Georgia District Court Finds No Duty To Defend In Waffle House Shooting

In its recent decision in Nautilus Ins. Co. v. EJIII Development Co., No. 1:17-cv-2048-TCB (N.D. Ga. July 19, 2018), the U.S. District Court for the Northern District of Georgia ruled that insurer Nautilus Insurance Company did not have to provide a defense to a wrongful death lawsuit where its insurance policy contained an assault-and-battery exclusion and an endorsement covering “security and patrol agency services.”

The underlying action involved an incident at the Waffle House in which, following an altercation between patrons and employees, a Waffle House employee shot and killed a patron.  Plaintiffs filed claims against Waffle House, Inc., its employee, and building owner EJIII Development Company, for wrongful death and negligent failure to provide and maintain a safe premise. Particularly, plaintiffs alleged that EJIII had negligently failed to “provide and/or properly train security guards”.

EJIII had a commercial general liability insurance policy with Nautilus Insurance Company, which included a duty to defend EJIII against and indemnify EJIII for claims for “bodily injury” or “property damage” caused by an “occurrence” during the policy period. The policy contained an assault-and-battery exclusion. However, the policy also contained an endorsement expressly covering “security and patrol agency services.” In attempting to invoke Nautilus’s duty to defend, EJIII relied on the policy’s endorsement providing coverage for security services, arguing that it superseded and negated the assault-and-battery exclusion.

The district court granted summary judgment in favor of Nautilus, finding that it had no duty to defend. The court explained that it was “clear” that the allegations arose from an alleged assault and battery or physical altercation. The decision rested on a technical interpretation of the policy language. Specifically, the court found that the security services endorsement was added to “Section 1, Coverage A” of the policy, whereas the assault-and-battery exclusion was added to “Exclusions of Section 1, Coverages A, B, and C.” As a result, although the endorsement expanded “Coverage A” to include security and patrol agency services, if those acts arose from assault-and-battery, then they were still excluded from Coverage A.

Here, the underlying claims stemmed from an alleged assault because security services failed to stop the altercation and shooting. The Court thus found that the exclusion applied to the entirety of the claims asserted in the lawsuit.