Court Upholds Exclusion Clause in Hotelier’s Insurance Policy Following Rape of Guest

Hotel owners, like other hospitality business operators, have a general duty to exercise reasonable care for the safety and security of their guests. The duty extends to protecting guests from harm caused by other guests and visitors to the premises. This does not mean that hotels are liable for any injury or loss that a guest suffers–generally, the victim must show that the hotel (through the actions of its employees) was negligent before the hotel faces liability. To help protect against this exposure, hotel owners typically buy liability insurance policies to cover the property in the event of a problem. However, these insurance policies frequently include substantial limitations. In particular, many policies exclude coverage for any injuries that arise from the service of alcoholic beverages on the premises. Other exclusions include denying coverage for physical assaults. In Piligra v. America’s Best Value Inn, Inc., No. 10-254 (La. App. 3d Cir. 2010), the court examined–and upheld–this very type of coverage exclusion.

Susana Piligra visited the nightclub inside the America’s Best Value Inn hotel where she consumed an excessive amount of alcohol and passed out. An employee of the hotel took Piligra up to a room on the second floor and, on the way, they came upon an unknown male who helped get Piligra to the room. The hotel employee left Piligra in the room with the unknown male. When Piligra’s friend later went to check on her, the friend opened the door to find the unknown male “climbing off her with his pants down.” Piligra went to a local hospital where it was determined that she was apparently raped by the unknown male while she was unconscious. Piligra filed suit against the hotel and its liability insurance carrier, Evanston Insurance Company, alleging that the hotel negligently transported her to a room without her consent and failed to attend to her in a responsible manner given her condition. Evanston filed a motion for summary judgment based on the exclusions contained in the hotel’s policy. The trial court granted Evanston’s motion, and both Piligra and the hotel appealed.

The Third Circuit reviewed that an “insurance policy is interpreted like any other contract,” and that “[i]nsurance companies are permitted to limit coverage through policy exclusions as long as the limitations do not conflict with statutory provisions or public policy.” Ledbetter v. Concord Gen. Corp., 665 So.2d 1166 (1996). With those principles in mind, the court examined the policy Evanston issued to the hotel and found a provision that clearly excluded coverage for any claim arising out of “assault and/or battery.” The court noted that “Louisiana courts have upheld [limitations] similar to the Evanston policy [limitations] that preclude coverage for assault and battery, including rape.” Thus, the court reasoned, “[b]ecause rape is a battery and because the assault and battery exclusion in the Evanston policy is unambiguous, we find that the exclusion is applicable and precludes coverage for Ms. Piligra’s injuries.” Accordingly, the court affirmed the decision of the trial court to dismiss Evanston Insurance Company from the suit.

This case brings to light one of the major challenges that plaintiffs can face when seeking to recover damages. Even assuming Piligra is successful in establishing the hotel’s negligence (a question not addressed in this appeal), without an insurance policy to cover Piligra’s award, the hotel may not have sufficient liquid assets available to satisfy the judgment. And although it may be possible for the hotel to sell off assets to raise the funds, that process would add considerable delay to Piligra’s ultimate recovery. An experienced trial attorney is an invaluable resource for a plaintiff through every step of the litigation process, including collecting a damages award.