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Insurer prevails in nightclub shooting case

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A federal court has refused to dismiss a motion by Evanston Insurance Co. seeking a declaratory judgment it is not obligated to defend or indemnify the owner of a property where a fatal nightclub shooting occurred, because the owner had falsely claimed on its insurance application that the building was vacant, says a federal court.

Orlando, Florida-based Republic Properties Inc. owns Orlando property that it leased to Glitz Ultra Lounge to operate as a nightclub, according to Friday’s ruling by the U.S. District Court in Orlando in Evanston Insurance Co. v. Republic Properties Inc.

Its policy application with Deerfield, Illinois-based Evanston, a unit of Markel Corp., for the period of Jan. 23, 2016, to Jan. 23, 2017, described the property as a vacant building, according to the ruling.

On Feb. 7, 2016, two individuals were killed and several others injured during a shooting incident at the nightclub, said the ruling. Four people were subsequently arrested and charged with second-degree murder in connection with the incident, according to news reports.

Some of those who were injured either filed claims against Republic, or sued the company, according to the ruling. Evanston initially advised Republic it would investigate the claims and lawsuits subject to a reservation of rights. 

However, upon learning that Republic had falsely described the property as a vacant building in its insurance applications, Evanston filed a lawsuit seeking a declaratory judgment it had no duty to defend nor indemnify Republic.

Republic filed a motion to dismiss Evanston’s complaint, contending the claim for a declaratory judgment was premature because there has been no decision as to whether Republic was responsible for any of the injuries involved in the claims and lawsuits.

The District Court disagreed. “The fact that Republic has not yet been found responsible for any of the injures at issue is of no consequence,” said the ruling. 

“A declaratory judgment would serve a useful purpose in settling the parties’ legal obligations and would afford relief from the uncertainty, insecurity and controversy giving rise to the proceedings,” it said, in denying Republic’s motion to dismiss the complaint.

Republic was given 14 days to answer Evanston’s complaint.