United Natl Ins. v. Penuches Inc. CV-96-230-JD 03/14/97 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

United National Insurance Co.

v. Civil No. 96-230-JD

Penuche's, Inc., et al.

O R D E R

United National Insurance Company ("United National")

brought this now-consolidated action under N.H. Rev. Stat. Ann.

("RSA") § 491:22, seeking a declaration that it has no duty to

defend or indemnify Penuche's, Inc. and Todd Tousley in a state

court action brought against Penuche's and Tousley by Thomas

Burke.1 Before the court are the motions for summary judgment of

plaintiff United National (document no. 13), and of defendants

Penuche's and Tousley (document no. 12) and defendant Burke

(document no. 14).

Background

This insurance dispute arises out of a lawsuit filed in

state court by Thomas Burke against Penuche's, Inc., a Keene, New

'On April 19, 1996, Todd Tousley and Penuche's filed a petition for declaratory judgment in New Hampshire Superior Court, seeking a declaration that United National had a duty to defend and indemnify Tousley and Penuche's in the underlying action. The action was removed to federal court and, by order dated June 20, 1996, consolidated with the instant action. Hampshire corporation doing business as Penuche's Ale House, and

its president, Todd Tousley. Burke alleges that on October 4,

1995, he was assaulted from behind by a Penuche's patron after

Burke attempted to break up a barroom altercation in which the

patron had been involved. Burke further alleges that when he

turned around, Tousley "approached [him] head-on and face to

face, grabbing [him] in a bear hug in an apparent effort to

immobilize him." Burke avers that "the force of Tousley's

contact caused [him] to fall backwards, his body striking various

obstructions as he fell," and contends that, as a result of the

fall, he suffered a severe spinal cord injury. In count I of his

complaint, Burke seeks relief against Tousley based on Tousley's

negligence in (a) "carelessly and unreasonably intercept[ing

Burke] for the purpose of moving him"; (b) "carelessly

intercept[ing Burke] so that [he] was thrown backward, thereby

unreasonably compromising [Burke's] ability to maintain his

footing"; "carelessly forcibly mov[ing Burke] with [his] arms

pinned to his sides, thereby unreasonably compromising [his]

ability to protect himself in the event of a fall"; (d)

"carelessly forcibly mov[ing Burke] backwards even though the

floor surface was slippery and there were numerous obstructions

preventing easy movement"; (e) "carelessly us[ing] a level of

force that was wholly unnecessary to accomplish any proper

2 purpose"; and (f) "otherwise . . . failing to use reasonably safe

means in his intervention with . . . Burke." In count II, Burke

alleges that Penuche's "is liable in respondeat superior for"

Tousley's negligence, and further avers that Penuche's was

"actively negligent insofar as the premises, being slippery

and/or cluttered, were a proximate cause of Thomas Burke's fall"

and the damages he has incurred.

After the commencement of the state court action, Tousley

and Penuche's demanded that United National provide coverage for

and a defense of Burke's claims under a multi-peril insurance

policy issued by United National to "Todd Tousley DBA Penuche's

Ale House." The policy obligates United National to defend the

insured against and indemnify the insured for claims asserting

bodily injury caused by "occurrence[s] . . . arising out of the

ownership, maintenance or use of the insured premises." After

originally refusing to provide a defense and denying any right to

coverage. United National subseguently agreed to provide a

defense subject to a reservation of rights, claiming that two

exclusions in the policy relieve it of any obligation to provide

coverage for Burke's loss. The first exclusion, hereinafter the

"liguor liability exclusion," provides that coverage does not

extend to claims for

3 bodily injury or property damages for which the insured or his indemnitee may be held liable

(I) as a person or organization engaged in the business of manufacturing, distributing, selling or serving alcoholic beverages.

The second exclusion, styled an "assault and battery exclusion,"

appears in a "multipurpose exclusion endorsement" and excludes

coverage for

claims arising out of an assault and/or battery, whether caused by or at the instigation of, or at the direction of, or omission by, the Insured, and/or his employees.

Discussion

United National contends that the liguor liability and

assault and battery exclusions of the policy negate its duties to

provide coverage for Tousley and Penuche's in the state court

action brought by Burke. Specifically, it claims that the liguor

liability exclusion is applicable because Burke's claims arise

out of the service and sale of alcohol. United National further

claims that, regardless of the fact that the state court action

sounds in negligence, it "arises out of" two batteries -- the

original altercation that Burke attempted to break up and of

which he ultimately became a victim, and the bearhug in which

Tousley placed Burke. The defendants dispute these assertions.

