Catlin Speciality Insurance Company v. RFB Inc et al
ORDER AND OPINION GRANTING 23 Plaintiff's Motion for Summary Judgment and DECLARING that under the assault and battery endorsement of commercialgeneral liability policy 3900100991, in effect from August 22, 2012 to Augu st 22, 2013, Plaintiff Catlin Specialty Insurance Company is not obligated to indemnify Defendant RFB, Inc. and Defendant Frank Clyburn for any amount above $25,000 with respect to the claims in Bass v. RFB, Inc., et al., Civ. No. 2:15-2410-RMG. All other pending motions are DENIED AS MOOT. AND IT IS SO ORDERED. Signed by Honorable Richard M Gergel on 6/8/2017.(sshe, )
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
Catlin Specialty Insurance Group,
RFB, Inc. d/b/a Max & Henry's a/kJa
Henry's Sports Bar, Frank Clyburn, and
Civil Action No. 2:16-3135-RMG
ORDER AND OPINION
This matter is before the Court on Plaintiff Catlin Specialty Insurance Group's motion for
summary judgment. For the reasons set forth below, the Court grants the motion.
Defendant Jesse Bass alleges that on December 6, 2012, Cedrick Price, a bouncer at a bar
owned by Defendant Frank Clyburn and Defendant RFB, Inc. (together, "Henry's"), struck him
with force sufficient to knock him unconscious and to inflict serious brain injury. (Dkt. No. 1-1
23.) The bouncer was employed by Elite Security Services LLC, a business that provides nightclub
security services. (ld.
14.) On June 15,2015, Mr. Bass filed a federal lawsuit against Henry's,
Elite Security, and Mr. Price. Bass v. RFB, Inc., Civ. No.2: 15-241 O-RMG. In that matter, claims
against Elite Security have settled and Mr. Price is in default. Regarding Henry's, Mr. Bass asserts
a claim of negligence, alleging Henry's breached its duty to exercise reasonable car in the hiring,
supervision, and retention of Elite Security.
Plaintiff Catlin Specialty Insurance Group issued a commercial general liability ("CGL")
policy to Henry's that was in effect at the time of the incident. (Dkt. No. 1-2.) Catlin is defending
Henry's in the underlying lawsuit, subject to a reservation of rights. The policy limit is $1 million
per occurrence. (Id. at 8.) It, however, has an Assault and Battery Endorsement that sets a sublimit
of $25,000 per occurrence. (Id.) On September 16, 2016, Catlin filed the present action seeking
a declaration that the Assault and Battery Endorsement applies to Mr. Bass's claim against
Henry's. (Dkt. No.1.) The underlying litigation has been stayed pending resolution of the present
Summary judgment is appropriate if a party "shows that there is no genuine dispute as to
any material fact" and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(a). In other words, summary judgment should be granted "only when it is clear that there is no
dispute concerning either the facts of the controversy or the inferences to be drawn from those
facts." Pulliam Inv. Co. v. Cameo Props., 810 F.2d 1282, 1286 (4th Cir. 1987). "In determining
whether a genuine issue has been raised, the court must construe all inferences and ambiguities in
favor of the nonmoving party." HealthSouth Rehab. Hosp. v. Am. Nat'l Red Cross, 101 F.3d 1005,
1008 (4th Cir. 1996). The party seeking summary judgment shoulders the initial burden of
demonstrating to the court that there is no genuine issue of material fact. Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986).
Once the moving party has made this threshold demonstration, the non-moving party, to
survive the motion for summary judgment, may not rest on the allegations averred in his pleadings.
Id. at 324. Rather, the non-moving party must demonstrate that specific, material facts exist that
give rise to a genuine issue. Id. Under this standard, "[c]onclusory or speculative allegations do
not suffice, nor does a 'mere scintilla of evidence'" in support of the non-moving party's case.
Thompson v. Potomac Elec. Power Co., 312 F.3d 645, 649 (4th Cir. 2002) (quoting Phillips v.
CSXTransp., Inc., 190 F.3d 285, 287 (4th Cir. 1999)).
The sole question before the Court is whether the COL policy's assault and battery sublimit
applies to December 6, 2012 incident in which Mr. Bass was injured. The sublimit applies to
claims for bodily injury, personal injury, advertising injury, or property damage
arising from an assault and battery or out of any act or omission in connection with
the prevention, suppression, or failure to protect or suppress such acts including the
failure to warn, train, or supervise, whether caused by or at the instigation or
direction of the insured, his employees, patrons, or other person.
