Strip Club Insurer Fights $5M Award In Drunken Driving Case
doctorevil
Evil Lair
Law360 (November 1, 2019, 8:56 PM EDT) -- A strip club’s insurer has asked the First Circuit to clear its name after being stuck with a $5.4 million judgment for knowingly mishandling a claim against the club by a dancer who got in a catastrophic drunken-driving accident, arguing it was duped by club employees during its investigation.
Capitol Specialty Insurance Co. said in a cross-appeal brief Thursday that it acted in good faith when it closed the book on dancer Kailee Higgins’ claim following its initial investigation after the crash, saying it didn’t learn the sordid details of the case or the enormous liability faced by the club until Higgins sued three years later. The insurer asked the court to reverse a judge’s finding that it deliberately mishandled the case and strung Higgins along to avoid paying.
Higgins, meanwhile, has asked the First Circuit to slap Capitol with a judgment as high as $22.5 million. She argued in her Oct. 1 brief that while a judge correctly found Capitol acted in bad faith on her claim that the club served her 15 shots of tequila before dumping her in the driver’s seat of her car, he erred by not leveling a trebled $7.5 million judgment as the price of violating multiple state business laws.
The legality of Capitol’s actions is hotly disputed on appeal, though many facts of the underlying case are not. Higgins worked as a dancer at the Worcester, Massachusetts, strip club Centerfolds, which knew she was under 21 but served her drinks and expected her to ply patrons with alcohol, according to court documents.
On Nov. 28, 2010, Higgins left the club stumbling drunk on the arm of a bouncer, who was supposed to call her a cab but instead lifted her into the driver’s seat of her car and handed her the keys, according to court documents. Minutes after driving away, she got into a catastrophic crash with an off-duty police officer, suffering injuries requiring more than a dozen surgeries and leaving her permanently impaired. Her blood alcohol content was 0.155%.
Capitol gleaned few of these details in its initial investigation, which included speaking to the owner and two employees who lied and said Higgins hadn’t been drinking, according to court documents. The insurer terminated its investigation in less than two weeks and didn’t reopen it until Higgins sued Centerfolds for liability three years later, according to court documents. Capitol hired an attorney to defend the club, and he soon gave a frank assessment: There was “zero chance” of a defense verdict, and damages could hit seven figures.
Capitol then sought a declaratory judgment in federal court limiting its exposure to $300,000 under Centerfolds’ liquor liability coverage. Higgins shot back with a counterclaim, accusing Capitol of knowingly misconstruing her claims and sitting on its hands to escape exposure under Centerfolds’ general liability policy.
While that litigation was underway, Higgins reached a $7.5 million settlement with Centerfolds, on the condition that she would only seek to collect from Capitol.
After a May 2017 bench trial, U.S. District Judge Timothy S. Hillman handed down a blistering judgment against Capitol, finding the insurer violated Massachusetts insurance laws by knowingly mishandling Higgins’ claim despite clear liability, depriving her of policy benefits and forcing her to needlessly litigate with Centerfolds.
“That Capitol twice closed its file without doing even a cursory investigation at best demonstrates willful blindness, and worse a deliberate and intentional act to avoid their statutory responsibilities,” Judge Hillman wrote. “Despite [a Capitol attorney’s] blunt assessment that he couldn’t win the case at trial, Capitol continued to prevaricate and string the plaintiff along.”
Judge Hillman, however, did not grant Higgins’ request to impose the Centerfolds settlement amount for damages, instead choosing to treble a $1.8 million judgment against the insurer for $5.4 million total.
Higgins is appealing the damages component of the decision, arguing the $7.5 million should be the base amount, while Capitol is urging the court to reverse the bulk of the lower court’s findings.
In its brief Thursday, Capitol argued that Judge Hillman erred in finding the insurer breached multiple Massachusetts business insurance laws, arguing Capitol was given false information by club employees. Capital also assailed the settlement agreement, arguing that Centerfolds and Higgins had colluded on the deal in secret.
Capitol also argued that it had a reasonable basis to believe Higgins was contributorily negligent in the case, reducing the club’s liability and leading the insurer to believe that only smaller claims for serving a minor were on the table.
Counsel for the parties did not respond to requests for comment Friday.
Higgins is represented by Joan A. Lukey and Justin J. Wolosz of Choate Hall & Stewart LLP and Peter A. Palmer and John P. Donohue of Fuller Rosenberg Palmer & Beliveau LLP.
Capitol is represented by Kevin J. O’Connor, Peter C. Netburn and Michael C. Kinton of Hermes Netburn O’Connor & Spearing PC.
The case is Capitol Insurance Corp. v. Kailee M. Higgins et al., case numbers 19-1496 and 19-1609, in the U.S. Court of Appeals for the First Circuit.
Capitol Specialty Insurance Co. said in a cross-appeal brief Thursday that it acted in good faith when it closed the book on dancer Kailee Higgins’ claim following its initial investigation after the crash, saying it didn’t learn the sordid details of the case or the enormous liability faced by the club until Higgins sued three years later. The insurer asked the court to reverse a judge’s finding that it deliberately mishandled the case and strung Higgins along to avoid paying.
Higgins, meanwhile, has asked the First Circuit to slap Capitol with a judgment as high as $22.5 million. She argued in her Oct. 1 brief that while a judge correctly found Capitol acted in bad faith on her claim that the club served her 15 shots of tequila before dumping her in the driver’s seat of her car, he erred by not leveling a trebled $7.5 million judgment as the price of violating multiple state business laws.
The legality of Capitol’s actions is hotly disputed on appeal, though many facts of the underlying case are not. Higgins worked as a dancer at the Worcester, Massachusetts, strip club Centerfolds, which knew she was under 21 but served her drinks and expected her to ply patrons with alcohol, according to court documents.
