Court Opinion

ID: 2965000
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:33:57.18181+00
Date Added: 2024-06-11T11:37:26.460184
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 97-1476

                          UNITED NATIONAL INSURANCE COMPANY,

                                Plaintiff, Appellant,

                                          v.

                               PENUCHE'S, INC., ET AL.,

                                Defendants, Appellees.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF NEW HAMPSHIRE

                   [Hon. Joseph A. DiClerico, U.S. District Judge]
                                              ___________________

                                 ____________________

                                        Before

                               Torruella, Chief Judge,
                                          ___________

                                Lynch, Circuit Judge,
                                       _____________

                             and Keeton,* District Judge.
                                          ______________

                                _____________________

               Richard  J. Riley,  with whom  Murphy &  Riley, P.C.  was on
               _________________              _____________________
          brief for appellant.
               Jeffrey S. Cohen, with whom  Gregory R. Kirsh and Sulloway &
               ________________             ________________     __________
          Hollis, P.L.L.C. were on brief for appellees.
          ________________

                                 ____________________

                                   November 6, 1997
                                 ____________________

                              
          ____________________

          *  Of the District of Massachusetts, sitting by designation.

                    TORRUELLA,  Chief  Judge.   United  National  Insurance
                    TORRUELLA,  Chief  Judge.
                                ____________

          Company  ("United   National")  brought   this  suit   seeking  a

          declaration that it has no duty to defend or indemnify Penuche's,

          Inc.  ("Penuche's"), and its  president, Todd Tousley,  in a tort

          action brought by a Penuche's Ale House patron, Thomas Burke.  At

          Penuche's, Burke  was involved  in an  altercation which  Tousley

          attempted to break up.  In so doing, Tousley caused Burke to fall

          backward,  injuring his spine.   Among other  contentions, United

          National  claims that under New  Hampshire law it  has no duty to

          indemnify Penuche's or Tousley for  this claim because its multi-

          peril  insurance  policy  contains an  exclusion  for  any claims

          "arising out  of an  assault and/or battery."   We  reject United

          National's arguments  and affirm  the district  court's award  of

          summary  judgment to  Penuche's  and  Tousley, but  we  do so  on

          different grounds than decided by that court.

                                      BACKGROUND
                                      BACKGROUND
                                      __________

                    The facts in this case  are essentially undisputed.  On

          October  4, 1995, Burke was in Penuche's  Ale House in Keene, New

          Hampshire.  An altercation ensued between two men, and Burke left

          his table to attempt to calm them down.  Afterwards, as he turned

          his back to return to  his table, he was  attacked by one of  the

          men with a barrage  of punches to the side and  back of his head.

          As  he  turned  around  to  face his  assailant,  he  observed  a

          Penuche's employee, Tousley, coming toward him to stop the fight.

          Tousley grabbed Burke  in a "bear  hug," pinning his arms  to his

          sides  in  an apparent  attempt  to  immobilize him  and  prevent

                                         -2-

          further fighting.   Tousley's momentum, however, caused  Burke to

          fall backwards,  striking various obstructions  as he fell.   The

          fall left Burke with a severe spinal cord injury.

                    Burke sued  Tousley and  Penuche's in  a New  Hampshire

          court,  alleging  that  his  injuries  resulted   from  Tousley's

          negligence in carelessly intercepting and restraining him.  Burke

          further   claimed  that  Penuche's  is  liable  under  respondeat
                                                                 __________

          superior,  and "actively  negligent" insofar  as  slippery and/or
          ________

          cluttered  premises proximately caused  his injuries.   After the

          commencement of  the state  court action,  Tousley and  Penuche's

          demanded that  United National  provide coverage  and defense  of

          Burke's claims under a multi-peril insurance policy held by "Todd

          Tousley DBA  Penuche's  Ale House."   United  National agreed  to

          provide a  defense subject to  a reservation of  rights, claiming

          that  an exclusion  in its  policy relieves  it of  any indemnity

          obligation.   It  subsequently  sued  Penuche's  and  Tousley  in

          federal  district court under diversity jurisdiction, 28 U.S.C.  

