Liquor liability won't cover Florida bar's negligence
A minor drank to the point of intoxication at a bar in Florida and was later killed by a train.
A negligence claim by a bar isn’t covered based on the policy’s liquor liability exclusion, a Florida appellate court recently ruled. The case is Preferred Nat’l Ins. v. Fat Investors, Inc., 842 So. 2d 1068 (Fla. Dist. Ct. App. 2003).
A minor drank to the point of intoxication at a bar in Florida. He departed the premises while intoxicated and was later killed by a train. His estate sued the bar where he had become intoxicated, alleging the bar had had a duty to prevent the minor from leaving the premises while inebriated.
Fat Investors, who owned the bar, sought coverage from Preferred National. The claim was denied based on the liquor liability exclusion in the bar’s policy, which stated that Preferred National would not cover claims for “’bodily injury’ or ‘property damage’ for which any insured may be held liable by reason of:
(1) Causing or contributing to the intoxication of any person; [or]
(2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol…”
The bar filed suit. The trial court found there was coverage available to the bar because the underlying suit alleged the bar had been negligent for allowing the minor to leave the premises while inebriated, which was separate and distinct from the liquor liability exclusion so that coverage was not precluded. The insurer appealed.
The lower court had looked to a Florida appellate decision, Estate of Starling v. Fisherman’s Pier, 401 So. 2d 1136 (Fla. Dist. Ct. App. 1981), to establish the existence of the bar’s duty of care. In Starling, an unconscious, inebriated person had rolled off a fishing pier into the water and drowned. The decedent’s family sued the company that owned the pier for negligence for the lack of safeguards. The trial court in Starling dismissed the case, but the appellate court had found the company “ha[d] an affirmative duty to take at least some minimal steps to safeguard an inert person.” (emphasis added).
The trial judges in this case reasoned that Starling meant there was a valid “cause of action against a proprietor for failure to render aid to a known inert invitee” in Florida. Fat Investors, the bar’s proprietor, had not fulfilled this duty regarding the deceased minor, the allegedly inert invitee, and allowed him to depart the premises while inebriated. Therefore, the estate’s underlying suit against the bar for its alleged negligence was “a [covered] cause of action against a proprietor [the bar] for failure to render aid to a known inert invitee [the inebriated minor].”
The appellate court disagreed. In Starling, the inebriated individual had been “both inert, and in a dangerous position on [the] defendant’s [fishing pier].” The company’s liability arose from a lack of safeguards, not from the decedent’s inebriated state. The bar’s liability in the underlying case, however, arose because the bar had allegedly been negligent when it allowed an already inebriated patron to leave while drunk.
Preferred National, on the other hand, argued for the application of Scarlett O’Hara’s, Inc. v. Sphere Drake Ins. Co., 715 So. 2d 317 (Fla. Dist. Ct. App. 1998). In that case, a minor employee of Scarlett O’Hara’s became intoxicated at an employer-sponsored event and struck a pedestrian while driving home, causing severe injury. The pedestrian sued Scarlett O’Hara’s, claiming the company had negligently entrusted the inebriated minor employee with his vehicle before he drove drunk and injured the pedestrian. The trial court ruled, and the appellate court affirmed, there was no coverage for the company because the underlying case, though it alleged negligent entrustment, could not be separated from liquor liability. The negligent entrustment was wrapped up in how Scarlett O’Hara’s, as the event sponsor, had negligently allowed the inebriated employee to drive his vehicle. Since the underlying claim couldn’t be separated from liquor liability, the exclusion applied and coverage was unavailable.
The appellate court in this case pointed out that the Scarlett O’Hara’s decision was one of several cases where courts had not imposed liability for negligence on other bars when the underlying claim alleged negligence for allowing an inebriated person to depart the premises. Since the minor’s estate claimed the bar had been negligent specifically for allowing the inebriated minor to exit the premises, the appellate court followed the logic in Scarlett O’Hara’s and ruled that the liquor liability exclusion precluded coverage for Fat Investors.
The trial court’s verdict was reversed.
Editor’s Note: Liquor liability can be twitchy. Even though a claim may not use the term “liquor,” that doesn’t mean the claim has nothing to do with liquor liability. In this case, the bar’s alleged liability for allowing the minor to leave the premises while inebriated arose solely because the minor was intoxicated when he left the premises. Had the minor not been intoxicated when he departed, the bar could not be held liable for allowing him to leave while drunk. Therefore, since the estate’s claim depended on the deceased minor’s drunken state, coverage was precluded by the liquor liability exclusion.
In the Starling case relied on by the trial court, the deceased’s drunken state was not determinative to the company’s liability for the lack of safeguards. If the deceased had been sober when he rolled into the water and drowned, the company could still be held liable for the lack of safeguards. Since the negligence alleged in the underlying suit could be separated from the deceased’s inebriated state and still leave the claim intact, it was not precluded under the policy exclusion for liquor liability.