Northfield Insurance Company v. M. Wadd Corporation et al

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF PENNSYLVANIA
NORTHFIELD INSURANCE
COMPANY,
Plaintiff,
v.
M. WADD CORPORATION, et al.,
Defendants.
CIVIL ACTION NO. 3:24-CV-01210
(MEHALCHICK, J.)
MEMORANDUM
Plaintiff Northfield Insurance Company (“Northfield”) initiated this action on July 22,
2024, by filing a complaint against Defendants M. Wadd Corporation d/b/a the Hayloft
Tavern and Grill (the “Hayloft”), Mark C. Waddington (“Mr. Waddington”), Marry Anne
Waddington (“Mrs. Waddington”), Reed Shave (“Shave”), Gary Edward Engstrom
(“Engstrom”) and Paige Lynn Scully (“Scully”) (collectively, “Defendants”). (Doc. 1).
Northfield also named interested party Corrine N. Rodriguez (“Rodriguez”) as administratrix
of the Estate of Abree Arlene Engstrom (the “Decedent”). (Doc. 1). Before the Court are
Northfield and the Hayloft’s motions for summary judgment. (Doc. 27; Doc. 32). For the
following reasons, Northfield’s motion will be granted, and the Hayloft’s motion will be
denied.
I. BACKGROUND AND PROCEDURAL HISTORY
The following background is taken from the parties’ joint stipulation of undisputed
facts. (Doc. 28). The Hayloft is a Pennsylvania business located in Lawton, Pennsylvania.
(Doc. 28, ¶¶ 2, 10). Northfield is an Iowa insurance company which insured the Hayloft under
policy WS410910 (the “Policy”). (Doc. 28, ¶¶ 1, 6). Scully is an individual residing in
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Scranton, Pennsylvania. (Doc. 28, ¶ 3). On April 9, 2024, Rodriguez filed an action, both
individually and as administratrix of the estate of the Decedent, in the Lackawanna Court of
Common Pleas (the “Underlying Action”). (Doc. 28, ¶ 8). In the state court complaint (the
“Underlying Complaint”), Rodriguez alleges that the Hayloft overserved Scully alcoholic
beverages. (Doc. 1-3, ¶ 3). Rodriguez further alleges that the Decedent, Scully’s four-year-old
daughter, was also a patron of the Hayloft, and the Hayloft permitted Scully to leave the
establishment with the Decedent. (Doc. 1-3, ¶¶ 2, 4-5). According to the Underlying
Complaint, because of the Hayloft overserving Scully, Scully was in a car accident while
driving the Decedent and this accident resulted in the Descendant’s death. (Doc. 1-3, at 1-5;
Doc. 28, ¶¶ 12, 14). The car accident occurred approximately one mile from the Hayloft. (Doc.
28, ¶ 13).
In September 2022, the Hayloft sent Northfield a notice of claim presented by the
estate of the Decedent under the Policy. (Doc. 28, ¶ 15). On or about September 15, 2022,
Northfield issued a letter to the Hayloft and Mrs. Waddington disclaiming coverage under
the Policy for claims asserted by the Decedent’s estate. (Doc. 28, ¶ 16). Subject to a full
reservation of rights, including its position that the Policy does not provide coverage for the
allegations asserted in the Underlying Complaint, Northfield has provided and continues to
provide courtesy defense to the Hayloft, Mr. Waddington, Mrs. Waddington, and Shave in
the Underlying Action. (Doc. 28, ¶ 18).
On November 3, 2025, Northfield filed a complaint seeking declaratory relief declaring
that it is not required to defend or indemnify Defendants in the Underlying Action under the
Policy. (Doc. 1). Defendants filed counterclaims requesting declaratory relief declaring that
Northfield has an obligation to defend Defendants in the Underlying Action under the Policy.
