Pluck U – At Least to Automobile Insurance Company of Hartford.

In the case of Metalios v. Tower Insurance Co. et al., Metalios was a Pluck U (a NYC fast food buffalo wing restaurant) restaurant owner. Metalios held a party to which Pluck U employees, guests and friends were invited. A verbal altercation occurred at the party. After the altercation a Pluck U employee fatally stabbed a guest and injured another person. Unsurprisingly, a lawsuit resulted and Pluck U sought coverage for the claim/suit. Tower Insurance Company, the CGL carrier, disclaimed based on the “assault and battery exclusion.” Automobile Insurance Company of Hartford, the homeowner’s carrier, disclaimed based on the “business pursuits exclusion.” The case went to up to New York’s First Department — http://www.loislaw.com/advsrny/flwhitview.htp?lwhitid=9929607

The First Department upheld Tower’s disclaimer – notwithstanding the fact that the lawsuit also alleged negligence. The First Department reasoned that “because the complaint’s negligence allegations could not survive except for the assault, those claims are deemed to have arisen from the assault and are thus subject to the assault and battery exclusion.”

AIC, however, was not so lucky. Its “business pursuits exclusion” barred coverage for activities in furtherance of “business pursuits.” The exclusion, however, had an exception that stated that the exclusion did not apply to activities which are “ordinarily incident to non-business pursuits.” AIC argued that the Pluck U party was a business pursuit since it was for Pluck U employees to improve morale (which Metalios conceded was a purpose of the party). The First Department disagreed. It construed the exclusion strictly against AIC and held that a social gathering is ordinarily incident to a non-business pursuit even when that gathering might also serve a business purpose. Pluck U indeed.

If you have any questions about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.