Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-01000/USCOURTS-caed-2_05-cv-01000-0/pdf.json

Parties Involved:
Elizabeth Gorman
Plaintiff
Troy Maloney
Plaintiff
Scottsdale Insurance Company
Defendant
Colby Worton
Plaintiff

Document Text:

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

COLBY WORTON, ELIZABETH

GORMAN, TROY MALONEY,

NO. CIV. S 05-1000 MCE GGH

Plaintiffs,

v. MEMORANDUM AND ORDER

SCOTTSDALE INSURANCE COMPANY,

and DOES 1 to 100,

Defendant.

----oo0oo----

Presently before the Court is a Motion to Dismiss brought by

Defendant Scottsdale Insurance Company (“Scottsdale”) on grounds

that, pursuant to Federal Rule of Civil Procedure 12(b)(6),

Plaintiffs’ complaint for breach of contract and breach of the

implied covenant of good faith and fair dealing fails to state

any viable claim against Scottsdale in the absence of any

insurance coverage owed by Scottsdale as a result of the incident

underlying this litigation. Plaintiffs’ complaint, originally

filed in state court, was removed to this Court on diversity of

citizenship grounds pursuant to 28 U.S.C. §§ 1332 and 1441(b). 

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Because oral argument would not be of material assistance, 1

this matter was deemed suitable for decision without oral

argument. E.D. Local Rule 78-230(h).

Unless otherwise noted, the facts as set forth in this 2

section are taken from the allegations of the complaint on file

herein and its exhibits.

A copy of this lawsuit, filed on May 31, 2002 and entitled 3

Worton v. Maloney, et al., El Dorado County Superior Court Case

No. PC20020322, is attached as Exhibit “B” to the instant

complaint.

See Exhibit “B” to Plaintiffs’ Complaint, p. 4, 6. 4

2

As set forth below, Scottsdale’s motion will be granted.1

BACKGROUND2

This action arises from a May 31, 2001 altercation between

two students at Golden Sierra High School. Plaintiff Colby

Worton (“Worton”) alleges that he sustained permanent injuries,

including scarring as well as bone and nerve damage to the eye

socket, as a result of being struck in the face by Plaintiff Troy

Maloney (“Maloney”). In the complaint filed on his behalf 3

following the incident, Worton alleges that Maloney’s conduct in

striking him was intentional, but goes on to alternatively frame

Maloney’s behavior in terms of negligence (Maloney “negligently

reached out with his arm and hand, striking [Worton] in the

face”). Both Maloney and his mother, Plaintiff Elizabeth Gorman 4

(“Gorman”), were named as defendants in that lawsuit.

Gorman tendered the defense of the action to her homeowners

insurance carrier, Defendant Scottsdale Insurance Company

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Although Plaintiffs’ complaint appears to attach only the 5

face page to the Scottsdale policy, it purports to incorporate

the entire policy as Exhibit “A”. Consequently, consideration of

the entire policy as attached to the Robertson declaration is

appropriate on this motion to dismiss, particularly since the

policy is central to the claims at issue herein and Plaintiffs

have not questioned the authenticity of the copy now being

offered. See, e.g., Branch v. Tunnell, 14 F.3d 449, 453-54 (9th

Cir. 1994).

3

(“Scottsdale”).

The Scottsdale policy provided bodily injury liability

coverage as follows:

SECTION II - LIABILITY COVERAGES

COVERAGE E - Personal Liability

If a claim is made or a suit is brought against an “insured”

for damages because of “bodily injury” or “property damage”

caused by an “occurrence” to which this coverage applies, we

will: 

1. Pay up to our limit of liability for the damages for

which the “insured” is legally liable. Damages include

prejudgment interest awarded against the “insured”; and

2. Provide a defense at our expense by counsel of our

choice, even if the suit is groundless, false or

fraudulent. We may investigate and settle any claim

or suit that we decide is appropriate. Our duty to

settle or defend ends when the amount we pay for

damages resulting from the “occurrence” equals out

limit of liability.” 

