Opinion ID: 1956353
Heading Depth: 1
Heading Rank: 3

Heading: Assault and Battery Exclusion.

Text: The Fieldhouse contends Watts' petition raises some allegations of negligence which are not excluded by the assault and battery provision, thus Essex's duty to defend must necessarily attach. See McAndrews, 349 N.W.2d at 119 (duty to defend arises when the totality of facts disclose potential coverage). In analyzing Essex's potential duty to defend, which is broader than the duty to indemnify, the appropriate starting point is the allegations contained in the petition filed by Watts against the Fieldhouse. West Bend Mut., 503 N.W.2d at 601; McAndrews, 349 N.W.2d at 119. In her petition, Watts raises claims of negligent hiring, training, and supervision of its employees, negligent admission of Hoff to the premises, failure to maintain safe premises, and negligent use of glass beer pitchers. We have not previously examined an assault and battery provision which purports to exclude negligent acts as well as intentional acts irrespective of who caused or directed the acts or omissions. See Altena v. United Fire & Casualty Co., 422 N.W.2d 485, 490 (Iowa 1988) (intentional act exclusion precluded coverage for sexual abuse by the insured); McAndrews, 349 N.W.2d at 119-20 (intentional act exclusion bars coverage even if insured's act is in self-defense). The Fieldhouse's principal argument is that Watts' claims are based on negligence rather than on an assault and battery. To be sure Watts' injuries may have been caused by the Fieldhouse's negligent acts, but it does not follow that these injuries did not arise out of the assault and battery. We believe Watts' real contention is that her injuries arose out of an assault which, in turn, arose out of the Fieldhouse's negligence. See, e.g., St. Paul Surplus Lines Ins. Co. v. 1401 Dixon's, Inc., 582 F.Supp. 865, 867-68 (E.D.Pa.1984). Regardless of the label, be it negligence or intentional tort, it is clear Watts is seeking damages for injuries sustained when she was assaulted by another patron at the Fieldhouse. In our review of the allegations made by Watts we examine the substance, as opposed to the form, of the claim. Although we require a narrow or restrictive construction of exclusion clauses in insurance policies, the claims against the Fieldhouse are clearly causally connected to the assault, thus triggering the exclusion. See Grinnell Mut. Reinsurance Co. v. Employer's Mut. Casualty Co., 494 N.W.2d 690, 693 (Iowa 1993); Kalell v. Mutual Fire & Auto. Ins. Co., 471 N.W.2d 865, 867-68 (Iowa 1991). This exclusion extends beyond the actual assault to preclude an entire class of risks arising out of an assault or battery. Further, the 1991 endorsement added a second clause that explicitly bars coverage for charges of negligent hiring, placement, training or supervision if they arise from an assault and battery. We conclude the claims set forth in Watts' complaint fall squarely within the Assault and Battery Exclusion of the Essex policy. Our conclusion is consistent with the overwhelming weight of authority in jurisdictions that have interpreted substantially similar assault and battery exclusions involving assault and battery committed by a third party. See Essex Ins. Co. v. Yi, 795 F.Supp. 319, 323-24 (N.D.Cal.1992); Stiglich v. Tracks, D.C., Inc., 721 F.Supp. 1386, 1387 (D.D.C. 1989); St. Paul Surplus Lines, 582 F.Supp. at 868-69; Gregory v. Western World Ins. Co., Inc., 481 So.2d 878, 881 (Ala.1985); Kelly v. Figueiredo, 223 Conn. 31, 610 A.2d 1296, 1299 (1992); Britamco Underwriter's, Inc. v. Zuma Corp., 576 So.2d 965 (Fla.Dist.Ct.App. 1991); Hernandez v. First Fin. Ins. Co., 106 Nev. 900, 802 P.2d 1278, 1280 (1990). Moreover, several courts have held that the arising out of language of the assault and battery exclusion also precluded coverage for claims based on negligent hiring, training and supervision even where the policy did not include a separate hiring and supervision clause. See, e.g., St. Paul Surplus Lines, 582 F.Supp. at 868; Hernandez, 106 Nev. at 902, 802 P.2d at 1280. A