occurrence under a commercial general liability policy is that the right question or is the right question whether a statutory violation of the dram shop act coupled with a resulting automobile crash an occurrence i don't believe so for this reason the as the policy makes clear the legal liability of central terminal has absolutely nothing to do with the automobile average doesn't have everything to do with the automobile accident the automobile accident had not occurred what would be the claim by any of these plaintiffs in other words if the underlying defendant had serve liquor to an intoxicated person and he then walks home and goes to bed and sleeps it off there would be a violation of the act with their not well no the there we the damage has to be a result of into the conduct of an intoxicated person but the violation of the statute does not involve whether or not there was an occurrence the prime  for the plaintiffs in this case whether or not the automobile accident was purposeful or whatever has nothing to do with central terminal's liability their liability and again because proximate cause and foreseeability are not part of the prime aphasia the plaintiffs to prevail don't have to prove the acts the damages occurred as a result of an accident they have to prove three or four things the commercial sale of alcohol that it was done knowingly to a visibly intoxicated person and the most critical thing is that the they have to prove intoxication at two points one when they serve and secondly that that intoxication has something to do with the damage understand all of that but why doesn't this come under judge curd those those decision going all the way back to hundred twenty one from the new york court of appeals and messersmith that an accident policy is about accidents or occurrences covers the accidental results of intentional acts why is this not from the vantage point of the insured the accidental result of an intentional act they intentionally or their agent intentionally knowingly served liquor to someone but not intending or even necessarily for seeing that there was going to be some kind of injury as a result of that and then it happens it's the unintentional result of an intentional act and i think the answer is because the dram ag abrogates the common law and as judge cardoza pointed out messersmith when you look at the transaction as a whole that we are not liable for the conduct of the individual mr gill re the operator of the motor vehicle is not our insured we are not in messersmith it was the act who precipitated the harm whether intentionally or not the question the question is what whether whether there's an accident or occurrence here and the question as i understand it that's being asked you is whether when there is an accident following an intentional violation of the dram shop back why isn't that an accident or an occurrence because we're not liable for the car that the person who because the accident is not our insured whether you're liable and i question what the policy says the policy says there has to be an accident or an occurrence and and that is and that's the issue that we're facing is not as opposed to something intentional that wasn't an accident it is but in this case when the the the liability of central terminal doesn't turn on whether somebody intended to do something or not the policy when it says legal liability for damages bodily injury arising out of an occurrence to which this insurance applies we are not legally intent to cause an accident but it results from the dram shop violation and i would submit your honor we will never know because again the unique under the unique pleadings in this case that inquiry will not be addressed by the by the underlying trial court whether or not the circumstance of the of the accident itself immaterial to central terminal's legal liability has absolutely nothing to do with whether or not there was an accident where there was no there can be no liability without the action correct there can be no liability without damage without you having that that we don't know whether guillory intentionally ran these people over and if he intentionally ran these people over then there should be no liability on the news so we should assume that because there's not never going to be a contest as to whether he did or didn't intentionally run the people over is that ironically your honor whether he intent whether he intentionally ran them over and not we're still liable if they make out the four elements under the dram shop act that's why with the district court by con flate ing in occurrence on the again the unique pleadings because when they talk about the the allegations there was do you have any case under new york decided under new york law by any new york court that supports your view well i believe the general law on an occurrence where i'm not aware of any case where they pick up  conduct of somebody who is not our insured and the and their conduct and their intent or their what they were thinking has nothing to do with our liability but we do have that second department case that you say was wrongly decided that would support liability and you tax the district court for relying on the appellate division case right rather than explicitly predicting what the new york court of appeals would do correct i  did say that the new york court of appeals has has not explicitly addressed that we've got one appellate division case that goes the other side's way that is based on the reasoning you say erroneous lee of a prior new york court of appeals decision and we have nothing on the other side of the ledger well what i say is that the appellate division's dissent which did express address the issue said that a violation of the dram shop act is not in a car and and i do cite other cases in other districts that who have explained