In Watford Specialty Insurance Co. v. MDF 92 River Street LLC, the New Jersey Appellate Division clarified that the term “wrongful eviction” in the insuring agreement of a commercial general liability policy’s “personal and advertising injury” coverage section contemplates eviction from a place where the individual has a possessory interest or right of private occupancy.
In that case, insurer Watford Specialty Insurance Co. issued a commercial general liability policy to MDF, the operator of a bar and nightclub in Hoboken, New Jersey, with limits of $1 million per occurrence and in the aggregate and a $1 million sublimit for assault and battery claims. MDF was sued by a patron of the bar, alleging that he was injured by two bouncers while they attempted to remove him from the premises. The lawsuit settled, and Watford paid MDF approximately $200,000, which represented the unimpaired amount remaining under the policy’s $1 million assault and battery sublimit. Watford then brought a declaratory judgment action seeking a declaration that its obligations to MDF under the policy had been satisfied.
In the declaratory judgment action, Watford argued that the lawsuit was covered under the “bodily injury” coverage part and subject to the policy’s $1 million assault and battery sublimit. The claimant (who had received an assignment of MDF’s rights under the policy) responded that the lawsuit was instead covered under the “personal and advertising injury” coverage part and was thus subject to a separate limit of liability. The claimant cited specifically to the subsection providing coverage for “the wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor,” arguing that the bouncers’ attempts to remove the claimant from the bar amounted to a “wrongful eviction” from a “room, dwelling, or premises that a person occupies.” The trial court found for Watford, holding that the loss fell squarely within the policy’s assault and battery sublimit. The claimant appealed.
On appeal, the court concluded that a “possessory interest or right of private occupancy” was required to trigger the “wrongful eviction” provision of the personal and advertising liability section of the commercial general liability policy, citing prior New Jersey Appellate Division precedent and case law from other jurisdictions in support. The court then noted that the claimant, as a patron of the insured’s bar, was merely a “business invitee” and had no possessory interest or right of private occupancy in the premises. As such, the court agreed with the trial court’s conclusion that the underlying allegations described “events more in line with that of assault th[a]n wrongful eviction,” such that the loss fell squarely within the policy’s assault and battery sublimit. The court rejected the claimant’s other arguments on appeal and affirmed the trial court’s judgment in favor of Watford accordingly.
