The California Court of Appeal has held that a liability insurer had a duty to defend its insured in an assault and battery case where there was evidence that the insured’s agent might have acted in “self-defense.” ( Jafari v. EMC Insurance Companies (2007) 155 Cal.App.4th 885)
Facts
Davar Jafari owned a tire and brake shop. Jafari employed Mark Mitchell as manager of the shop.
Farhad Nazemzadeh, a customer, came to the shop to pick up his car. When Mitchell, the shop manager, told Nazemzadeh that his car was not ready for pickup, Nazemzadeh allegedly became verbally abusive and threatened to kill Mitchell. Mitchell responded by punching Nazemzadeh in the face. When the police investigated the incident, Mitchell stated that he was “defending himself” against Nazemzadeh.
Nazemzadeh later sued Jafari (the shop owner) and Mitchell (the shop’s manager). Nazemzadeh’s complaint contained causes of action for assault, battery, negligence, intentional and negligent infliction of emotional distress, premises liability and negligent hiring.
Jafari tendered defense of the lawsuit to Jafari’s business liability insurer, EMC Insurance Companies (EMC). However, EMC refused to defend Jafari on the ground that Jafari’s alleged liability did not arise from an “accident” as required by the insuring clause of the policy.
Jafari subsequently filed a suit for breach of contract and bad faith against EMC, alleging that EMC had wrongfully failed to defend and indemnify Jafari in the underlying lawsuit. The trial court ruled in favor of EMC, holding that Jafari’s alleged liability in the underlying lawsuit did not arise from an “accident” and that EMC thus had no duty to defend Jafari in the lawsuit. Jafari appealed.
Holding
The Court of Appeal reversed and held that EMC did have a duty to defend Jafari in the underlying lawsuit. The appellate court reasoned that under existing case law, an “accident” can be found “when any aspect in the causal series of events leading to the injury or damage was unintended by the insured and a matter of fortuity.” Citing that rule, the appellate court held that “acts in self-defense can be an ‘accident’ where the third party’s actions provoking the self-defense response were the unforeseen and unexpected element in the causal chain of events making the insured’s acts in self-defense unplanned and involuntary. ” Because there was evidence that Jafari’s employee, Mitchell, had acted in self-defense, EMC had a duty to defend Jafari in the underlying lawsuit.
The appellate court also noted that while the EMC policy had an exclusion for bodily injury which was “expected or intended” by the insured, that exclusion contained an exception for bodily injury “ resulting from the use of reasonable force to protect persons or property .” According to the appellate court, the exclusion’s exception bolstered the conclusion that the term “accident” in the insuring clause should be interpreted to cover “deliberate acts of self-defense in response to unexpected, unforeseen and unintended events by the third party….”
Comment
The Court of Appeal’s decision in Jafari v. EMC is similar to the Court of Appeal’s recent decision in Delgado v. Interinsurance Exchange . In both cases, the Court of Appeal held that an insured’s alleged act of self-defense can qualify as an “accident” within the meaning of the insuring clause in a liability policy. Notably, the California Supreme Court has recently granted the insurer’s petition for review in Delgado , and we expect that the insurer in Jafari likewise will seek review by the Supreme Court.
Until the Supreme Court resolves this issue, insurers should proceed with caution in this area. Specifically, when faced with an alleged assault and battery incident in which the insured claims to have acted in “self-defense,” an insurer should broadly interpret the “accident” requirement.