Facts
In AIX Specialty Insurance Co. v. Everettt, No. 8:19-cv-2533-CEH-AAS, (M.D. Fla. 6/16/2021), affirmed No. 21-12386 (11th Cir. 3/30/2022), Everett sued MLK Liquors alleging she was shot on MLK’s premises. MLK’s CGL insurer AIX Specialty defended MLK Liquors and filed a separate suit seeking a declaratory judgment of no duty to defend or indemnify MLK Liquors based on a “Firearms Exclusion” providing:
It is understood that no coverage is afforded by this policy for any injury, death, claims, or actions occasioned directly or indirectly or as an incident to the discharge of firearms by person or persons on or about the insured premises.
Holding
The federal trial court held that the exclusion did not apply to eliminate a duty to defend because the exclusion uses the undefined term “firearms” in its plural form only, meaning multiple firearms, while the underlying complaint alleges that Everett was shot by a bullet, as in a single bullet, negating the potential of the discharge of multiple firearms. The court states that it is significant that the exclusion expressly uses the singular and plural form of “person.” Although dicta, the court also notes that a common dictionary definition of firearm states that it typically refers to small arms. On appeal, the Eleventh Circuit affirmed for the simple reason AIX Specialty’s argument on appeal focused on why there was a sufficient connection between the insured premises and the injury to satisfy the nexus requirements of the exclusion. Because AIX Specialty did not address the singular versus plural/number agreement issue that the trial court’s decision was based on, the Eleventh Circuit held that the argument was abandoned. While suggesting that the court may have found some merit to the abandoned argument, it does not go any further.
Takeaways
The primary lesson here for insurers is to pay extremely close attention to the singular and plural use of policy terms. The secondary lesson is to be aware of dictionary definitions of critical undefined policy terms.