An insurer is not obligated to provide coverage to a restaurant whose owner was accused of sexual assault on a minor under its policy’s criminal act exclusion, says a federal appeals court, in affirming a lower court ruling, but on a different basis.

Ajredin Deari, owner of Pastazios Pizza Inc. in Dallas, was charged with luring an 18-year-old “Jane Doe” in 2011 to his restaurant and plying her with alcohol, then driving her to a nearby hotel and sexually assaulting her, according to Monday’s ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in Century Surety Co. v. Scott M. Seidel, trustee of the Pastazios Pizza Inc. Credit Trust.

Mr. Deari later pleaded no contest to the crime of aggravated assault.  Ms. Doe filed suit against the owner, another man who was involved and the restaurant, which resulted in a judgment that held Mr. Deari and the restaurant joint and severally liable for more than $20 million.

The restaurant’s insurer, Westerville, Ohio-based Century Surety Co., initially provided a defense under its commercial general liability policy but a few months later withdrew, stating it had no duty to defend under the policy based on the factual allegations in the complaint.

The restaurant filed for bankruptcy, and the bankruptcy trustee and Ms. Doe filed suit in U.S. District Court in Dallas charging Century had breached its duty under the policy to defend and indemnify the restaurant in the underlying suit. The District Court ruled in favor of the insurer on the basis of the policy’s liquor liability and intentional act exclusions.

The three-judge appeals court panel unanimously also ruled in favor of the insurer, but based on a third, criminal act exclusion. “We hold that Century had no duty to defend because Doe’s complaint demonstrates that all of Doe’s damages arose out of Pastazios’ criminal act of giving alcohol to a minor,” said the ruling.

“We also hold that Century has no duty to indemnify because it was established at trial that all of Doe’s damages arose out of or resulted from Pastazios’ criminal act of giving alcohol to a minor,” the ruling said, in affirming the lower court’s summary judgment.