(Policy, attached as Exhibit 1 to the Declaration of Ann L.

Robertson, p. SIC 0030.5

The policy excludes any coverage, however, for bodily injury

arising from assault or battery committed by any person:

This insurance does not apply to bodily injury or property

damage arising from:

A. Assault and Battery committed by any insured, any

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employee of any insured, or any other person;

B. The failure to suppress or prevent Assault and Battery

by any such person; or

C. Any Assault or Battery from or allegedly related to the

negligent hiring, supervision or training of any

employee of the insured.

Id. at p. SIC 0010.

Although Scottsdale initially assumed the representation of

Maloney and Gorman in the Worton lawsuit, Scottsdale ultimately

withdrew that defense on or about March 31, 2003 after

determining that the assault and battery exclusion contained

within its policy precluded any coverage for the loss.

Plaintiffs Maloney and Gorman ultimately entered into a

stipulated judgment for the disposition of the Worton lawsuit

after Scottsdale withdrew its defense. Through the present

action, Plaintiffs seek to collect that $275,000 judgment as well

as extra-contractual damages stemming from Scottsdale’s allegedly

wrongful failure to defend and/or indemnify its insured, Gorman,

in the underlying lawsuit.

STANDARD

On a motion to dismiss for failure to state a claim

under Rule 12(b)(6), all allegations of material fact must be

accepted as true and construed in the light most favorable to the

nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336,

337-38 (9th Cir. 1996). A complaint will not be dismissed for

failure to state a claim “‘unless it appears beyond doubt that

plaintiff can prove no set of facts in support of [his or] her

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claim that would entitle [him or] her to relief.’” Yamaguchi v.

Dep’t of the Air Force, 109 F.3d 1475, 1480 (9th Cir. 1997)

(quoting Lewis v. Tel. Employees Credit Union, 87 F.3d 1537, 1545

(9th Cir. 1996)).

If the court grants a motion to dismiss a complaint, it must

then decide whether to grant leave to amend. The Court should

"freely give[]" leave to amend when there is no "undue delay, bad

faith[,] dilatory motive on the part of the movant, . . . undue

prejudice to the opposing party by virtue of . . . the amendment,

[or] futility of the amendment. . . ." Fed. R. Civ. P. 15(a);

Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to

amend is only denied when it is clear that the deficiencies of

the complaint cannot be cured by amendment. DeSoto v. Yellow

Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).

ANALYSIS

This case hinges on whether the assault and battery

exclusion contained in Scottsdale’s policy unambiguously excludes

any coverage for damages stemming from Plaintiff Worton’s

injuries. According to Plaintiffs, a potential for coverage

exists inasmuch as the underlying complaint alleges negligent

conduct. In that regard, Plaintiffs contend that Scottsdale’s

investigation of the incident revealed that Maloney mistakenly

acted in self defense to what he perceived as a threat from

Worton. (Plaintiffs’ Opposition, 2:20-23, 5:24-26). Plaintiffs’

complaint describes Maloney’s behavior in this regard as

“imperfect self defense”. (Complaint, ¶ 7). Plaintiffs contend

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that if Maloney lacked the intent necessary to sustain a claim

for assault and battery, the exclusion contained in the

Scottsdale policy necessarily cannot apply.

Despite the label attached to Maloney’s conduct, California

case law unequivocally indicates there can be no coverage under

the Scottsdale policy for the altercation giving rise to this

lawsuit. In considering assault and battery exclusions like

that contained in Scottsdale’s policy, courts have routinely held

that any claim based on assault and battery is precluded

irrespective of the legal theory asserted against the insured. 

See, e.g., Century Transit Sys., Inc. v. American Empire Surplus

Lines Ins. Co., 42 Cal. App. 4 121 (1996); Zelda, Inc. v. th

Northland Ins. Co., 56 Cal. App. 4 1252 (1997). Where any th

incident of physical injury from an altercation is at the core of

a claim or suit, the exclusion precludes any duty to defend or to

indemnify even if the suit is couched in allegations of

negligence. The cases focus on the type of event in which injury

is sustained in determining the applicability of the exclusion,

not upon the insured’s conduct or intent. 

