Leonard Gamble v. Sputniks, LLC
2012 Tenn. LEXIS 378
| Tenn. | 2012Background
- Consolidated Tennessee actions arise from an altercation at Sputniks, a bar/restaurant, leading to a default judgment against Sputniks and related liability.
- Plaintiffs Clark and Gamble sought coverage and defense under Sputniks’ liability policy with QBE Insurance Corp.; insurer denied coverage.
- Trial court initially found coverage under both commercial general liability and liquor liability portions; garnishment actions followed to collect judgments.
- Court of Appeals held liquor liability coverage existed but commercial general liability coverage did not.
- This Court reverses in part, holds no liability coverage exists under the policy terms, and remands to quash garnishment writs.
- Key issue is whether estoppel by judgment prevents insurer from challenging coverage and whether the policy’s exclusions defeat coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Estoppel by judgment applicability | Insurer is collaterally estopped by the default judgments. | Estoppel by judgment cannot create coverage where the policy excludes the loss. | Estoppel by judgment does not apply. |
| Concurrent nonexcluded cause of loss | Defendants’ negligence in security/defense constitutes a nonexcluded concurrent cause. | Any concurrent cause is excluded because assault and battery is expressly excluded. | No coverage under concurrent-cause doctrine. |
| Liquor liability coverage applicability | Pattern of conduct encouraging inebriation and failure to protect patrons may trigger liquor coverage. | No allegation that alcohol was sold/served to the decedent or caused the injury; no coverage. | Liquor liability coverage does not apply. |
Key Cases Cited
- Home Ins. Co. v. Leinart, 698 S.W.2d 335 (Tenn. 1985) (collateral estoppel limited to issues within insurance contract scope)
- Kelly v. Cherokee Ins. Co., 574 S.W.2d 735 (Tenn. 1978) (insurer not bound by judgments outside contract scope; duty to defend not broadened by estoppel)
- Bill Brown Constr. Co. v. Glens Falls Ins. Co., 818 S.W.2d 1 (Tenn. 1991) (waiver/estoppel cannot extend policy coverage or create primary liability)
- Planet Rock, Inc. v. Regis Ins. Co., 6 S.W.3d 484 (Tenn. Ct. App. 1999) (distinguishes nonexcluded concurrent cause where nonexcluded negligence exists)
- Allstate Ins. Co. v. Watts, 811 S.W.2d 883 (Tenn. 1991) (concurrent-cause doctrine requires a nonexcluded concurrent cause)