(Dkt. No. 1-2 at 6.) In South Carolina, an assault is conduct that places another "in reasonable fear
of bodily harm," and a battery is "the actual infliction of any unlawful, unauthorized violence on
the person of another." Mellen v. Lane, 659 S.E.2d 236, 244 (S.C. Ct. App. 2008). Mr. Bass
alleges he was struck in the head, knocking him unconscious by Mr. Price. (Dkt. No. 1-1
Witnesses to the incident have averred likewise. (Dkt. Nos. 31-2 & 31-3.) Mr. Bass has testified
that he was "attacked." (Dkt. No. 23-2 at 3.) There is no genuine dispute that Mr. Bass's alleges
his injuries arise from an assault and battery that occurred on December 6,2012.
Mr. Bass indeed does not contest that Mr. Price battered Mr. Bass, but he sue Henry's for
negligence, not the intentional torts of assault and battery. (Dkt. No.1-I.) That is a common
pleading practice. Insurers who insure bars are reluctant to insure the bar against liability for
barroom fights or for the actions of bouncers. In response, plaintiffs often attempt to plead into
coverage by asserting negligence-attempts federal and state courts routinely reject. See, e.g.,
Mount Vernon Fire Ins. Co. v. Creative Hous. Ltd, 93 F.3d 63, 66 (2d Cir. 1996); Scottsdale Ins.
Co. v. Moonshine Saloon, LLC, No. 2: 16-CV-0797-DCN, 2017 WL 68794, at *4 (D.S.C. Jan. 6,
2017); Mt. Vernon Fire Ins. Co. v. Dobbs, 873 F. Supp. 2d 762, 767 (N.D.W. Va. 2012);
Versatility, Inc. v. Capitol Indem. Corp., No. 2:10-942-JCM-PAL, 2011 WL 3444187, at *3 (D.
Nev. Aug. 5,2011); Downtown Norfolk Entm 't, Inc. v. Penn-Am. Ins. Co., 660 F. Supp. 2d 669,
675 (E.D. Va. 2008); St. Paul Reinsurance Co. v. Ollie's Seafood Grille & Bar, LLC, 242 F.R.D.
348, 351 (D.S.C. 2007), aff'd sub nom. St. Paul Reinsurance Co. v. Riviello, 296 F. App'x 377
(4th Cir. 2008); Kamaki Skiathos, Inc. v. Essex Ins. Co., 396 F. Supp. 2d 624, 629 (D. Md. 2005);
Capitollndem. Corp. v. Blazer, 51 F. Supp. 2d 1080, 1088 (D. Nev. 1999); Hermitage Ins. Co. v.
Dahms, 842 F. Supp. 319, 326 (N.D. IlL 1994); Eady v. Capitol Indem. Corp., 502 S.E.2d 514,
App. 1998); Essex Ins. Co. v. Fieldhouse, Inc., 506 N.W.2d 772, 776 (Iowa 1993);
Capitol Indem. Corp. v. Callis, 963 S.W.2d 247,250 (Mo. Ct. App. 1997); Berg v. Schultz, 526
N.W.2d 781, 783 (Wis. Ct. App. 1994).
Those cases express two principles that apply fully to the present case. First, "[a]lthough
the injuries may have been caused by the negligent acts of the defendant, that does not necessarily
mean that they did not arise out of an assault and/or battery." Callis,963 S.W.2d at 250. Second,
plaintiffs "cannot mischaracterize intentional acts as negligence claims in order to avoid the
exclusions contained within the insurance policy." Dobbs, 873 F. Supp. 2d at 766. In this case,
even if Henry's was negligent, and even if that negligence proximately caused Mr. Bass's injuries,
Mr. Bass's injury nonetheless arises out of an alleged battery. Mr. Bass cannot avoid a policy
sublimit by mischaracterizing Mr. Price's admittedly intentional act as negligence. Simply put, if
a sub limit for injuries arising from an assault and battery does not apply to punching a man in the
head intentionally during a fight at a bar, then it is difficult to imagine when it would ever apply.
