Tennessee Supreme Court Reverses Judgments Totaling $2.775 Million Against Insurance Company

June 8th, 2012  
Rainey Kizer’s Reviere and Stewart Proved Claims Not Covered

NASHVILLE, Tenn. (June 8, 2012) – The Tennessee Supreme Court has reversed lower court decisions ordering an insurance company to pay $2,775,000 in damages on behalf of a business at which an individual died following an altercation. The court found that no liability insurance coverage existed under the terms of the policy held by the defendant business.

Rusty Reviere and Jonathan Stewart of Rainey, Kizer, Reviere & Bell PLC. (Rainey Kizer) represented QBE Insurance Corporation in the successful appeal of the award.

“We are pleased with the court’s decision,” Reviere said. “If the trial court and court of appeals decision had been affirmed rather than reversed, the impact on the insurance industry and every business that serves alcoholic beverages would likely have been very significant.”

At issue were compensatory damage awards of $2.5 million to Donna Clark and $275,000 to Leonard Gamble. Clark’s husband, Samuel Clark, died after being assaulted at Sputniks, a bar and restaurant in Hendersonville, TN. Gamble allegedly was injured when he attempted to intervene on behalf of Clark.

The plaintiffs, Clark and Gamble, received the judgment awards in suits they filed against Sputniks and its owner Cristie Phillips. The trial court ruled on behalf of Clark and Gamble and, in a subsequent hearing, awarded damages. In an effort to collect the judgments, the plaintiffs brought declaratory actions against the QBE Insurance Corporation. The trial court ruled that the altercation at Sputniks was covered under both the commercial general liability and the liquor liability of Sputniks’ insurance policy QBE.

QBE appealed, and the Court of Appeals ruled that liquor liability portion of the insurance policy provided coverage and the commercial general liability portion did not.

In their argument before the Supreme Court, Reviere and Stewart made two key points:

  • The provisions of the commercial general liability insurance did not cover assault and battery or any acts to prevent or stop an assault.
  • Clark and Gamble failed to show that Phillips and Sputniks negligently served alcohol to the assailant and, therefore, the liquor liability coverage did not apply.

 

The Supreme Court found “no liability insurance coverage under the terms of the policy” and reversed the ruling of the trial court. Thus, the Supreme Court affirmed the Court of Appeals’ decision denying coverage under commercial general liability and reversed the its decision on the applicability of the liquor liability coverage.

Rainey, Kizer, Reviere & Bell P.L.C. is AV rated by Martindale-Hubbell and was named a Go-To Firm® by Fortune 500 general counsels. The full-service law firm with offices in Jackson and Memphis represents local, state, and national clients before state and federal courts and regulatory agencies throughout the Mid-South. For more information visit www.raineykizer.com.

 Casey Smith
 csmith@raineykizer.com
 731-423-2414