QBE Insurance v. Jinx-Proof Inc.

6 N.E.3d 583, 22 N.Y.3d 1105

• Court: New York Court of Appeals
• Decided: February 18, 2014
• Status: Published

Opinions

OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed, with costs, and the certified question answered in the affirmative.

Plaintiff QBE Insurance Corp. (QBE) issued a liability policy to defendant Jinx-Proof Inc. (Jinx-Proof) that contained an assault and battery exclusion. In December 2007, a patron of a bar owned by Jinx-Proof commenced the underlying personal injury action to recover for injuries she allegedly sustained when one of Jinx-Proofs employees threw a glass at the customer’s face. On January 28, 2008, Jinx-Proof notified QBE of the underlying action, which alleged claims sounding in both negligence and intentional acts. QBE, through a third-party administrator, subsequently wrote two letters to Jinx-Proof— one on January 31, 2008, and the other on February 26, 2008— stating, among other things, that Jinx-Proof had no coverage for the assault and battery claims. Upon dismissal of the negligence and Dram Shop Act claims asserted in the underlying action, QBE commenced this declaratory judgment action and moved for summary judgment declaring that it was not obligated to defend or indemnify Jinx-Proof on the remaining claims. Jinx-Proof cross-moved for summary judgment dismissing the complaint as asserted against it. Supreme Court granted QBE’s motion and denied Jinx-Proofs cross motion. The Appellate Division modified the order only to the extent of declaring that QBE is not obligated to defend Jinx-Proof in the underlying action, and otherwise affirmed (102 AD3d 508 [2013]).

The courts below properly determined that QBE effectively disclaimed coverage for the assault and battery claims asserted in the underlying action. The first letter sent to Jinx-Proof stated that QBE would not defend or indemnify Jinx-Proof “under the General Liability portion of the policy for the assault and battery allegations” and that Jinx-Proof did not have liquor liability coverage. The second letter stated that Jinx-Proof did have liquor liability coverage but that the policy excludes coverage for assault and battery claims. Specifically, the second letter stated:

“[W]e are defending this matter under the Liquor Liability portion of the [commercial general liability] coverage, and under strict reservation of rights for allegations of Assault and Battery. Your policy excludes coverage for assault and battery claims . . . Therefore, should this matter proceed to verdict, any awards by the Court stemming from allegations of Assault and Battery will not be covered under your Commercial General Liability policy” (emphasis omitted).

Although the letters contained some contradictory and confusing language, the confusion was not relevant to the issue in this case. The letters specifically and consistently stated that Jinx-Proofs insurance policy excludes coverage for assault and battery claims. These statements were sufficient to apprise Jinx-Proof that QBE was disclaiming coverage on the ground of the exclusion for assault and battery, and this disclaimer was effective even though the letters also contained “reservation of rights” language (see e.g. Blue Ridge Ins. Co. v Jiminez, 7 AD3d 652, 653 [2d Dept 2004]).

Finally, Jinx-Proofs claim that the liquor liability portion of the policy may have included coverage for assault and battery was not raised below and refers to matter dehors the record and is therefore beyond our review. Neither party submitted the liquor liability portion of the policy to the motion court, and those provisions were not included in the record on appeal. Thus, not only is Jinx-Proofs claim that it may have had coverage for assault and battery unreviewable, it is based on pure speculation.