In opposition to summary judgment, Mr. Bass argues that "assault and battery" is
ambiguous because the insurance policy does not define those terms. (Dkt. No. 31 at 4.) That
argument is without merit. The terms assault and battery are well defined under South Carolina
law and Mr. Bass apparently agrees with Catlin about the definition of those tenus. (Compare
Dkt. No. 23-1 at 6 (Catlin citing Mellen v. Lane, 659 S.E.2d 236 (S.c. Ct. App. 2008) to define
assault and battery) with Dkt. No. 31 at -45 (Mr. Bass citing Mellen to define assault and battery).
Mr. Bass also argues that there is a question of disputed material fact about whether Mr.
Bass's injuries arose from a battery. (Dkt. No. 31 at 5.) Mr. Bass points out that a battery requires
"unlawful, unauthorized violence" and he counterintuitively argues that here is a disputed factual
question about "whether the striking of Mr. Bass was unlawful or unauthorized." (ld.) Again, that
argument is without merit. If Mr. Bass alleges Mr. Price acted in a lawful, legally authorized
manner when he struck Mr. Bass, then he breached no duty owed Mr. Bass and neither Mr. Price
nor his employer is liable for the resulting injury to Mr. Bass. If Mr. Bass does not allege Mr.
Price acted lawfully, then there is no factual dispute. Moreover, in the underlying litigation Mr.
Bass has alleged Mr. Price acted unlawfully. (Dkt. No. 1-1
(alleging Mr. Price's actions were
"done with reckless disregard for Plaintiffs rights").) Mr. Bass is estopped from arguing the
opposite position in this coverage litigation.
Mr. Bass further argues the sublimit itself is ambiguous because it provides a $25,000 each
occurrence and $50,000 aggregate limit for claims arising from assault and battery and states
"[t]his aggregate limit is included in and not in addition to the policy General Aggregate Limit."
(Dkt. No. 31 at 7.) According to Mr. Bass, that fails to state that the $25,000 each occurrence limit
is not in addition to the policy's $1,000,000 general limit for each occurrence. That argument,
again, is without merit. The sub limit is perfectly clear: "The Limit of Insurance for this coverage
is $25,000 each occurrence and $50,000 aggregate for the policy." (Dkt. No. 1-2 at 6.)
Finally, Mr. Bass argues summary judgment is inappropriate because discovery is not yet
complete-in particular, Mr. Bass has not deposed Catlin's corporate representative. Often that
would be a compelling argument, but not in the present case. Mr. Bass's injuries manifestly arise
from an assault and battery, and so his claim for damages for those injuries arises from an assault
and battery even if his lawyers plead it as a negligence claim. Further discovery cannot change
Henry's argues that summary judgment should be denied because it was not "adequately
notified" of the assault and battery sublimit. (Dkt. No. 32 at 2.) Henry's does not argue that it
did not have actual notice of the policy limitation. Rather, Henry's argues it was not "notified"
that an assault and battery limitation on coverage could apply to claims arising from an assault and
battery even if those claims are artfully pleaded as negligence. (See id at 2-3.) That argument is,
of course, without merit.
To the extent Henry's means to argue that the policy limit is
unenforceable because it renders the policy meaningless, its argument fails because the policy
covers a great many risks other than assaults and batteries by employees or patrons-e.g., slip
Courts have held exclusions unenforceable because they would render an
insurance policy virtually meaningless only where the insurer attempts to exclude virtually all
claims that might arise from the insured's activities. See, e.g., Isle ofPalms Pest Control Co. v.
Monticello Ins. Co., 459 S.E.2d 318,321 (S.C. Ct. App. 1994).
For the foregoing reasons, the Court GRANTS Plaintiffs motion for summary judgment
(Dkt. No. 23) and DECLARES that under the assault and battery endorsement of commercial
general liability policy 3900100991, in effect from August 22,2012 to August 22, 2013, Plaintiff
Catlin Specialty Insurance Company is not obligated to indemnify Defendant RFB, Inc. and
Defendant Frank Clyburn for any amount above $25,000 with respect to the claims in Bass v. RFB,
Inc., et al., Civ. No. 2:15-2410-RMG. All other pending motions are DENIED AS MOOT.
AND IT IS SO ORDERED.
Richard Mark Gergel
United States District Court Judge
June ~, 2017
Charleston, South Carolina
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