Supreme Court: Big Daddy's insurance not required to cover damages in OWI crash

·3 min read

Jun. 16—The Indiana Supreme Court has ruled the insurance provider for Big Daddy's Show club is not required to cover damages to a Kokomo family after the strip club served alcohol to an intoxicated man who later caused a car crash.

William Spence was drinking at the strip club and was visibly intoxicated on July 5, 2015, according to court records. Spence got into an altercation, and a bouncer at the club removed him from the premises.

In the parking lot, the bouncer, who was volunteering at the club, insisted that Spence leave and threatened violence if he didn't.

Spence got into his truck and drove away. Shortly afterward, he struck a car on Davis Road occupied by members of the Ebert family. The crash caused two young girls to suffer broken bones and cuts, as well as bleeding in their father's brain.

Spence pleaded guilty to four felony charges and five misdemeanor charges related to the incident and was handed a 10-year prison sentence.

Later, in an effort to secure financial restitution for damages, the family sued Big Daddy's, asserting the business was liable for the crash in part because it forced Spence to leave knowing he was intoxicated.

However, the club's insurance company, Illinois Casualty Company, said it wasn't liable to cover damages.

The company's policy stated it excluded covering incidents in which bodily injury or property damage was caused due to the club "causing or contributing to the intoxication of any person."

The insurance company filed for summary judgement, saying their policy clearly stated that kind of incident was excluded from their coverage.

Howard Superior Court Judge Brant Parry agreed and ruled the company wasn't liable to cover claims arising directly or indirectly from the incident.

"Without Mr. Spence being intoxicated, there would be no lawsuit," Parry said in his ruling. "The cause of the injuries suffered by the Eberts was William Spence operating a vehicle while intoxicated."

The Eberts and Big Daddy's appealed the decision, both arguing the insurance company was liable to pay for damages, and Parry was wrong to issue a summary judgement.

The Indiana Court of Appeals in September agreed with the family and the club, saying the insurance company had to pay for damages because the policy didn't cover instances in which the patron may have arrived at the club already intoxicated.

"If Illinois Casualty wished to exclude coverage for any and all claims arising from intoxication generally or from intoxicated patrons, then it would have drafted a contract that said so," the court said.

The insurance company requested the case be transferred to the Indiana Supreme Court for a final ruling. They argued in part that the appeals court's decision "drastically rewrites and expands the scope of insurers' duties to defend in Indiana, which is a dramatic and impermissible departure from Indiana law."

On Thursday, the Indiana Supreme court agreed and upheld Parry's initial ruling. The court said the insurance policy clearly and unambiguously states that it won't cover or indemnify incidents in which damages were caused due to the club contributing to the intoxication of a person.

"We find that the efficient and predominant cause of the Eberts' injuries was drunk driving precipitated by the negligent service of alcohol," the court said in its ruling. "... The policy excludes the Eberts' claims from its coverage."

Carson Gerber can be reached at 765-854-6739, or on Twitter @carsongerber1.