Two pedestrians, injured outside a pub by an automobile operator who was allegedly intoxicated, sued the driver and the pub where he had been drinking. They stressed that the pub had violated the Pennsylvania Dram Shop Act by serving alcohol to a visibly intoxicated person.

When the pub made claim under its general liability insurance, the insurer brought a declaratory judgment action for a determination that it did not have a duty to defend or indemnify its insured. It contended that it did not have a defense duty because of the familiar liquor liability exclusion in the policy.

The insured asserted that the claims of the injured persons were founded in negligence rather than the dram shop act. It argued that the liquor liability exclusion was ambiguous when considered with the automobile exclusion in the policy. In pertinent part, that exclusion was qualified to not apply to "....the parking of an automobile on insured premises if such automobile is not owned by or rented or loaned to any insured."

The court stated that the duty of the insured to the injured persons derived solely from its sale of alcoholic beverages to the car driver. The liquor liability exclusion in the policy specifically addressed such activity. "The policy clearly and unambiguously excludes coverage of the instant claims."

The insurer's motion for summary judgment was granted. It did not have a duty to defend or indemnify the insured. (THOSE CERTAIN UNDERWRITERS AND INSURERS SUBSCRIBING TO LLOYD'S POLICY NO. SP3/7131, Plaintiffs v. 6091 FRANKFORD AVENUE, INCORPORATED ET AL., Defendants. United States District Court for the Eastern District of Pennsylvania. No. 96-4733. January 16, 1997. CCH 1997 Fire and Casualty Cases, Paragraph 5948.)