UNITED NAT. INS. v. WATERFRONT NY REALTY CORP. No. 1409, Docket 92-9350.
994 F.2d 105 (1993)
UNITED NATIONAL INSURANCE CO., Plaintiff-Appellant, v. WATERFRONT NEW YORK REALTY CORPORATION; William M. Weaver; William M. Weaver Trust; Coleman P. Burke; Adreas M. Rickenbach; Atone E. Schraft; Loring D. Bolger; Bulgroup Properties; Chalet Suiss International, Inc.; C.A. Kalman; James A. Newman; John C. Wist; Karl-Adam Bonnier; Francis P. Lang; Maag Finance Ltd.; Atone E. Schraft; Tuckerman Ltd.; U.S. Friends Investment Corp. (Panama), doing business as Waterfront N.Y., and The Tunnel, Inc., also known as The Tunnel; Eli-Ben Dayan; Jonata Dayan, Defendants-Appellees, Lourdes Ortiz, Defendant.
United States Court of Appeals, Second Circuit.
Decided June 2, 1993.
Sheryl E. Katz, New York City (Carolyn Karp Schwartz, Richard E. Lerner, Wilson, Elser, Moskowitz, Edelman & Dicker, of counsel), for plaintiff-appellant.
Warren A. Herland, New York City (Michelle J. France, Jones Hirsch Connors & Bull, of counsel), for defendants-appellees.
Before: PRATT and JACOBS, Circuit Judges, and KNAPP, Senior District Judge.
JACOBS, Circuit Judge:
United National Insurance Co. ("UNI") appeals from a judgment of the United States District Court for the Southern District of New York (Lowe, J.), declaring that it must defend and indemnify defendants-appellees Waterfront New York Realty Corp. ("Waterfront") and The Tunnel, Inc. under a liability insurance policy. The insured premises were operated as a nightclub known as The Tunnel.
On July 17, 1988, Ms. Ortiz was sexually assaulted by an unidentified armed man while she was using the women's bathroom at The Tunnel. Ms. Ortiz thereafter filed a complaint in state court against, inter alia, Waterfront and The Tunnel, Inc. in which she alleged that she was "accosted, attacked, assaulted, sodomized, raped and placed in fear of deadly bodily harm" while on The Tunnel's premises. For a first cause of action, Ms. Ortiz alleged that the defendants in that suit were liable to her in negligence because the women's and men's bathrooms were open to and used by both sexes and that this practice was known to employees of The Tunnel. For a second cause of action, Ms. Ortiz alleged that the defendants were liable to her because they violated various
UNI had issued a liability policy to The Tunnel, Inc., the nightclub operator, and its landlord, Waterfront, for the period from July 16, 1988 to July 16, 1989. The policy includes an assault and battery exclusion for:
The policy also contains a sexual molestation exclusion which provides that coverage does not apply:
UNI agreed to defend Waterfront and The Tunnel, Inc. in Ms. Ortiz's state court action, but did so under a reservation of rights. UNI then began the present action against the insureds and Ms. Ortiz, seeking a declaration that it owed no duty of defense or indemnification. UNI brought a motion for summary judgment and Waterfront cross-moved. The sole issue to be determined was the interpretation of the assault and battery exclusion. The Tunnel, Inc., which became defunct sometime after the attack on Ms. Ortiz, did not respond to any of the motions.
On October 29, 1991, the district court issued a non-final order granting summary judgment in favor of Waterfront and The Tunnel, Inc. The district court held that the assault and battery exclusion is ambiguous because assault and battery is legally distinguishable from assault with intent to commit rape. The district court found that "[t]he distinction is further supported by the fact that UNI felt it necessary to create a separate exclusion for sexual molestation." The district court reasoned that the sexual molestation clause, which excludes coverage for claims arising from the sexual abuse or molestation of persons under the age of 16, would not have been necessary "had the assault and battery clause been as clear and unambiguous as UNI maintains." The district court further observed:
777 F.Supp. at 257. Having perceived an ambiguity in the assault and battery exclusion, the district court construed the ambiguity against the insurer, and held that the policy provided coverage for claims arising out of the rape of Ms. Ortiz, who had attained the age of 16 years.
On December 2, 1992, Ms. Ortiz's state court suit was settled for $1,050,000. UNI paid this amount to Ms. Ortiz, but reserved its right to appeal the district court's coverage opinion and to recover the damage award from its policyholders. On December 10, 1992, the district court amended its order and entered a final judgment. This appeal ensued.