          1332, seeking a declaratory judgment to this effect.

                    Penuche's policy requires United National to defend and

          indemnify it  against claims  asserting bodily  injury caused  by

          "occurrence[s] . . . arising out of the ownership, maintenance or

          use of  the  insured premises."   United  National contends  that

          "exclusions" take  away coverage  that would  otherwise apply  to

          this case under this broad "coverage" provision.

                    One of the policy provisions excludes coverage for:

                    claims  arising  out  of  an  assault  and/or
                    battery,   whether  caused   by  or   at  the

                                         -3-

                    instigation of,  or at  the direction of,  or
                    omission   by,   the  Insured,   and/or   his
                    employees.  

          This is  the "assault  and battery" exclusion  at issue.   United

          National  also requests  a limited  declaration  that insofar  as

          Burke's claims arise out  of Penuche's negligent sale or  service

          of  alcoholic beverages,  coverage  is  precluded  by  a  "liquor

          liability" exclusion.

                    The  district   court  found  that   neither  exclusion

          precluded coverage for  the underlying suit.   The court  awarded

          summary  judgment  for  Penuche's and  Tousley,  ordering  United

          National to  defend and indemnify  the claims.   United  National

          appeals this award,  asking for declaratory judgments  under both

          exclusions and  further  arguing that  it was  premature for  the

          district court to order it to indemnify the underlying claims, as

          opposed to merely ordering a defense of those claims.

                                      DISCUSSION
                                      DISCUSSION
                                      __________

                    We review de  novo a district court's  grant of summary
                              ________

          judgment.  Pine  Tree Medical Associates  v. Secretary of  Health
                     _____________________________     ____________________

          and Human  Services, __ F.3d __, 1997 WL  563587 at *2, (1st Cir.
          ___________________

          1997).

          I.  The Assault and Battery Exclusion
          I.  The Assault and Battery Exclusion

                    United  National  claims   that  coverage  for  Burke's

          injuries is excluded because they  "arose out of" two assault and

          batteries:  first Burke was attacked by another Penuche's patron;

          and  then he  was manhandled  by Tousley,  who was  attempting to

          break up the  fighting.  United National argues  that the assault

                                         -4-

          and battery exclusion  applies if the claims arose  out of either

          or both of these incidents.

                    A.  The Fight
                    A.  The Fight

                    It is not disputed that  Burke was battered by  another

          patron of Penuche's on October 4, 1995.  However, the assault and

          battery exclusion is only  implicated by this fight  if batteries

          by customers were a type of battery excluded by the contract, and

          if Burke's injuries could fairly  be said to "arise out of"  this

          patron's attack. 

                    The policy excludes  "claims arising out of  an assault

          and/or battery, whether caused by or at the instigation of, or at
                          _______

          the  direction  of, or  omission  by,  the  Insured,  and/or  his

          employees." (emphasis added).  Tousley claims that this exclusion

          is inapplicable to  any claims arising out of  the patrons' fight

          because its terms  only exclude coverage  for assaults caused  by

          acts or  omissions of employees.   In other words,  Tousley reads

          the examples following the word  "whether" as an exhaustive list.

          He argues that,  at the very least, this  provision is ambiguous,

          and that under New Hampshire  law this ambiguity must be resolved

          against United National.   See Hoepp v. State Farm  Ins. Co., 697
                                     ___ _____    ____________________

          A.2d 943, 945 (N.H. 1997).  These arguments fail.

