BlogLine

Oh, Saturday night’s alright for fighting, but you won’t get a little coverage in

12/20/24

By: Jessica Cauley

On August 27, 2024, the United States District Court for the Southern District of Florida entered an Order granting Westchester Surplus Lines Insurance Company and Illinois Union Insurance Company’s Motion for Final Summary Judgment in a declaratory action. RDY Store Inc. v. Westchester Surplus Lines Insurance Company, et al., 2024 WL 3949358, Case No. 23-23865-CIV-ALTONAGA, Reid. 

The action arises out of a dispute over the insurers’ duty to defend a Florida corporation operating a 7-Eleven convenience store after a store employee confronted a customer to return a beer bottle he took while under video surveillance. When the customer rebuffed the employee on his way out, the employee repeatedly struck the customer, resulting in severe injuries. The customer sued the convenience store for negligent hiring, training, and retention, and the insurers denied coverage under their respective general liability and liquor liability policies.  

Ordinarily, the duty to defend is determined solely by the “eight-corners” of the underlying customer’s Complaint and the insurance policies at issue. Mt. Hawley Ins. Co. v. Roebuck, 383 F. Supp. 3d 1351, 1360 (S.D. Fla. 2019). However, Florida courts will also consider extrinsic facts that are undisputed and, had they been pled in the Complaint, would place the claims outside the scope of coverage. Id. at 1361. Here, the parties agreed that the Incident Report and Arrest Affidavit regarding the event were appropriate for the Court’s consideration. 

Westchester successfully argued that its policy expressly precluded coverage for injuries arising out of assault and/or battery, which the policy defined as “attempted, threatened, intentional or voluntary act[s]” that “place[ ] another person in reasonable apprehension of immediate harmful or offensive contact.” The court found this language excluded coverage for all offensive contact, save completely involuntary acts. The court further discussed that the exclusion does not require an intent to harm, only that the employee intentionally struck the customer. Consistent with the Incident Report and Arrest Affidavit, there was no genuine dispute of fact as to the employee’s intentional (and surveilled) actions.  

Finally, the court was unpersuaded by the alternate argument that the employee acted out of self-defense. Namely, Florida courts have frequently concluded “that self-defense is not an exception to [an] intentional acts exclusion[.]” State Farm Fire & Cas. Co. v. Marshall, 554 So. 2d 504, 505 (Fla. 1989). As such, the employee intentionally made offensive contact with the customer, the assault and battery exclusion precluded coverage, and Westchester had no duty to defend the convenience store against the customer’s underlying Complaint. 

Illinois Union’s policy limited coverage, in relevant part, to damages resulting from injury that is the “direct result of selling, serving or furnishing of any alcoholic beverage.” Contrary to the convenience store’s position, the underlying theory of liability was not founded in the particular item the customer was there for, i.e. “a belly full of beer” a la Sir Elton John. Rather, the customer’s allegations revolved around negligent hiring, training, and retention. Consequently, Illinois Union did not owe a duty to defend the convenience store under its liquor liability policy by virtue of alcohol’s presence on the storefront. 

The court’s decision is a thorough analysis of the relationship between the customer’s allegations, evidence, and applicable policy language. The evaluation of the liquor liability policy is particularly instructive on how to properly examine the theory of liability rather than conflating facts that do not fairly invoke coverage under Florida law.  

For additional information about coverage issues, please contact Jessica Cauley (jessica.cauley@fmglaw.com) or your local FMG coverage attorney.