A Delaware court has ruled that insureds were in the business of “furnishing alcoholic beverages” within the meaning of a liquor liability exclusion in an insurance policy even if they did not actually pour drinks but only arranged for alcohol to be served at events.

The Case

Capozzoli Catering of Delaware, Inc., planned and catered various social events at the Executive Banquet and Conference Center, located in Newark, Delaware. Capozzoli leased the center from Plumbers & Pipe Fitters Local No. 74. The lease agreement between Capozzoli and Local No. 74 stated that Local No. 74, “shall maintain the sole liquor license for the Premises and, in accordance therewith, will be solely responsible for distributing any and all alcohol … from the bar.”

On October 17, 2013, Capozzoli catered an event for the Alpha Epsilon Phi sorority at the Center. Local No. 74 provided bartenders to serve alcohol at the event. Ethan Connolly, a minor, allegedly attended the event and was served alcohol at the bar. Connolly allegedly left the event intoxicated and attempted to cross the road when he was fatally struck by oncoming traffic.

Connolly's parents filed a wrongful death lawsuit against Capozzoli and the Center, contending the defendants had proximately caused their son's death due to their negligence in failing to maintain the premises and ensure underage patrons were not served alcohol.