B. Review of Insurance Contracts Under Pennsylvania Law.*fn6
Under Pennsylvania law, it is the province of the Court to
interpret contracts of insurance. Niagara Fire Ins. Co. v.
Pepicelli, Pepicelli, Watts and Youngs, P.C., 821 F.2d 216, 219
(3d Cir. 1987). The primary consideration in interpreting an
insurance contract is "to ascertain the intent of the parties as
manifested by the language of the written instrument." Standard
Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300,
469 A.2d 563, 566 (Pa. 1983). In doing so, "an insurance policy must
be read as a whole [by the court] and construed according to the
plain meaning of its terms." C.H. Heist Caribe Corp. v. American
Home Assurance Co., 640 F.2d 479, 481 (3d Cir. 1981); see also
Koval v. Liberty Mut. Ins. Co., 366 Pa. Super. 415, 531 A.2d 487,
489 (Pa.Super. 1987) ("[The court] must construe a contract of
insurance as a whole and not in discrete units."). Where a
provision of a contract of insurance is ambiguous, the provision
must be construed in favor of the insured, and against the
insurer, the drafter of the contract. Standard Venetian Blind
Co., 469 A.2d at 566. However, "a court should read policy
provisions to avoid ambiguities, if possible, and not torture the
language to create them." St. Paul Fire & Marine Ins. Co. v.
United States Fire Ins. Co., 655 F.2d 521, 524 (3d Cir. 1981).
An insurer's duty to defend an insured arises "whenever the
complaint filed by the injured party may potentially come within
the policy's coverage." Pacific Indem. Co. v. Linn,
766 F.2d 754, 760 (3d Cir. 1985). The duty to defend is triggered even if
the complaint asserting claims against the insured is
"groundless, false, or fraudulent." Gedeon v. State Farm Mut.
Auto. Ins. Co., 410 Pa. 55, 188 A.2d 320, 321 (1963). In
determining whether the complaint asserts a claim against the
insured to which the policy potentially applies, the factual
allegations of the complaint are controlling. Id. at 760;
Humphreys v. Niagara Fire Ins. Co., 404 Pa. Super. 347,
590 A.2d 1267, 1271 (1991), appeal denied, 528 Pa. 637, 598 A.2d 994
(Pa. 1991). If the factual allegations of the complaint, taken as
true and construed liberally, state a claim to which the policy
potentially applies, the insurer must defend, unless and until it
can narrow the claim to a recovery that the policy does not
cover. Cadwallader v. New Amsterdam Cas. Co., 396 Pa. 582,
152 A.2d 484, 488 (Pa. 1959); Biborosch v. Transamerica Ins. Co.,
412 Pa. Super. 505, 603 A.2d 1050, 1052 (Pa.Super. 1992), appeal
denied, 532 Pa. 653, 615 A.2d 1310 (Pa. 1992). Where a claim may
potentially come within the scope of the policy, an insurer's
refusal to defend its insured is a decision it makes at its own
peril. Cadwallader, 152 A.2d at 488. However, the insurer is
not required to defend the claim "when it is apparent from the
face of the complaint that none of the injuries that are alleged
falls within the coverage of the policy." Britamco Underwriters,
Inc. v. O'Hagan, No. 94-1160, 1994 WL 477551, at *3 (E.D.Pa.
Sep.2, 1994), aff'd, 60 F.3d 814 (3d Cir. 1995). To determine
whether a claim may potentially come within the coverage of a
policy, the Court must ascertain the scope of the insurance
coverage, and then analyze the allegations in the complaint.
Britamco Underwriters, Inc. v. Grzeskiewicz, 433 Pa. Super. 55,
639 A.2d 1208, 1210 (Pa.Super. 1994).
The duty to defend is a distinct obligation separate from an
insurer's duty to indemnify. Erie Ins. Exchange v. Transamerica
Ins. Co., 516 Pa. 574, 533 A.2d 1363, 1368 (Pa. 1987). The duty
to indemnify is more limited than an insurer's duty to defend,
and "arises only when the insured is determined to be liable for
damages within the coverage of the policy." Britamco
Underwriters, Inc. v. Logue's Tavern, Inc., No. 95-2997, 1995 WL
710570, at *2 (E.D.Pa. Dec.1, 1995). The burden is on the insured
to establish coverage under an insurance policy. Erie Ins.
Exchange, 533 A.2d at 1366-67. The insurer has the burden of
showing that policy exclusions preclude coverage. American
States Ins. Co. v. Maryland Cas. Co., 427 Pa. Super. 170,
628 A.2d 880, 887 (Pa.Super. 1993); Miller v. Boston Ins. Co.,
420 Pa. 566, 218 A.2d 275, 277
(Pa. 1966). Exclusions are strictly construed against the
insurer. Selko v. Home Ins. Co., 139 F.3d 146, 152 n. 3 (3d
Cir. 1998). However, "[e]xclusions from coverage contained in an
insurance policy will be effective against an insured if they are
clearly worded and conspicuously displayed, irrespective of
whether the insured read the limitations or understood their
import." Pacific Indem. Co., 766 F.2d at 761. Thus, if there is
no possibility that any of the underlying claims could fall
within the coverage of the policy, then the insurer has no duty
to defend and indemnify. Germantown Ins. Co. v. Martin,
407 Pa. Super. 326, 595 A.2d 1172 (Pa.Super. 1991), appeal denied,
531 Pa. 646, 612 A.2d 985 (Pa. 1992).
A. Duty to Defend.
In assessing whether Drake has a duty to defend, the Court must
first ascertain the scope of the coverage, and then assess
whether the factual allegations asserted within the underlying
complaint may potentially fall within that scope.