4 Summary judgment is appropriate when material facts are

undisputed and the moving party is entitled to judgment as a

matter of law. Rodriquez-Garcia v. Davila,

(1st

Cir. 1990) (citing Fed. R. Civ. P. 56 (c)). The burden is on the

moving party to establish the lack of a genuine, material factual

issue, Finn v. Consolidated Rail Corp.,

(1st Cir.

1986), and the court must view the record in the light most

favorable to the nonmovant, according the nonmovant all

beneficial inferences discernable from the evidence. Caputo v.

Boston Edison Co.,

(1st Cir. 1991) . However,

once the movant has made a properly supported motion for summary

judgment, the adverse party "must set forth specific facts

showing that there is a genuine issue for trial." Anderson v.

Liberty Lobby, Inc.,

(1986) (citing Fed. R.

Civ. P . 56 (e)).

Under New Hampshire law, "an insurer's obligation to defend

its insured is determined by whether the cause of action against

the insured alleges sufficient facts in the pleadings to bring it

within the express terms of the policy." Happy House Amusement,

Inc. v. New Hampshire Ins. Co.,

,

(1992) (guoting United States Fidelity & Guar. Co. v.

Johnson Shoes,

,

(1983)); see

also Fisher v. Fitchburg Mut. Ins. Co.,

, 560

, 631-32 (1989). A duty to defend will be found if,

resolving any doubts in favor of the insured, coverage is

inferable from the "reasonable intendment" of the pleadings.

Green Mountain Ins. Co. v. Foreman,

,

(1994) (citing Happy House,

,

(citation omitted)). When construing the scope of a

liability policy's coverage, the

court must compare the policy language with the facts pled in the underlying suit to see if the claim falls within the express terms of the policy; the legal nomenclature the plaintiff uses to frame the suit is relatively unimportant.

Pennsylvania Millers Mut. Ins. Co. v. Doe,

(D.N.H. 1994) (guoting Titan Holdings Syndicate, Inc. v. City of

Keene,

(1st Cir. 1990)), aff'd sub nom.

Pennsylvania Millers Mut. Ins. Co. v. Cheever,

(1st

Cir. 1995); see also Winnacunnet C o o p . Sch. Dist. v. National

Union Fire Ins. Co.,

(1st Cir. 1996) (court may

inguire into underlying facts "'to avoid permitting the pleading

strategies, whims, and vagaries of third party claimants to

control the rights of parties to an insurance contract'")

(guoting M. Mooney Corp. v. United States Fidelity & Guar. Co.,

,

(1992)). At all times,

the insurer bears the burden of showing that no coverage exists

under the policy. See RSA § 491:22-a (1983) .

6 The complaint in the underlying action, which alleges that

Tousley negligently restrained Burke and that Tousley and

Penuche's negligently maintained the premises, contains factual

allegations from which it may be inferred that Burke suffered

bodily injury caused by an "occurrence" that "ar[ose] out of the

ownership, maintenance or use of the insured premises." Because

these allegations are sufficient to bring Burke's claims within

the general scope of coverage under the policy. United National

will have a duty to defend and indemnify Tousley and Penuche's in

the underlying action unless it demonstrates that coverage is

barred by either of the exclusions that it claims are applicable.

The court first dispatches with United National's contention

that the liguor liability exclusion in the policy precludes

coverage. By its terms, this provision excludes only those

claims "for which the insured or his indemnitee may be held

liable as a person or organization enqaged in the business of

manufacturing, distributing, selling or serving alcoholic

beverages" (emphasis added). The clear import of this provision

is that it excludes coverage in the event that the insured is

found liable in his capacity as a manufacturer, distributor,

seller, or server of alcohol. See, e.g.. New Hampshire Ins. Co.

v. Hillwinds Inn, Inc.,

,

(1977) (similar language excluded coverage for suit brought

7 against tavern for negligently serving alcohol to customer who,

under influence of alcohol, injured plaintiff). Under the theory

of liability in the underlying case, it is clear that Burke does

not seek relief from Tousley and Penuche's in their capacities as

sellers or servers of alcohol. Although Burke's complaint makes

reference to the defendants' general duty to "[plrovide that

those persons exercising the role of 'bouncer' be absolutely

sober," this allegation is unrelated to Burke's theories of

recovery -- namely, that Tousley was negligent in restraining

him, and that the defendants negligently maintained the

facilities. Accordingly, the court finds the liguor liability

exclusion inapplicable to Burke's state court action.

The court next addresses United National's reliance on the

assault and battery exclusion. As noted above, the policy

excludes

coverage for claims arising out of an assault and/or battery, whether caused by or at the instigation of, or at the direction of, or omission by, the Insured, and/or his employees.

