Utah Partners Prevail on Appeal in Dram Shop Insurance Case

Salt Lake City Partners Thomas J. Rollins and Vincent J. Velardo recently obtained affirmance on appeal for our insurance company client in the United States Court of Appeals for the Tenth Circuit, upholding our client’s denial of coverage for damages arising out of an assault and battery.

In 2017, Plaintiff visited a nightclub with a group of friends. When leaving the nightclub, Plaintiff was approached by an intoxicated patron in its parking lot who proceeded to punch Plaintiff. As a result of the assault, Plaintiff sustained extensive facial and dental injuries that required multiple reconstructive surgeries. Plaintiff claimed that the nightclub bartender overserved alcohol to the assailant. Subsequently, Plaintiff filed suit in Utah State Court against the nightclub, alleging claims of negligence, negligent hiring and retention, and violation of Utah’s dram shop statute. When requested, our insurance client claimed they did not owe a duty to defend their nightclub insured due to their policy’s assault and battery (A&B) exclusion stating, “coverage does not apply to claims arising out of an assault and/or battery.” Plaintiff then settled with the nightclub for an assignment of rights under their Policy of Insurance, and directly filed suit against our insurance client in a second Utah State Court lawsuit for breach of contract, breach of covenants of good faith and fair dealing, and bad faith.

In response, our partners, Tom Rollins and Vince Velardo, petitioned the Court to remove the case to the United States District Court for the District of Utah and moved to dismiss Plaintiff’s claims for lack of coverage pursuant to the A&B exclusion. The District Court agreed with our Defense that Plaintiff’s claim “fell squarely within the A&B exclusion,” and granted our partners’ Motion to Dismiss. Plaintiff timely appealed to the United States Court of Appeals for the Tenth Circuit.

During the hearing in the Appellate Court, Tom Rollins and Vince Velardo proved that the nightclub’s policy’s A&B exclusion unambiguously denies coverage for claims arising out of an assault or battery. Our partners also proved that the A&B exclusion’s “whether caused by” clause does not limit the exclusion to assaults and batteries committed only by the nightclub’s employees.

In July 2024, the Appellate Court affirmed the District Court’s decision and granted our Defense’s Motion to Dismiss in favor of our insurance client.

Tom Rollins handles every aspect of his litigation practice while defending clients against personal injury, construction defect and malpractice cases. He also has experience presenting oral arguments before the Utah State Court of Appeals.

Vince Velardo focuses his practice on insurance coverage involving first-party property, third-party liability and bad faith claims, as well as contract litigation and unfair competition. He also provides counsel on premises liability trademark disputes and civil rights matters.