
- Any act or omission in connection with the prevention or suppression of such acts, whether caused by or at the instigation or direction of you, your employees or volunteers, patrons or any other persons; or
- Claims, accusations or charges of negligent hiring, placement, training or supervision arising from any of the foregoing are not covered.
We shall have no obligation to defend you, or any other insured, for any such loss, claim or suit.
The district court granted Acceptance’s motion to dismiss, finding Conner’s claims arose out of assault and battery committed by another bar patron. According to the district court, Conner’s allegations in the underlying action — that two patrons engaged in a physical altercation in the bar and that one drew a firearm from his waistband, aimed it at the second patron, and fired multiple shots, striking the second patron and two bystanders, including Conner — plainly encompassed the definition of assault and/or battery. The district court also found Conner’s injury plainly arose out of that assault and/or battery.
In combined appeals by Conner and Scaglione, Conner sought to enforce a state court judgment against Scaglione and Acceptance, arguing that the assault and battery exclusion was inapplicable because it did not specifically state that it applied “where the perpetrator was a third party unrelated to the insured and the victim was a bystander.” Separately, Scaglione argued the exclusion was limited to claims by the intended victim of the assault and battery. The Eight Circuit rejected both arguments.
According to the Eighth Circuit, the plain language of the exclusion provided that it applied to “any claims arising out of assault and/or battery.” The court disagreed that the exclusion was limited to an assault and/or battery committed by Scaglione or his employees and that it was limited to claims by the intended victim. Rather, the court found the exclusion applied to any claims arising out of assault and/or battery, including claims by innocent bystanders injured in the course of an assault and/or battery committed on the premises.
Moreover, the court agreed with the district court that the “concurrent proximate cause rule” — that insurance policies should be construed to provide coverage if an injury is proximately caused by two events, even if one event is subject to an exclusion — was inapplicable here. Because Scaglione knew patrons were often armed with dangerous weapons and failed to provide adequate security measures, the court found his alleged negligence was not independent of the assault. Rather, the court concluded that Conner’s injury was a foreseeable outcome of Scaglione’s alleged negligence, and thus the underlying assault and/or battery fell within the policy’s assault and battery exclusion. As such, the Eighth Circuit affirmed the district court judgment dismissing the claims against Acceptance.
