INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Rooster calls but CUP doesn’t answer
In 2019, Joey Bailey (Bailey), while inebriated, operated his vehicle in the wrong lane of an interstate highway. Tragically, he caused a collision that ended with the death of himself and all five members of a family occupying the other vehicle.
Prior to the accident, Bailey consumed food and alcoholic beverages at a restaurant called Roosters, and also at another restaurant/bar, named Horseshoes. Herein, the restaurants and related entities are referred to as Roosters, as they are both owned by the same entity.
The legal representative of the deceased family sued Roosters, which at the time of the loss was insured under a businessowners policy (BOP) as well as by a commercial umbrella policy (CUP) issued by Grange Insurance Company (Grange).
The insurer advised that it would respond only to the loss via the BOP, because liquor liability coverage existed there; due to an endorsement, it held that no coverage was provided under the CUP. Roosters responded by filing a declaratory judgment, asking that coverage be found under both policies.
The initial court ruled that ambiguity existed within the endorsement, so both policies applied to the loss. Later, a higher court reversed that decision (in favor of Grange) and Roosters appealed.
The latest court asked to deliberate over the matter focused on the applicability of the CUP’s liquor liability endorsement. Roosters presented an argument that two items resulted in ambiguity:
First, the business held that the CUP’s liquor liability endorsement was a modification of the underlying BOP’s section on liquor liability.
Second, it raised a new argument. Its position was, if the CUP endorsement was held to be a replacement of the BOP’s applicable wording, it then created possible coverage involving negligent supervision of Roosters’ employees. (Editor’s note: Though not specifically mentioned in the opinion, it’s likely that the negligence was from employees overserving a customer to the point of drunkenness.)
The higher court started by addressing the possibility of ambiguity with the CUP’s endorsement. It began with a review of the endorsement language. It then considered rulings of several cases it believed to be relevant.
The court reached a firm conclusion: It was decided that the CUP endorsement was unambiguous. Opposite Roosters’ first argument, the court found that the endorsement’s wording was clear and that it completely replaced the liquor liability portion of the underlying BOP. It quoted the endorsement, including the form’s statement that the endorsement changed part of the underlying policy and that it should be read and noted for impacts on coverage.
The form also specifically referenced the exact portion of the BOP language that it was replacing. Therefore, application of the language resulted in there being no obligation for the CUP to respond to the loss.
With regard to Roosters’ second argument, the court’s ruling flowed directly from what it decided in argument number one. Having held that the CUP’s liquor liability endorsement completely replaced the BOP’s provision, the endorsed policy contained no reference to liability that could arise from negligent supervision. The lower court’s ruling in favor of Grange was affirmed.
Georgetown Chicken Coop, LLC, et.al. v. Grange Insurance Co.—Supreme Court of Kentucky—No. 2023-SC-0522-DG—September 18, 2025.