                    An insurance  policy's language  "must be accorded  its

          natural and ordinary meaning."  Coakley v. Maine Bonding and Cas.
                                          _______    ______________________

          Co.,  618 A.2d  777, 781  (N.H.  1992) (quoting  Trombly v.  Blue
          ___                                              _______     ____

          Cross/Blue Shield,  423 A.2d  980, 984 (N.H.  1980)).   Tousley's
          _________________

          position either  reads the  word "whether"  out of  the exclusion

                                         -5-

          completely, or  gives it  a meaning identical  to the  word "if."

          This interpretation runs against the commonly accepted meaning of

          the  word "whether"  in this context.   If  one hears,  "the post

          office will deliver your mail, whether it is raining or snowing,"

          one will  not take this  to mean that  mail is only  delivered in

          inclement weather.   Similarly, where this policy  lists specific

          types  of  excluded   assaults  and  batteries  after   the  word

          "whether," it does  not follow that other  assaults and batteries

          are  not excluded.    Our  interpretation  of this  exclusion  is

          consistent with the  only other court that we have  found to have

          addressed this  question.  In  United Nat'l Ins. Co.  v. Horning,
                                         _____________________     ________

          Ltd., 882 F. Supp. 310  (W.D.N.Y. 1995), United National sought a
          ____

          declaratory judgment  under an  identical exclusion  in a  liquor

          liability policy.   Horning involved an action brought  by a rape
                              _______

          victim  against  a  drinking  establishment  and  bartenders  for

          serving  her attacker  even though  he  was under  the influence.

          Rejecting a reading of the clause identical to that proposed here

          by   Tousley,  the  district  court  held  that  "[t]he  specific

          instances  identified  in the  clause  are  simply not  meant  to

          provide an  exhaustive list of  the conduct  contemplated by  the

          exclusion."  Id. at 314.  We agree.
                       ___

                    Furthermore,  if   Burke  is   trying  to  hold   these

          defendants liable  for the actions  of a customer, his  theory of

          liability  must  necessarily follow  from an  act or  omission of

          Penuche's or its employees.  See, e.g., United Nat'l Ins.  Co. v.
                                       ___  ____  ______________________

          Waterfront New York Realty Corp.,  994 F.2d 105, 109-110 (2d Cir.
          ________________________________

                                         -6-

          1993) citing  United Nat'l Ins. Co. v. The Tunnel, Inc., 988 F.2d
                ______  _____________________    ________________

          351, 354 (2d Cir. 1993) (identical assault and  battery exclusion

          cannot be read to exclude only more "direct" acts or omissions of

          employees as opposed to more "remote acts  of negligence" leading

          to assaults  and batteries).  Therefore, the exclusion applies to

          the fight in this case, and the district court erred in  adopting

          Penuche's limited interpretation of this clause.

                    Even  if the  policy  exclusion  covers  this  type  of

          battery, however, the  exclusion only precludes recovery  in this

          case if  Burke's injuries also can be said  to "arise out of" the

          fight.  Under New Hampshire law, "arising out of" is a very broad

          term  meaning  "originating from  or  growing out  of  or flowing

          from."  Winnacunnet Coop. Sch.  Dist. v. National Union Fire Ins.
                  _____________________________    ________________________

          Co., 84 F.3d 32, 35 (1st Cir. 1996) (citing Merrimack  Sch. Dist.
          ___                                         _____________________

          v. National Sch. Bus Serv., Inc., 661 A.2d 1197, 1199 (N.H. 1995)
             _____________________________

          (quoting Carter  v. Bergeron,  160 A.2d 348,  353 (N.H.  1960))).
                   ______     ________

          While the concept  of "arising out of" is  broader than proximate

          causation,  it  is not  so  broad  as  to encompass  a  "tenuous"

          connection.  See Cannon v. Maine Bonding & Casualty Co., 639 A.2d
                       ___ ______    ____________________________

          270, 271  (N.H. 1994); Akerley  v. Hartford Ins. Group,  616 A.2d
                                 _______     ___________________

          511, 515 (N.H. 1992).

