West Virginia Upholds Disclaimer Based on Liquor Liability Exclusion

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In its recent decision in Essex Ins. Co. v. Napple’s Bullpen, LLC, 2014 U.S. Dist. LEXIS 97186 (N.D. W.Va. July 17, 2014), the United States District Court for the Northern District of West Virginia had occasion to consider the application of exclusions for liquor liability and assault and battery.

The underlying lawsuit involved an assault that happened outside of the Napple’s Bar. Plaintiff brought suit against Napple’s, and two other defendants, alleging theories of premises liability and violation of West Virginia law prohibiting the sale of alcohol during the hours of 3:30 a.m. to 7:00 a.m. Essex denied coverage under a general liability policy it issued to Napple’s based on exclusions applicable to liquor liability and assault and battery.

The liquor liability exclusion barred coverage for “bodily injury claims for which an insured may be held liable by reason of (1) causing or contributing to the intoxication of any person; (2) furnishing alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.” The assault and battery exclusion applied broadly to any injury “arising out of . . . [a]ssault and/or battery, or any act or omission in connection with the prevention or suppression of such acts, whether caused by or at the direction of any insured, insured’s ‘employees’, patrons or any other person.”

In opposition to Essex’s motion for summary judgment, Napple’s argued, among other things, that a question of fact was raised as to whether the defendants contributed to the intoxication of any person involved in the underlying suit.

In considering the application of the liquor liability exclusion, the court noted that the West Virginia Supreme Court, in Kelly v. Painter, 504 S.E.2d 171, 174 (W. Va. 1987), held a similarly worded exclusion to be unambiguous and concluded that “the insurance does not apply to bodily injury for which the insured may be liable if the insured caused or contributed to the intoxication of the person involved and the insured is in the business of . . . serving or furnishing alcoholic beverages.” Thus, because the underlying suit alleged that plaintiff was injured as a result of the insured’s violation of West Virginia liquor law, the court agreed that the exclusion operated to bar coverage.

The court likewise held that the policy’s assault and battery exclusion applied based on allegations that plaintiff was “attacked, robbed and brutally beaten” and that as a result, he suffered significant injuries. The court agreed that such allegations fell entirely within the scope of the exclusion and thus negated any duty on the part of Essex to defend or provide indemnification with respect to the underlying suit.

 

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In its recent decision in Essex Ins. Co. v. Napple’s Bullpen, LLC, 2014 U.S. Dist. LEXIS 97186 (N.D. W.Va. July 17, 2014), the United States District Court for the Northern District of West Virginia had occasion to consider the application of exclusions for liquor liability and assault and battery.

The underlying lawsuit involved an assault that happened outside of the Napple’s Bar. Plaintiff brought suit against Napple’s, and two other defendants, alleging theories of premises liability and violation of West Virginia law prohibiting the sale of alcohol during the hours of 3:30 a.m. to 7:00 a.m. Essex denied coverage under a general liability policy it issued to Napple’s based on exclusions applicable to liquor liability and assault and battery.

The liquor liability exclusion barred coverage for “bodily injury claims for which an insured may be held liable by reason of (1) causing or contributing to the intoxication of any person; (2) furnishing alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.” The assault and battery exclusion applied broadly to any injury “arising out of . . . [a]ssault and/or battery, or any act or omission in connection with the prevention or suppression of such acts, whether caused by or at the direction of any insured, insured’s ‘employees’, patrons or any other person.”

In opposition to Essex’s motion for summary judgment, Napple’s argued, among other things, that a question of fact was raised as to whether the defendants contributed to the intoxication of any person involved in the underlying suit.

In considering the application of the liquor liability exclusion, the court noted that the West Virginia Supreme Court, in Kelly v. Painter, 504 S.E.2d 171, 174 (W. Va. 1987), held a similarly worded exclusion to be unambiguous and concluded that “the insurance does not apply to bodily injury for which the insured may be liable if the insured caused or contributed to the intoxication of the person involved and the insured is in the business of . . . serving or furnishing alcoholic beverages.” Thus, because the underlying suit alleged that plaintiff was injured as a result of the insured’s violation of West Virginia liquor law, the court agreed that the exclusion operated to bar coverage.

The court likewise held that the policy’s assault and battery exclusion applied based on allegations that plaintiff was “attacked, robbed and brutally beaten” and that as a result, he suffered significant injuries. The court agreed that such allegations fell entirely within the scope of the exclusion and thus negated any duty on the part of Essex to defend or provide indemnification with respect to the underlying suit.

 


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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