lone federal court found potential coverage under such an exclusion. See Terra Nova Ins. Co. Ltd. v. 900 Bar, Inc., 887 F.2d 1213, 1226 (3d Cir.1989). By contrast, the plaintiff in the Terra Nova case raised claims involving the improper use of a firearm which were distinct and severable from the assault and battery claim. Id. In addition to the applicability of the exclusion, the Fieldhouse also raises several questions concerning the effectiveness of the exclusion. First, it argues the terms of the assault and battery exclusion are ambiguous and as such the policy should be construed in favor of the insured. See A.Y. McDonald, 475 N.W.2d at 619. Ambiguity exists if, after the application of pertinent rules of interpretation to the policy, a genuine uncertainty results as to which one of two or more meanings is the proper one. Id. at 618. Although parties may disagree as to the meaning of terms, this does not automatically establish an ambiguity. Id. at 619. The test is whether the language is fairly susceptible to two interpretations. Id. Also, we have held that when an exclusion acts to withdraw a promised coverage, it must be clearly and explicitly defined. Id.; see also Clark-Peterson Co., Inc. v. Independent Ins. Assoc., Ltd., 492 N.W.2d 675, 679 (Iowa 1992). At the same time clear and unambiguous exclusions must be given effect; liability should not be imposed that was neither intended nor purchased. Leuchtenmacher v. Farm Bureau Mut. Ins. Co., 461 N.W.2d 291, 294 (Iowa 1990); Gateway State Bank v. North River Ins. Co., 387 N.W.2d 344, 346 (Iowa 1986). We find the terms of the assault and battery exclusion could not be clearer; the plain language dictates a finding of no coverage for Watts' claims against the Fieldhouse. Next, the Fieldhouse contends the exclusion relied on by Essex is ineffective because it was buried at the back of the policy, it was not brought to its attention, and the endorsement forms were unsigned. For the following reasons, these contentions fail. In general, an insurance contract includes the policy form along with the declarations and endorsements. See 13A John Alan Appleman & Jean Appleman, Insurance Law and Practice § 7537, at 140 (1976). To be effective, an endorsement must be made a part of the policy and incorporated by reference. Id. § 7538, at 163. We have stated an exclusion need not be a part of the insuring clause; it is enough if it is clearly delimited at another point in the policy. Mallinger v. State Farm Mut. Auto. Ins. Co., 253 Iowa 222, 227, 111 N.W.2d 647, 649 (1961). Here, the original Essex policy included an assault and battery exclusion set forth on a form labeled Special Provisions Endorsement. All included endorsements were listed on the declarations page of the policy. We find the endorsements were clearly referenced and effectively incorporated into the policy. Likewise, the renewal certificate for 1991 clearly set forth and incorporated by reference the Combined Provisions Endorsement containing the modified Assault and Battery/Hiring Supervision Exclusion. Notably, this was the third liability policy between these parties and the modified exclusion was so substantially similar to the original one that it added little to the breadth of the exclusion. It too contained a Liquor Liability Exclusion. Contrary to the Fieldhouse's argument, we find that an unsigned policy endorsement does not render it ineffective. If an endorsement is physically attached to an insurance policy contemporaneous with its execution, and is delivered to the insured as attached, and sufficient reference is made in either the policy or the attached matter to identify the papers as related, the fact that the matter so attached is without the signature of the insurer or its authorized agents will not preclude its inclusion and construction as a part of the insurance contract. 13A John Alan Appleman & Jean Appleman, Insurance Law and Practice § 7538, at 163-64 (1976). Having found the exclusion in both policies effectively incorporated, clearly worded and conspicuously displayed, it must be enforced.