UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

________________ _________________ NAUTILUS INSURANCE COMPANY, Plaintiff - Appellee,

v. FANTASIA HOOKAH LOUNGE, LLC; MOHAMMAD ZAKIE ALSHAMMAT; JORGE HERNANDEZ, Defendants - Appellants, and JJG PROPERTIES, LLC, Defendant. No. 23-5129 (D.C. No. 4:22- CV-00064-CVE-JFJ) (N.D. Okla.)

________________ _________________ ORDER AND JUDGMENT *

________________ _________________ Before PHILLIPS , BALDOCK , and FEDERICO , Circuit Judges.

________________ _________________

* After examining the briefs and appellate record, this panel has determined unanimously to honor the pa rties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore submitted with out oral argument. This order and judgment is not binding precedent, exce pt under the doctrines of law of the case, res judicata, and colla teral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### October 3, 2024 Christopher M. Wolpert Clerk of Court Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 12 This appeal involves a dispute ab out the scope of coverage under a commercial insurance policy that Naut ilus Insurance Comp any issued to Fantasia Hookah Lounge, LLC (“Fant asia”). Nautilus sought from the district court a declaratory judgment that the policy did not cover the liability of Fantasia, its owner, Moha mmed Zakie Alshammat, or Fantasia’s landlord, JJG Properties , LLC (collectively, “F antasia Defendants”), for gunshot injuries Jorge Hernandez susta ined during an exchange of gunfire between Fantasia’s securi ty guards and an armed patron. The district court granted summary judgment in favor of Nautilus, concluding that the policy’s “Exclusion – All Assault or Battery” endorsement (“Exclusion”), Aplt. App. II at 345, excluded cove rage for any claims arising out of Hernandez’s injuries. Fantasia, Alsh ammat, and Hernan dez (“Appellants”) appeal. Exercising juri sdiction under 28 U.S.C. § 1291, we affirm. I Fantasia operated a hookah lounge in Tuls a, Oklahoma. The lounge stayed open until 5:00 a.m. but did not serve alcohol. It was known as a popular destination for indi viduals to go after othe r bars or entertainment venues in the area had closed for the night. On June 15, 2019, at approximatel y 2:00 a.m., a fistfight broke out among patrons in the lounge’s parking lot. During the fight, a patron fired several gunshots into the air. Two of Fantasia’s security guards then Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 23 exchanged gunfire with the patron. Du ring the exchange, the patron shot and killed one of the guards. Hernande z was a bystander and also shot by either the patron or on e of the guards, sustaini ng serious and permanent injuries such as permanent para lysis and is now a paraplegic. Hernandez filed a lawsuit agains t the Fantasia Defendants in Oklahoma state court fo r damages (the “Underly ing Suit”). There he asserted one claim, for negligence , alleging the Fantasia Defendants breached their duty to provide thei r business invitees reasonably safe business premises by regularly allowing after-hours crowds to gather in the lounge parking lot and consume alcohol, which often led to fights, and by failing to have sufficiently trained and qualified security personnel. Nautilus agreed to defend Fantasia and Alshammat but reserved its rights to deny coverage an d to withdraw its defense should it be determined that the policy does not cover the clai ms against them. Nautilus then filed a complaint for declaratory judgment in federal district court and moved for summary judgment, arguing that the Exclusion precludes coverage for Hernandez’s claims. The policy provides that Nautilus “will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.’” Aplt. App. II at 322. In releva nt part, the Exclusion provides: Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 34 Regardless of culpability or intent of any person, this insurance does not apply to “bodily injury”, “property damage ”, “personal and advertising injury” or medical payments arising out of any: 1. Actual