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Yakitori Boy, Inc. v. Starr Indemnity & Liability Co.

United States District Court, E.D. Pennsylvania

June 28, 2019

YAKITORI BOY, INC., et al.
v.
STARR INDEMNITY & LIABILITY COMPANY

          MEMORANDUM RE: MOTION FOR JUDGMENT ON THE PLEADINGS

          Baylson, J.

         I. Introduction

         In this declaratory judgment action, Plaintiff Yakitori Boy, Inc. seeks a declaration regarding the limits of coverage required by an insurance policy it has with Defendant Starr Indemnity & Liability Company. This matter is related to an ongoing personal injury action in Pennsylvania state court, where Yakitori Boy is named as a defendant and Starr is tasked with defending and indemnifying Yakitori Boy under the insurance policy at issue here. Starr removed the declaratory judgment action to this Court and now moves for Judgment on the Pleadings.

         For the reasons that follow, Starr's Motion for Judgment on the Pleadings is DENIED.

         II. Factual History

         The events that give rise to this declaratory judgment action are the subject of a second amended complaint, (ECF 7-1 at Ex. B., the “Underlying Complaint”), filed by Sierra in the Philadelphia Court of Common Pleas, No. 2900 (the “Underlying Action”). The Underlying Complaint alleges that Sierra was walking with a group of individuals in Philadelphia when, “suddenly and without warning, ” Gordon and Schmid struck Sierra in the head, causing him to fall to the ground. (Underlying Complaint at ¶¶ 9-10). When Sierra attempted to stand up, the underlying complaint alleges that Gordon and Schmid “again punched and/or kicked [him] about his face and head, causing [him] to lose consciousness.” (Id.). Sierra allegedly suffered various physical injuries and incurred medical expenses from of the incident. (Id. ¶¶ 16-17).

         The Underlying Complaint asserts two causes of action against Gordon and Schmid for assault and battery and negligence. It also asserts a cause of action against Yakitori Boy for negligently overserving alcohol to Gordon and Schmid prior to the attack. (Id. at ¶ 32).[1] Sierra claims that his injuries “were a proximate and foreseeable result of [Yakitori Boy's] act of supplying . . . alcoholic beverages to visibly intoxicated patrons.” (Id. ¶ 31).[2] Yakitori Boy's alleged negligence consisted of:

(a) Continuously and repeatedly serving alcoholic beverages to its patrons, including the patrons who assaulted and battered the Plaintiff, despite the knowledge that said patrons were intoxicated;
(b) Negligence per se as being in violation of 47 Pa. C.S. 4-493(a) unlawful acts relative to liquor, malt and beverages and licenses;
(c) Failing to have a responsible management alcohol program [sic] “RAMP” to prevent the service of alcohol to visibly intoxicated patrons in violation of 47 Pa. C.S. 4-493; and
(d) Failing to hire proper and qualified bartenders, as well as, have proper and/or sufficient bartender training to prevent the service of alcohol to visibly intoxicated patrons in violation of 47 Pa. C.S. 4-493.

(Id. ¶ 33).

         Since Sierra filed the Underlying Complaint, Starr has defended Yakitori Boy under the terms of a liquor liability insurance policy (the “General Policy”). (ECF 25, “Am. Compl. for Decl. Judgment, ” at ¶ 31). The General Policy requires Starr to provide coverage for “those sums that the insured becomes legally obligated to pay as damages because of ‘injury' to which [the] insurance applies if liability for such ‘injury' is imposed on the insured by reason of the selling, serving or furnishing of any alcoholic beverage.” (Id. ¶ 35). The insurance limits for liquor liability coverage are $1 million in the aggregate and $1 million for each common cause. (Id. ¶ 36).

         The General Policy's coverage is modified by an Assault and Battery Exclusion (the “Exclusion”) and an Assault and Battery Endorsement (the “Endorsement”). (See ECF 7-3). The Exclusion provides that:

         This insurance does not apply to:

         Assault and Battery

(1) “Bodily injury”, “property damage”, “injury” or “personal and advertising injury” arising from the following:
(a) “assault and battery” or any act or omission in connection with the prevention or suppression of such acts; or
(b) harmful or offensive contact between or among two or more persons . . .
(2) This exclusion applies regardless of the degree of capability or intent and without regard to:
(a) whether the acts are alleged to be by or at the instruction or at the direction of the insured, his officers, “employees”, agents or servants; or by any other person lawfully or otherwise on, at or near the premises owned or occupied by the insured; or by any other person;
(b) the alleged failure of the insured or his officers, “employees”, agents or servants in the hiring, supervision, retention or control of any person, whether or not an officer, “employee”, agent or servant of the insured;
(c) the alleged failure of the insured or his officers, “employees”, agents or servants to attempt to prevent, bar or halt any such conduct.

(ECF 7-3 at the “Exclusion, ” at ¶ A.2). The Endorsement provides that:

A. The following is added to . . . the Liquor Liability Coverage Form of Section 1 - Liquor Liability Coverage . . .
We will pay those sums that the insured becomes legally obligated to pay as damages for “bodily injury, ” “property damage”, or “personal and advertising injury” arising from “Assault and/or Battery.” This endorsement applies regardless of the degree of culpability or intent and without regard to:
(1) whether the acts are alleged to be by or at the instruction or at the direction of the insured, his officers, “employees”, agents or servants; or by any other person lawfully or otherwise on, at or near the premises ...

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