Revised May 14, 1999

UNITED STATES COURT OF APPEALS

For the Fifth Circuit

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No. 98-20034

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SCOTTSDALE INSURANCE COMPANY,

Plaintiff-Appellee,

VERSUS

TEXAS SECURITY CONCEPTS AND INVESTIGATION, et al,

Defendants,

KIMBERLEY BARNES and ROLANDA WILLIAMS,

Defendants-Appellants.

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Appeal from the United States District Court

for the Southern District of Texas

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January 7, 1999

Before DAVIS, SMITH, and WIENER, Circuit Judges.

PER CURIAM:

Scottsdale Insurance Company (“Scottsdale”) filed this

declaratory judgment action to determine whether coverage exists

under one of its liability policies. We must decide whether the

Assault and Battery Exclusion in Scottsdale’s policy violates Texas

public policy and is therefore void. We answer this question in

the negative and affirm the district court’s judgment.

I.

In the case underlying this appeal, Kimberley Barnes and
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Rolanda Williams alleged that in December 1993 they were unlawfully

restrained, falsely imprisoned, assaulted, and raped in a Houston

area apartment complex. According to Barnes and Williams, Texas

Security Concepts (“Texas Security”), the company that provided

security at the apartment complex, negligently failed to provide

proper security. Texas Security was insured by a Scottsdale

liability policy. Scottsdale filed an action for declaratory

judgment seeking a determination that it provided no coverage and

thus had no duty to defend or to indemnify Texas Security for

losses related to the underlying suit.

Defendants Texas Security and Raleigh Randal Hanks, a Texas

Security employee, were served, but did not appear. The district

court granted summary judgment against these defendants. Barnes

and Williams answered Scottsdale’s complaint. Scottsdale then

filed a motion for summary judgment against Barnes and Williams.

Scottsdale denied that it had any duty to defend or to indemnify

Texas Security in the underlying lawsuit because of the liability

policy’s Assault and Battery Exclusion. Barnes and Williams

responded and filed a cross-motion for summary judgment. The

district court granted summary judgment in favor of Scottsdale.

Barnes and Williams now appeal.

Barnes and Williams make two main arguments: (1) the Assault

and Battery Exclusion is void as against Texas public policy; and

(2) some of the claims that they assert do not fall within the

Assault and Battery Exclusion.

II.
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A.

Barnes and Williams argue first that the Assault and Battery

Exclusion is void as against Texas public policy as expressed in

Texas Revised Civil Statute Art. 4413(29bb), § 40(a), which

regulates the licensing of private security agencies. This statute

requires that the licensing board verify that the security agency

applying for a license holds a general insurance policy that will

cover “all sums which the licensee becomes legally obligated to pay

as damages because of bodily injury, property damage, or personal

injury, caused by an event involving the principal, its servants,

officers, agents or employees in the conduct of any business

licensed under this Act.”

Barnes and Williams contend that the Assault and Battery

Exclusion violates this statute and is therefore void as against

Texas public policy. In response, Scottsdale contends that

statutes regulating the amount or kind of insurance that businesses

must purchase cannot operate to modify the terms of the policy that

is actually purchased. As Scottsdale puts it, “If the businessman

does not purchase the required policy, it is between him and the

regulating agency,” citing Baker v. Guaranty National Insurance

Co., 615 S.W.2d 303, 306 (Tex. Civ. App. 1981).

The Texas statute under consideration is regulatory in nature

and is addressed to the security business. When considering a

similar challenge to a similar statute, the Louisiana Supreme Court

determined, among other things, that the insurance requirement for

the licensing of private security agents was directed to the
1 Barnes and Williams make the additional argument that

because Scottsdale certified that it had issued Texas Security an

insurance policy that satisfied the Texas private security

insurance statute, it is directly implicated by the public policy

argument. We disagree. Scottsdale’s certification expressly

stated that the certification did not expand the policy’s coverage

in any way.

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security agent, not to the insurance company. Hickey v. Centenary

Oyster House, 719 So.2d 421, 424-25 (La. 1998). We agree with the

reasoning of the Louisiana court. The Texas statute is regulatory

in nature and does not affirmatively establish a public policy of

the state that would override the parties’ agreement. See Aero

Int’l, Inc. v. United States Fire Ins. Co., 713 F.2d 1106, 1109

(5th Cir. 1983) (“Without an affirmative expression of an

overriding public policy by the [state] courts or legislature, we

are constrained to enforce the parties’ agreement according to its

plain meaning.”); Fidelity & Deposit Co. of Maryland v. Conner, 973

F.2d 1236, 1241 (5th Cir. 1992) (public policy exception “to be

applied cautiously and only in plain cases involving dominant

public interests”).1 Therefore, we agree with the district court

that the Assault and Battery Exclusion in Scottsdale’s policy is

not unenforceable as against public policy.

B.

In addition, Barnes and Williams argue that they asserted

“personal injury” claims for false imprisonment that are distinct

from those that fit under the Assault and Battery Exclusion. They

argue that, under Texas law, when a loss is caused by both a

covered peril and an excluded peril, the insurer is liable, citing
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Guaranty National Insurance Co. v. North River Insurance Co., 909

F.2d 133, 137 (5th Cir. 1990). In response, Scottsdale argues that

the claims for false imprisonment and forcible restraint are so

interrelated to the rape and assault claims that they are also

excluded by the Assault and Battery Exclusion. 

When an exclusion precludes coverage for injuries “arising out

of” described conduct, the exclusion is given a broad, general, and

comprehensive interpretation. A claim need only bear an incidental

relationship to the described conduct for the exclusion to apply.

American States Ins. Co. v. Bailey, 133 F.3d 363, 370 (5th Cir.

1998). 

While Guaranty National does hold that when a loss is caused

by a covered act and a noncovered act the loss is covered, 909 F.2d

at 137, the two acts in that case were completely independent. The

Guaranty National court noted that under Texas law an insured is

not liable when a covered peril and a noncovered peril concurrently

cause a loss. In this case, the rape, assault, and unlawful

restraint all occurred concurrently and as part of the same

sequence of events. 

Also in contrast to Guaranty National, the alleged negligence

on the part of Texas Security is the same for both the assault

claim and the false imprisonment claim. See Commercial Union Ins.

Co. v. Roberts, 7 F.3d 86, 89-90 (5th Cir. 1993) (noting importance

of whether allegations are distinct or involve the same conduct by

the defendant); Burlington Ins. Co. v. Mexican American Unity

Council, Inc., 905 S.W.2d 359, 362-63 (Tex. Ct. App. 1995) (same).
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Thus, because Barnes’s and Williams’s false imprisonment claims are

based on the same alleged negligence as the claims excluded by the

Assault and Battery Exclusion, the policy excludes the claims.

CONCLUSION

Finding no error with the district court’s summary judgment

decision, we AFFIRM.