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(Doc. 16; Doc. 17; Doc. 19; Doc. 20). On August 1, 2025, Northfield filed a motion for
summary judgment along with a brief in support. (Doc. 27; Doc. 29). Also on August 1, 2025,
the parties filed a stipulation as to the relevant facts in this matter. (Doc. 28). On September
5, 2025, the Hayloft filed a motion for summary judgment on its crossclaim along with a brief
in support which both responded to Northfield’s motion and supported the Hayloft’s motion.
(Doc. 32; Doc. 33). On February 11, 2026, Northfield filed a brief in opposition to the
Hayloft’s motion. (Doc. 40). On February 24, 2026, the Hayloft filed a reply brief. (Doc. 42).
II. LEGAL STANDARD
Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment should be
granted only if “there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is “material” only if it might
affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A
dispute of material fact is “genuine” if the evidence “is such that a reasonable jury could return
a verdict for the non-moving party.” Anderson, 477 U.S. at 248. In deciding a summary
judgment motion, all inferences “should be drawn in the light most favorable to the non-
moving party, and where the non-moving party’s evidence contradicts the movant’s, then the
non-movant’s must be taken as true.” Pastore v. Bell Tel. Co. of Pa., 24 F.3d 508, 512 (3d Cir.
1994). However, a party opposing a summary judgment motion must comply with Local Rule
56.1, which specifically directs the oppositional party to submit a “statement of the material
facts, responding to the numbered paragraphs set forth in the statement required [to be filed
by the movant], as to which it is contended that there exists a genuine issue to be tried”; if the
nonmovant fails to do so, “[a]ll material facts set forth in the statement required to be served
by the moving party will be deemed to be admitted.” See M.D. Pa. L.R. 56.1.
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A federal court should grant summary judgment “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir. 2000).
In deciding a motion for summary judgment, the court’s function is not to make credibility
determinations, weigh evidence, or draw inferences from the facts. Anderson, 477 U.S. at 249.
Rather, the court must simply “determine whether there is a genuine issue for trial.” Anderson,
477 U.S. at 249.
The party seeking summary judgment “bears the initial responsibility of informing the
district court of the basis for its motion,” and demonstrating the absence of a genuine dispute
of any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant makes
such a showing, the non-movant must go beyond the pleadings with affidavits or declarations,
answers to interrogatories, or the like, to demonstrate specific material facts which give rise
to a genuine issue. Fed. R. Civ. P. 56(c); Celotex, 477 U.S. at 324. The non-movant must
produce evidence to show the existence of every element essential to its case, which it bears
the burden of proving at trial, because “a complete failure of proof concerning an essential
element of the nonmoving party’s case necessarily renders all other facts immaterial.” Celotex,
477 U.S. at 323. Furthermore, mere conclusory allegations and self-serving testimony,
whether made in the complaint or a sworn statement, cannot be used to obtain or avoid
summary judgment when uncorroborated and contradicted by other evidence of record. See
Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888 (1990); see also Thomas v. Delaware State Univ.,
626 F. App’x 384, 389 n.6 (3d Cir. 2015) (nonprecedential) (“[U]nsupported deposition
testimony, which is contradicted by the record, is insufficient to defeat summary judgment”);
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Nat’l Labor Rel. Bd. v. FES, 301 F.3d 83, 95 (3d Cir. 2002) (“[The plaintiff’s] testimony. . .
amounts to an unsupported, conclusory assertion, which we have held is inadequate to satisfy
the movant’s burden of proof on summary judgment”).
III. DISCUSSION
Northfield and the Hayloft stipulated to the relevant facts in this matter and Northfield
and Hayloft both move for summary judgment regarding whether the Policy does or does not
provide coverage for Defendants. (Doc. 28; Doc. 27; Doc. 32). According to Northfield, the
Underlying Action is outside of the scope of the Policy because the Policy clearly and
unambiguously limits coverage to bodily injury and property damage which occurs on the
Hayloft’s premises and excludes liability for bodily injury or property damages caused by
overserving alcohol. (Doc. 29, at 15-26). Northfield avers that it is entitled to summary
judgment because the relevant accident occurred approximately one mile from the Hayloft
and involves the alleged overserving of alcohol. (Doc. 29, at 15-26). The Hayloft counters that
the provision limiting coverage to liability for bodily injury which occurs on the Hayloft’s
premises is ambiguous and the Court must side with the insured where a policy is ambiguous.