In Century Transit, the insured, like Plaintiffs herein,

argued that an assault and battery exclusion barring any coverage

for a claim “based on assault and battery” did not apply because

negligent conduct was alleged. After reviewing law interpreting

similar exclusions by other jurisdictions, the court rejected

that argument, stating as follows:

... no California case has considered the application of

this exclusion but, given its lack of ambiguity and its

plain clear meaning, courts in other states have had no

trouble concluding that such an exclusion precludes coverage

of any claim based on assault and battery irrespective of

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the legal theory advanced against the insured.

Century Transit Sys. v. American Empire, 42 Cal. App. 4 at 127. th

In affirming summary judgment on behalf of the insurer, the

Court explained that by excluding coverage for any claim “based”

on assault and battery, the focus was placed not upon an

insured’s conduct or intent, but instead upon the kind of event

which triggered the injury. Id. at 126. Because any claimed

negligence was “based” on assault and battery, the Century court

found that the insured could “not rely upon the allegations of

negligence to create a potential for coverage.” Id. at 128.

Significantly, another California case decided after Century

Transit Systems came to the same conclusion. In Zelda Inc. v.

Northland Ins. Co., the insured restaurant sought coverage for

damages sustained as a result of a fight between a bartender and

one of the restaurant’s patrons. The lawsuit filed by the

injured patron included allegations that the bartender

“negligently assaulted.... and battered” the patron. 56 Cal.

App. 4 at 1257-58. th

The Zelda court noted that the facts available to the

insurer suggested either that the assault was either entirely

unwarranted on the part of the bartender, or alternatively that

the bartender acted in self defense based on the patron’s

aggression. Significantly, Zelda found that the exclusion for

injuries “arising out of assault and battery” applied under

either version of events. As Zelda noted, in both instances the

injuries stemmed from an unwarranted assault, whether instigated

by the patron or the bartender. The court hence concluded that

“[b]ecause the altercation, however viewed, fell squarely within

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the exclusion, the facts known to [the insurer] did not trigger a

potential for coverage under the policy.” Id. at 1262. The

Zelda decision agreed with Century Transit that a suit based on

assault and battery was excluded no matter who commits it,

inasmuch as “[i]t is the happening of the event which compels

application of the exclusion.” Id. at 1261. 

This same rationale applies with equal force to the case

presently before this Court. Maloney either acted 1) in an

unprovoked fashion by striking Worton; or 2) was negligent in

doing so. An assault or battery underlies either scenario, and

according to the express language of the Scottsdale exclusion,

any personal injury arising from an assault or battery is

excluded no matter what was responsible for initiating such

injury. As Century Transit and Zelda also instruct, the event

which injured Worton was based on assault and battery, which

means that the exclusion applies irrespective of intent.

The reasoning employed by Century Transit and Zelda is

equally applicable to the case at bar, even though the present

motion is for dismissal under Federal Rule of Civil Procedure

12(b)(6) rather than for summary judgment. It is simply

undisputed that Maloney hit Worton in the face, which event, in

turn, ultimately triggered this lawsuit. That fact translates

into the Scottsdale exclusion barring coverage irrespective of

Maloney’s reasons for hitting Worton. There is no reason to look

further than Plaintiffs’ complaint, its attachments and the

Scottsdale policy in making that determination.

Essex Ins. Co. v. Yi, 795 F. Supp. 319 (N.D. Cal. 1992)

reached the same conclusion. In that case, an employee of the

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It must also be noted that in order for Maloney to have 6

been engaged in self defense, Worton himself had to have engaged

in some conduct giving rise to the level of assault and battery. 

Worton’s actions under that scenario trigger the exclusion just

as plainly as if Maloney himself precipitated the altercation.

