Zindy Corp. v. Admiral Insurance Company
- Martinez-Olguin
- 3:23-cv-03893
- U.S. District Court · Northern District of California
- 14
In Zindy Corp. v. Admiral Insurance Company, Judge Martinez-Olguin granted Admiral summary judgment, ruling an assault-and-battery endorsement limited coverage and defeated Zindy’s claims.
Zindy Corp. and Admiral Insurance Company; the ruling concerns Admiral’s defense and coverage obligations for the underlying lawsuit involving Mirko Jovanovic’s injuries.
What happened
Zindy Corp. sued Admiral Insurance Company over insurance coverage for a lawsuit arising from injuries suffered by Mirko Jovanovic during an altercation at Zindy’s bar. Zindy argued that the policy’s assault-and-battery endorsement did not limit coverage for the underlying negligence claim.
The court ruled that the endorsement applied because the underlying complaint connected Jovanovic’s injuries to physical contact with the bar’s bouncers and alleged battery. The endorsement limited coverage to $25,000, which Zindy had exhausted through defense costs. The court therefore found that Admiral fulfilled its policy obligations.
Judge Araceli Martinez-Olguin granted Admiral’s motion for summary judgment on all of Zindy’s claims: breach of contract, breach of the implied promise of good faith and fair dealing, and declaratory relief.
The detailed version
- Zindy Corp. v. Admiral Insurance Company · No. 3:23-cv-03893
- Martinez-Olguin
- Dec. 2, 2024
Background
Admiral issued Zindy Corp., doing business as Dan’s Bar, a commercial general liability policy effective from October 15, 2020, through October 15, 2021. The policy generally covered amounts Zindy became legally obligated to pay for bodily injury and required Admiral to defend covered lawsuits.
The policy also included an Assault & Battery Event Limited Coverage Endorsement. The endorsement broadly excluded injuries or damages actually or allegedly arising out of, relating to, or connected with an assault or battery on or adjacent to the insured’s premises or connected with the insured’s operations. It provided limited assault-or-battery-event coverage of $25,000 per event and $50,000 in the aggregate. Defense expenses reduced those limits.
On September 4, 2021, Mirko Jovanovic was injured during an altercation at Dan’s Bar involving bouncers Christopher Maydahl and Dante Sims. The underlying complaint alleged negligence, negligent hiring and supervision, and battery. It alleged that the bouncers physically restrained Jovanovic, rendered him unconscious, and released him while unconscious, causing him to fall and suffer injuries. The battery claim was later dismissed, but the underlying lawsuit remained in discovery when this opinion was issued.
Zindy notified Admiral of the claim and later of the underlying lawsuit. Admiral reserved its rights, stated that the endorsement applied, and assigned counsel to defend Zindy subject to the endorsement’s eroding $25,000 limit. Zindy incurred $25,000 in defense costs and therefore exhausted that limit.
Zindy then brought this action, asserting breach of contract, breach of the implied covenant of good faith and fair dealing, and declaratory relief. Zindy argued that the underlying negligence claim was not subject to the endorsement’s limit and that Admiral had acted in bad faith by relying on the endorsement and related California cases.
Court’s analysis
The court applied the summary-judgment standard, under which judgment may be entered without a trial when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. The court treated interpretation of the insurance policy as a legal question because the relevant facts were undisputed.
The court focused on the allegations in the underlying complaint, along with facts known to Admiral when the defense was tendered. It concluded that the precise movements and severity of the bouncers’ conduct, their intent, the evidence supporting the alleged assault, and their acquittal in the criminal case did not affect the coverage analysis.
Reading the underlying complaint as a whole, the court found that Jovanovic alleged injuries resulting from physical contact with the bouncers and described that contact in the battery claim as intentional, willful, and wanton touching intended to harm him. The court held that the negligence allegations were also connected to the alleged assault or battery because they concerned the same physical contact and the alleged failure to prevent it.
The court rejected Zindy’s argument that the endorsement did not apply because the negligence claim appeared first in the underlying complaint and did not incorporate the battery claim. It held that the endorsement’s broad language applied to negligence claims arising from the same event as an alleged battery, regardless of the order or label of the pleaded claims.
The court also overruled Zindy’s objections to materials submitted by Admiral. It found the objections procedurally defective because they were filed separately rather than included in the brief. The court stated that it would overrule the objections even if they had been properly filed.
Ruling
The court held that the endorsement applied to Zindy’s claim and limited Admiral’s coverage to $25,000. Because Zindy did not dispute that it had exhausted the limit through defense costs, the court found that Admiral had fulfilled its policy obligations. Zindy’s breach-of-contract claim therefore failed as a matter of law.
The court further held that, under California law, a breach-of-the-implied-covenant claim could not succeed without a breach of the insurance contract. Because the breach-of-contract claim failed, the implied-covenant claim also failed. The court reached the same result for Zindy’s declaratory-relief claim, which was based on the alleged breach.
The court granted Defendant Admiral Insurance Company’s motion for summary judgment.
Read the full 14-page opinion on CourtListener, the free public archive maintained by the Free Law Project.