(Doc. 33, at 13-19). The Hayloft further argues that the Policy’s alcohol exemption does not
cover the Underlying Action because parts of the Underlying Complaint are not related to the
overserving of alcohol. (Doc. 33, at 19-26).
Under Pennsylvania law, insurance policy contracts create both a duty for the insurer
to defend the insured and a duty to indemnify the insured. See Post v. St. Paul Travelers Ins. Co.,
691 F.3d 500, 517 (3d Cir. 2012) (discussing the distinctions between the duty to defend and
the duty to indemnify). “[A]n insurer's duty to defend is broader than its duty to indemnify.”
Post, 691 F.3d at 517. The insurer has a duty to defend the insured against an underlying
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action where “‘the factual allegations of the complaint on its face encompass an injury that is
actually or potentially within the scope of the policy.” Am. & Foreign Ins. Co., 606 Pa. at 609
(emphasis added). By contrast, an insurer only has a duty to indemnify where the insurance
policy “‘actually covers a claimed incident.’” State Farm Fire & Cas. Co. v. DeCoster, 67 A.3d 40,
46 (Pa. Super. Ct. 2013) (emphasis in original) (quoting Am. States Ins. Co. v. State Auto Ins.
Co., 721 A.2d 56, 63 (Pa. Super. Ct. 1998)). The question of whether an insurer has a duty to
indemnify is generally not ripe until after the insured is held liable in an underlying action,
but “a duty to indemnify cannot exist without a duty to defend.” Permanent Gen. Ins. Corp. of
Ohio v. McDevitt, 612 F. Supp. 3d 422, 426 (E.D. Pa. 2020). Although the duties to defend and
indemnify are distinct, courts evaluate both by interpreting the relevant insurance policy. See
Am. & Foreign Ins. Co., Inc., 606 Pa. at 609.
“[T]he interpretation of the scope of coverage of an insurance contract is a question of
law properly decided by the court.” Med. Protective Co. v. Watkins, 198 F.3d 100, 103 (3d Cir.
1999); see Beazley Underwriting, LTD v. Max & Mia Reality, LLC, 792 F. Supp. 3d 543, 548 (M.D.
Pa. 2025). To determine whether an insurance policy covers an underlying action, the Court
must compare “the four corners of the insurance contract to the four corners of the
[underlying] complaint.” Am. & Foreign Ins. Co., 606 Pa. at 609; see See Post, 691 F.3d at 517.
The Court must assume that the allegations in the underlying complaint are true when
comparing the complaint to the insurance policy. See Post, 691 F.3d at 517.
“In interpreting an insurance policy, a court must ascertain the intent of the parties as
manifested by the language of the written agreement.” Stevens Painton Corp. v. First State Ins.
Co., 746 A.2d 649, 657 (Pa. Super. Ct. 2000). Where “the language of the contract is clear and
unambiguous, a court is required to give effect to that language.” Standard Venetian Blind Co.
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v. Am. Empire Ins. Co., 503 Pa. 300, 305 (1983); see Beazley Underwriting, LTD, 792 F. Supp. 3d
at 548 (stating “the court must enforce the plain language of the policy if its terms are clear
and unambiguous”). However, “[w]here a provision of a policy is ambiguous, the policy
provision is to be construed in favor of the insured and against the insurer, the drafter of the
agreement.” Standard Venetian Blind Co., 503 Pa. at 305; see Beazley Underwriting, LTD, 792 F.
Supp. 3d at 548. “Courts interpret coverage clauses broadly ‘to afford the greatest possible
protection to the insured,’ and, accordingly, they interpret exceptions to an insurer’s general
liability narrowly against the insurer.” Verticalnet, Inc. v. U.S. Specialty Ins. Co., 492 F. Supp.
