USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 97-1476
UNITED NATIONAL INSURANCE COMPANY,
Plaintiff, Appellant,
v.
PENUCHE'S, INC., ET AL.,
Defendants, Appellees.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Joseph A. DiClerico, U.S. District Judge]
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Before
Torruella, Chief Judge,
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Lynch, Circuit Judge,
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and Keeton,* District Judge.
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Richard J. Riley, with whom Murphy & Riley, P.C. was on
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brief for appellant.
Jeffrey S. Cohen, with whom Gregory R. Kirsh and Sulloway &
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Hollis, P.L.L.C. were on brief for appellees.
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November 6, 1997
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* Of the District of Massachusetts, sitting by designation.
TORRUELLA, Chief Judge. United National Insurance
TORRUELLA, Chief Judge.
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Company ("United National") brought this suit seeking a
declaration that it has no duty to defend or indemnify Penuche's,
Inc. ("Penuche's"), and its president, Todd Tousley, in a tort
action brought by a Penuche's Ale House patron, Thomas Burke. At
Penuche's, Burke was involved in an altercation which Tousley
attempted to break up. In so doing, Tousley caused Burke to fall
backward, injuring his spine. Among other contentions, United
National claims that under New Hampshire law it has no duty to
indemnify Penuche's or Tousley for this claim because its multi-
peril insurance policy contains an exclusion for any claims
"arising out of an assault and/or battery." We reject United
National's arguments and affirm the district court's award of
summary judgment to Penuche's and Tousley, but we do so on
different grounds than decided by that court.
BACKGROUND
BACKGROUND
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The facts in this case are essentially undisputed. On
October 4, 1995, Burke was in Penuche's Ale House in Keene, New
Hampshire. An altercation ensued between two men, and Burke left
his table to attempt to calm them down. Afterwards, as he turned
his back to return to his table, he was attacked by one of the
men with a barrage of punches to the side and back of his head.
As he turned around to face his assailant, he observed a
Penuche's employee, Tousley, coming toward him to stop the fight.
Tousley grabbed Burke in a "bear hug," pinning his arms to his
sides in an apparent attempt to immobilize him and prevent
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further fighting. Tousley's momentum, however, caused Burke to
fall backwards, striking various obstructions as he fell. The
fall left Burke with a severe spinal cord injury.
Burke sued Tousley and Penuche's in a New Hampshire
court, alleging that his injuries resulted from Tousley's
negligence in carelessly intercepting and restraining him. Burke
further claimed that Penuche's is liable under respondeat
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superior, and "actively negligent" insofar as slippery and/or
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cluttered premises proximately caused his injuries. After the
commencement of the state court action, Tousley and Penuche's
demanded that United National provide coverage and defense of
Burke's claims under a multi-peril insurance policy held by "Todd
Tousley DBA Penuche's Ale House." United National agreed to
provide a defense subject to a reservation of rights, claiming
that an exclusion in its policy relieves it of any indemnity
obligation. It subsequently sued Penuche's and Tousley in
federal district court under diversity jurisdiction, 28 U.S.C.
1332, seeking a declaratory judgment to this effect.
Penuche's policy requires United National to defend and
indemnify it against claims asserting bodily injury caused by
"occurrence[s] . . . arising out of the ownership, maintenance or
use of the insured premises." United National contends that
"exclusions" take away coverage that would otherwise apply to
this case under this broad "coverage" provision.
One of the policy provisions excludes coverage for:
claims arising out of an assault and/or
battery, whether caused by or at the
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instigation of, or at the direction of, or
omission by, the Insured, and/or his
employees.
This is the "assault and battery" exclusion at issue. United
National also requests a limited declaration that insofar as
Burke's claims arise out of Penuche's negligent sale or service
of alcoholic beverages, coverage is precluded by a "liquor
liability" exclusion.
The district court found that neither exclusion
precluded coverage for the underlying suit. The court awarded
summary judgment for Penuche's and Tousley, ordering United
National to defend and indemnify the claims. United National
appeals this award, asking for declaratory judgments under both
exclusions and further arguing that it was premature for the
district court to order it to indemnify the underlying claims, as
opposed to merely ordering a defense of those claims.
DISCUSSION
DISCUSSION
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We review de novo a district court's grant of summary
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judgment. Pine Tree Medical Associates v. Secretary of Health
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and Human Services, __ F.3d __, 1997 WL 563587 at *2, (1st Cir.
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1997).
I. The Assault and Battery Exclusion
I. The Assault and Battery Exclusion
United National claims that coverage for Burke's
injuries is excluded because they "arose out of" two assault and
batteries: first Burke was attacked by another Penuche's patron;
and then he was manhandled by Tousley, who was attempting to
break up the fighting. United National argues that the assault
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and battery exclusion applies if the claims arose out of either
or both of these incidents.
A. The Fight
A. The Fight
It is not disputed that Burke was battered by another
patron of Penuche's on October 4, 1995. However, the assault and
battery exclusion is only implicated by this fight if batteries
by customers were a type of battery excluded by the contract, and
if Burke's injuries could fairly be said to "arise out of" this
patron's attack.
