Pennsylvania Federal Court Upholds Assault or Battery Exclusion
On July 14, 2026, the United States District Court for the Eastern District of Pennsylvania held that a commercial general liability insurer had no duty to defend or indemnify a landlord against negligence and premises liability claims arising from a violent assault committed by one tenant against another.
In Xaywu, LLC v. State Auto Ins. Co., No. 26-2828, 2026 LX 350819 (E.D. Pa. July 14,2026), the insured landlord argued that claims for negligent property management and failure to protect a tenant triggered coverage under the landlord’s business-owner’s insurance policy. The Court disagreed, concluding that the policy’s assault or battery exclusion unambiguously barred coverage because the tenant’s injuries arose out of a battery and the landlord’s alleged failure to prevent it.
Background
The claim at issue arose from a June 2024 incident at a property owned by Xaywu, LLC (“Xaywu”). The plaintiff in the underlying suit, Mr. Byrd, a tenant at the property, alleges that he was violently attacked by Mr. Strassburg, another tenant. Mr. Byrd shot and killed Mr. Strassburg and was later acquitted of all criminal charges on the basis that Mr. Byrd was acting in self-defense. Mr. Byrd subsequently filed a lawsuit against Xaywu in the Court of Common Pleas in Montgomery County, Pennsylvania, asserting claims for negligence and premises liability based on allegations that Xaywu failed to protect him from Mr. Strassburg.
Xaywu was insured under a business-owners insurance policy with State Automobile Mutual Insurance Company (“State Auto”). State Auto disclaimed coverage pursuant to the policy’s assault or battery exclusion. Xaywu then commenced a declaratory judgment action seeking a determination that State Auto owed both a duty to defend and indemnify it in the underlying lawsuit. Among other things, the subject exclusion precludes coverage for bodily injury “arising out of or caused in whole or part by assault, battery, assault and battery, or any other similar violent act” (1) committed by “any . . . person”; (2) resulting from the “failure to suppress or prevent” the assault, battery or violent act; or (3) resulting from “any . . . cause whatsoever.”
Following State Auto’s disclaimer, Xaywu initiated a declaratory judgment action against State Auto, arguing that the underlying claims were based on its own negligence – not the assault itself – and therefore fell within the policy’s liability coverage. State Auto filed a Fed. R. Civ. P. 12(b)(6) motion to dismiss arguing that the policy’s assault or battery exclusion precluded coverage because Mr. Byrd alleged that his injuries arose out of: (1) Xaywu’s alleged failure to suppress or prevent assault, battery, assault and battery, or any other similar violent act, (2) Xaywu’s alleged failure to provide an environment safe from assault, battery, assault and battery or any other similar violent act, and (3) Xaywu’s alleged failure to warn of the dangers of the environment, which could contribute to assault, battery, assault and battery, or any other similar violent act.
The Decision
The Court granted State Auto’s motion to dismiss, holding that it had no duty to defend or indemnify Xaywu, because the underlying lawsuit fell within the policy’s assault or battery exclusion. Applying Pennsylvania law, the Court explained that phrase “arising out of” incorporates “but for” causation principles. The Court further noted, in accordance with Pennsylvania decisional law, that “battery” is defined as intentional harmful or offensive bodily contact. Applying these principles, the Court concluded that Mr. Byrd’s claimed injuries would not have occurred but for Mr. Strassburg’s alleged battery, regardless of whether Xaywu was negligent.
The Court relied on the Pennsylvania Superior Court’s decision in Britamco Underwriters, Inc. v. Grzeskiewicz, 639 A.2d 1208 (Pa. Super. Ct. 1994), where a patron sued a bar after being attacked with a broken beer bottle. There, the Superior Court held that the insurer had no duty to defend or indemnify the bar because the plaintiff’s injuries arose out of battery and therefore, fell within the policy’s assault and battery exclusion. Similarly, the Eastern District of Pennsylvania found that Mr. Byrd’s claims arose from the alleged violent attack and Xaywu’s failure to prevent it.
The Court also relied on the Third Circuit’s decision in Nautilus Ins. v. Motel Mgmt. Services, Inc, No. 21-2590, 2022 U.S. App. LEXIS 30033 (3d Cir. Oct. 28, 2022), where victims of human trafficking sued a hotel for negligently failing to prevent their trafficking. The Third Circuit held that the insurer owed no duty to defend because the plaintiff’s injuries would not have occurred “but for” assaults and battery committed by the traffickers. Applying the same reasoning, the Court concluded that Mr. Byrd’s injuries would not have occurred “but for” Mr. Strassburg’s battery.
The Court rejected Xaywu’s arguments that the assault or battery exclusion should not be enforced pursuant to QBE Insurance v. M & S Landis Corp., 915 A.2d 1222 (Pa. Super. Ct. 2007) and Britamco Underwriters, Inc. v. Weiner, 636 A.2d 649 (Pa. Super. Ct. 1994). The Court found both decisions factually distinguishable and legally inapplicable.
After reviewing the State Auto’s policy language and the allegations contained within the four corners of the underlying complaint, the Court ruled:
Byrd alleges Strassburg violently attacked him and that Xaywu (among other things) failed to remove or evict Strassburg, failed to warn him about Strassburg, failed to act knowing Strassburg was violent, failed to provide security and failed to take all reasonable steps to prevent violent tenants from living on the premises. (State Court Compl. ¶¶ 6-8, 17-36.) Thus, but for Strassburg’s intentional harmful or offensive bodily contact and Xaywu’s failure to prevent Strassburg’s attack, Byrd’s injuries would not have occurred. His suit plainly seeks damages for bodily injury arising out of a battery committed by any person and resulting from a failure to prevent it or another cause.
Takeaways for Insurers
Xaywu, LLC v. State Auto Ins. Co. confirms where the alleged injuries would not have occurred “but for” an assault or battery, the Eastern District of Pennsylvania will enforce exclusions barring claims arising out of such conduct, including when such exclusions preclude an alleged failure to suppress, warn, and/or prevent an assault or battery from coverage.
For any additional questions, please contact Richard J. Barca, Principal in Post & Schell’s Insurance Law Group at 215-587-1123 or rbarca@postschell.com; or Brendan Reilly, Associate in Post & Schell's Insurance Law Group at (215) 587-1050 or breilly@postschell.com; or the Post & Schell attorney with whom you normally consult.
Disclaimer: This post does not offer specific legal advice, nor does it create an attorney-client relationship. You should not reach any legal conclusions based on the information contained in this post without first seeking the advice of counsel.
