Thursday, June 28, 2018

$20 Million Judgment Against Restaurant That Gave Alcohol To Minor Was Not Covered By Insurance

The U.S. Court of Appeals for the Fifth Circuit has ruled that a $20 million judgment against a restaurant that committed the criminal act of giving alcohol to a minor was not covered by the restaurant’s insurance policy.

The Case

Ajredin Deari, owner of Pastazios Pizza, Inc., allegedly lured an 18-year-old woman to his restaurant, plied her with alcohol despite her protests, and then drove her to a nearby hotel and sexually assaulted her.

Deari later pleaded no-contest to the crime of aggravated assault.

The woman sued Deari (alleging a variety of intentional torts) and the Pastazios restaurant (alleging negligence, gross negligence, Dram Shop liability, false imprisonment, and premises liability).

She obtained a judgment for more than $20 million against Pastazios and Deari. With respect to Pastazios, the court found the restaurant liable for gross negligence, Dram Shop liability, and “negligent” false imprisonment, and imposed punitive damages.

The woman sought to enforce the judgment against the restaurant’s insurance carrier, Century Surety Company, asserting that Century had breached its duties under the policy to defend and to indemnify Pastazios with respect to her lawsuit.

The U.S. District Court for the Northern District of Texas granted summary judgment in favor of Century, and the woman appealed to the Fifth Circuit.

The Century Policy

The Century policy excluded coverage for bodily injury:

arising out of or resulting from a criminal act committed by any insured.

The Fifth Circuit’s Decision

The circuit court affirmed, holding that because all of the woman’s injuries arose out of or resulted from the restaurant’s criminal act of giving alcohol to a minor, the policy’s criminal act exclusion applied and barred Pastazios’ coverage claims.

In its decision, the circuit court explained that, in Texas, it was a Class A misdemeanor to give alcohol to a minor in the absence of her parents. The Fifth Circuit noted that the woman’s complaint against Pastazios stated that she was a minor and that Pastazios, the restaurant itself, had given her more than one alcoholic beverage.

Thus, the Fifth Circuit found, the woman’s bodily injury arose out of or resulted from a criminal act committed by Pastazios, the insured. In fact, the circuit court said, the woman’s complaint was “unequivocal” that all of her injuries arose out of Pastazios’ provision of alcohol.

Accordingly, the Fifth Circuit concluded, coverage was precluded because all of the woman’s injuries arose out of or resulted from Pastazios’ criminal act of giving alcohol to a minor.

The case is Century Surety Co. v. Seidel, No. 17-10026 (5th Cir. June 25, 2018).

FC&S Legal Comment

Many other courts have applied a criminal act exclusion to bar liability coverage for damages arising out of providing alcohol to a minor. See, e.g., Allstate Ins. Co. v. Greer, 921 N.E.2d 793 (Ill. Ct.App. 2009); Continental Ins. Co. v. Kovach, No. 05-1152 (W.D. Pa. Aug. 14, 2007); Auto Club Ins. Co. v. Petz, No. 242933 (Mich. Ct.App. Dec. 18, 2003); Davis v. Malcolm, No. 212689 (Mich. Ct.App. Feb. 11, 2000); cf. Coregis Ins. Co. v. School Board of Allen Parish, No. 07-30844 (5th Cir. June 6, 2008); Allstate Ins. Co. v. Blount, 491 F.3d 903 (8th Cir. 2007).

Steven A. Meyerowitz, Esq., is the Director of FC&S Legal, the Editor-in-Chief of the Insurance Coverage Law Report, and the Founder and President of Meyerowitz Communications Inc. As FC&S Legal Director, Mr. Meyerowitz, a member of the team that conceptualized FC&S Legal, provides daily analysis and commentary on the most significant insurance coverage law decisions from courts across the country and news regarding legislative and regulatory developments. A graduate of Harvard Law School, Mr. Meyerowitz was an attorney at a prominent Wall Street law firm before founding Meyerowitz Communications Inc., a law firm marketing communications consulting company.


Sisters reach $1M settlement in suit against bouncers

GRAIN VALLEY, Mo. (AP) — Two sisters have reached a $1 million settlement in a lawsuit that alleged they were handcuffed to the wall of a Kansas City bar and battered because bouncers wrongly thought they had used a counterfeit $50 bill.
The Kansas City Star reports that the sister's attorney, Nick Hinrichs, says he is glad his clients can "finally put this nightmare behind them." The suit says the sisters were confronted by multiple bouncers wearing skull or camouflage masks in late 2016 at the Whiskey Tango bar in Grain Valley, even though they arrived 90 minutes after the counterfeit bill was used.

The suit named as defendants E.I.E. LLC, the company doing business as Whiskey Tango, and five current or former employees. Four of them pleaded guilty to criminal charges or face trial.


Wednesday, June 20, 2018

Families, victim got $2M settlement in ex-Linden cop's wrong-way crash

Three years ago, an intoxicated Linden cop turned the wrong way onto a Staten Island highway, causing a crash that killed two of his companions and critically injured a third.

