Precedential Decision in Insurance Coverage Case

November 17, 2009
Miles A. Kirshner

 Margolis Edelstein Pittsburgh partner Miles A. Kirshner represented Regis Insurance Company in a declaratory judgment action seeking to disclaim general liability insurance coverage for an incident which occurred outside its insured tavern.  A group of individuals were engaging in improper behavior outside the bar.  They were accosted by the bar’s security staff, and one of these individuals died as the “bouncerâ€ù was kneeling on him to restrain him until the police could arrive.  Suit was brought seeking damages from the bar and its staff members.

 Regis’ coverage defense was based on an assault and battery exclusion found within its policy, excluding coverage for all actions arising from harmful or offensive contact between two or more persons, and providing that such exclusion applied regardless of whether the harm was caused by or on the instruction of the insured, and regardless of whether it arose from any alleged failure to train or supervise.  Though the trial court agreed that the language of the assault and battery exclusion clearly applied to the facts of the underlying action, it granted summary judgment to the tavern, because its owner claimed that the exclusion was contrary to his reasonable expectations.

 On appeal, the Superior Court of Pennsylvania reversed and remanded the matter to the trial court with instructions to enter summary judgment for Regis.  In this published opinion, the Superior Court: (1) validated the language of the assault and battery exclusion as clear, unambiguous and applicable to the facts of the underlying action; (2) agreed that the record created by counsel from Margolis Edelstein demonstrated as a matter of law that the insured received exactly the policy that it had bought and paid for; and (3) held that an insurance producer who is not captive to one particular company, but rather markets coverage for his customer from a variety of insurers, is the agent of the insured, and not of the insurer.

 This precedential opinion will be useful for insurers litigating declaratory judgment actions in Pennsylvania.  It limits the applicability of prior case law finding a duty to defend cases arising out of assault and battery; validates the particular assault and battery exclusion in issue in the subject policy, and also affirms the continued viability of Pennsylvania’s plain meaning rule of insurance policy interpretation.  Further, this opinion limits the scope of the doctrine of reasonable expectations, and provides important guidance as to the true role of the independent producer of insurance products.  For more information, or to address insurance coverage issues relating to a variety of insurance policies, please contact Miles Kirshner in our Pittsburgh office, or visit the insurance coverage section of our website, for information on the attorneys in our insurance coverage practice group in offices throughout Pennsylvania, New Jersey and Delaware.