Ebert v. Ill. Cas. Co.

• Decision Date: 30 August 2021
• Docket Number: Court of Appeals Case No. 21A-PL-69
• Citation: 177 N.E.3d 435
• Parties: William EBERT, Michelle Ebert, Cora Ebert, Alexandra Ebert, Dan the Man LLC, Daniel Parks, and D&D Saloon LLC, Appellants-Defendants, v. ILLINOIS CASUALTY COMPANY, Appellee-Plaintiff.
• Court: Indiana Appellate Court

177 N.E.3d 435

William EBERT, Michelle Ebert, Cora Ebert, Alexandra Ebert, Dan the Man LLC, Daniel Parks, and D&D Saloon LLC, Appellants-Defendants,

v.ILLINOIS CASUALTY COMPANY, Appellee-Plaintiff.

Court of Appeals Case No. 21A-PL-69

Court of Appeals of Indiana.

FILED August 30, 2021

Attorney for William Ebert, Michelle Ebert, Cora Ebert, and Alexandra Ebert: Craig R. Karpe, Indianapolis, Indiana

Attorney for Dan the Man LLC, Daniel Parks, and D&D Saloon LLC: Mark S. Fryman Jr., Logansport, Indiana

Attorneys for Appellee: Thomas J. Costello III, Eman Z. Senteno, Chicago, Illinois

Tavitas, Judge.

Case Summary

[1] In this declaratory judgment action, William Ebert, Michelle Ebert, Cora Ebert, Alexandra Ebert, Dan the Man LLC, Daniel Parks,¹ and D&D Saloon LLC appeal the trial court's grant of summary judgment to Illinois Casualty Company. This case involves two "show" bars in Kokomo by the name of Little Daddy's and Big Daddy's, owned by distinct entities with a common principal.² On July 5, 2015, William Spence consumed alcohol at Big Daddy's and was visibly intoxicated. After Spence became involved in an altercation, an employee of Little Daddy's, who happened to be helping out at Big Daddy's as a bouncer, removed Spence from the premises. In the parking lot, the bouncer insisted that Spence leave and threatened violence if Spence did not leave. Spence got into his truck and drove away. Shortly thereafter, he struck a car occupied by the Ebert family, causing significant injuries.

[2] The family sued Big Daddy's and Little Daddy's, asserting an array of theories of liability for both. The insurer of both businesses, Illinois Casualty Company ("Illinois Casualty"), provided both a general business owner's policy and a liquor liability policy for each bar, a total of four policies. Illinois Casualty filed a separate action for declaratory relief with respect to three of those policies. First, Illinois Casualty sought a judgment declaring that the liquor liability exclusion contained in both business owner's policies precluded coverage for any and all claims arising from the occurrences of July 5, 2015, and that, accordingly, Illinois Casualty did not owe a duty to defend or to indemnify under either policy. Additionally, Illinois Casualty sought a declaration that the liquor liability policy for Little Daddy's was inapplicable, on the grounds that Little Daddy's was not open on the night in question and, therefore, did not serve any alcohol. Accordingly, Illinois Casualty argued it owed no duties under the Little Daddy's liquor liability policy. Thus, Illinois Casualty reasoned that coverage was limited to that secured in the Big Daddy's liquor liability policy. Illinois Casualty then sought summary judgment as to all three policies, which the trial court granted. The Eberts, as well as the bars themselves, now appeal the declarations pertaining to the two general business owner's insurance policies.³ Finding that the trial court erroneously interpreted the insurance contracts at issue, we reverse with respect to the declarations thereon and remand with instructions.

Issue

[3] In separate briefs, Appellants raise a single issue which we restate as whether coverage for all claims is excluded under the business owner's insurance policies.

Facts

[4] The designated evidence shows that, in 2015, Daniel Parks was the principal for two distinct entities—Dan the Man LLC and D&D Saloon LLC—which operated two bars in Kokomo: Little Daddy's and Big Daddy's ("the bars"). On July 5, 2015, William Spence patronized Big Daddy's, consumed alcohol, and then became embroiled in an altercation with another patron. Spence was "pretty trashed," and Christopher French ("Razor") intervened. Eberts’ App. Vol. III p. 180. Razor was employed at the time as a bouncer and laborer by Little Daddy's, but he happened to be assisting at Big Daddy's that evening. Spence was ejected from the bar, and the police were called. After the police had come and gone, but before Spence had left the parking lot, Razor stepped outside and confronted Spence.