or allege d assault or battery; 2 Physical altercation; or 3. Any act or omission in connection with the prevention or suppression of such acts, includin g the alleged failu re to provide adequate security. This exclusion applies regardless of whether su ch actual or alleged damages are caused by any: 1. Insured; 2. “Employee”; 3. Patron; or 4. Any other person; and whether or not such damages occu rred at any premises owned or occupied by any insured. Id. at 345 (emphasis added). The Exclusion states that it “appl ies to . . . [a]ll causes of action arising out of any assault or battery, or out of a physical altercation including, but not limited to, allegations of negligent hiring, placement, training, or supervision, or to any act, error, or omission relating to such an assault or battery, or physical altercation.” Id. (emphasis added). The Exclusion further provides that Nautilu s “will have no du ty to defend or indemnify any insured in any action or proceeding alleging damages arising out of any assault or battery, or physical altercation.” Id. (emphasis added). The district court granted Naut ilus’s summary ju dgment motion, concluding that although Hernandez did not assert a cause of action in the Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 45 Underlying Suit based on assault or ba ttery, his negligence claim arose out of the injuries he received during th e shooting, and therefore the Exclusion unambiguously excluded th ose claims from coverage. The court rejected Hernandez’s reliance on th e “concurrent proximate cause rule” because he had not demonstrated any injuries that arose from the alleged negligence other than those resulting from the sh ooting. This timely appeal followed. II We review de novo a district co urt’s decision to grant summary judgment, applying the same standar d governing the district court. Siloam Springs Hotel, L.L.C. v. Century Sur. Co. , 906 F.3d 926, 930 (10th Cir. 2018). A “court shall grant summary ju dgment if the movant shows that there is no genuine dispute as to a ny material fact and the movant is entitled to judgment as a matter of law. ” Fed. R. Civ. P. 56(a). “We view all facts and evidence in the light mo st favorable to the party opposing summary judgment.” Craft Smith, LLC v. EC Design, LLC , 969 F.3d 1092, 1099 (10th Cir. 2020) (internal quotation marks omitted). “A federal court sitting in diversit y must apply the law of the forum state, in this case Okla homa, and thus must ascertain and apply Oklahoma law with the objective that the result obtained in the fe deral court should be the result that would be re ached in an Oklahoma court.” Siloam Springs Hotel , 906 F.3d at 930 (internal quot ation marks omitted). Under Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 56 Oklahoma’s general choice -of-law rule, the interpre tation of an insurance contract “is governed by the la w where the contract is made.” Bohannan v. Allstate Ins. Co. , 820 P.2d 787, 793 (Okla. 1991) . The policy in this case was made in Oklahoma. See Aplt. App. II at 305 (showing Oklahoma addresses for the insured and the insurance ag ent, and stating that the policy was “Countersigned” in Oklahoma). We therefore apply Oklahoma insurance law to resolve the issues in this appeal. 1 Under Oklahoma law, “[i]nsurance policies are contracts interpreted as a matter of law,” and “[w]hen po licy provisions are unambiguous and clear, the employed language is ac corded its ordinary, plain meaning.” BP Am., Inc. v. State Auto Prop. & Cas. Ins. Co. , 148 P.3d 832, 835 (Okla. 2005) (footnote omitted). “A federal district court’s state-law determinations are entitled to no de ference and are reviewed de novo.” Siloam Springs Hotel , 906 F.3d at 931 (internal quotation marks omitted). III Appellants argue the district co urt erred by not applying the concurrent proximate cause rule. Accord ing to the primary case they rely on, the concurrent proximate cause rule provides that if an injury has two concurrent proximate causes , one that is covered by an insurance policy and