2d 452, 456 (E.D. Pa. 2007) (quoting Westport Ins. Corp. v. Bayer, 284 F.3d 489, 498 (3d Cir.
2002)); see Beazley Underwriting, LTD, 792 F. Supp. 3d at 548. Where a policy includes an
exemption to coverage, the insurance company bears the burden of showing the exemption
applies. See Empire Fire & Marine Ins. Co. v. Jones, 739 F. Supp. 2d 746, 762 (M.D. Pa. 2010).
The Policy here provides:
1. Insuring Agreement.
a. [Northfield] will pay those sums that the insured becomes legally
obligated to pay as damages because of “bodily injury” or “property
damage” to which this insurance applies. [Northfield] will have the right
and duty to defend the insured against any “suit” seeking those damages.
However, [Northfield] will have no duty to defend the insured against any
“suit” seeking damages for “bodily injury” or “property damage” to which
this insurance does not apply . . .
b. This insurance applies to “bodily injury” and “property damage” only
if:
(1) The “bodily injury” or “property damage” is caused by an
“occurrence” that takes place in the “coverage territory”;
(2) The “bodily injury” or “property damage” occurs during the policy
period; and
(3) Prior to the policy period, no insured . . . and no “employee”
authorized by [the Hayloft] to give or receive notice of an “occurrence”
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or claim, knew that the “bodily injury” or “property damage” had
occurred, in whole or in part . . .
(Doc. 33-1, at 20).
Under the Policy’s definitions, Coverage Territory includes “[t]he United States of
America (including its territories and possessions), Puerto Rico, and Canada.” (Doc. 33-1, at
31). The Policy also contains an endorsement entitled “LIMITATION OF COVERAGE TO
DESIGNATED PREMISES, PROJECT OR OPERATION” (the “Premises Endorsement”).
(Doc. 33-1, at 67). The top of the Premises Endorsement reads “THIS ENDOREMENT
CHANGES THE POLICY. PLEASE READ IT CAREFULLY.” (Doc. 33-1, at 67) The
Premises Endorsement provides:
1. Paragraph 1.b. under Section 1 - Coverage A - Bodily Injury And Property
Damage Liability is replaced by the following:
b. This insurance applies to “bodily injury” and “property damage” caused
by an “occurrence” that takes place in the “coverage territory” only if:
(1) The “bodily injury” or “property damage”:
(a) Occurs on the premises shown in the Schedule or the grounds and
structures appurtenant to those premises; or
(b) Arises out of the project or operation shown in the Schedule;
(2) The “bodily injury” or “property damage” occurs during the policy
period; and
(3) Prior to the policy period, no insured . . . and no “employee”
authorized by [the Hayloft] to give or receive notice of an “occurrence”
or claim, knew that the “bodily injury” or “property damage” had
occurred, in whole or in part . . .
(Doc. 33-1, at 67).
The Premises Endorsement also modifies the Schedule to state that premises is defined
as “All Covered Locations as Scheduled on the Declarations” and states “Project or
Operation: Not Applicable.” (Doc. 33-1, at 67). The Policy’s “Commercial General Liability
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Coverage Part Declarations” contain a section entitled “Address of All Premises” which only
lists 10774 State Route 267, Lawton, Pennsylvania, 18828. (Doc. 33-1, at 18). The Policy also
has another endorsement entitled “EXCLUSION - LIQUOR - ABSOLUTE” (the “Liquor
Endorsement”). (Doc. 33-1, at 73). The Liquor Endorsement adds an exclusion to the Policy
for the following liability:
c. Liquor Liability
“Bodily injury” or “property damage” for which any insured may be held
liable by reason of:
(1) Causing or contributing to the intoxication of any person, including
causing or contributing to the intoxication of any person because alcoholic
beverages were permitted to be brought on your premises for consumption
on your premises;
(2) The furnishing of alcoholic beverages to a person under the legal
drinking age or under the influence of alcohol; or
(3) Any statute, ordinance or regulation relating to the sale, gift,
distribution or use of alcoholic beverages.
(Doc. 33-1, at 73).