[5] The following exchange, as retold by Razor, then occurred:

But, anyway, I had stepped out the door, and I'm standing there smoking a cigarette. I said, "Where's your truck at?" [Spence] said, "Out there in the middle." And I said, "Go ahead and get it." He said, "I ain't falling for that ‘cause if I come back on that property, [the police] said they was gonna arrest me." "You know they just left. If you want to get your a** out of here and go home, then now's the time to get in that damn truck and leave." So here he come across the parking lot. Open up [ ] the driver's door was away from me. His truck was facing the east. He got something out of the truck, and as he come around the a** end of that truck, he had a pipe in his hand. "What do you think you're gonna do?" He said, "I'm going in to get my hat." "Dude, you know you've got to go past me to get in here." I don't want no trouble with you, Razor. I don't want no smoke." He said, "I just want to get my hat." "You're not getting your damn hat, dude. You need to get in that damn truck and get the hell out of here ‘cause you get any closer to me, I'm gonna stick that pipe up your a**." So he turned around and he went back and got in the truck, fired it up, and hauled a**. Stepped on that son of a b****, up and across the curb, throwing gravel, squalling [sic] tires, and headed northbound on 35.

Eberts’ App. Vol. III pp. 178-79.

[6] Approximately ten to fifteen minutes later, Razor became aware of a "bad wreck down there at the stoplight." Id. at 180. Razor rode his motorcycle to the collision site to investigate. There Razor discovered the Ebert family, all significantly injured, as well as Spence and the two damaged vehicles.

[7] The Eberts brought a suit in the Howard Circuit Court against Daniel Parks, as well as the bars ("the underlying action").⁴ The complaint was subsequently amended multiple times.⁵ Among the allegations in the second amended complaint are the following:

37. At said time and place, the Defendant Dan the Man, LLC, d/b/a Big Daddy's Show Club, carelessly and negligently violated Indiana Code 7.1-5-10-15.5 in continuing to serve alcohol to William Spence when Defendant knew or should have known that Mr. Spence was inebriated;

* * * * *

49. At said time and place, the Defendant, Dan the Man, LLC d/b/a Big Daddy's Show Club, was careless and negligent in one or more of the following respects:

a. The Defendant carelessly and negligently continued serving alcohol to William Spence when it knew or should have known that Mr. Spence was inebriated and impaired;

b. The Defendant carelessly and negligently allowed William Spence to drive his vehicle from Defendant's premises when Defendant knew or should have known that Mr. Spence was inebriated and impaired;

c. The Defendant carelessly and negligently failed to notify law enforcement that William Spence had left Defendant's premises in an inebriated state and was operating his vehicle in an inebriated state, posing a danger to himself and others; and

d. The Defendant carelessly and negligently failed to obtain alternative transportation for William Spence to prevent Mr. Spence from operating his vehicle in an inebriated and impaired state;

* * * * *

64. At said time and place, the Defendants, Daniel Parks, D & D Saloon LLC, individually and through their agents, were careless and negligent in one or more of the following respects:

a. The defendant carelessly and negligently continued serving alcohol to William Spence when it knew or should have known that Mr. Spence was inebriated and impaired;

b. The defendant carelessly and negligently allowed William Spence to drive his vehicle from the Defendant's premises when Defendant knew or should have known that Mr. Spence was inebriated and impaired;

c. The Defendant carelessly and negligently failed to notify law enforcement that William Spence had left Defendant's premises in an inebriated state and was operating his vehicle in an inebriated state, posing a danger to himself and others; and

d. The Defendant carelessly and negligently failed to obtain alternative transportation for William Spence to prevent Mr. Spence from operating his vehicle in an inebriated and impaired state;

Eberts’ App. Vol. III pp. 105, 107-108, 110-111.

[8] Each bar had an identical general business owner's insurance policy and a separate identical liquor liability policy. All four policies were provided by Illinois Casualty. The two general business owner's policies (one for each bar) contain the following provision:

(c) This insurance does 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 beverages.

This exclusion - c.(1), c.(2), and c.(3), applies even if the claims allege negligence or other wrongdoing in:

(a) The supervision, hiring, employment, training, or monitoring of others by an insured; or

(b) Providing or failing to provide transportation with respect to any person that may be under the influence of alcohol;

[i]f the "occurrence" which caused the "bodily injury" or "property damage" involved that which is described in Paragraph (1), (2), or (3) above.

Eberts’ App. Vol. II pp. 21-22.

[9] On August 5, 2018, Illinois Casualty filed a separate action in the Howard Superior Court seeking declaratory relief. Specifically, Illinois Casualty sought a declaration that Illinois Casualty "does not owe any duty to defend or indemnify Defendants DAN THE MAN LLC, DAN PARKS, and D& D SALOON LLC in regard to the Underlying Suit under certain insurance policies issued by [Illinois Casualty]." Id. at 16-17. Illinois Casualty argued that all of the Eberts’ claims...