VOLUME XV, NUMBER 11
November, 2003

LIQUOR LIABILITY EXCLUSION BARS COVERAGE IN CLAIM THAT BAR WAS NEGLIGENT IN ALLOWING DRUNK MINOR TO LEAVE PREMISES

After drinking heavily at Dax’s Bar, a downtown West Palm Beach bar, Shawn Limegrover, a minor, left the premises on foot and was killed by a train. His estate sued the bar claiming that the bar was responsible for the minor’s death. The bar was insured by Preferred National Insurance, who denied coverage for the claim pursuant to its policy liquor liability exclusion which provided: “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 a alcoholic beverage.”

The estate claimed that the claim against the bar was not connected with the furnishing of liquor. Rather the negligence claim was based upon the theory that a premises owner owes a duty to a person who is known to be drunk to “render aid” so that the person does not leave and injure himself or others. The trial court agreed with this novel concept holding that the estate had a cause of action against the bar and there was policy under the bar’s liability policy. In reaching its decision, the trial court relied on a 1981 Fourth District case in which a fishing pier operator was held liable for failure to safeguard a passed-out drunk customer who was left lying near the ocean on the pier and who rolled into the water and drowned. Estate of Starling v. Fisherman’s Pier, Inc., 401 So.2d 1136 (Fla. 4th DCA 1981).

The Fourth District disagreed with this analysis. Its opinion in Preferred National Ins. v. Fat Investors, Inc. d/b/a Dax’s Bar & Grill, et al., 28 FLW D1013 (Fla. 4th DCA April 23, 2003), the appellate court held that under the estate’s theory of liability, any business would be liable even if it had not furnished liquor to the patron. Thus, for example, if a drunk person stumbled into a fast food restaurant, the restaurant would be under a duty to not allow the drunk person to leave. The Fourth District differentiated Starling, noting that in Starling the patron was passed-out drunk, inert in a dangerous place within the premises. On the other hand, Limegrover was neither inert, nor in danger while at the bar. Thus, while a business owner cannot ignore and step over an unconscious customer lying in a dangerous place upon his premises, no duty exists which requires the owner to prevent the person from leaving. Moreover, the estate’s attempt to state the claim in such terms was insufficient to overcome the liquor liability exclusion. Accordingly, the Fourth District reversed the trial court's order, and ordered entry of judgment finding no coverage.

Anna D. Torres

BLASTING ACTIVITIES EXCLUDED BY EARTH MOVEMENT EXCLUSION IN “ALL RISK” HOMEOWNERS POLICY

In Fayad v. Clarendon National Insurance Company, 28 FLW D2221, (September 24, 2003) after analysis of the earth movement exclusion and its lead-in provision, based upon the plain language of the policy, the court held that the earth movement exclusion contained in an “all risk” homeowners policy precluded coverage for structural damage to the home and damage to personal property caused by “blasting activities” affirming the lower court’s final summary judgment ruling.

This matter originally arose when the Fayads reported to Clarendon that, during the policy period, nearby blasting activities had caused structural damage to their home and personal property. Clarendon sent the Fayads a denial of coverage letter stating that the results of its investigation revealed that the damages to the home were the result of “settlement, shrinking and thermal effects[,]” which the policy specifically excluded.

As a result of Clarendon’s denial, the Fayads demanded appraisal pursuant to the policy. Clarendon then filed a declaratory judgment action seeking to relieve itself of the appraisal obligation and to obtain a declaration of no coverage. Clarendon subsequently moved for the   summary judgment on the grounds that coverage was precluded for the Fayads’ claim by virtue of the earth movement exclusion. The Fayads themselves, and their expert, filed affidavits in support of their opposition to Clarendon’s summary judgment motion stating that the damage to their home was caused by “man-made blasting/explosions.”

Clarendon’s earth movement exclusion and its lead-in provision provided:

“SECTION I - EXCLUSIONS

1. We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.

* * *

b. Earth Movement, meaning earthquake, including land shock waves or tremors before, during or after a volcanic eruption; landslide; mine subsidence; mudflow; earth sinking, rising or shifting; unless direct loss by:

(1) Fire; [or]

(2) Explosion…

ensues and then we will pay only for the ensuing loss. (emphasis added).”

The court ruled that in order for there to be coverage to the home, the blasting or explosion would have had to have been an ensuing loss following one of the enumerated natural events from the earth movement exclusion in the policy.

The Fayads further argued that the policy provided coverage under the personal property section and took it away under the earth movement exclusion. While it was true that an “explosion” was a listed peril with regard to personal property, the court held that the exclusionary provision, when reconciled with the personal property language, still acted to bar coverage for explosions except those following one of the enumerated natural phenomena.

Stephanie H. Luongo

LIVING ARRANGEMENTS CONTROL WHETHER SOMEONE IS A “RESIDENT RELATIVE”

In Florida Residential Property & Casualty Joint Underwriting Assoc. v. Patricia W. Anthony, 28 FLW D813 (Fla. 4th DCA March 23, 2003), the Fourth District Court of Appeal interpreted policy language providing liability coverage to the named insured and “residents of your household who are [your] relatives.” The Defendant in the underlying tort lawsuit, Patricia Anthony, sought coverage under her sister’s homeowner’s policy for claims arising from a dog bite incident. The bite occurred on property owned by Anthony in Hollywood, Florida. Anthony’s adult son lived at the Hollywood property. Anthony’s sister, Jacqueline Tucker, was the named insured on a JUA policy which provided coverage for a home in Clewiston, Florida owned by Tucker and which included coverage for “resident relatives.”