1 The parties have given no indicati on that any other law applies, and there appears to be no choice of law provision in the policy. Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 67 one that is excluded, a court will cons true the policy to provide coverage if the causes are “truly independent and distinct.” Adams v. Certain Underwriters at Lloyd’s of London , 589 S.W.3d 15, 29 (Mo. Ct. App. 2019). Appellants argue that Oklahoma fo llows the concurrent proximate cause rule stated in Adams . From that premise, they assert that Hernandez alleged in the Underlying Suit that th e Fantasia Defendants were negligent in the operation of their business and that negligence is the concurrent proximate cause of the injuries Hernan dez suffered. Therefore, they argue, the policy provides coverage notwithsta nding the exclusion of coverage for assault or battery. Adams , however, involved application of Missouri law, not Oklahoma law. And we have found no case involving Oklahoma law where an Oklahoma court applied the concurre nt proximate cause rule. Instead, Oklahoma appears to apply the rela ted but distinct “e fficient proximate cause doctrine.” See Nat’l Am. Ins. Co. v. Gerlicher Co. , 260 P.3d 1279, 1286 (Okla. Civ. App. 2011) (“The efficien t proximate cause doctrine has been applied in Oklahoma.”) (citing Shirey v. Tri-State Ins. Co. , 274 P.2d 386 (Okla. 1954)); see also Goodwill Indus. of Cent. Okla., Inc. v. Phila. Indem. Ins. Co. , 21 F.4th 704, 714 (10th Cir. 2021) (recognizing that Oklahoma “embraced” the efficient proximate cause doctrine in Shirey ). Unlike the “independent and distinct” requirement of the concurrent proximate cause Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 78 rule, see Adams , 589 S.W.3d at 29, the effici ent proximate cause doctrine “applies when at least two identifiable causes combine to form a single property loss, and one is covered un der the policy while the other one is excluded under the policy,” Gerlicher , 260 P.3d at 1286 (emphasis added). But like the concurrent proximate caus e rule, the efficient proximate cause doctrine provides that “[i]f the insu red successfully demonstrates that the proximate cause of the loss is covered under the policy, the entire loss is covered notwithstanding th e fact that an event in the chain of causation was specifically excluded from coverage.” Duensing v. State Farm Fire & Cas. Co. , 131 P.3d 127, 133 (Okla. Civ. App. 2005) (italics omitted). Nonetheless, for purposes of ar gument, we will assume Oklahoma would apply the concurrent proximate ca use rule in this case rather than the efficient proximate cause doctrine. And we will further assume that the alleged negligence by the Fantasia Defendants was a proximate cause of Hernandez’s injuries. But as we explai n, even with such assumptions, the concurrent proximate cause rule is inapplicable because the Exclusion precludes coverage for the negligen ce alleged in the Underlying Suit. 2 Again, the premise of Appellants’ argument is that the Fantasia Defendants’ alleged neglig ence with respect to th e parking lot conditions