1. Scope of the coverage.
Drake contends that the assault and battery exclusion contained
in the Policy precludes coverage of Clark's and McCuff's claims
because their claims of injury arose out of an alleged assault
and battery caused by Frazier's intentional act of discharging
his firearm inside Papa Doc's. The Insureds counter that the
shooting was not the result of an assault and battery, but rather
was an accident. The exclusion reads as follows:
Assault and Battery/Negligent Hiring Exclusion
Notwithstanding anything contained to the contrary,
it is understood and agreed that this policy excludes
claims arising out of:
1. Assault and Battery, whether caused by or at the
instructions of, or at the direction of or negligence
of the insured, his employees, patrons or any cause
2. Allegations that the insured's negligent acts,
errors or omissions in connection with the hiring,
retention, supervision or control of employees,
agents or representatives caused, contributed to,
related to or accounted for the assault and battery.
Pl.'s Ans., at Ex. A. Giving the assault and battery exclusion
its plain meaning, the Court finds, as other courts have done,
that the terms of this exclusion are clear and unambiguous.*fn7
See Certain Underwriters at Lloyd's, London v. Brownie's
Plymouth, Inc., 24 F. Supp.2d 403, 405 (E.D.Pa. 1998); River
Thames Ins. Co. v. 5329 West, Inc., No. 95-0751, 1996 WL 18812,
at *1 (E.D.Pa. Jan. 18, 1996); Britamco Underwriters, Inc. v.
Weiner, 431 Pa. Super. 276, 636 A.2d 649, 652 (Pa.Super. 1994),
appeal denied, 540 Pa. 575, 655 A.2d 508 (Pa. 1994). Therefore,
if the assault and battery exclusion is applicable, it would
exclude coverage in this case.
Pennsylvania law recognizes that if the injuries are alleged to
have been caused by the intentional acts of the insured's
patrons, then the assault and battery exclusion would preclude
coverage. See Altipenta, Inc., t/a Pennants v. Acceptance Ins.
Co., No. 96-5752, 1997 WL 260321, at *3 (E.D.Pa. May 14, 1997),
aff'd, 141 F.3d 1153 (3d Cir. 1998) (finding no coverage for
negligent acts of bar owners arising out of shootings by a patron
because "there is no suggestion that the three shootings were not
intentional"); Britamco Underwriters, Inc. v. C.J.H., Inc.,
845 F. Supp. 1090, 1094-96 (E.D.Pa. 1994), aff'd, 37 F.3d 1485 (3d
Cir. 1994) (finding no coverage for negligent acts of bar owners
arising out of two intentional attacks by other patrons); Terra
Nova Ins. Co., Ltd. v. Thee Kandy Store, Inc., 679 F. Supp. 476,
478 (E.D.Pa. 1988) (finding no coverage for negligent acts of bar
owners arising out of an assault and battery by another patron);
Gene's Restaurant. Inc. v. Nationwide Ins. Co., 519 Pa. 306,
548 A.2d 246, 247 (Pa. 1988) (finding no coverage for assault and
battery where complaint alleged that victim was struck with
fists, repeatedly shook with great force and violence, cast and
thrown to the ground); Britamco Underwriters, Inc. v.
Grzeskiewicz, 433 Pa. Super. 55, 639 A.2d
1208, 1211 (Pa.Super. 1994) (finding no coverage for negligent
acts of bar owners arising out of an attack by another patron
with a broken beer bottle where the injured party claimed that
her injuries "were solely the result of [the patron's]
intentional, willful and purposeful acts").
On the other hand, Pennsylvania law also recognizes that a
commercial general liability insurance policy, such as the
instant Policy, although containing an assault and battery
exclusion, may provide coverage if the injuries claimed in the
complaint are alleged, in the alternative, to have been caused by
the negligent conduct of the insured. For example, in Britamco
Underwriters, Inc. v. Weiner, 431 Pa. Super. 276, 636 A.2d 649
(Pa.Super. 1994), appeal denied, 540 Pa. 575, 655 A.2d 508 (Pa.
