Washington Court: Firearms Exclusion Excludes Coverage For Pre-Shooting Negligence And Shooting Claims

In Capitol Specialty Insurance v. JBC Entertainment Holdings, Inc., et al., No. 68129-0-I, 2012 Wash. App. LEXIS 2835 (Ct. App. Dec. 10, 2012), the Washington Court of Appeals held a firearms exclusion in a commercial general liability (CGL) policy unambiguously excludes coverage for all claims arising from a nightclub shooting regardless of who used the firearm, including those claims characterized as pre-shooting negligence. The court distinguished the holding from those claims where there are allegations of post-shooting acts that lead to further injury or harm to the claimant.

Policy and Firearms Exclusion at Issue

Capitol Specialty Insurance Corporation (Capitol) issued a CGL insurance policy to JBC Entertainment Holdings, Inc. (JBC) that provided "[w]e will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies." The policy contained a firearms exclusion at issue in the case, which excluded from coverage "'[b]odily injury' or 'property damage' that arises out of, relates to, is based upon, or attributable to the use of a firearm(s)."

Underlying Facts and Complaint

JBC operated Jillian's nightclub in Seattle. On March 21, 2010, an unidentified person at Jillian's fired a gun, injuring a patron. Following this incident, the patron filed a complaint against JBC, JBC employee Michael Knudsen, JBC owners Gemini Investors (Gemini) and Alpha Capital Partners, Ltd. (Alpha), and non-employee event promoter Marquis Holmes. The complaint included causes of action for negligent hiring, training and supervision and negligent failure to provide adequate security. All of the claims related to the shooting incident itself, and none related to alleged negligence after the shooting. Capitol agreed to defend JBC, Alpha, Gemini and Knudsen subject to a reservation of rights.

Coverage Action

Capitol filed a declaratory judgment action to determine whether the policy covered the patron's claims. Capitol moved for summary judgment, arguing the firearms exclusion directly applied to all claims "[r]egardless of the 'dressing up' of the shooting into different negligence theories." The trial court granted Capitol's motion for summary judgment, and JBC, Alpha, and Gemini (collectively JBC) appealed.

Firearms Exclusion Unambiguously Excluded Coverage

The Washington Court of Appeals affirmed the trial court and held the firearms exclusion unambiguously excludes...