Sixth Circuit Provides Declaratory Relief Without Interfering In Pending State Case

Following a shooting at Cole’s Place, a bar in Kentucky, several injured bar patrons sued in state court, alleging tort claims. The bar’s insurer, United Specialty Insurance, took up the bar’s defense although the policy “exempted the insurer from defending or indemnifying the bar for any alleged assaults.” Relying on the policy language, the insurer asked the United States District Court for declaratory relief that it was not required to defend or indemnify the bar. When the district court agreed with the insurer, the bar appealed. The Sixth Circuit relied on precedent from Grand Trunk Western R. Co. v. Consolidated Rail Corp., 746 F.2d 323 (6th Cir. 1984) to affirm the district court’s decision despite the pending suit for the tort claims. The specific wording in the United Specialty’s policy allowed the Sixth Circuit to apply the five-factor test from Grand Trunk. Read more about how the court applied these factors, and how a slightly different case could result in a different outcome.