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A Munich Re unit does not have to indemnify a bar and its owner for negligence stemming from a bar employee’s attack in the lounge’s parking lot because its policy’s assault-and-battery exclusion applies, a federal appeals court said Tuesday, in affirming a lower court ruling.
Michael Andrews was attacked by an employee of the Tool Shed Lounge in Kansas City, Missouri, in August 2012 by a bar employee, according to the ruling by the 8th U.S. Circuit Court of Appeals in St. Louis in Great Lakes Insurance SE v. Michael L. Andres; Ray A. Perrin; RAJJ Entertainment Inc., doing business as Tool Shed Lounge.
Mr. Andrews filed a negligence lawsuit in state court against the bar’s owner, Mr. Perrin, and the company that owned the bar, RAJJ Entertainment. A jury found both RAJJ and Mr. Perrin liable and ordered them to each pay $97,500, according to the ruling.
RAJJ and Mr. Perrin’s insurer, Munich Re unit Great Lakes, filed suit in U.S. District Court in Kansas City, Missouri, seeking a declaratory judgment its insurance policy did not require it to indemnify them because Mr. Andrews’ injuries were excluded under its coverage.
The district court ruled in the insurer’s favor and was affirmed by a unanimous three-judge appeals court panel. The coverage’s assault-and-battery exclusion applies to the damages award, a three-judge appeals court panel said.
The action that occurred “undeniably fit the policy’s definitions of assault, battery, and physical altercation” and the jury’s verdict indicates it agreed, the ruling said. “Therefore, the ‘relevant evidence adduced at trial’ confirms the exclusion of coverage,” it said, in citing an earlier case.
The ruling said RAJJ and Mr. Perrin argue that even if the assault-and-battery exclusion applies, their negligence counts as a separate, covered cause under the concurrent-proximate rule.
This rule provides that when an insured risk and an excluded risk are the concurrent, proximate cause of an accident, a liability insurer is liable as long as one of the causes is covered by the policy, the ruling said.
That rule does not apply here because RAJJ and Mr. Perrin’s negligence is not a covered cause, the panel said, in affirming the lower court’s decision.
Attorneys in the case did not respond to requests for comment.