The policy excludes "claims arising out of an assault
and/or battery, whether caused by or at the instigation of, or at
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the direction of, or omission by, the Insured, and/or his
employees." (emphasis added). Tousley claims that this exclusion
is inapplicable to any claims arising out of the patrons' fight
because its terms only exclude coverage for assaults caused by
acts or omissions of employees. In other words, Tousley reads
the examples following the word "whether" as an exhaustive list.
He argues that, at the very least, this provision is ambiguous,
and that under New Hampshire law this ambiguity must be resolved
against United National. See Hoepp v. State Farm Ins. Co., 697
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A.2d 943, 945 (N.H. 1997). These arguments fail.
An insurance policy's language "must be accorded its
natural and ordinary meaning." Coakley v. Maine Bonding and Cas.
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Co., 618 A.2d 777, 781 (N.H. 1992) (quoting Trombly v. Blue
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Cross/Blue Shield, 423 A.2d 980, 984 (N.H. 1980)). Tousley's
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position either reads the word "whether" out of the exclusion
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completely, or gives it a meaning identical to the word "if."
This interpretation runs against the commonly accepted meaning of
the word "whether" in this context. If one hears, "the post
office will deliver your mail, whether it is raining or snowing,"
one will not take this to mean that mail is only delivered in
inclement weather. Similarly, where this policy lists specific
types of excluded assaults and batteries after the word
"whether," it does not follow that other assaults and batteries
are not excluded. Our interpretation of this exclusion is
consistent with the only other court that we have found to have
addressed this question. In United Nat'l Ins. Co. v. Horning,
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Ltd., 882 F. Supp. 310 (W.D.N.Y. 1995), United National sought a
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declaratory judgment under an identical exclusion in a liquor
liability policy. Horning involved an action brought by a rape
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victim against a drinking establishment and bartenders for
serving her attacker even though he was under the influence.
Rejecting a reading of the clause identical to that proposed here
by Tousley, the district court held that "[t]he specific
instances identified in the clause are simply not meant to
provide an exhaustive list of the conduct contemplated by the
exclusion." Id. at 314. We agree.
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Furthermore, if Burke is trying to hold these
defendants liable for the actions of a customer, his theory of
liability must necessarily follow from an act or omission of
Penuche's or its employees. See, e.g., United Nat'l Ins. Co. v.
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Waterfront New York Realty Corp., 994 F.2d 105, 109-110 (2d Cir.
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1993) citing United Nat'l Ins. Co. v. The Tunnel, Inc., 988 F.2d
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351, 354 (2d Cir. 1993) (identical assault and battery exclusion
cannot be read to exclude only more "direct" acts or omissions of
employees as opposed to more "remote acts of negligence" leading
to assaults and batteries). Therefore, the exclusion applies to
the fight in this case, and the district court erred in adopting
Penuche's limited interpretation of this clause.
Even if the policy exclusion covers this type of
battery, however, the exclusion only precludes recovery in this
case if Burke's injuries also can be said to "arise out of" the
fight. Under New Hampshire law, "arising out of" is a very broad
term meaning "originating from or growing out of or flowing
from." Winnacunnet Coop. Sch. Dist. v. National Union Fire Ins.
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Co., 84 F.3d 32, 35 (1st Cir. 1996) (citing Merrimack Sch. Dist.
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v. National Sch. Bus Serv., Inc., 661 A.2d 1197, 1199 (N.H. 1995)
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(quoting Carter v. Bergeron, 160 A.2d 348, 353 (N.H. 1960))).
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While the concept of "arising out of" is broader than proximate
causation, it is not so broad as to encompass a "tenuous"
connection. See Cannon v. Maine Bonding & Casualty Co., 639 A.2d
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270, 271 (N.H. 1994); Akerley v. Hartford Ins. Group, 616 A.2d
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511, 515 (N.H. 1992).
United National argues that Burke's injuries arose out
of the altercation with the other patron insofar as that
altercation necessitated Tousley's doomed intervention. While
this argument has some plausibility, we hold that Burke's
injuries cannot be said to "arise out of" the initial attack.
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The spinal injury occurred when Tousley's "bear hug" and his
momentum from hurrying over to stop the fight caused Burke to
fall backward, into a table and onto the floor. All of the
damages in this tort action stem from a discrete intervening act
of alleged negligence, and this claim cannot be said to arise out
of earlier actions. Tousley had a completely different objective
from the brawling patron, and Burke's eventual injuries were not
caused by the blows he received in the fight. See Winnacunnet,
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84 F.3d at 38 (observing that assault and battery exclusions are
intended to preclude coverage of claims where such excluded acts
immediately cause the injury). This is not a case in which a
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bartender or bouncer joined sides in a donnybrook. The injury
caused by the employee in this case arose entirely out of his own
actions.
The district court's conclusion that the assault and
battery exclusion is inapplicable to the fight is affirmed on
these alternate grounds. See Frillz, Inc. v. Lader, 104 F.3d
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515, 516 (1st Cir. 1997) (reviewing court is not bound by the
rationale of the lower court on summary judgment, but may affirm
"on any alternative ground made manifest by the record").
