From the Desk of Kyle Riley: This case of first impression in Washington establishes that a firearm exclusion in a CGL policy can exclude coverage for claims of negligence arising out of the use of a firearm during a shooting incident at a Seattle nightclub.
Claims Pointer: The firearm exclusion at issue in this case was found to exclude coverage for all claims arising from a nightclub shooting, which included claims of pre-shooting negligence, regardless of who used the firearm.
Capitol Specialty Insurance Corporation v. JBC Entertainment Holdings, Inc., in the Court of Appeals of the State of Washington, Division I, No. 68129-0-I
On March 21, 2010, an unknown person fired a gun at Jillian’s Billiard Club; a nightclub on Westlake Avenue along the south shore of Lake Union in Seattle. This gunshot injured nightclub patron Jackson Jacob Mika. In January 2011, Mika filed a complaint related to his injuries against JBC Entertainment Holdings, which operates Jillian’s; JBC employee Michael Knudsen; JBC owners/shareholders Gemini Investors and Alpha Capital Partners, Ltd.; and nonemployee event promoter Marquis Holmes. Mika’s claims involved negligent hiring, training and supervision and negligent failure to provide adequate security at the nightclub. JBC, Alpha, Gemini, and Knudsen all tendered defense of this lawsuit to Capitol Specialty Insurance Corporation, who supplied JBC’s CGL insurance policy. Capitol agreed to defend under a reservation of rights. Capitol’s policy provided that “[w]e will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” However, a firearms exclusion within the policy stated “[t]his insurance does not apply to…’ [b]odily injury’ or ‘property damage’ that arises out of, relates to, is based upon, or attributable to the use of a firearm(s).” Based upon this language, Capitol thereafter brought a declaratory judgment action to determine whether the policy covered Mika’s claims, and later moved for summary judgment arguing that the firearms exclusion directly applied to Mika’s claims. The trial court granted Capitol’s summary judgment motion. JBC, Alpha and Gemini appealed.
The Washington Court of Appeals agreed with the trial court, finding that while application of the firearms exclusion to negligence claims was a matter of first impression in Washington, the firearms exclusion in the Capitol CGL policy unambiguously excluded coverage for all claims made by Mika arising from the shooting at Jillian’s. Important to the Court of Appeals determination was that all claims made by Mika related only to pre-shooting negligence involving negligent hiring, training, supervision and security, and therefore Capitol’s insured’s alleged negligence was wholly dependent upon the shooting; an occurrence that was specifically excluded from coverage under the firearm exclusion. Post-assault negligence, which a prior Washington State Supreme Court decision found to fall outside of assault and battery exclusions, was not part of Mika’s claims. Further, the court found the preceding language of “[t]his insurance does not apply to” as language that unambiguously excluded the activity regardless of who used the firearm.
Case updates are intended to inform our clients and others about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in this email without seeking professional counsel.