Wade Clark Mulcahy LLP

<p style="text-align: justify;">The United States District Court for the Western District of Pennsylvania recently denied a restaurant’s attempt at dismissal from an insurance company’s lawsuit. In<em> <a href="https://www.wcmlaw.com/wp-content/uploads/2019/07/Encompass-Insurance-Co-v.-Stone-Mansion-Restaurant-Incorporated-1.pdf">Encompass Insurance Co v. Stone Mansion Restaurant Incorporated</a></em>, the restaurant moved for summary judgment by challenging expert evidence claiming that it over-served an intoxicated driver who was later involved in a deadly crash.</p>
<p style="text-align: justify;">The underlying lawsuit involved a deadly car accident in which the driver was killed and the passenger, Helen Hoey (“Hoey”), was severely injured. It was alleged that the driver became intoxicated at an event at Stone Mansion Restaurant Incorporated (“Stone Mansion”), an eatery near Pittsburgh, Pennsylvania. As a result, Hoey sued the driver’s estate alleging that the accident occurred due to the severe intoxication. In turn, the estate tendered the defense Encompass Insurance Company (“Encompass”) which settled with Hoey in October of 2016 for $600,000.00.</p>
<p style="text-align: justify;">Stone Mansion moved for summary judgment, alleging that Encompass’ expert testimony left room for resolution as material facts remained unresolved. Specifically, Stone Mansion contested that it remained unclear as to whether staff served the driver alcohol prior to him driving the subject vehicle. Instead, Stone Mansion stated that the driver may have been given alcohol by other attendees of the event. Thus, Stone Mansion argued, it may never have served the driver while he was visibly intoxicated and should not be held liable.</p>
<p style="text-align: justify;">Rather than dismissing Stone Mansion from the matter, the Court stated that the challenges to Encompass’ expert testimony indicated that there remained a question of fact as to who last served the driver alcohol which was for the jury to resolve. Therefore, the Court concluded that summary judgment was not appropriate and denied Stone Mansion’s motion.</p>
<p style="text-align: justify;">Furthermore, the Court stated that it remained unclear whether or not the settlement paid by Encompass was voluntary or not. Stone Mansion argued that the settlement was a voluntary contribution as Encompass was not obligated under the policy to make any payments given that the driver did not own the car and was only supposed to be conducting work on it. However, Encompass’ position was that the driver obtained permission of the vehicle’s owner to use the car prior to the accident. Interestingly, the Court noted that Encompass previously filed a declaratory judgment action as to whether it had any responsibility given that the driver’s use of the vehicle was “outside the scope of a permissive use of the vehicle.”</p>
<p style="text-align: justify;">Finally, Stone Mansion argued that the Doctrine of Laches was applicable in this matter. Under this doctrine, Stone Mansion must show that Encompass “slept” on its rights for a period of time greater than the applicable statute of limitations. The Court disagreed, however, noting that the applicable statute of limitations was six years for claims of contribution. As such, the statute of limitations began to run in October of 2016, when the settlement monies were paid to Hoey. As this lawsuit was initiated well within the statute of limitations period, the Court concluded that the Doctrine of Laches did not apply.</p>
<p style="text-align: justify;">Thanks to Zhanna Dubinsky for her contribution to this post. Please email <a href="mailto:VPinto@wcmlaw.com">Vito A. Pinto</a> with any questions.</p>