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insured, Yi, injured the claimant during an altercation at the

insured’s amusement center. In the face of an assault and

battery exclusion similar to that of the present case, both the

claimant and the insured argued against application of the

exclusion on grounds that because the employee had allegedly

acted in self defense at the time of the altercation, no assault

or battery had occurred. The court rejected that argument since

the exclusion (like the Scottsdale policy at issue herein)

applied to an assault and battery committed by “any person”. 

Hence the exclusion would apply even if the claimant actually

instigated the fight. According to Yi, coverage would be

excluded whether or not Maloney acted intentionally, negligently,

or alternatively had no liability at all in striking Worton. Id.

at 324. As the Yi court noted, the assault and battery exclusion

“precludes coverage for an entire class of risks arising

from specified conduct and does not turn on the intent of

the insured at all. If the acts fell within the scope of

the exclusion, coverage is barred regardless of the

[insured’s] intent.

Id. at 324, n. 2.

It follows that in the present case, the exclusion

applies no matter how the underlying incident is denominated– 

whether or not it occurred as a result of Maloney’s intentional

act, his negligence, or conduct on Worton’s part which caused

Maloney to act in self defense. Moreover, because the exclusion 6

also unambiguously excludes coverage for the failure to suppress

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Scottsdale’s assertion that it reserved its rights upon 7

initially providing a defense in the underlying action (Opening

Points and Authorities, 1:13-14) has not been disputed by

Plaintiffs herein.

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an assault or battery by any person, any potential liability of

Gorman for failing to prevent her son, Maloney, from starting the

fight would also be excluded. Hence, irrespective of the

alternatively pled allegations of the complaint, there can be no

coverage under the Scottsdale policy.

Although the duty to defend under the Scottsdale policy is

broadly construed to apply even to suits that are “groundless,

false, or fraudulent”, that duty is not unlimited. While an

insurer owed a duty to defend when there is a possibility that

the claim may be covered by its policy (See Montrose Chem. Corp.

v. Superior Court, 6 Cal. 4 287, 295 (1993)), it may properly th

refuse to defend if circumstances show conclusively that

liability would in fact be excluded. National Auto. & Cas. Ins.

Co. v. Stewart, 223 Cal. App. 3d 452, 463 (1990); Wausau

Underwriters Ins. Co. v. Unigard Security Ins. Co., 68 Cal. App.

4 1030, 1035 (1998). An insurer may also withdraw from a th

defense that has been accorded under reservation of rights if it 7

determines that there is in fact no coverage. St. Paul Mercury

Ins. Co. v. Ralee Engineering Co., 804 F.2d 520, 522 (9 Cir. th

1986); Hartford Accident & Indemnity Co. v. Superior Court, 23

Cal. App. 4 1774, 1779 (1994). th

The complaint in this case clearly shows that the event

precipitating the claim occurred as a result of an altercation

which the Scottsdale policy excludes from coverage. Because it

is the event itself that triggers this exclusion rather than just

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how that event was initiated, on the basis of the complaint alone

this Court can determine that the exclusion applies and that no

coverage is present. In the absence of coverage there can be no

breach of contract on Scottsdale’s part, and without such breach

there is no liability for breach of the implied covenant of good

faith and fair dealing on Scottsdale’s part. See, e.g., Waller

v. Truck Ins. Exch., Inc., 11 Cal. 4 1, 36 (1995); Love v. Fire th

Ins. Exch., 221 Cal. App. 3d 1136, 1153 (1990). Since those two

claims are the only causes of action pled in Plaintiffs’

complaint, Scottsdale’s Motion to Dismiss must be granted. 

CONCLUSION

Given the above, Plaintiffs’ complaint fails to state a

claim upon which relief can be granted, thereby mandating

dismissal under Federal Rule of Civil Procedure 12(b)(6). 

Because the Court does not believe that the deficiencies of the

complaint can be cured, no leave to amend will be permitted. 

Broughton v. Cutter Labs., 622 F.2d 458, 460 (9th Cir. 1980). 

The Clerk of Court is accordingly directed to close this file. 

IT IS SO ORDERED.

DATED: August 1, 2005

_____________________________

MORRISON C. ENGLAND, JR

UNITED STATES DISTRICT JUDGE

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