Ontario Superior Court denies insurance coverage to a sports bar in personal injury case

The bar employees allegedly over-served drinks and forcibly removed a patron

Ontario Superior Court denies insurance coverage to a sports bar in personal injury case

The Ontario Superior Court of Justice has dismissed a claim against a third-party insurer, finding that it had no duty to defend in a personal injury case.

In Jack-O’s Sorts Bar v. US Liability Insurance Co., 2023 ONSC 5925, Guy Kelloway alleged that he suffered bodily injuries when he was removed from Jack-O’s Sports Bar in December 2021. He claimed that the bar employees over-served him with alcohol, and as a result, he fell from a barstool. He claimed that he was then forcibly removed from the establishment. Kelloway filed a lawsuit against the bar owners, seeking damages for his alleged injuries.

The United States Liability Insurance Company insured Jack-O’s under a policy that included commercial general and liquor liability coverage. Kelloway’s claims fell within primary coverage grants within the policy for claims for “compensatory damages” because of “bodily injury.” However, the insurer refused coverage, relying upon broadly worded exclusions that denied a duty to defend where the action was in consequence of or “in any way involving” assault or battery, including whether it was caused in whole or in part by “negligence” and any “acts or omissions” of an insured or its employees.

Jack-O’s commenced a third-party claim against its insurer, seeking contribution and indemnity according to the Negligence Act and in common law regarding the denial of a duty to defend and indemnify.

The Ontario Superior Court of Justice ultimately granted summary judgment dismissing the third-party claim against the insurer. Jack-O’s acknowledged that intentional acts do not trigger a duty to defend. However, they argued that there were personal injury claims in negligence that were severable from those claims that fell within the exclusion clauses. They also contended that Kelloway’s allegation of falling from the barstool is severable from the uncovered claims.

However, the court concluded that the pleadings of negligence in the amended statement of claim could not be severed from the factual matrix to avoid the application of these broad exclusion clauses.

The court found that the exclusionary language was drafted in the broadest terms such that the defined terms of “assault” or “battery” need only be part of the chain of events leading to the claimant’s injuries. The exclusion clauses negate coverage for bodily injury “arising out of, directly or indirectly resulting from, in consequence of, or in any way involving assault or battery.”

The court emphasized that even if there was a claim of negligence arising from the plaintiff’s fall from the barstool, the alleged events were also connected to his subsequent removal from the bar’s premises and also involved allegations of assault or battery as defined in the policy, such that there was no duty to defend.

In any event, the court found that a plain reading of the policy excluded a duty to defend for personal injuries arising from a negligent removal of the plaintiff from the premises. The terms “assault” and “battery” were expansively defined in the policy to include negligence in the insured’s use of force. Accordingly, the court granted summary judgment dismissing the claims against the insurer.

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