1994), a patron filed suit against the owners of a bar alleging
that a co-owner and an employee of the bar struck the patron in
the neck. Id. at 650. The patron's underlying complaint
asserted several theories of liability against the insureds,
specifically, assault and battery, intentional, reckless, and/or
negligent infliction of emotional distress, and general claims of
negligence. Id. The insurer refused to defend its insureds,
pursuant to an assault and battery exclusion, and filed a
declaratory judgment action seeking a judicial determination of
its duty to defend. The court held that the insurer had a duty to
defend the insureds because the patron's complaint alleged
alternative theories of recovery, i.e., accidental, intentional,
or reckless acts, one of which may potentially come within the
coverage of the policy. Id. at 652. The court also found that
the patron's claims were not excluded by the assault and battery
exclusion because "[the patron's] injuries may have been caused
by the negligent acts of [the insured] and not necessarily by the
intentional acts of any individual." Id.See also Terra Nova Ins.
Co., Ltd. v. 900 Bar, Inc., 887 F.2d 1213, 1226 (3d Cir. 1989)
(concluding that insurer had duty to defend where underlying
complaint alleged that a firearm had been discharged
"negligently, recklessly, and/or intentionally, willfully,
wantonly, and maliciously" because such allegations raised
possibilities that the shooting did not arise from an assault and
battery); Mechetti v. Illinois Ins. Exchange/Classic Syndicate,
No. 97-5855, 1998 WL 151024, at *3 (E.D.Pa. Mar.30, 1998)
(stating its view that Weiner represents the current law of
Pennsylvania); First Oak Brook Corp. Syndicate v. Ultimate
Sports Bar, Inc., No. 94-4395, 1995 WL 241459, at *4 (E.D.Pa.
Apr.20, 1995) (following Weiner and concluding that insurer had
duty to defend, despite the presence of an assault and battery
exclusion, where the underlying complaint alleged negligent
physical contact); Britamco Underwriters, Inc. v. Logue's
Tavern, Inc., No. 95-2997, 1995 WL 710570, at *5-6 (E.D.Pa.
Dec.1, 1995) ("Where the complaint alleges that the harm causing
event may have been committed negligently, Weiner controls.").
Thus, the Court must determine whether the allegations
contained in the underlying complaint claim that the injuries
were caused by the intentional acts of the Named Insureds'
patron, or whether, in the alternative, the complaint alleges
that they were caused by the negligent conduct of the Named
2. The allegations of the complaint potentially fall within
the scope of the coverage.
The underlying state court complaint filed by Clark and McCuff
alleges four (4) causes of action against the Named Insureds: (1)
infliction of emotional distress; (2) negligence, gross
negligence, and negligence per se; (3) premises liability; and
(4) punitive damages. It is the factual allegations averred in
the complaint, and not the nature of the act that caused the
injury, that are controlling in determining an insurer's duty to
defend. Nationwide Mut. Fire Ins. Co. v. Pipher, 140 F.3d 222,
224 (3d Cir. 1998); Mechetti v. Illinois Ins. Exch./Classic
Syndicate, No. 97-5855, 1998 WL 151024, at *3 n. 8 (E.D.Pa.
Mar.30, 1998). The underlying complaint avers the following
26. Defendant Frazier then fired five shots, which in
unknown order, entered the abdomen of Hamilton,
entered the inside of Hamilton's wrist, while three
(3) more flew toward the rear of the crowded bar.
28. As Douglas McCuff exited the kitchen, leading
Shirley Clark, one of defendant Frazier's bullets
entered Douglas McCuff's abdomen, passed through his
body and entered Shirley Clark's stomach.
39. As a direct and proximate result of the above
described unlawful and malicious acts of defendants
Hamilton and Frazier, all committed under their
authority as Philadelphia police officer, and while
acting in that capacity, plaintiffs suffered grievous
bodily harm, all of which is in violation of their
rights under the laws and Constitution of the United
States, in particular the Fourth, Fifth and
Fourteenth Amendments thereof and 42 U.S.C. § 1983.
42. Defendants Hamilton and Frazier subjected the
plaintiffs to these deprivations of their rights
either maliciously, or by acting with a reckless
disregard for whether plaintiffs' rights would be
violated by their actions.
68. The acts of defendants Frazier and Hamilton,
alleged in the preceding paragraphs, constitute the
torts of assault and battery, all to plaintiffs'
great detriment and loss.
72. The individual defendants intentionally and
recklessly caused plaintiffs severe emotional
73. The acts of the individual defendants alleged in
the preceding paragraphs constitute the tort of
intentional or reckless infliction of emotional
distress, all to plaintiffs' great detriment and
74. The individual defendants negligently caused
plaintiffs' severe emotional distress.
84. The acts of the Stu's and Papa Doc's defendants
alleged in the preceding paragraphs constitute the
torts of negligence, gross negligence, and negligence
per se, all to plaintiffs' great detriment and loss.
94. The Papa Doc's defendants are liable for the harm
caused plaintiffs by the accidental, negligent or
intentionally harmful acts of defendants Hamilton and
Frazier, as is more fully set forth herein.
98. The herein described conduct of defendants
Hamilton, Frazier, Stu's and the Papa Doc's
defendants, was malicious, wanton, willful, reckless
and intentionally designed to inflict grievous bodily
harm, mental distress and/or death upon the person of
Pl.'s Compl., at Ex. A.