The Underlying Complaint alleges that on November 18, 2020, Scully crashed her car
in the 5900 Block of State Route 367, Lawton, Pennsylvania, while driving home from the
Hayloft. (Doc. 1-3, ¶ 1). This crash resulted in the Decedent’s death. (Doc. 1-3, ¶ 1). According
to the Underlying Complaint, prior to the accident, the Hayloft, a restaurant, by and through
its employees, overserved Scully alcoholic beverages while she and the Decedent were
business invitees at the Hayloft and while Scully was visibly intoxicated. (Doc. 1-3, ¶¶ 30-35).
The Underlying Complaint alleges that Defendants are liable for negligence, premises liability,
negligent training and supervision, permitting improper persons to engage in activities, failure
to protect, and negligent entrustment. (Doc. 1-3, ¶¶ 112-96, 204-13). The Underlying
Complaint also brings a survival action. (Doc. 1-3, ¶¶ 197-203).
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The parties agree that the car accident occurred approximately one mile away from
the Hayloft, but dispute whether the Policy would cover bodily injury a mile outside of the
Hayloft’s premises. (Doc. 28, ¶ 13; Doc. 29, at 16-20; Doc. 33, at 14-19). According to
Northfield, the Premises Endorsement unambiguously modifies the Policy so that it only
applies to bodily injuries or property damage which occurs on the Hayloft’s premises. (Doc.
29, at 16-20). The Hayloft argues, relying on caselaw from Florida federal courts, that the
Policy is a general liability policy which covers all liability for bodily injuries occurring in
North America, and the Premises Endorsement does not “clearly and unequivocally convert
the commercial general liability policy into a premises liability policy.” (Doc. 33, at 14-19).
The Hayloft further avers that the Policy’s Schedule is ambiguous as to what the Hayloft’s
premises are. (Doc. 33, at 17).
The Court agrees with Northfield that the Premises Endorsement limits liability to the
Hayloft’s premises. (Doc. 29, at 16-20). Under Pennsylvania law, an endorsement is an
enforceable part of an insurance policy that modifies the terms of the policy so long as the
Court can ascertain, based on the text of the endorsement, that the parties intended to change
the terms of the policy. See Tuscarora Wayne Mut. Ins. Co. v. Kadlubosky, 889 A.2d 557, 561 (Pa.
Super. Ct. 2005) (finding that an endorsement limited liability to the insured’s premises); see
also Whole Enchilada, Inc. v. Travelers Prop. Cas. Co. of Am., 581 F. Supp. 2d 677, 692 (W.D. Pa.
2008) (stating “[u]nder Pennsylvania law, an endorsement ‘will be considered part of the
insurance contract if it appears that the parties intended that is should be so considered’”
(quoting Young v. U. S. Fid. & Guar. Co., 445 A.2d 542, 544 (Pa. Super. Ct. 1982)). “[T]he
Court must read the endorsement as part of the contract between the parties. When there is a
conflict between the terms of the policy and the endorsement, the endorsement will prevail.”
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Whole Enchilada, Inc., 581 F. Supp. 2d at 693 (citations omitted); see also St. Paul Fire & Marine
Ins. Co. v. U.S. Fire Ins. Co., 655 F.2d 521, 524 (3d Cir. 1981) (noting that an endorsement
prevails where it conflicts with the body of the policy); see also U.S. Fire Ins. Co. v. Kelman
Bottles, 538 F. App’x 175, 180 (3d Cir. 2013) (nonprecedential) (noting the same).
The plain text of the Premises Endorsement clearly shows that the parties intended to
change the terms of the Policy because it states in large capital letters that “THIS
ENDORSMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.” (Doc.
