Fourth Circuit Affirms Denial of Coverage for Accidental Gunshot Injury

July 19, 2016

On April 14, the Fourth Circuit held that an insurer owed no defense or indemnity coverage for an underlying personal injury suit against the policyholder’s employee, a security guard who accidentally shot a friend while socializing at the business off-hours. The court concluded that the firing of the gun was not within the scope of employment and clarified the dividing line between actions performed within the scope of employment and those actions which — even if arguably work-related — are not.

The underlying facts in QBE Ins. Corp. v. Cobb, No. 15-1880, were as follows: Robert Crooks worked as a sales and service representative for Jeco, Inc., and lived in an apartment in the same building housing Jeco’s business to provide “some level of security for the business off-hours.” While entertaining friends at the apartment off-hours, Crooks was “playing around” with a gun and accidentally shot his friend, Nicholas Cobb. Crooks sought coverage for Cobb’s resulting personal injury claims from Jeco’s commercial general liability (CGL) insurer, QBE Insurance Corp., contending that the accident occurred while he was “maintaining a presence” for Jeco as a night watchman. QBE denied coverage and sought a declaratory judgment that it had no duty to defend or indemnify Crooks.

The District of South Carolina granted QBE’s motion for summary judgment, concluding that Crooks was not acting within the scope of his employment or performing duties related to Jeco’s business when he was “playing with the gun” and shot Cobb. Thus, Crooks did not qualify as an “insured” under the CGL policy.

Under South Carolina law, “[a]n act is within the scope of a servant’s employment where reasonably necessary to accomplish the purpose of his employment and in furtherance of the master’s business,” even if the act is outside the scope of the servant’s authority. However, a servant’s act that is “done to effect some independent purpose of his own and not with reference to the service in which he is employed” is not within the scope of his employment. “If a servant steps aside from the master’s business for some purpose wholly disconnected with his employment, the relation of master and servant is temporarily suspended; this is so no matter how short the time, and the master is not liable for [the servant’s] acts during such time.”

The Fourth Circuit agreed that as a matter of law Crooks had “stepped away” from his duties as night watchman when he fired the gun and “was not within the scope of his employment or in performance of a duty related to employment.” In the court’s view, “[t]o conclude otherwise would stretch the insurance policy far beyond its intended coverage,” contrary to South Carolina law that counsels against adopting a “strained or violent interpretation not contemplated by the parties.”