explicitly addressed this say that it is not in a car and you can other districts you mean outside of new york correct that's right there we go to the fund raising endorsement here i am the fund raising endorsement doesn't itself doesn't speak in terms of an occurrence it's an extension of the general liability it's a endorsement to the general liability policy correct that's correct and but it's says here this insurance applies to bodily injury property damage and personal and advertising injury arising out of your fund raising events with the following exceptions which don't apply arising out of is not tied to any particular occurrence it's broader than that but an end to the extent that you're going to argue well it's still in compass occurrence because it's part of the general it seems to me that this is this is not when it doesn't speak in the in the language of an occurrence then it may create an ambiguity which would cut it cut against the insurer is that is that right in other words why isn't there liability into the general policy by virtue of the endorsement of that general policy which expands seems to expand the coverage i think the answer is in the lying which it again uses arising out of which we generally understand incident to originating from but again what's defined there is the bodily injury now importantly the bodily injury has absolutely nothing to do with central terminal the people who were injured were not at that coverage in the main policy and they wanted to want to be to nail this down that's right and they would have coverage for a bodily injury arising out of an occurrence at the festival doesn't say that it says arising out of all of your fund raising events with the following exceptions right and i submit that the again what defines what what arises out of as opposed to a lot of when you additional insured indorsements where they refer to the event or the business operation here it's the bodily injury that must arise out of the fund raising event and it did not has absolutely nothing to do and why doesn't it why doesn't the bottle the injury come from the van you said yourself that the shop liability for the terminal has depend on the fact that the guy was still drunk when he ran people over right and again that's our legal liability not the individual the bodily injury has to occur at the event and has to originate from the bodily injury or has nothing to do with the event say that it's is arising out of it says it's connected to somehow right but again just is flowing out of the fund raising event right and i would again go back to no matter what that that fund raising event only modifies the general liability coverage so excuse me so that if it does not arise the bottle injury does not arise out of an occurrence coverage on the on the basic policy it toot two million for me i submit then it's still that the it has to it's a comments based because it only the fundraising indorsement modifies the commercial general liability policy which again i submit that under the pleadings and what's alleged against the central terminal does not constitute in a car i think maybe putting it a little differently i think your argument might be that because the original policy talks about two million in the limit of liability and four million in total for each occurrence it's tied to the actual coverages tied to the two to occurrence in the general what's arising out of his the bodily injury and there's no allegation that this bodily injury has anything to do with the or incident to the fund raising event these people were not there it would be completely different if the bodily injury occurred at the event in which case we don't we don't dispute that they would have general liability coverage all right you have some rebuttal time we'll hear from the in on behalf of the insured and the apparently central terminal restoration corporation and please interrupt me many questions but i reaffirm this idea and that the primary argument by philadelphia insurance is that we're going to exclude all dram shop coverage from from commercial general liability policies because there's some intent element but let me start by saying that that statute it's a statutory claim it doesn't have a  intent on and doesn't have a negligent element it's a statutory claim there are certain things that need to be proven but if we go along with that argument the argument still flies in the face of well established precedent that says even if it's an intentional act even if it's an intentional act something is blatant one of the cases we have where a person takes a gun and and fires it at somebody thinking that it's unloaded and builds or that another case where somebody is excavating their land and building this thing despite warnings that it might cause damage to the next door neighbor and the courts don't bar coverage based on more than the allegation is for negligence or whether it's for an intentional court or whether it's for dram shop even be a liability for an intentional tort committed by a third party that is the result of a liability causing an act by a for example a landlord right if the landlord says intentionally i'm not going to bother to fix that door lock not intending that the inhabitant of the apartment the tenant of the apartment be raped and some guy breaks in through the door which is has a defective lock and rapes the tenant then the landlord is liable and the landlord's liability insured pays the tab right even though that was because there was and unintended result of intentional conduct not only on the part of the insured but also on the part of the interloping third party absolutely or are and that is the test they would the court has forever looked at and you brought out the case from one thousand twenty one has always looked at what are was the insured intending the results