33-1, at 67); see Whole Enchilada, Inc., 581 F. Supp. 2d at 692 (finding that an endorsement is
clearly intended to change an insurance policy where it unambiguously stated as much). The
Premises Endorsement further states that it changes the Policy so that coverage only applies
to bodily injury that “[o]ccurs on the premises shown in the Schedule or the grounds and
structures appurtenant to those premises” or that “arises out of the project or operation shown
in the schedule.” (Doc. 33-1, at 67). The Premises Endorsement’s modification to the
Schedule indicates that there is no project or operation covered by the Policy and the only
premises listed in the Policy’s Declarations is the Hayloft’s location at 10774 State Route 267,
Lawton, Pennsylvania, 18828. (Doc. 33-1, at 18, 67). Courts applying Pennsylvania law have
enforced similar clauses limiting liability to a designated premises. See Tuscarora Wayne Mut.
Ins. Co., 889 A.2d at 561 (finding that an endorsement stating “[t]his insurance applies only
to ‘bodily injury,’ ‘property damage,’ ‘personal injury,’ ‘advertising injury’ and medical
expenses arising out of . . .[t]he ownership, maintenance or use of the premises shown in the
Schedule” excluded coverage for bodily injury which occurred away from the designated
premises); see also Foremost Ins. Co. v. Steele, No. 3:24-CV-00684, 2025 WL 1689403, at *3
(M.D. Pa. June 16, 2025) (finding a policy “extend[ed] coverage only to . . . that occurs on
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premises listed on the policy's Declarations page” because the policy stated that it would only
cover “damages because of bodily injury or property damage, caused by an accident on your
premises”); see also Foremost Ins. Agency, Grand Rapids, Michigan v. Himmel, No. 1:09-CV-2575,
2012 WL 13001585, at *6 (M.D. Pa. June 1, 2012) (finding that a policy only applied to a
designated premises because the policy stated “WE'LL pay up to the Limit of Liability all
sums YOU legally must pay as damages because of bodily injury or property damage caused
by an accident and occurring on YOUR premises as described in the Schedule” and noting
that the policy only described one premises). Accordingly, the Court agrees with Northfield
that the Policy only applies to bodily injury which occurred at the Hayloft and does not cover
the car accident described in the Underlying Complaint which occurred approximately one
mile away from the Hayloft. (Doc. 28, ¶ 13); see Tuscarora Wayne Mut. Ins. Co., 889 A.2d at
561; see also Steele, 2025 WL 1689403, at *3; see also Himmel, 2012 WL 13001585, at *6.
In opposition, the Hayloft argues that whether the Policy is limited to premises liability
is ambiguous because while the Premises Endorsement appears to limit liability, the body of
the Policy repeatedly indicates that the policy is intended to provide general liability insurance
for the risks associated with running a restaurant. (Doc. 33, at 14-19). However, these
contradictions do not render the Policy ambiguous. Under Pennsylvania law, where an
endorsement, like the Premises Endorsement, clearly indicates that the parties intended to
modify a policy, the endorsement’s language applies instead any contradictory language from
the policy’s body.1 See Whole Enchilada, Inc., 581 F. Supp. 2d at 693; see also St. Paul Fire &
1 The Florida law the Hayloft relies on is contradictory to Pennsylvania law, and thus
inapplicable. (Doc. 33, at 14-19). The Hayloft relies heavily on Contessa v. White Pine Ins. Co.,
No. 3:23-CV-00487, 2024 WL 4221699 (M.D. Fla. Sept. 16, 2024). (Doc. 33, at 15-19).
Contessa is at odds with Pennsylvania law because in Contessa, the Middle District of Florida
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Marine Ins. Co., 655 F.2d at 524; see also Kelman Bottles, 538 F. App’x at 180. Thus, applying
Pennsylvania law, the Court finds that the Premises Endorsement limits liability to bodily
injuries which occurred at the Hayloft’s physical address at 10774 State Route 267, Lawton,
Pennsylvania, 18828 and does not cover bodily injuries which occurred approximately one
mile away. (Doc. 28, ¶ 13; Doc. 33-1, at 18, 67).