B. The "Bear Hug"
B. The "Bear Hug"
Having disposed of United National's argument that
Burke's fight precludes coverage, the applicability of the
assault and battery exclusion hinges on whether Tousley's attempt
to break up the fight itself constituted a "battery." Since
there is no definition of "battery" in the policy, we look to the
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common law definition of the term. According to the Restatement
(Second) of Torts, an actor is liable to another for battery if:
(a) he acts intending to cause a harmful
or offensive contact with the person of
the other or a third person, or an
imminent apprehension of such a contact,
and
(b) a harmful contact with the person of
the other directly or indirectly results.
Restatement (Second) of Torts 13 (1977). As both parties
acknowledge in their briefs, the disputed issue here is whether
Tousley had the requisite intent to cause an "offensive" contact
with Burke.1
United National refers this Court to section 19 of the
Restatement (Second), which provides that "bodily contact is
offensive if it offends a reasonable person's sense of personal
dignity." It argues that Tousley's protective "bear hug" would
offend a reasonable person's sense of dignity. We find this
argument unpersuasive.
Burke testified at his deposition that, from the moment
he saw Tousley about to grab him, he understood Tousley to be
acting in a peacekeeping role. No reasonable person would feel
their personal dignity offended by a bartender trying to prevent
fighting in his establishment. This would be a different case if
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1 To commit an "assault" under the Restatement (Second) of
Torts, the actor must intend to cause an imminent apprehension in
another person of harmful or offensive contact. Restatement
(Second) of Torts 21 (1977). Because, under the common law,
the intent element of "battery" subsumes the intent element of
"assault," and because neither party argues that Tousley's bear
hug constituted an "assault" rather than a "battery," it will
suffice to inquire whether Tousley committed a battery.
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Tousley had hit or pushed Burke, however, it is undisputed that
Tousley was merely attempting to keep Burke out of harm's way.
Professor Prosser offered a helpful example to
distinguish between the intentional battery and negligence:
If an automobile driver runs down a man
in the street before him, with the desire
to hit him, or with the belief that he is
certain to do so, it is an intentional
battery; but if he has no such desire or
belief, but merely acts unreasonably in
failing to guard against a risk which he
should appreciate, it is negligence.
Prosser, Law of Torts, section 31 at 145 (4th ed. 1971). In this
case, Tousley's actions were negligent at most, and United
National's "offending dignity" argument is unavailing.
II. The Liquor Liability Exclusion
II. The Liquor Liability Exclusion
United National also seeks a declaratory judgment that,
to the extent that Burke's claims arise out of Penuche's sale or
service of alcoholic beverages, coverage is precluded by a
"liquor liability" exclusion. This exclusion bars claims for
"bodily injury or property damages for which the insured or his
indemnitee may be held liable . . . as a person or organization
engaged in the business of manufacturing, distributing, selling
or serving alcoholic beverages." However, in his Memorandum in
Support of Motion for Summary Judgment, Burke admitted "[t]here
is no allegation or evidence that Tousley or Penuche's would be
liable for bodily injury by reason of the 'violation of any
statute, ordinance or regulation' pertaining to the sale of
alcohol." In the face of this concession, United National's
request for a declaration on its "liquor liability" exclusion is
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superfluous. Under no reasonable construction of Burke's
complaint is Penuche's being sued for negligently furnishing
alcoholic beverages.
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III. The Court Order to Indemnify the Insured
III. The Court Order to Indemnify the Insured
Finally, United National argues that even if the
exclusions do not apply to Burke's tort claims, the district
court acted prematurely when it ordered United National to
indemnify the insured before a trial. The insurance company
argues that "[i]t is currently unknown precisely what the
evidence will be concerning the encounter," and that it was error
to "assume that the evidence will be as it has been presented in
discovery." This argument lacks any support in law. The New
Hampshire Supreme Court, as a matter of course, affirms court
orders to indemnify that are issued before trial. See, e.g.,
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Trefethen v. New Hampshire Ins. Group, 645 A.2d 72, 75 (N.H.
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1994) (affirming declaratory judgment that insurer had duty to
defend and indemnify claims); White Mountain Constr. Co. v.
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Transamerica Ins. Co., 631 A.2d 907, 910 (N.H. 1993) (same).
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If Burke prevails at trial, and we have determined that
no exclusions in the policy apply, United National simply cannot
avoid its obligation. Federal courts cannot limit their rulings
in anticipation of potential surprise revelations during trial.
If, in fact, some heretofore unanticipated development during
trial negates the rationale of this or any judgment, the affected
party may file a Motion for Relief From Judgment or Order in
accordance with Rule 60(b) of the Federal Rules of Civil
Procedure. However, we will not refrain from affirming an order
awarding indemnification for insurance claims on summary judgment
whereallavailablefactsandlawindicatethatsuchanorderisappropriate.
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For the reasons stated herein, the district court's
award for summary judgment and order for the defense and
indemnification of Thomas Burke's claims is affirmed.
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