Construing any ambiguity created by the use of the term "whether"

against the insurer, see, e.g., Trombly v. Blue Cross/Blue

Shield,

,

(1980), the court

interprets the exclusion to apply only to claims arising out of

assaults and batteries caused "by or at the instigation of, or at

8 the direction of, or omission by, the Insured, and/or his

employees," and not to claims arising out of assaults and

batteries that fall outside of this category.

This limitation undermines the plaintiff's contention that

Burke's claim is excluded from coverage under the policy because

of its relation to the original altercation that Burke attempted

to break up and of which he ultimately became a victim. Neither

Tousley's complaint nor the record before the court indicates

that Burke, through either his acts or omissions, bears

responsibility for any assault or battery committed during the

course of the original altercation. Absent any such involvement

on the part of Burke, the altercation cannot not trigger the

assault and battery exclusion.

The court next turns to the plaintiff's second justification

for invoking the assault and battery exclusion, i.e., its claim

that the underlying lawsuit arises out of the bearhug in which

Tousley placed Burke, and inguires whether the bearhug can

constitute a battery sufficient to trigger the assault and

battery exclusion. It is well settled that "[a]n actor is

subject to liability to another for battery if . . . 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 contact, and . . . a harmful contact with the person of the

9 other directly or indirectly results." Restatement (Second) of

Torts § 13 (1965); accord 6 Am. Jur. 2d Assault and Battery § 111

(1963), cited in Tupick v. Town of Gorham, No. 93-475-JD, slip

op. at 14 (D.N.H. Oct. 13, 1994) (applying New Hampshire law).

In order to be liable for battery, an actor must act "for the

purpose of bringing about a harmful or offensive contact or an

apprehension of such contact to another or to a third person or

with knowledge that such a result will, to a substantial

certainty, be produced by his act." Restatement (Second) of

Torts § 18 cmt. e. A bodily contact is offensive only if it

"offends a reasonable sense of personal dignity." Id. § 19.

In the instant case, it is undisputed that Tousley was

merely acting as a peacemaker and did not intend to cause a

harmful contact to Burke. Moreover, even taken in the light most

favorable to United National, the record does not support an

inference that Tousley intended to, or knew with substantial

certainty that his acts were likely to, cause a contact with

Burke that would offend a reasonable sense of personal dignity.

Although the placement of a person in a bearhug might, in

isolation, invade a reasonable person's sense of autonomy, such

action, undertaken by an in innkeeper in a good-faith attempt to

prevent the escalation of an altercation on the premises of his

establishment, can only be viewed as a reasonable response to a

10 potentially dangerous situation. Thus, it is beyond dispute that

Burke's actions, although potentially performed negligently, lack

the reguisite intent to constitute a battery and thus to trigger

the assault and battery exclusion.2

For the foregoing reasons, the court finds that Burke's

claim against Tousley and Penuche's falls within the scope of the

policy and is not barred by the liguor liability or assault and

battery exclusion. Accordingly, the court declares that United

National has a duty to defend, and, if necessary, to indemnify

Tousley and Penuche's in Burke's state court action against them.

The court pauses to note that while United National cites the district court's opinion in United Nat'l Ins. Co. v. The Tunnel, Inc..

, No. 90 CIV. 1070 (MJL) (S.D.N.Y. Sept. 14, 1992) for the proposition that the exclusion at issue would exclude coverage for a bouncer's actions in ejecting a patron, regardless of whether the bouncer acted intentionally or negligently, it has failed to point out that the case was heard on appeal and that the Second Circuit expressly overruled the district's court reasoning in affirming the case. See United Nat'l Ins. Co. v. The Tunnel, Inc.,

(2d Cir. 1993). On appeal, the Second Circuit suggested that the exclusion would not preclude coverage for a bouncer who, in the course of performing his duties, negligently made contact with a patron but did not commit a battery. See

The appellate court nonetheless affirmed the district court's grant of summary judgment because the claimant in the underlying tort suit, although proceeding under a negligence theory, had not advanced a colorable claim of negligence. See

. United National's failure to mention either the existence of an appeal in The Tunnel or the Second Circuit's analysis of the issues presented therein is particularly troubling given the centrality of the appellate opinion in The Tunnel to the issues presented in the instant case and the fact that United National was one of the litigants who argued The Tunnel before the Second Circuit.

11 Conclusion

United National's motion for summary judgment (document no.

13) is denied. The motions for summary judgment of defendants

Penuche's and Tousley (document no. 12) and defendant Burke

(document no. 14) are granted. The clerk is ordered to close the

case.

SO ORDERED.

Joseph A. DiClerico, Jr. Chief Judge

March 14, 1997

cc: Vincent A. Wenners Jr., Esguire Rand S. Burnett, Esguire James B. Kazan, Esguire Jeffrey S. Cohen, Esguire

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