The Eleventh Circuit reversed the district court's grant of summary judgment to the insurer in a case involving coverage for a shooting death. Kinsale Ins. Co. v. Pride of St. Lucie Lodge 1189, Inc., 2025 U.S. App, LEXIS 9346 (11th Cir. April 18, 2025)
The Lodge was operating as a club and bar while hosting a weekend social event. The Lodge was staffed by a bartender and a couple of security volunteers. A previous fight had occurred on he Lodge's property just two months before the fight at issue.
Around 1:00 a.m., two groups of female patrons at the Lodge became involved in a fight on the dance floor and were removed from the Lodge out separate exits. Both groups ended up in the Lodge's parking lot and the fight continued. Tanya Oliver was shot in the forehead ten to fifteen minutes after the groups were turned out of the Lodge,. She died from her injuries the following year.
Oliver's Estate sued the Lodge on a theory of negligent security. At trail a jury found the Lodge liable for Oliver's injuries and awarded damages exceeding $3.348 million.
Kinsale insured the Lodge. The policy had a sublimit of $50,000 for any claims arising out of assault and battery. The Kinsale adjuster became aware of the background of the incident and the serious injuries suffered by Oliver, including her eventual death. Kinsale offered its $50,000 assault and battery sublimit, but it was rejected by the Estate.
Kinsale filed its coverage action in federal district court seeking a declaratory judgment that the policy's $50,000 assault and battery sublimit applied. The Estate and the Lodge counter-claimed for bad faith, arguing that Kinsale breached its duty of good faith by failing to make a settlement offer within the policy limits before the Estate's claim was filed. Kinsale moved for summary judgment on the bad faith counterclaim. The district court granted summary judgment to Kinsale on the ground that "no reasonable jury could conclude that Kinsale acted in bad faith in handling the Lodge's claim."
The Eleventh Circuit disagreed. There was no question that the Lodge had a duty to protect its patrons. This included an obligation to take reasonable steps to protect its patrons from foreseeable disorderly conduct by third persons which might endanger the safety of patrons. The bar's duty of care was particularly salient where the bar ejected the feuding parties at the same time into the same general place.
A jury could reasonably find that liability was clear. The Lodge had held meetings regarding concerns that the volunteer security guards were standing by when fights occurred. The security guards had led one group out the front door and another group out the back door, knowing that the best practice was not to let two conflicting groups out simultaneously. Neither of the security guards intervened in the second fight in the parking lot, and the fight continued until the warring groups broke apart on their own.
Kinsale knew from the outset that the injuries were catastrophic. Oliver was shot in the forehead. Kinsale knew the damages greatly exceeded the comparatively small $50,000 assault and batter sublimit.
All told, a jury could reasonably find that Kinsale acted in bad faith in failing to tender its policy limit prior to the Estate filing suit. The district court erred in taking the case away from a jury, holding that as a matter of law, a jury could not find that Kinsale acted in bad faith.