                    United National  argues that Burke's injuries arose out

          of  the  altercation  with  the  other  patron  insofar  as  that

          altercation necessitated  Tousley's doomed  intervention.   While

          this  argument  has  some  plausibility,  we  hold  that  Burke's

          injuries cannot  be said  to "arise out  of" the  initial attack.

                                         -7-

          The  spinal injury  occurred when  Tousley's "bear  hug" and  his

          momentum from  hurrying over  to stop the  fight caused  Burke to

          fall backward,  into a  table and  onto the  floor.   All of  the

          damages in this tort action  stem from a discrete intervening act

          of alleged negligence, and this claim cannot be said to arise out

          of earlier actions.  Tousley had a completely different objective

          from  the brawling patron, and Burke's eventual injuries were not

          caused by the blows he  received in the fight.  See  Winnacunnet,
                                                          ___  ___________

          84 F.3d at 38 (observing  that assault and battery exclusions are

          intended to preclude coverage of  claims where such excluded acts

          immediately cause  the injury).   This is not  a case in  which a
          ___________

          bartender or  bouncer joined sides  in a donnybrook.   The injury

          caused by the employee in this case arose entirely out of his own

          actions.

                    The district  court's conclusion  that the assault  and

          battery exclusion  is inapplicable  to the fight  is affirmed  on

          these alternate  grounds.   See Frillz, Inc.  v. Lader,  104 F.3d
                                      ___ ____________     _____

          515, 516 (1st  Cir. 1997)  (reviewing court is  not bound by  the

          rationale of the lower court  on summary judgment, but may affirm

          "on any alternative ground made manifest by the record").

                    B.  The "Bear Hug"
                    B.  The "Bear Hug"

                    Having  disposed  of  United National's  argument  that

          Burke's  fight  precludes  coverage,  the  applicability  of  the

          assault and battery exclusion hinges on whether Tousley's attempt

          to  break up  the fight  itself constituted  a "battery."   Since

          there is no definition of "battery" in the policy, we look to the

                                         -8-

          common law definition of the  term.  According to the Restatement

          (Second) of Torts, an actor is liable to another for battery if:

                      (a) he acts intending  to cause a harmful
                      or offensive  contact with the  person of
                      the  other  or  a  third  person,  or  an
                      imminent apprehension of  such a contact,
                      and
                      (b) a harmful contact  with the person of
                      the other directly or indirectly results.

          Restatement  (Second) of  Torts    13  (1977).   As both  parties

          acknowledge in their  briefs, the disputed issue  here is whether

          Tousley had the requisite intent to cause an "offensive"  contact

          with Burke.1

                    United National refers this Court to section 19  of the

          Restatement (Second),  which  provides that  "bodily  contact  is

          offensive if it offends a  reasonable person's sense of  personal

          dignity."  It argues  that Tousley's protective "bear hug"  would

          offend  a reasonable  person's sense  of dignity.   We  find this

          argument unpersuasive.

                    Burke testified at his deposition that, from the moment

          he saw Tousley  about to  grab him, he  understood Tousley to  be

          acting in a  peacekeeping role.  No reasonable  person would feel

          their personal dignity offended by a bartender trying  to prevent

          fighting in his establishment.  This would be a different case if

                              
          ____________________

          1   To  commit an  "assault"  under the  Restatement (Second)  of
          Torts, the actor must intend to cause an imminent apprehension in
          another  person of  harmful or  offensive  contact.   Restatement
          (Second)  of Torts    21 (1977).  Because,  under the common law,
          the  intent element of  "battery" subsumes the  intent element of
          "assault," and because  neither party argues that  Tousley's bear
          hug constituted  an "assault"  rather than  a "battery,"  it will
          suffice to inquire whether Tousley committed a battery.

                                         -9-

          Tousley had hit  or pushed Burke, however, it  is undisputed that

          Tousley was merely attempting to keep Burke out of harm's way.

