When One Customer Stabs Another There is No Coverage for the Bar 

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In November 2014, Shakeva Soniat and Serena Tribbit were having drinks at a bar on Bourbon Street in New Orleans called Funky 544. Ronesha Kelly, who at age 19 was too young to be served alcohol, had been drinking there. She began arguing with the two women, then stabbed them both. In Funky 544, L.L.C. v. Houston Specialty Insurance Company, No. 21-30310, United States Court of Appeals, Fifth Circuit (October 22, 2021). They, and Funky 544 sued Funky’s insurer after a judgment entered against the bar.

Funky 544, L.L.C. appealed the district court’s determination that its insurer, Houston Specialty Insurance Company, did not have a duty to defend it against litigation arising out of a stabbing at its bar.

FACTUAL BACKGROUND

In January 2015, Soniat and Tribbit sued Funky 544 (not the assailants) in state district court for Orleans Parish, Louisiana, claiming that their injuries resulted from Funky 544’s negligence. The bar owner had a commercial general liability insurance policy with Houston Specialty Insurance Company. In July 2015, five months after Funky 544 notified it of the suit, Houston Specialty declined coverage.

Eventually, because of Funky’s default, the state court awarded the two plaintiffs almost $580,000 for pain and suffering and almost $55,000 for medical expenses. Funky 544 sued Houston Specialty who moved for summary judgment on those claims, arguing an exclusion in the policy applied to Soniat and Tribbit’s claims. This exclusion applies to injuries caused by the use of firearms or other weapons:

DISCUSSION

In Louisiana, an insurer must provide a defense whenever the pleadings against the insured disclose a possibility of liability under the policy. Insurance policies are interpreted according to their plain, ordinary and generally prevailing meaning, unless the words have acquired a technical meaning. It is only where a policy is interpreted unambiguously to exclude coverage that an insurer does not have a duty to defend.

Here, every negligence claim in the state court suit derived from the stabbing. The policy’s weapons exclusion therefore applies.

ZALMA OPINION

Funky 544 got into trouble because they served a minor alcoholic beverages only to have the minor stab two customers of Funky 544. The language of the policy was clear, obvious and easily understood by anyone with a fourth grade education. A knife is defined by the policy as a weapon and injuries caused by a weapon are excluded. A clear and unambiguous exclusion must be enforced and although the two plaintiffs were seriously injured, their injuries were anticipated and excluded because it was a risk of liability of a bar no insurer would be willing to take.

© 2021 – Barry Zalma