In its recent decision in Nautilus Ins. Co. v. Roberts, 2013 U.S. Dist. LEXIS 50141 (E.D. Mo. Apr. 8, 2013), the United States District Court for the Eastern District of Missouri had occasion to consider the application of a liquor liability exclusion in a general liability policy.

The insured, American Legion, was named as a defendant in a dram shop liability suit, alleging that it allowed a patron to become intoxicated.  That patron was later involved in an auto accident while driving under the influence, resulting in the death of one individual and causing serious injuries to another.  Nautilus, as the American Legion’s general liability insurer, brought a coverage action against its insured and the underlying claimants, seeking a declaration that it owed no coverage obligation as a result of its policy exclusion applicable to:

Bodily injury" or "property damage" for which any insured or his indemnitee 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 to the sale, gift, distribution or use of alcoholic beverages.

Nautilus later moved for summary judgment on the basis of this exclusion.  American Legion defaulted in the suit, and for reasons not clear, the underlying claimants failed to oppose the motion.  The court nevertheless considered the merits of Nautilus’ motion, since as the insurer, Nautilus had the burden of proving the application of the exclusion.   Noting that claimants sought to hold American Legion liable as a result of it having caused the intoxication of the patron, the court agreed that the exclusion applied to all claims against Nautilus’ insured.  Further, at least one prior Missouri court had held the exclusion applicable on similar facts.  See, Auto Owners (Mut.) Ins. Co. v. Sugar Creek Memorial Post. No. 3976, 123 S.W.3d (Mo. Ct. App. 2003).   As such, and given the absence of any meaningful opposition, the court granted summary judgment in favor of Nautilus.