469_C284

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DOES POLICY COVER HOST WHO SERVED MINORS?

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Homeowners	Occurrence
Vicarious Liability	Liquor Liability

On August 6, 2006, Morgan Brown, Joshua Tucker, Matthew Humphreys and Courtney McDonough were involved in a serious automobile accident. The four individuals, who were under age, were traveling together after attending a party at the residence of Jeff Corra. The vehicle was driven by McDonough, then age 19, who had been drinking at the party. Tucker and Humphreys were killed, and Brown was seriously injured. Corra had been present during the party, to which guests had been invited by his daughter. Corra was convicted on four counts of knowingly providing alcohol to underage persons.

Corra had a homeowners policy issued by American Modern Home Insurance Company. Brown and the estates of Tucker and Humphreys notified Corra that they intended to bring claims under the policy. American Modern Home filed an action seeking a declaratory judgment that Brown, Tucker and Humphreys’ injuries were not covered under the policy and that the insurer had no duty to defend or indemnify Corra.

The American Modern Home policy provided coverage for an “occurrence,” which was defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in: a. bodily injury; or b. property damage.”

The lower court asked the Supreme Court of Appeals of West Virginia to certify the question of whether knowingly permitting an underage adult to consume alcoholic beverages on a homeowner’s property constituted an “occurrence” within the meaning of the policy. The court agreed to certify and answer the question. It found that conduct engaged in knowingly was not an “accident” and thus not an “occurrence” within the meaning of the policy. The court noted that the criminal conviction for knowingly providing alcohol to minors was immaterial to its decision. According to the court, the key question was whether Corra knowingly permitted underage individuals to consume alcohol on his property. The court concluded that, under West Virginia law, knowingly permitting an underage adult to consume alcoholic beverages on a homeowner’s property did not constitute an “occurrence” within the meaning of the American Modern Home homeowners policy.

The certified question was answered.

American Modern Home Insurance Company vs. Corra-No. 33861-Supreme Court of Appeals of West Virginia-December 15, 2008-67