In Hermitage Insurance Company v. Sportsmen’s Athletic Club, et al., 2008 U.S. Dist. LEXIS 65138 (D. Conn. Aug. 25, 2008), the United States District Court for the District of Connecticut (Bryant, J.) held that the plaintiff insurer did not owe a duty to defend or indemnify its insured, Sportsmen’s Athletic Club (“Sportsmen’s”), under a commercial general liability policy.

The Court found the following facts to be undisputed: On November 14, 1999, an unidentified patron of Sportsmen’s, a nightclub, fired a handgun at the defendant, Joseph Ellis, inside the facility. The gunshots hit Joseph Ellis, Xavier Cluff, Jermaine Floyd and Joseph Howard Dubose, also patrons of the nightclub. The shooting left Ellis, Cluff and Floyd injured, and killed Dubose.

At the time of the incident, Sportsmen’s was insured under a commercial general liability policy issued by the plaintiff, Hermitage Insurance Company (“Hermitage”). Sportsmen’s notified Hermitage of the shooting incident on November 17, 1999. After an investigation, Hermitage disclaimed coverage under the policy.

On December 7, 1999, Carolyn Dubose Moody and Delaida Rosario, co-administratives of the estate of Joseph Howard Dubose, filed suit against Sportsmen’s in the Connecticut Superior Court. That complaint alleged wrongful death and emotional distress as a result of Sportsmen’s’ negligence. Likewise, on December 15, 1999, Cluff and Floyd brought a second suit against Sportsmen’s. In addition to making claims similar to those in the Moody complaint, Cluff and Floyd alleged that their injuries were caused by Sportsmen’s’ violation of the Connecticut Department of Liquor Control’s regulations. Finally, on January 8, 2001, Ellis brought a third suit against Sportsmen’s, alleging it was negligent in failing to warn Ellis of the danger posed by the nightclub’s history of violent incidents, and also asserted a violation of the Department of Liquor Control’s regulations. The three cases were consolidated and on April 2, 2007, the Connecticut Superior Court entered judgment against Sportsmen’s.

Following the entry of judgment against Sportsmen’s, Hermitage brought a declaratory judgment action against the nightclub and the injured parties in the United States District Court for the District of Connecticut. Hermitage sought a declaration that it had no duty to defend Sportsmen’s in the state court suits and no duty to indemnify the nightclub for the losses incurred as a result of those suits. After the close of evidence, Hermitage filed a motion for summary judgment. After briefing, Judge Bryant granted summary judgment in favor of Hermitage on all three grounds upon which it moved. Overall, the Court rejected Sportsmen’s’ claims that it intended broader coverage in its insurance policy, that the insurance policy’s terms were misleading, that the insurance policy was difficult to understand and that, as a result, there was a genuine dispute as to the scope and terms of the policy.

In the first instance, the Court determined that the November 14, 1999 shooting incident was not an “occurrence” under the Hermitage policy. The policy defined an “occurrence” as an accident, an unintended happening. Citing the Connecticut Supreme Court’s determination that the last event in the causal chain is what should be examined in order to determine whether an “occurrence” has been alleged, the Court focused only on the shooting incident to determine if there was coverage in this case, as the shooting incident was the actual event that caused the injury. Despite the defendants’ claims, the Court held that the underlying negligence claims against Sportsmen’s were irrelevant. The Court determined that, as there were no allegations that the gun was accidentally or unintentionally fired, the November 14, 1999 shooting was intentional. Accordingly, because Connecticut recognizes the doctrine of transferred intent, the Court held that all the injuries caused by the November 14, 1999 shooting were intentional. Therefore, as no accident took place, there was no “occurrence” as defined by the insurance policy and no coverage was available for the shooting.

In addition to ruling that the November 14, 1999 shooting did not constitute an occurrence under the Hermitage policy, the Court went on to hold that even if the incident fell within coverage in the first instance, the policy’s Assault and/or Battery Exclusion precluded coverage for the shooting. Specifically, the Exclusion provided that an assault and/or battery “shall not be deemed an accident” and excluded coverage for any bodily injury arising or alleged to arise out of an assault and/or battery caused by or at the direction of: the insured, his agent or employee; any patron of the insured; or any other person. The Exclusion also stated that the insurer was not obligated to pay or defend any claim alleging an assault and/or battery no matter how it was alleged to have occurred. Based upon this language and the facts of the case, the Court determined that any and all liability asserted against Sportsmen’s arose out of an assault and/or battery and, therefore, was excluded from coverage under the policy by virtue of the Exclusion. In coming to this conclusion, the Court highlighted the fact that the phrase “arising out of” is construed broadly under Connecticut law, and attempting to disguise claims arising out of an assault and/or battery as claims of negligence will not defeat such an Assault and/or Battery exclusion. As a result, the Court held that because the November 14, 1999 shooting arose out of the intentional assault by the unidentified patron, and because based upon the doctrine of transferred intent, the Exclusion applied equally to all the defendants, no coverage was available for the injuries sustained.

Finally, the Court also held that coverage was barred for any and all claims premised upon violations of the regulations of the Connecticut Department of Liquor Control. This conclusion was premised upon the Hermitage policy’s Liquor Liability Exclusion which excluded coverage for bodily injury and property damage claims based on “[a]ny statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.” Based upon this language, the claims of Cluff, Floyd and Ellis asserting violations of the Department of Liquor Control regulations were not covered.