Strip Club Insurance Won't Cover Bouncer's Assault on Patron

Tod Hunter
PHILADELPHIA — A federal judge has reversed his own ruling and found that an insurer has no duty to indemnify the owner of a strip club for a bouncer's assault on a patron, because the policy had an assault-and-battery exclusion and the bouncer was convicted on a criminal assault charge for the altercation.

On March 26, 2000, according to court papers, Mark Jaworski attended his brother-in-law's bachelor party at the Show and Tel Show Bar and was involved in an altercation with a bouncer, Terrence Benson.

Benson was later convicted of simple assault after a nonjury trial in Philadelphia court. Jaworski then filed a civil suit against RMJC Inc., owner of the club, alleging that Benson had attacked him inside the club, dragged him out a side exit, and threw him down the stairs, causing serious injuries to his wrist. In the suit, Jaworski pursued only negligence claims and did not seek recovery on assault and battery charges.

After the suit was filed, Essex went to federal court and filed a declaratory judgment action. Chief U.S. District Judge Harvey Bartle III of the Eastern District of Pennsylvania found that since Jaworski was alleging only negligence claims, the insurer had a duty to pursue a defense. Bartle then postponed the Essex suit, saying the court would address the issue of indemnification after the state court suit was resolved.

The state court suit was resolved in February 2003, when an 11-member jury unanimously found in favor of Jaworski and awarded $350,000 in damages. Essex paid the entire judgment in May 2005, by which time the payment had increased by more than $60,000 in delay damages.

When the dispute returned to federal court, Bartle ruled that the insurer should cover the judgment because negligence on the part of RMJC was covered under the insurance policy.

But the 3rd Circuit ruled that the civil jury's finding of negligence had not decided the issue of indemnification, and ordered Bartle to reopen the case and determine whether the assault-and-battery exclusion would apply.

In the most recent decision, Bartle concluded that the terms of the exclusion are unambiguous, and Essex carries its burden of proving that an assault occurred and that the assault was the "but for" cause of Jaworski's injuries.

Bartle also found that Essex is entitled to be reimbursed more than $410,000 from RMJC because Essex paid the judgment after Jaworski's verdict was upheld by the Pennsylvania courts.

"By paying the money to Jaworski when it did before this court decided whether it or RMJC would ultimately be liable, Essex protected not only itself but also its insured, RMJC, from having to expend an even larger amount when this action was finally decided," Bartle wrote.

If Essex had not made the payment of the judgment, Bartle said, RMJC "would now be faced with paying Jaworski a significantly greater amount."

Therefore, Bartle said, "it would be unconscionable for RMJC, which is liable for the Jaworski judgment, not to pay restitution to Essex."

Oshtry declined to comment on the ruling to reporters.