However, even if the Policy was not limited to bodily injury which occurred on the
Hayloft’s premises, the Policy does not cover the Underlying Action because of the Liquor
Endorsement. (Doc. 33-1, at 73). The Liquor Endorsement states that the Policy does not
cover “‘Bodily injury’ . . . for which any insured may be held liable by reason of . . . [c]ausing
or contributing to the intoxication of any person” or “[t]he furnishing of alcoholic beverages
to a person . . . under the influence of alcohol.” (Doc. 33-1, at 73). Courts have found similar
clauses enforceable under Pennsylvania law. See Transportation Ins. Co v. Heathland Hosp. Grp.
LLC, 783 F. App’x 186, 189 (3d Cir. 2019) (nonprecedential) (affirming a district court’s
finding that a clause limiting alcohol-related liability was enforceable); see also State Auto. Mut.
Ins. Co. v. Lucchesi, No. 4:11-CV-0735, 2012 WL 2009355, at *1 (M.D. Pa. June 5, 2012), aff'd,
563 F. App’x 186 (3d Cir. 2014) (enforcing a clause limiting alcohol-related liability).
Where an insurance policy contains a provision limiting liability related to serving
alcohol, the Court must review the underlying complaint to determine if the underlying action
found that the policy in question was ambiguous under Florida law because “the
Endorsement is the policy's only mention of limiting coverage to the premises and contradicts
the references throughout to general liability coverage.” 2024 WL 4221699, at *5. If
Pennsylvania law were applied in Contessa, the court would have applied the language in the
endorsement over the language in the body rather than finding ambiguity due to the
contradictions. See Whole Enchilada, Inc., 581 F. Supp. 2d at 693; see also St. Paul Fire & Marine
Ins. Co., 655 F.2d at 524; see also Kelman Bottles, 538 F. App’x at 180.
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is “inextricably intertwined with the negligent provision of alcohol; where the claims of
negligence are inextricably intertwined with—or not sufficiently independent of—the
provision of alcohol, the liquor liability exclusion will bar coverage.” Lucchesi, 2012 WL
2009355, at *5 (citations and internal quotations omitted) (finding that a provision limiting
coverage in cases involving alcohol prevented coverage for an underlying action where a
plaintiff alleged the bar overserved a patron and allowed him to leave the bar intoxicated after
which he was hit by a car); see also Heathland Hosp. Grp. LLC, 783 F. App’x at 188 (finding that
a provision limiting coverage excluded coverage for an underlying action involving a decedent
whom the defendants allegedly overserved and allowed to get into a car before he crashed).
When making this determination, the Court must consider whether the factual basis for the
claims is inextricably linked to serving alcohol and not how the plaintiff in the underlying
action labels their claims. See Lucchesi, 2012 WL 2009355, at *5 (stating “[i]n determining
whether a liquor liability exclusion applies, the Court must look to the factual averments in
the complaint and may not rely simply on the labels applied to those averments”); see also AIX
Specialty Ins. Co. v. Am. Legion Dep't of Pennsylvania, No. CV 21-2338, 2022 WL 767834, at *10
(E.D. Pa. Mar. 14, 2022) (noting the same and finding that a clause limiting liability regarding
alcohol did not apply because although part of the underlying plaintiff’s claim related to
overserving alcohol, that plaintiff also alleged the defendant was negligent in permitting an
individual to enter a bar with a gun). Where the basis for a claim is a defendant allegedly
overserving alcohol and allowing a clearly intoxicated patron to leave, the liquor exclusion
applies regardless of how the claim is labeled. See Heathland Hosp. Grp. LLC, 783 F. App’x at
188; see also Lucchesi, 2012 WL 2009355, at *5
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The Underlying Complaint is inextricably linked to Defendants allegedly overserving
alcohol because the Underlying Complaint alleges that the Hayloft and its employees were
negligent in overserving Scully despite her being visibly intoxicated and by allowing her to
leave the Hayloft with the Decedent despite Scully being visibly intoxicated. (Doc. 1-3, ¶¶ 30-
35). Courts have found identical language to that found in the Policy to exclude liability for
similar claims. See Heathland Hosp. Grp. LLC, 783 F. App’x at 189 (finding a policy excluded
liability for claims related to overserving a patron alcohol and allowing them to leave visibly
intoxicated); see also Lucchesi, 2012 WL 2009355, at *5 (finding the same). The Hayloft avers
that the Liquor Endorsement does not apply because Count II of the Underlying Action is
entitled “Negligent/Premises Liability” and alleges that Defendants are liable for failing to
prevent the Decedent from leaving with Scully, who was in a “dangerously wild, erratic, and
inebriated condition.” (Doc. 33, at 22-23). The Hayloft cites AIX Specialty Ins. Co. v. Am. Legion
Dep't of Pennsylvania, No. CV 21-2338, 2022 WL 767834, at *10 (E.D. Pa. Mar. 14, 2022) and
Penn-Am. Ins. Co. v. Peccadillos, Inc., 27 A.3d 259, 268 (Pa. Super. Ct. 2011) to argue that while
part of the Underlying Action’s claims involve the overserving of alcohol, Count II is not
inextricably linked from serving alcohol. (Doc. 33, at 19-23). However, both cases are readily
distinguishable. AIX Specialty Ins. Co. involved allegations that a bar was negligent in both
overserving a patron and for not taking away the patron’s gun despite conducting pat downs.
