MAY 2009 BAD FAITH CASES NO BAD FAITH WHEN NO DUTY TO DEFEND; CLAIMS UNDER ASSAULT & BATTERY EXCLUSIONS DO NOT DISTINGUISH BETWEEN DIRECT AND INDIRECT RESPONSIBILITY (Philadelphia Federal)
In Anglo American Investments, LLC d/b/a Pizza Peddler v. Utica First Insurance Company, the court granted the insurer’s motion to dismiss because it found that the charges in the underlying case fell under policy exclusions so the insurer had no duty to defend and, therefore, could not have breached its contract or acted in bad faith.
This case arises from an underlying tort case in which the insured and its employee were being sued based upon the employee’s actions. The insurer denied a defense and indemnification because the charges fell under the policy’s assault and battery exclusions.
The insured brought this case for breach of contract and statutory bad faith, asserting that the exclusions applied only to its direct actions, but the court found that the unambiguous language of the exclusion did not make any distinction between direct and indirect (i.e., under respondeat superior) action and that it excluded “any and all claims arising out of any assault, battery,. . .” The exclusion also applied to negligent supervision, another count in the tort case complaint, and there was no assertion of additional negligent action to take it outside of the exclusion.
The insured argued that the final count in the tort case, for general negligence against the employee, should be considered as pled against it, too, because the complaint could be amended in that manner. The court, however, could address only the claims that the insured was required to defend against currently.
With all of the claims in the tort suit being excluded under the policy, the insurer had no duty to defend or indemnify and, therefore, did not breach its contract or act in bad faith.