The case is reprinted in its entirety on the blog and I read it pretty closely. I’m not sure I agree with the court. I’m not entirely sure I disagree either, but I didn’t really like the court’s writing and analysis, so I kind of want to disagree, but I can’t. It seems Randi was sued by Uri Geller, a man who claimed to do various paranormal stuff and did not appreciate Randi’s attempted debunking. The issue in the case was whether the insurance company owed a defense to Randi, who was sued along with a group, of which he was a director. The policy said directors were insureds under the policy as long as they were acting within the course and scope of their duties as directors.
Colony Insurance Co. v. Barnes, 2006 WL 1995720 (11th Cir. July 18, 2006) is a case that could serve as a model of how a plaintiff can plead to avoid a policy’s assault and battery exclusion. In May 2004, Faheem Brown, a patron of the Dreamland Inn in Greenwood, Florida, was killed when other patrons began firing guns in the parking lot. It is not clear from the case exactly why they did this, whether out of malice or stupidity, but it appears Brown was struck by a stray bullet and was not an intended target.
His estate brought a wrongful death suit against the club, alleging that it failed to suppress patrons from recklessly shooting firearms, that it failed to provide an environment free from gunplay, and that firearm use at the club was so frequent as to constitute an ultra-hazardous activity for which the club was strictly liable. The club’s insurer, Colony, filed a declaratory action, seeking to establish that the policy’s assault and battery exclusion precluded a duty to defend. However, the U.S. district court, and on appeal, the 11th Circuit, found that assault and battery, which were not defined in the policy, require an intent to injure or to create a well-founded fear of imminent peril. The complaint, the 11th Circuit said, contained no allegation of intent by the shooter, and therefore Colony owed a duty to defend the club.
It may occur to many of you, as it did to me, that bringing a dec action in circumstances like this, where the underlying tort action against the insured is ongoing, is tricky and hazardous. An insurer can’t force an insured to defend itself in a dec action with a position that will expose it to liability to the underlying plaintiff. In this case, it would appear that the insured could defend the dec action merely by saying that the complaint alleged no criminal intent by the club or the shooter, without admitting any negligence or ultra-hazardous conduct in the complaint. Still, the nightclub would have to assume for purposes of argument that the gun was fired on its premises, a fact that exposes it to potential liability. Maybe there was no dispute about this and the club admitted.