2022 WL 767834, at *10. The court found that the allegations regarding the gun were distinct
from the allegations regarding overserving. AIX Specialty Ins. Co., 2022 WL 767834, at *10.
Similarly, in Peccadillos, Inc., the court found that the underlying action did not solely involve
an establishment overserving a patron and allowing them to leave intoxicated, but rather,
involved an establishment failing to call the police after patrons got into a fight and then
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ejecting the patrons who fought from the bar while they were inebriated and irrational. 27
A.3d at 268. The Underlying Action here, by contrast, alleges that Defendants were negligent
for overserving Scully and allowing her to leave with the Decedent despite her “inebriated
condition.” (Doc. 1-3, ¶¶ 30-111, 135). Count II explicitly references the Defendants
overserving Scully because it alleges that a bartender at the Hayloft stated that she continued
to serve Scully alcohol and allowed her to leave with the Decedent because she “needed to
make money too.” (Doc. 1-3, ¶ 140). According to the Underlying Complaint’s allegations in
Count II, “[a]fter [a bartender was] expressly warned of the unreasonable risk of imminent
harm that [the Decedent] was placed in in due to the condition of its patron, Scully, the
Hayloft’s bartender permitted Scully to become even more dangerous to both herself and [the
Decedent]” by continuing to serve Scully alcoholic beverages and permitting Scully and the
Decedent to leave together. (Doc. Doc. 1-3, ¶ 140). Thus, the Underlying action is analogous
to cases in which courts have found liquor exclusions prevented coverage. See Heathland Hosp.
Grp. LLC, 783 F. App’x at 189; see also Lucchesi, 2012 WL 2009355, at *5. The Court finds that
the Policy does not create a duty to defend the Underlying Action both because of the
Premises Endorsement and because of the Liquor Endorsement. (Doc. 33-1, at 67, 73).
Because the Policy does not create a duty to defend, it also does not create a duty to indemnify.
See Permanent Gen. Ins. Corp. of Ohio, 612 F. Supp. 3d at 426. Northfield’s motion for summary
judgment (Doc. 27) is GRANTED and the Hayloft’s motion is DENIED. (Doc. 32).
IV. CONCLUSION
For the foregoing reasons, Northfield’s motion for summary judgment (Doc. 27) is
GRANTED and the Hayloft’s motion (Doc. 32) is DENIED. Defendants’ counterclaims are
DISMISSED. (Doc. 16; Doc. 17; Doc. 19; Doc. 20). Judgment is entered in favor of
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Northfield and against Defendants. The Policy does not create any obligation on behalf of
Northfield to defend or indemnify Defendants in the Underlying Action. The Clerk of Court
is directed to close this action.
An appropriate Order follows.
BY THE COURT:
Dated: February 27, 2026 s/ Karoline Mehalchick
KAROLINE MEHALCHICK
United States District Judge
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