Harleysville Preferred Insurance Company v. Executive Banquet and Conference Center
N15C-07-068 FWW
| Del. Super. Ct. | Nov 21, 2016Background
- Capozzoli Catering leases the Executive Banquet and Conference Center; Local No. 74 (the lessee) holds the sole liquor license and provides bartenders for events.
- On Oct. 17, 2013, Capozzoli catered a sorority event at the Center where a minor (Ethan Connolly) was allegedly served alcohol and later died in a traffic accident.
- Connolly’s parents sued Capozzoli, the Center, the fraternity, and others for wrongful death alleging negligence including serving alcohol to a minor.
- Defendants are insured under two commercial liability policies that include a liquor-liability exclusion barring coverage for injury arising from "causing or contributing to the intoxication of any person" or "the furnishing of alcoholic beverages" if the insured is "in the business of ... furnishing alcoholic beverages."
- Plaintiffs (insurers Harleysville and Nationwide) sought a declaratory judgment that they owe no duty to defend or indemnify because the exclusion applies; cross-motions for summary judgment followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Defendants are "in the business of furnishing alcoholic beverages" such that the liquor exclusion bars coverage | Defendants arrange, advertise, negotiate and collect for bar services; they make alcohol available at events and admit alcohol service is integral to their business — therefore they are in the business of furnishing alcohol and the exclusion applies | Defendants do not physically serve alcohol, do not hold the liquor license, do not employ bartenders, and do not receive alcohol sale proceeds — therefore they are not in the business of furnishing alcohol and exclusion should not apply | Court held Defendants are in the business of furnishing alcoholic beverages ("furnish" = supply/make available); exclusion applies and insurers have no duty to defend |
Key Cases Cited
- Merrill v. Crothall-Am., Inc., 606 A.2d 96 (Del. 1992) (summary judgment standard and review of record)
- Emmons v. Hartford Underwriters Ins. Co., 697 A.2d 742 (Del. 1997) (summary judgment appropriate when no genuine factual dispute)
- Rhone-Poulenc Basic Chems. Co. v. American Motorists Ins. Co., 616 A.2d 1192 (Del. 1992) (insurance-policy language given ordinary meaning; avoid creating ambiguity where none exists)
- Hallowell v. State Farm Mut. Auto. Ins. Co., 443 A.2d 925 (Del. 1982) (policy terms construed by plain meaning)
- Johnston v. Tally Ho, Inc., 303 A.2d 677 (Del. Super. 1973) (policy interpretation principles)