Courts May Never Assume They Must Deal in Facts
Barry Zalma
Oct 24, 2023
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Break the Word “Assume” Into its Component Parts
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Grange Insurance Company (“Grange”) issued two insurance policies for insureds called Roosters – a Business Owners’ Policy (“BOP”), and a Commercial Umbrella Policy (“CUP”). All agree the BOP provides coverage. The BOP specifically covered liquor liability the CUP specifically excluded liquor Liability.
In Grange Insurance Company v. Georgetown Chicken Coop, LLC; Anthony Crish; Chad Givens; Cock-A-Doodle-Doo, LLC; Preston Restaurant “A,” LLC; and Robert Gauthier all aka “Roosters”, No. 2022-CA-0101-MR, Court of Appeals of Kentucky (October 20, 2023) the Court of Appeal read the full CUP and ruled on its unambiguous language.
FACTUAL BACKGROUND
On the night of January 5, 2019, Joey Lee Bailey (“Bailey”), was served and consumed alcohol at Roosters in Georgetown. During the early morning hours of January 6, 2019, Bailey was driving the wrong direction on Interstate 75. Bailey’s truck hit a vehicle carrying the five-member Abbas family. All six people were killed.
The estates sued. Grange sought a legal determination concerning their insurance coverage under the CUP. It lost and Grange appealed.
ANALYSIS
Courts may not rewrite the plain language of a policy examined as a whole.
The circuit court’s said: “There is no purpose for an umbrella policy if not to supplement the underlying policy if exhausted.” What it ignored was that the purpose is only to supplement underlying policy coverages that the insurer agreed to supplement.
The Court of Appeal was unable to find authority for the proposition that an umbrella cannot exclude additional coverage for certain claims covered by a primary policy.
Courts are not in the business of assumptions. Rather, a court must apply facts to the law.
The Court of Appeal reversed the trial court.
ZALMA OPINION
Whenever an insured or a court assumes facts or coverages exist without applying the actual language of the policy they must break the word “assume” into its component parts and Roosters and the trial court’s assumption of coverage made an ass out of the insured and the circuit court. Although few actually read an insurance policy that is no excuse for any insured who did not pay someone to read it for them if they were unable to do it personally. The Court of Appeal had no choice, it read the policy and applied it as written.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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The Source for the Insurance Fraud Professional
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Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf
Zalma’s Insurance Fraud Letter – June 1, 2025
See the full video at https://lnkd.in/gw-Hgww9 and at https://lnkd.in/gF8QAq4d, and at https://zalma.com/blog plus more than 5050 posts.
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at ...
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ZIFL Volume 29, Issue 10
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See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
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