A Delaware court has ruled that insureds were in the business of“furnishing alcoholic beverages” within the meaning of a liquorliability exclusion in an insurance policy even if they did notactually pour drinks but only arranged for alcohol to be served atevents.

The Case

Capozzoli Catering of Delaware, Inc., planned and cateredvarious social events at the Executive Banquet and ConferenceCenter, located in Newark, Delaware. Capozzoli leased the centerfrom Plumbers & Pipe Fitters Local No. 74. The lease agreementbetween Capozzoli and Local No. 74 stated that Local No. 74, “shallmaintain the sole liquor license for the Premises and, inaccordance therewith, will be solely responsible for distributingany and all alcohol … from the bar.”

On October 17, 2013, Capozzoli catered an event for the AlphaEpsilon Phi sorority at the Center. Local No. 74 providedbartenders to serve alcohol at the event. Ethan Connolly, a minor,allegedly attended the event and was served alcohol at the bar.Connolly allegedly left the event intoxicated and attempted tocross the road when he was fatally struck by oncoming traffic.

Connolly's parents filed a wrongful death lawsuit againstCapozzoli and the Center, contending the defendants had proximatelycaused their son's death due to their negligence in failing tomaintain the premises and ensure underage patrons were not servedalcohol.

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