The officer, Pedro Abad, is now serving a sentence of 8 1/3 to 25 years in prison after being found guilty of aggravated vehicular homicide.

The survivor - former Linden police officer Patrik Kudlac - and the families of the two men who died - Linden officer Frank Viggiano and Linden resident Joseph Rodriguez - are still living with the repercussions.

Kudlac and the estates of Viggiano and Rodriguez in October resolved what may have been the last outstanding legal issue in the case when they settled a lawsuit against Abad and the two bars where he drankbefore the ill-fated crash, according to Kudlac's attorney, David L. Wikstrom.

The three parties received a total of $2,085,000, including $1 million from Curves in Staten Island, New York, and $750,000 from Central Park in Roselle, Wikstrom said in a statement.

He said another $300,000 came from Abad's insurer and an uninsured motorist policy paid $35,000.

The "dram shop" lawsuit, which was the result of a consolidation of three original lawsuits from the victims, alleged negligence against Abad and that Curves and Central Park had served him while he was visibly drunk.


Abad's blood-alcohol content was three times the legal limit on March 20, 2015, when he drove the wrong way on the West Shore Expressway and crashed into a tractor-trailer, authorities have said.

Curves shut down after the fatal crash. Another strip club, called Xcess Gentleman's Club, now stands in its place.

The former managers of Curves could not be reached for comment on the settlement. Curves' attorney in the lawsuit, Steven J. Weiderhorn, did not respond to a phone call.

Central Park in recent years has served more than one off-duty police officer who later caused a fatal crash. Elizabeth officer Romulo Meneses-Alvarez this month pleaded guilty to causing a fatal crash with a motorcyclist while driving drunk on Halloween night. He admitted in court that he had been drinking at Central Park beforehand, his lawyer, Joshua McMahon, previously said.

An attorney for Central Park could not be reached for comment. The bar's manager, Susan Todaro, did not respond to phone calls.

Kudlac, who was 23 at the time of the crash, and the families of Viggiano and Rodriguez, both 28, could not be reached.

At Abad's sentencing last June in New York City Criminal Court in Kings County, Rodriguez's sister said the loss of her brother still haunted her and her father.

"I hate you," the sister, Roseann Rodriguez, told Abad at the time. "I don't feel bad for you. I actually hope you die before it comes time for you to be released."

Viggiano's sister, Kathleen Viggiano, said at the sentencing that her brother was smart and often tried to help other people.

"I can only hope Pedro can live with the knowledge he killed two men and that will be a prison sentence in itself," she said.


Friday, June 1, 2018

Jury awards $1 million to family of man who died after being punched outside bar

Four years after a Palatine man died of a punch to the head, members of his family cried and embraced Friday afternoon when a jury returned a verdict awarding them just over $1 million.

The jury’s decision, reached after three hours of deliberation, was far less than the $20 million the family of Ryan Flannigan sought. But the family’s attorney, Michael Sorich, insisted it wasn’t about money.

“They just wanted answers for their son’s death, and I think the jury proved that (defendant) Michael Platt was ultimately responsible and he was held accountable for his conduct,” Sorich said.

Flannigan, 26, died 10 days after being punched by Platt on July 18, 2014. Platt was found not guilty of first-degree murder in June 2015 after a trial in which his attorneys argued their client did not intend to kill or seriously injury Flannigan. Jurors were not given the choice of finding Platt guilty of a lesser crime.

Platt’s attorney, Scott Barber, said following the verdict that his client acted in self-defense and that the jury was swayed by Platt’s criminal record.

“I don’t think (those convictions) had anything (with the Flannigan case) other to do than make him look like a bad guy,” Barber said.

In his closing argument, Sorich told jurors that “this is a case about being held accountable for one’s actions.”

He said that even if Platt didn’t intend to kill Flannigan, he did intend to hurt him. And after the punch, Platt walked away and said, “He’s still on the (expletive) ground,” Sorich told the jury.

He noted that Platt is a two-time convicted felon — on drug and theft charges — and had originally lied to police and detectives when questioned about the incident. Sorich worked to undermine Platt’s argument of self-defense by saying that Platt was the only person who claimed that Flannigan lifted his arms as if he was preparing to punch Platt. Witnesses earlier in the trial testified Flannigan lifted his arms but was not about to throw a punch.

Barber said during his closing arguments that while the event was tragic, it stemmed from the drunken and obnoxious actions of Flannigan’s group of friends at Pop’s Bar and Grill. They confronted a physically disabled friend of Platt’s, and Platt moved to defend his pal, Barber said.

After the verdict was announced, Debra Flannigan, Ryan Flannigan’s mother, said, “We’re very happy that justice has finally been served. That’s all.”

Her husband, Tim Flannigan, added, “We were able to finally, after four years, get the results that was justified — that Ryan should’ve got the first time around.”