On Nov. 28, 2010, Higgins left the club stumbling drunk on the arm of a bouncer, who was supposed to call her a cab but instead lifted her into the driver’s seat of her car and handed her the keys, according to court documents. Minutes after driving away, she got into a catastrophic crash with an off-duty police officer, suffering injuries requiring more than a dozen surgeries and leaving her permanently impaired. Her blood alcohol content was 0.155%.
Capitol gleaned few of these details in its initial investigation, which included speaking to the owner and two employees who lied and said Higgins hadn’t been drinking, according to court documents. The insurer terminated its investigation in less than two weeks and didn’t reopen it until Higgins sued Centerfolds for liability three years later, according to court documents. Capitol hired an attorney to defend the club, and he soon gave a frank assessment: There was “zero chance” of a defense verdict, and damages could hit seven figures.
Capitol then sought a declaratory judgment in federal court limiting its exposure to $300,000 under Centerfolds’ liquor liability coverage. Higgins shot back with a counterclaim, accusing Capitol of knowingly misconstruing her claims and sitting on its hands to escape exposure under Centerfolds’ general liability policy.
While that litigation was underway, Higgins reached a $7.5 million settlement with Centerfolds, on the condition that she would only seek to collect from Capitol.
After a May 2017 bench trial, U.S. District Judge Timothy S. Hillman handed down a blistering judgment against Capitol, finding the insurer violated Massachusetts insurance laws by knowingly mishandling Higgins’ claim despite clear liability, depriving her of policy benefits and forcing her to needlessly litigate with Centerfolds.
“That Capitol twice closed its file without doing even a cursory investigation at best demonstrates willful blindness, and worse a deliberate and intentional act to avoid their statutory responsibilities,” Judge Hillman wrote. “Despite [a Capitol attorney’s] blunt assessment that he couldn’t win the case at trial, Capitol continued to prevaricate and string the plaintiff along.”
Judge Hillman, however, did not grant Higgins’ request to impose the Centerfolds settlement amount for damages, instead choosing to treble a $1.8 million judgment against the insurer for $5.4 million total.
Higgins is appealing the damages component of the decision, arguing the $7.5 million should be the base amount, while Capitol is urging the court to reverse the bulk of the lower court’s findings.
In its brief Thursday, Capitol argued that Judge Hillman erred in finding the insurer breached multiple Massachusetts business insurance laws, arguing Capitol was given false information by club employees. Capital also assailed the settlement agreement, arguing that Centerfolds and Higgins had colluded on the deal in secret.
Capitol also argued that it had a reasonable basis to believe Higgins was contributorily negligent in the case, reducing the club’s liability and leading the insurer to believe that only smaller claims for serving a minor were on the table.
Counsel for the parties did not respond to requests for comment Friday.
Higgins is represented by Joan A. Lukey and Justin J. Wolosz of Choate Hall & Stewart LLP and Peter A. Palmer and John P. Donohue of Fuller Rosenberg Palmer & Beliveau LLP.
Capitol is represented by Kevin J. O’Connor, Peter C. Netburn and Michael C. Kinton of Hermes Netburn O’Connor & Spearing PC.
The case is Capitol Insurance Corp. v. Kailee M. Higgins et al., case numbers 19-1496 and 19-1609, in the U.S. Court of Appeals for the First Circuit.
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6 comments
1. She was under 21, working at a club that sold booze
2. The club encouraged her to drink and sell drinks to customers
3. At end of her shift, she was 15 shots in and fucking wasted.
4. The club was supposed to have a bouncer put her in a taxi to take her home, but
5. Instead, the bouncer placed her in her own car and handed her the keys.
6. She had a blood alcohol level of 0.155% witch is at least 50% over the legal standard for drunk in the state
7. She hit an off duty cop and suffered massive, permanently impairing injuries.
8. The club lied to insurance investigators
9. The insurance company lied to her
10. Everyone is now suing everyone.
11. Ultimately, she will (or at least SHOULD) win huge dollars.
12. The club could be (should be) liable for some or all of the final settlement
13. The local municipality that oversees the club should investigate and revoke their booze license and possibly their business license, assuming they do not end up bankrupt from the settlement.
So they told a bouncer to call a cab for a drunken stripper. The bouncer dropped the girl in her car. She had a horrible accident.
And - news flash - strip club employees proved unreliable witnesses! They actually lied! Omg!
“It is ok to be an asshole as long as you aren’t 100% a dick”
Let me give an example. Let’s say you see a bunch of drunk male hairless apes standing around a bonfire. You see a can of gasoline on the ground. What do you do?
1. Grab the gasoline. Throw some on the ape closest to the fire. Watch him burn. Laugh while drinking their beer.
2. Befriend the apes and treat yourself to a beer. Casually glance at the gasoline while chatting with an ape. Say “you know what would be ‘bitchin’? A bigger fire!” Watch the ape pick up the gasoline and throw it on the fire. Laugh while watching said ape burn. While drinking their beer.
A true rick would choose #2. Much funnier, plus the ape could have said “hey, let’s get more wood for the fire”.
The difference is that in #1 you are being totally 100% a dick whereas with #2 you’re just an asshole. When the club recognized that they should send the drunken female hairless ape home in a taxi but didn’t do so they crossed the line.
So endeth the lesson. Pay attention and you may master the subtle art of rickiness. Roar!
It doesn’t matter exactly what they burn (he could burn his couch, his mother’s couch, his girlfriend’s prosthetic leg, etc). What matters is that he will regret burning whatever he burns! After all, being an asshole is still a lot of fun. ROAR!!!