2 The result would be the same un der the efficient proximate cause doctrine because it too requires at least one covered proximate cause. Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 89 and security is a proximate cause of Hernandez’s injuries and is covered under the policy. A close reading of the Exclusion, however, reveals otherwise. 3 The Exclusion uses three relevant phrases in defining its scope: “arising out of,” “in connection with,” an d “relating to.” Aplt . App. II at 345. Oklahoma broadly construes such ph rases when used in an insurance policy. The Oklahoma Supreme Court ha s described the phrase “‘arising out of . . . use’ in a liability policy” as being “broad, general and comprehensive,” and has observed that lik e Oklahoma courts, courts in other jurisdictions construing “‘arising out of’” have understood it to mean “‘originating from,’ ‘having its origins in,’ ‘growing out of,’ or ‘flowing from.’” Ply v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. , 81 P.3d 643, 649 (Okla. 2003). Furthermore, in Federal Insurance Co. v. Tri-State Insurance Co. , 157 F.3d 800 (10th Cir. 1998), this court considered the Oklahoma Court of Appeals’ holding that “‘arising out of ’ merely requires causation-in-fact.’”

3 We need not decide if Appellan ts bear the burden to establish coverage for the negligence claim under the policy or if Nautilus bears the burden to show it is excluded; we re ach the same result regardless of who shoulders the burden. Compare U S. Fid. & Guar. Co. v. Briscoe , 239 P.2d 754, 756 (Okla. 1951) (“The insurer is, of course, entitled to stand upon its contract, as written and the [plaintiff] must bring himself within the terms of the policy, before he can establ ish insurer’s liability thereon.”), with Fehring v. Universal Fid. Life Ins. Co. , 721 P.2d 796, 799 (Okla. 1986) (explaining that the insure r has the burden to prov e an exclusion applies). Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 910 Id. at 803 (quoting Wallace v. Sherwood Constr. Co. , 877 P.2d 632, 633 (Okla. Civ. App. 1994)). We viewed that holding as “consistent with the general consensus that th e phrase ‘arising out of’ should be given a broad reading such as ‘originating from’ or ‘growing out of’ or ‘flowing from’ or ‘done in connection with ’—that is, it requires some causal connection to the injuries suffered.” Id. at 804 (emphasis). But “pro ximate cause in the legal sense” is not required. Id. Although we have found no case on point, there appears to be no reason to think Oklahoma courts would construe less broadly the phrase “relating to.” We start with the exclusions of cove rage for any “‘bodily injury’ . . . arising out of any . . . assault or batte ry” or “[p]hysical altercation,” and for “[a]ll causes of action arising out of any assault or battery” or “physical altercation.” Aplt. App. II at 345. Hernandez’s bodily injuries and the resulting negligence cause of action he asserted in the Underlying Suit clearly arose out of (i.e., originated from, had i ts origin in, grew out of, or flowed from) an assault or battery—being shot. In civil actions, Oklahoma employ s the definitions of “assault” and “battery” found in the Restatement (Second) of Torts. See Brown v. Ford , 905 P.2d 223, 229 n.34 (Okla. 1995), overruled on other gr ounds by Smith v. Pioneer Masonry, Inc. , 226 P.3d 687, 689 (Okla. 2009). The Restatement defines assault to include intentiona lly causing “a harmful or offensive Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 1011 contact with the person of the othe r or a third person,” Restatement (Second) of Torts § 21 (1965), and it de fines battery to include intentionally causing “a harmful or offensive contac t with the person of the other or a third person” and such a contact “d irectly or indirectly results,” id. § 13. Under Oklahoma law, “‘intent . . . deno te[s] that the actor desires to cause consequences of his act, or that he believes that the consequences are substantially certain to result from it.’” Parret v. UNICCO Serv. Co. , 127 P.3d 572, 577 (Okla. 2005) (quoting Re statement (Second) of Torts § 8A (1965)); see also Wells v. Okla. Roofing & Sheet Metal, L.L.C. , 457 P.3d 1020, 1025 (Okla. 2019) (“It is well-settled that the common law divides actionable tortious conduct into two categories: (1) accidental and (2) willful acts that result in intended or unintended harm.”). Applying these definitions, all sh ots fired during th e shootout were, indisputably, intentional acts; none were accidental. 4 Thus, Hernandez’s bodily injuries and his negligence cause of action arose out of an assault or battery. It is equally true that He rnandez’s bodily injuries and his negligence cause of action arose out of a “physical altercation,” Aplt. App. II at 345—the fist fight progressed to an ex change of gunfire, resulting in his

4 We acknowledge that the Excl usion applies “[r]egardless of culpability or intent of any person,” Aplt. App. II at 345, but in an abundance of caution, we consider inte nt as part of dete rmining whether an assault or battery occurred here. Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 1112 injuries. Hernandez did not allege that he sustained any injuries other than those resulting from being shot, so Hernandez’s bodily injuries and his negligence cause of action necessarily arose out of the assault, battery, or physical altercation. If this were not enough to bring Hernandez’s bodily injuries and negligence cause of action within the Exclusion, we read ily conclude that the bodily injuries arose ou t of “act[s] or omission[s] in connection with the prevention or suppression of” an assa ult, battery, or physical altercation, id. (emphasis added). Moreover, the Exclus ion similarly emphasizes that it applies “to any act, error, or omission relating to . . . an assault or battery, or physical altercation.” Id. (emphasis added). The allegations that the Fantasia Defendants’ negligence fome nted the conditions that led to Hernandez’s injuries (be they viewed as arising from an assault, a battery, or a physical altercation) fall within the meaning of this portion of the Exclusion, too. Finally, the Exclusion states that Nautilu s “will have no duty to defend or indemnify any insure d in any action or proceeding alleging damages arising out of any assault or battery, or physical altercation.” Id. (emphasis added). We fail to see how the damages at issue in Hernandez’s negligence cause of action escape the reach of this provision. In sum, we agree with the district court that the Exclusion denies coverage under the insurance polic y for any liability the Fantasia Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 1213 Defendants may have for Hernandez’s negligence claim. Nautilus has no duty to defend or indemnify it s insured in the Underlying Suit. 5 AFFIRMED.

Entered for the Court

Richard E.N. Federico Circuit Judge

5 Our conclusion that the Exclusion a pplies is in accord with at least two other cases applying Oklahoma law: Event Security, LLC v. Essex Insurance Co. , 715 F. App’x 853, 855–56 (10th Cir. 2017), where this court reached the same result when faced with a similar exclusion and a negligence claim, and Great Lakes Insurance SE v. Bank of Eufaula , 391 F. Supp. 3d 1060, 1065 (E.D. Okla. 2019), where the district court held that a similar exclusion extended to cl aims that a bank was negligent in not hiring enough security and in having too many entrances. Appellate Case: 23-5129 Document: 46-1 Date Filed: 10/03/2024 Page: 13