Opinion
No. 0-396 / 99-985.
Filed September 27, 2000.
Appeal from the Iowa District Court for Kossuth County, PATRICK M. CARR, Judge.
Sergeant, the trustee in bankruptcy for an individual injured in an assault at a tavern and his wife, appeals following the grant of summary judgment in favor of the tavern's liability insurance carrier. AFFIRMED.
Thomas W. Lipps of Peterson Lipps, Algona, for appellant.
David E. Schrock of DeVries, Price Davenport, Mason City, for appellee.
Considered by HUITINK, P.J., and MAHAN and ZIMMER, JJ.
I. Background Facts and Proceedings.
Sergeant's claim against Capitol Indemnity Corporation (Capitol) originated in a lawsuit Michelle and Troy Peterson (Petersons) brought against the Jukebox tavern and its owners, Gary and Paula Erpelding (collectively the Jukebox). Petersons sued the Jukebox for personal injury and property damage sustained when they were assaulted by an unidentified patron of the Jukebox. Under Petersons' property damage theory, the Jukebox negligently failed to restrain and identify their assailants resulting in the loss of any personal injury claim the Petersons could bring against their assailants.
Capitol, the general liability carrier for the Jukebox, declined coverage for Petersons' claim citing the assault and battery exclusion of its policy insuring the Jukebox. As a result, the Jukebox sued Capitol for breach of contract and tort damages in a third-party petition filed as part of the Petersons' lawsuit. After reaching a settlement with the Petersons, the Jukebox assigned any claims against Capitol to Sergeant, the Petersons' bankruptcy trustee.
Capitol moved for summary judgment citing the following policy language:
This insurance does not apply to bodily injury, property damage or personal injury arising out of assault, battery, or assault and battery. This exclusion applies to all coverages under this coverage part.
Definitions:
1. Assault — A willful attempt or offer with force or violence to harm or hurt a person without the actual doing of the harm or hurt.
2. Battery — Any battering or beating inflicted on a person without his or her consent.
3. Assault and Battery — For purposes of this insurance, this term includes assault and battery, and specifically includes the ejection or exclusion with force or violence, or attempt thereof, of any person from the premises by the insured and his/her/its employees or agents.
Sergeant resisted Capitol's motion claiming the exclusion did not apply. Sergeant argued the Petersons' property damage was caused by negligence independent of the underlying assault and consequently was not property damage "arising out of assault." The district court rejected Sergeant's claim and entered summary judgment, dismissing his breach of contract claim against Capitol.
On appeal the Petersons argue the district court erred in holding that "an assault and battery" exclusion in a liability policy precludes recovery for property damages proximately caused by acts and omissions subsequent to and independent of the assault and battery. The Petersons also contend the district court erred by declining to hold that an innkeeper has a common-law duty to protect their guests' property.
II. Standard of Review.
Our review of a grant or denial of summary judgment is at law. Hill v. McCartney, 590 N.W.2d 52, 55 (Iowa App. 1998). Summary judgment is only appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Id. We review the record in the light most favorable to the party opposing summary judgment as we would a motion for directed verdict. Smith v. CRST Int'l, Inc., 553 N.W.2d 890, 893 (Iowa 1996). Under this standard, summary judgment is inappropriate if reasonable minds would differ on how the issue should be resolved. Dickerson v. Mertz, 547 N.W.2d 208, 212 (Iowa 1996). Entry of summary judgment is proper if, under the entire record, the only conflict concerns legal consequences flowing from undisputed facts. Brown v. Monticello State Bank, 360 N.W.2d 81, 84 (Iowa 1984). Generally, questions of negligence and proximate cause are for the jury; it is only in exceptional cases that they be decided as a matter of law. Iowa R. App. P. 14(f)(10).
III. Assault and Battery Exclusion.
Insurance policy exclusions are strictly construed against the insurer. Grinnell Mut. Reinsurance Co. v. Employers Mut. Casualty Co., 494 N.W.2d 690, 693 (Iowa 1993) (exclusionary clauses are given a narrow or restrictive construction). An insurer must define exclusions in clear and explicit terms. West Bend Mut. Ins. Co. v. Iowa Iron Works, 503 N.W.2d 596, 598 (Iowa 1993). If an exclusion is clear and unambiguous it must be given effect. Hickman v. IASD Health Servs. Corp., 572 N.W.2d 165, 167 (Iowa App. 1997). On the other hand, if an exclusion is fairly susceptible to two reasonable interpretations, the exclusion is ambiguous and the interpretation most favorable to the insured will be adopted. A.Y. McDonald Indus. v. Insurance Co. of N. Am., 475 N.W.2d 607, 618-19 (Iowa 1991). Interpreting an insurance policy for ambiguity or lack thereof is a question of law for the court. Johnson v. Farm Bureau Mut. Ins. Co., 533 N.W.2d 203, 206 (Iowa 1995). In interpreting an insurance policy the court must construe the document as a whole. Gracey v. Heritage Mut. Ins. Co., 518 N.W.2d 372, 373 (Iowa 1994).
We are required to examine the substance rather than form of a claim implicating an assault and battery exclusion under these circumstances. See Essex Ins. Co. v. Fieldhouse, Inc. 506 N.W.2d 772, 775 (Iowa 1993). It is the causal connection of the claim to the excluded conduct that is determinative rather than the label used by the claimant or insured. Id. at 775-76.
Essex, like this case, involved claims against a bar by a patron assaulted by another patron. There the court upheld application of the exclusion noting the exclusions extension to the whole class of risks arising out of an assault and battery. Id. at 776. Most significantly, the court also held the assault and battery exclusion precluded coverage for claims premised on the insured's negligent hiring, training, and supervision of its employees. Id.
We conclude the court's rationale in Essex controls the outcome in this case. Contrary to Sergeant's claim, Petersons' property damage claim is inextricably linked to their underlying assault and battery claim. As the district court wisely noted:
[T]he failure to detain and identify an assailant at a bar cannot itself be negligent without the pre-existing assault, otherwise there is no one to detain. If no assault (the excluded cause) is involved, there is nothing to give rise to the defendant's negligence and no injury at all. In fact, it is impossible to imagine a scenario where one could be liable for the failure to detain an assailant without a prior assault.
We therefore reach the same conclusion as the district court. Petersons' claims fall squarely within the assault and battery exclusion of the Jukebox's liability insurance policy with Capitol.
IV. Innkeeper Duties.
The district court disposed of this issue stating:
The Petersons' recourse was against the bar, if anyone, not the insurer. While an innkeeper may have a common law duty to maintain safe premises, that does not mean that his or her insurance policy will cover all such situations. Dolan v. State Farm Fire and Cas. Co., 573 N.W.2d 254, 257 (Iowa 1998) ("a tort victim, by pleading and trying his or her lawsuit on a negligence theory, cannot control the liability insurer's policy obligations to indemnify its insured tortfeasor."). Of course, Plaintiff's claim of bad faith also fails, since its breach of contract claim has failed.[footnote omitted.]
We agree with these observations and accordingly affirm on this issue. The judgment of the district court is affirmed.