Anthony claimed she was a resident relative of Tucker and was therefore entitled to coverage under her sister’s JUA policy. Anthony paid some bills and helped to remodel some of the rooms of the Clewiston home.   However, Tucker had not lived at the Clewiston property for several years prior to and after the date of the incident. In fact, Tucker had never spent more than a few nights at the home prior to Anthony moving in, and infrequently visited when Anthony lived there.

The Fourth District relied upon Philbin v. American States Ins. Co., 729 So.2d 484 (Fla. 4th DCA 1999) in reaching its determination that the JUA policy did not provide coverage for Anthony as a resident relative of Tucker. The court affirmed its analysis that someone who resides in an home owned by an insured relative is not necessarily a “resident relative” for purposes of liability insurance coverage, regardless of any landlord/tenant relationship which may or may not exist. The “critical aspect... was not the rental agreement, but the living arrangement and how it fit into the policy’s definition of an insured.” Accordingly, the Fourth District reversed summary judgment entered by the trial court in favor of Anthony, with instructions that the court enter judgment in favor of the insurer JUA.

Anna D. Torres

FLA. R. CIV. P. 1.061(a) AND KINNEY ANALYSIS PREREQUISITE TO FORUM NON CONVENIENS RULING

When a party seeks a change of venue based upon the doctrine of forum non conveniens, the trial court must conduct and the record must demonstrate a requisite analysis of four factors, first established in Kinney Systems Inc. v. Continental Insurance Co., 674 So. 2d 86 (Fla. 1996), now codified in Rule 1.061(a), the Fourth District Court of Appeal recently held in Strauss v. Allstate Insurance Co., 28 FLW D2009 (Fla. 4th DCA August 27, 2003).

Forum non conveniens is a common law doctrine addressing the problem that arises when a local court technically has jurisdiction over a suit but the cause of action may be fairly and more conveniently litigated elsewhere. In Kinney, the Florida Supreme Court adopted the federal forum non conveniens doctrine, which sets out factors a court should consider in determining whether an action should be dismissed because it was brought in an inconvenient forum. The Kinney factors were later codified in Rule 1.061(a). See Ira Mex, Inc. v. Southeastern Interior Constr., Inc. 777 So. 2d 1107, 1109 (Fla. 4th DCA 2001).

“Rule 1.061(a) provides that an action may be dismissed on the grounds that relief can be sought in a more convenient forum if: (1) the trial court finds that an adequate alternate forum exists which possesses jurisdiction over the whole case, including all of the parties; (2) the trial court finds that all relevant factors of private interest favor the alternate forum, weighing in the balance a strong presumption against disturbing plaintiffs’ initial forum choice; (3) if the balance of private interests is at or near equipoise, the court further finds that factors of public interest tip the balance in favor of trial in the alternate forum; and (4) the trial judge ensures that plaintiffs can reinstate their suit in the alternate forum without undue inconvenience or prejudice.”

In Strauss, a motor vehicle accident occurred in New Jersey. The accident was caused by the negligence of a Pennsylvania resident. The parties involved in the accident were both insured by Allstate. After Allstate tendered the policy limits available from the policy belonging to the Pennsylvania driver, Strauss filed suit in Palm Beach County to recover underinsured motorist benefits under his own policy.

Allstate moved to “transfer venue” to Atlantic County, New Jersey on the grounds that the accident occurred in that county, two other drivers involved lived in New Jersey and Pennsylvania, Strauss stayed in New Jersey three to four months each year, Strauss was residing in his New Jersey home at the time of the accident, Strauss was treated for his injuries in New Jersey, Strauss did not return to Florida until approximately eight weeks after the accident, Strauss and his wife filed bodily injury lawsuits in New Jersey and he gave a deposition in New Jersey in connection with the claim. Strauss attested that he was a resident of Florida, he was registered to vote in Florida, his car is registered in Florida, the subject insurance policy was in Florida and he was treated before and after the accident by an orthopedic surgeon in Florida.

At the hearing on the motion, Strauss argued that based upon the facts presented, Allstate’s motion was mistitled because it was not moving for a change of venue, but rather was seeking a dismissal based upon forum non conveniens grounds pursuant to Fla. R. Civ. P. 1.061(a). Strauss further argued that the facts in this case did not satisfy the Kinney test. He argued that venue was proper in Florida because it was essentially a contract action concerning a Florida resident’s coverage under a policy issued in Florida covering an automobile registered in Florida and that Florida law should apply to the interpretation of a Florida contract.

The court applied statutory and case law pertaining to motions seeking an intrastate transfer of venue, but entered a written order granting Allstate’s amended motion to change venue “based upon forum non conveniens.” The order changed venue to New Jersey and dismissed the case in Florida without prejudice.

Upon an appeal by Strauss arguing that the trial court failed to address the factors enunciated in Kinney before dismissing his case, Allstate conceded that the trial court mistakenly relied on the change of venue statute rather than on the appropriate rule of civil procedure, but argued that the court’s ruling was still correct because the record supported the court’s finding that Florida was an inconvenient forum.

The Fourth District held that the record did not demonstrate that the trial court conducted the requisite analysis of the four factors before dismissing Strauss’ action and ultimately reversed the trial court order and remanded the matter for a determination of the Kinney factors.

Stephanie H. Luongo