Court Addresses Coverage For July 4th Highland Park Mass Shooting
The coverage issue in Acceptance Indem. Ins. Co. v. Red DOT Arms, Inc., No. 22C7145 (N.D. Ill. Nov. 14, 2023) is not particularly noteworthy. But I include it here, in the Tapas column, as it addresses coverage for a well-known event – the tragic 2022 mass shooting, in Highland Park, Illinois, at the city’s July 4th parade.

At issue was coverage, under a general liability policy, for Red Dot Arms, Inc. for claims that, in violation of federal law and local ordinances, it transferred the firearm to the gunman who used it in the shooting. The insured argued that coverage was precluded by the policy’s exclusion for “‘bodily injury’ or ‘property damage’ arising out of any acts committed with a ‘firearm’ or ammunition that is sold, distributed, or transferred by any insured where such sale, distribution or transfer is in violation of ATF, federal, state or local laws or regulations for the lawful transfer of a ‘firearm’ or ammunition.” 

The court agreed, despite Red Dot’s arguments that the underlying complaints alleged negligence apart from a violation of laws.  The court also held that, even if this exclusion did not apply, coverage was precluded by the policy’s assault and battery exclusion.    

Court Treats Abuse of Process As Malicious Prosecution For Personal And Advertising Injury Coverage
While lots of courts do not see it this way, and if you’ve had this issue you know that, a California trial court, in Abramson v. Spinnaker Ins. Co., No. 22STCV24687 (Sup. Ct. Calif. Sept. 15, 2023), concluded that Personal and Advertising Injury coverage, for malicious prosecution, includes a cause of action for abuse of process.

The court analysis is fairly detailed. Among other things, its conclusion was based on the Ninth Circuit’s decision in Lunsford v. American Guarantee (1994), which was impressed by the Wisconsin federal court’s reasoning in Koehring Co. v. American Mutual Liability Ins. Co. (1983). 

From Lunsford: “While California courts have not yet considered whether ‘malicious prosecution’ coverage includes actions for abuse of process, the analysis in Koehring is consistent with California law. The Koehring court applied Wisconsin law and interpreted language  in a ‘Personal Injury Liability Coverage Endorsement’ that included ‘malicious prosecution’ as a covered hazard. 564 F.Supp. at 308. The court concluded that the ‘theoretical legal distinction between ‘malicious prosecution’ and ‘abuse of process’ is not so clear that insurance coverage of one should exclude coverage of the other unless the exclusion is specifically stated in the policy.’”