The U.S. District Court for the Northern District of Mississippi has ruled that an alcohol exclusion in an insurance policy issued to a package store precluded coverage of a lawsuit against the store seeking damages as a result of its alleged sale of alcohol to an intoxicated patron.
The Case
As alleged in a lawsuit filed by Jason and Jackie Tackett against East Main Package Store, Inc.:
- Larry Mills was visibly intoxicated when he entered East Main Package Store on January 2, 2015 and purchased alcohol;
- After making his purchase, Mills exited the store and remained outside by the entrance;
- James Taylor arrived at the store driving a 2006 Hummer and left his vehicle running and unlocked while he went inside the store; and
- Mills entered the Hummer, drove away, and collided with a vehicle carrying the Tacketts.
East Main asked Union Insurance Company for defense and indemnity.
Believing that East Main was not entitled to defense or indemnity, Union asked a court to declare that it did not have a duty to defend or indemnify East Main.
Union moved for judgment on the pleadings, arguing that the policy excluded coverage for accidents involving alcohol.
The Union Policy
The Union policy provided that it did not apply to:
"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;
(2) The furnishing of 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 beverage.
This exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages.
The District Court's Decision
The court granted the motion, finding that the Union policy did not cover the accident.
In its decision, the court explained that, as alleged, the incident began at the insured's store and involved two of its patrons who purchased alcohol from store employees. The court added that the complaint against East Main that gave rise to Union's action alleged that East Main sold liquor to a visibly intoxicated person who later caused an accident.
The court then ruled that it was "evident" that the "clear and unambiguous" policy language "exclude[d] coverage for bodily injuries resulting from the sale of alcohol."
The case is Union Ins. Co. v. East Main Package Store, Inc., No. 1:18-CV-98-SA-DAS (N.D. Miss. Sept. 23, 2019).
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].