                    Professor  Prosser   offered  a   helpful  example   to

          distinguish between the intentional battery and negligence:  

                      If  an automobile driver  runs down a man
                      in the street before him, with the desire
                      to hit him, or with the belief that he is
                      certain to  do so,  it is  an intentional
                      battery;  but if he has no such desire or
                      belief, but  merely acts  unreasonably in
                      failing to  guard against a risk which he
                      should appreciate, it is negligence.

          Prosser, Law of Torts, section 31 at 145 (4th ed. 1971).  In this

          case,  Tousley's actions  were  negligent  at  most,  and  United

          National's "offending dignity" argument is unavailing.   

          II.  The Liquor Liability Exclusion
          II.  The Liquor Liability Exclusion

                    United National also seeks a declaratory judgment that,

          to  the extent that Burke's claims arise out of Penuche's sale or

          service  of alcoholic  beverages,  coverage  is  precluded  by  a

          "liquor liability"  exclusion.   This exclusion  bars claims  for

          "bodily injury or  property damages for which the  insured or his

          indemnitee may be held liable .  . . as a person or  organization

          engaged in  the business of manufacturing,  distributing, selling

          or serving alcoholic  beverages."  However, in his  Memorandum in

          Support of Motion  for Summary Judgment, Burke  admitted "[t]here

          is no allegation  or evidence that Tousley or  Penuche's would be

          liable  for bodily  injury by  reason  of the  'violation of  any

          statute,  ordinance  or  regulation' pertaining  to  the  sale of

          alcohol."   In  the face  of this  concession,  United National's

          request for a declaration on its "liquor  liability" exclusion is

                                         -10-

          superfluous.     Under  no  reasonable  construction  of  Burke's

          complaint  is Penuche's  being  sued  for negligently  furnishing

          alcoholic beverages.

                                         -11-

          III.  The Court Order to Indemnify the Insured
          III.  The Court Order to Indemnify the Insured

                    Finally,  United  National  argues  that  even  if  the

          exclusions  do not  apply to  Burke's tort  claims,  the district

          court  acted prematurely  when  it  ordered  United  National  to

          indemnify the  insured before  a trial.    The insurance  company

          argues  that  "[i]t  is  currently  unknown  precisely  what  the

          evidence will be concerning the encounter," and that it was error

          to "assume that  the evidence will be as it has been presented in

          discovery."   This argument lacks  any support in  law.  The  New

          Hampshire Supreme  Court, as  a matter  of course,  affirms court

          orders to  indemnify that  are issued before  trial.   See, e.g.,
                                                                 ___  ____

          Trefethen  v. New  Hampshire Ins.  Group, 645  A.2d 72,  75 (N.H.
          _________     __________________________

          1994)  (affirming declaratory judgment  that insurer had  duty to

          defend  and  indemnify  claims); White  Mountain  Constr.  Co. v.
                                           _____________________________

          Transamerica Ins. Co., 631 A.2d 907, 910 (N.H. 1993) (same).  
          _____________________

                    If Burke prevails at trial, and we have determined that

          no exclusions in the policy  apply, United National simply cannot

          avoid its obligation.  Federal courts cannot limit their  rulings

          in  anticipation of potential  surprise revelations during trial.

          If,  in fact,  some  heretofore unanticipated  development during

          trial negates the rationale of this or any judgment, the affected

          party may  file a Motion  for Relief  From Judgment  or Order  in

          accordance  with  Rule  60(b)  of  the  Federal  Rules  of  Civil

          Procedure.  However, we will  not refrain from affirming an order

          awarding indemnification for insurance claims on summary judgment

          whereallavailablefactsandlawindicatethatsuchanorderisappropriate.

                                         -12-

                    For  the reasons  stated herein,  the  district court's

          award  for  summary  judgment  and  order  for  the  defense  and

          indemnification of Thomas Burke's claims is affirmed. 
                                                      ________

                                         -13-