The primary question presented is whether the assault and battery exclusion is ambiguous. "As with contracts generally, a provision in an insurance policy is ambiguous when it is reasonably susceptible to more than one reading." United States Fire Ins. Co. v. General Reinsurance Corp.,
Garza v. Marine Transport Lines, Inc.,
Waterfront contends that the assault and battery exclusion is ambiguous because the phrase "assault and battery" can be construed to reference a fight or altercation rather than a rape which, it asserts, is "qualitatively different." Waterfront argues that the presence of the sexual molestation exclusion is evidence of ambiguity because it encompasses some incidents of sexual assault and battery that would also be excluded by the assault and battery clause. According to Waterfront, the sexual molestation exclusion would not have been necessary had the assault and battery exclusion unambiguously applied to incidents of a sexual nature. Waterfront adduces extrinsic evidence to support its reading of the exclusion, in particular, the New York Penal Law, which defines assault and rape as separate offenses, and which differentiates among degrees of assault based on the nature of the injury inflicted and weapons used. Finally, Waterfront invites us to invoke the rule that ambiguities in an insurance policy are to be construed against the insurer and accordingly limit application of the assault and battery exclusion to assaults of a non-sexual nature.
Waterfront's analysis is flawed. To begin with, Waterfront's narrow reading of the assault and battery exclusion is not sustainable. An "assault" is an intentional placing of another person in fear of imminent harmful or offensive contact. A "battery" is an intentional wrongful physical contact with another person without consent. See Hernandez v. Lattimore,
6 N.Y.Jur.2d—Assault § 3, at 197. Thus, the terms "assault" and "battery" cover all types of "qualitatively different" situations.
It does not matter that the penal law lays down specific elements for the various offenses or degrees of offenses that entail unwanted touching, or that the crime of rape, as compared with assault and battery, entails other or additional elements. In the civil context in which the insurance contract was made, the common meanings of "assault" and "battery" subsume all forms of tortious menacing and unwanted touching.
While it is true that ambiguities are often construed against insurers, a clause may be general without being ambiguous, and even a vague clause may be ambiguous only at its edges. It is neither possible nor desirable for an insurance contract to enumerate the various kinds and degrees of attacks encompassed by an assault and battery exclusion. The clause need not mention rape or strangulation or mayhem, or other greater or lesser invasions of the person; all are subsumed in the broad language employed. Accordingly, in United National Ins. Co. v. Entertainment Group, Inc.,
The sexual molestation exclusion does not create or evidence any ambiguity in the assault and battery exclusion. While the
We find no ambiguity in the relevant policy provisions, because
Breed v. Insurance Co. of North America,
Having determined that the assault and battery exclusion is unambiguous, we have no reason to consider extrinsic evidence or the applicability of the contra proferentem rule. See Breed, 46 N.Y.2d at 353-54, 413 N.Y.S.2d at 354-55, 385 N.E.2d at 1282; Couch on Insurance § 15.83 (1984).
Waterfront advances an alternative basis for coverage, which the district court did not reach. Waterfront argues that the assault and battery clause is limited by its language to losses "caused" by the insured or its employees, whether by instigation, direction or omission; that the exclusion therefore refers only to assault or battery that the policyholder directly precipitated or failed to stop, rather than to remote acts of negligence that are not the direct cause of the assault and battery; that its negligence in part consisted of permitting the use of its bathrooms by both sexes, a violation of the applicable building code; that this separate and distinct underlying cause of the assault falls outside the assault and battery exclusion; and that UNI owes full coverage if any part of the claim is within the scope of the policy.
This Court has already rejected that same argument raised by Waterfront in another case. In United National Ins. Co. v. The Tunnel, Inc., a patron named Jeffrey Bernstein sued The Tunnel in state court after he was brutally beaten by the club bouncer. Bernstein alleged two causes of action: (a) assault and battery, and (b) negligent hiring of the bouncer. Waterfront argued that the assault and battery exclusion does not bar coverage where one of the negligence theories charges that the insured caused the assault and battery indirectly. UNI contended
988 F.2d at 354 n. 1. Similarly, Ms. Ortiz's cause of action alleging negligent maintenance of The Tunnel's bathrooms is premised upon an assault and battery caused by an "omission by" the insureds, and is therefore unambiguously excluded from coverage.
The assault and battery exclusion in the UNI policy precludes coverage for claims arising out of the attack on Ms. Ortiz. The policy contains no obligation to defend or indemnify Waterfront or The Tunnel, Inc. with respect to Ms. Ortiz's claim. The judgment of the district court is reversed, and the district court is directed to enter judgment consistent with this opinion.
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