United States District Court, D. Massachusetts
Capitol Specialty Insurance Corporation, Plaintiff, Counter
Defendant: Brian R. Biggie, PRO HAC VICE, Goldberg Segalla
LLP, Buffalo, NY; Peter J. Barrett, Suzanne M. Whitehead,
Zelle McDonough & Cohen LLP, Boston, MA.
Entertainment of Worcester, Inc., doing business as
Centerforlds II, Defendant: Meaghan L. Pomeroy, LEAD
ATTORNEY, Hanover, MA; John P. Donohue, Fuller, Rosenberg,
Palmer & Beliveau, Worcester, MA.
Kailee Higgins, Defendant, Counter Claimant: John P. Donohue,
LEAD ATTORNEY, Peter A. Palmer, Fuller, Rosenberg, Palmer &
Beliveau, Worcester, MA.
Kailee Higgins, Counter Claimant: John P. Donohue, LEAD
ATTORNEY, Fuller, Rosenberg, Palmer & Beliveau, Worcester,
Entertainment of Worcester, Inc., Counter Claimant: John P.
Donohue, Fuller, Rosenberg, Palmer & Beliveau, Worcester, MA.
Capitol Specialty Insurance Corporation, Counter Defendant:
Brian R. Biggie, Goldberg Segalla LLP, Buffalo, NY; Peter J.
Barrett, Suzanne M. Whitehead, Zelle McDonough & Cohen LLP,
AND ORDER ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
(Docket No. 22) and DEFENDANT'S CROSS-MOTION FOR SUMMARY
JUDGMENT (Docket No. 27)
S. HILLMAN, DISTRICT JUDGE.
Capitol Specialty Insurance Corporation (" Capitol
Specialty" ) seeks declarations regarding its
obligations under an insurance policy issued to Defendant PJD
Entertainment, d/b/a Centerfolds II (" Centerfolds"
). This action arises out of an underlying personal injury
lawsuit in Massachusetts Superior Court brought by Defendant
Kailee Higgins (" Higgins" ) against Centerfolds.
Capitol Specialty asserts that it is not obligated to defend
and indemnify Centerfolds under the terms of the insurance
policy. Centerfolds has filed counterclaims against Capitol
Specialty for violations of M.G.L. c. 93A and 176D. The
parties have cross-moved for summary judgment on two of
Capitol Specialty's declaratory judgment claims. For the
following reasons, Capitol Specialty's motion for summary
judgment (Docket No. 22) is granted and
Defendants' cross-motion for summary judgment (Docket No.
27) is denied.
Higgins filed the underlying tort action in Massachusetts
Superior Court in May 2013, asserting claims against
Centerfolds for negligence and gross negligence. The state
court complaint alleged that Higgins was working as a dancer
at Centerfolds when management and staff served and
encouraged her to consume excessive amounts of alcohol.
See State Court Compl., Docket No. 25-1, ¶ 6.
Higgins, then only twenty years old, became intoxicated and
was obviously impaired when an employee of Centerfolds
escorted Higgins to her vehicle. Id. at ¶
¶ 7-9. Higgins drove away and, as a consequence of her
intoxication, was involved in a violent motor vehicle
accident. Id. at ¶ ¶ 11-13. She suffered
severe injuries due to Centerfolds' service of alcohol
and failure to take reasonable precautions to prevent her
from driving. Id. at ¶ ¶ 6-16.
and Centerfolds have now resolved the state court action by
way of an agreement for judgment in favor of Higgins in the
amount of $7.5 million. Under the terms of the settlement,
Higgins has agreed to hold Centerfolds harmless for all but
$50,000 of the judgment. In return, Centerfolds has assigned
all rights and claims it has against Capitol Specialty to
Higgins. Higgins now seeks to collect on the judgment under
the insurance policy issued to Centerfolds by Capitol
time of the accident, Centerfolds was insured under a policy
that provided two distinct coverages relevant to this
dispute. The first coverage is contained in the " Liquor
Liability Coverage Form" and provides up to $300,000 for
losses sustained " by reason of the selling, serving or
furnishing of any alcoholic beverage." See
Liquor Liability Coverage Form, Docket No. 26-1, at 80.
Capitol Specialty does not dispute that it is obligated to
defend and indemnify Centerfolds under this provision. The
second coverage is set forth in the " Commercial General
Liability Coverage Form" (" CGL Coverage Form"
), and provides up to $1 million in coverage. See
CGL Coverage Form, ...