Certain Underwriters at Lloyd's London went to federal court in South Carolina seeking a declaration that the commercial insurance policy issued to the Butlers did not provide coverage for Ms. Green's claim because her claim arose “out of the assault and battery” and was excluded from coverage. Underwriters moved for summary judgment.

The Insurance Policy

The commercial property insurance policy issued to the Butlers provided:

We 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. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply.

The policy also provided:

This insurance does not apply to any claim and/or cause of action arising from:

1. An assault and/or battery regardless of culpability or intent; or

2. A physical altercation; or

3. Any act or failure to act to prevent or suppress such assault and/or battery or physical altercation.

The above applies whether caused by the insured, an employee, a patron, or any other person; and whether or not the acts occurred at the premises owned leased, rented or occupied by the insured.

This exclusion also applies to any claim and/or cause of action seeking:

….

4. Damages arising out of allegations of negligent hiring, placement, training or supervision, or to any act, error, or omission relating to such assault and/or battery or physical altercation.

5. Damages arising out of failure to provide proper security or safe premises to any person subject to any assault and/or battery or physical altercation.

We are under no duty to defend an insured in any “suit” alleging such damages arising out of any assault and/or battery or physical altercation of any nature whatsoever.

….

…. This insurance does not apply to a claim of or indemnification for punitive or exemplary damages. If a suit shall have been brought against you for a claim within the coverage provided under the policy, seeking both compensatory and punitive or exemplary damages, then we will afford a defense for such action. We shall not have an obligation to pay for any costs, interest, or damages attributable to punitive or exemplary damages. 

The district court denied the motion.

In its decision, the district court found that Ms. Green's complaint left open “the possibility” that the injury she alleged had not arisen from an assault or battery. The district court said that the only allegation in her complaint regarding the circumstances of the shooting did “not suggest that the weapon's discharge was intentional in any way.”

The district court pointed out that the only sentence describing the incident said:

On or about the 11th day of August 2013, the Plaintiff, a minor at the time, was a guest at the adult business of the Defendants when she [was] shot in both of her legs, causing permanent damage.

In the district court's opinion, nothing in this sentence suggested that the weapon had been discharged “during, or in relation to, a dispute” or that it had been discharged “with some form of intent to cause bodily injury or to place another in apprehension of bodily injury.”

Rather, the district court continued, the sentence was consistent with an allegation that the weapon had been discharged “unintentionally or by accident.”

The district court concluded that because Ms. Green's underlying complaint created a “possibility” that her injury had not arisen from assault or battery, it could not rule that the policy's assault and battery exclusion precluded the duty to defend.

The case is Certain Underwriters at Lloyd's London v. Butler, No. 1:16-cv-00975-JMC (D.S.C. Feb. 13, 2017).