Summary Judgment Obtained In High-Profile Declaratory Relief Action

December 31, 2014

Alan Yuter, Jim Henshall, and Andrew Chan recently had a motion for summary judgment granted in a high-profile declaratory relief action for a liability insurance carrier.

The insured, a restaurant and bar, was sued in an underlying lawsuit after an auto accident occurred which left certain third parties severely injured. The injured parties contended the insured had a practice of hiring underage girls to work in the bar as a means to attract patrons. It was contended the insured's business practices included transporting these girls back to their homes on the date of the accident.

One of the third parties, who was paralyzed in the accident, received a multi-million dollar verdict against the insured. A declaratory relief action was filed requesting that the superior court determine the insurance carrier did not have a duty to indemnify the insured for this verdict.

The court granted the insurance carrier's motion for summary judgment in the declaratory relief action based on the grounds the auto exclusion in the policy precluded coverage as the insured's use of the vehicle had caused the accident. The court also agreed with the argument that coverage was not triggered under a liquor liability endorsement form as there was no evidence in the underlying lawsuit that alcohol had caused the accident. The liability insurance carrier was pleased the superior court upheld the policy language in the policy.

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