if the insurer punched somebody in the nose and they got a broken nose well that's immediate and it's an intended injury if the injured does something and then there's a series of consequential events as here i mean you couldn't have more than here yeah actually if two car accidents before the car accident that really cause the event you know but for any of those car accidents those gentlemen wouldn't have been standing by that road so there and that went into this so many consequential acts and fortuitous i hate to use that word because this was a horrible accident the but the concept is that there it's not a it's not intended effect and by the way the law says it's all right if it's foreseeable it's just not intended and clearly nobody is claiming that that was the intent of the insurer what about these a fund raising endorsement you heard his argument here that that's also subsumed within the occurence provision and therefore the arising out of language really doesn't do any any extra work it's hard to imagine because there is no exclusion in the c g all policy for fundraising events ok any exclusions come from the endorsement itself ok so if you buy extra insurance to get a heightened level of coverage and you specifically schedule the dentist day event which is what gave rise to it and you're in and the argument is you've got you don't have coverage for that that that makes no sense to me the substituted lawyers an additional premium paid here right for now yes absolutely and hundred nine hundred dollars or something of the right because we scheduled this event specifically where alcohol would be sold and that would get around exactly you're substituting the words bodily injury arising out of this event the schedule of vent ok for the words in the c d o policy that say bodily injury caused by an occurrence so to read that word additional two million dollars in coverage and i wrong about that we're not it's just the underlying coverage amount yes it just it just makes it easier to get that underlying two million dollar amount now philadelphia insurance also says you also bought a liquor liability exclusion and because you bought that because you paid an additional premium for that we don't have to give you as much coverage and that makes no sense to me why anyone why would you buy additional insurance if  you're going to get a million dollars into that mat is now going to limit your ability to get the two million that you're entitled to under the c g i and the endorsement that makes no sense you are all but you would agree that the fund raising endorsement does not assist you with regard to the umbrella it's not part of the umbrella that you're right it's not so that clause only was original argument that you're making right i still think the court decided right on the access policy because just using the traditional analysis of the courts that say was this an intended act of the insurer even if if it was intentional and even if you agree with him that the dram shop has some level of intent to it which i don't necessarily agree with but just go along with it the question is still was the injury arising out of an accident was it a series of consequential ovens i want to let these gentlemen speak of much of the question for me i just wanted to say on the reply brief it said that we did not central terminal do not preserve below its argument for that is absolutely not true it's in the record in the least five different places including three fifty three fifty eight through sixty on the motion argued we've also made another motion to the court for our attorneys fees below and the court has said wait to see what happens in the second circuit it's very important the central terminal which is a not profit corporation and to my left from that that is preserved it was preserved below it was certainly preserved many times and in this court thank you thank you york court of appeals in the year two thousand basically sets forth what an occurrence is and that should govern how the court decides this case whether or not there's an occurrence in this case inequality l a tenant was assaulted by an unknown assailant in a hotel in a lobby the claim was brought by the deceased dissidents a state against the insured owner of the property for the intentional act of the assailant and judge wesley in that case in the opinion for the new york court of appeal stated that from the standpoint of the assailant it's an intentional act it could not seriously be argued from the standpoint of the victims that this is an intentional act and therefore it's an accident and therefore an occurrence from the standpoint of the insured this court has also decided the case of johnston johnston where the city of johnstone had a leaking garbage dump i think it was garbage was leaking into the water table the city was notified that this this there was a problem the city did nothing about it litigation ensued and the claim was that that this was an intentional act by the city and therefore not an occurrence again the analysis as the court pointed out earlier that it's the overall point of the entire event from the beginning to end in the court in johnstone said where damages accidentally arise out of a chain of events unintended though expected or foreseeable that occur after an intentional act and that's what i submit happened in this particular case so for all those reasons it's our position that this was an occurrence and therefore falls within the terms of the policy is it please the court my name is joseph a met leon on behalf of mr serrano one of the injured parties i only have a few points i think the court has picked up on every argument that we have briefed and made here today but i just want to put a little different spin on the first point of whether or not this is occurrence and here's here's my argument to you hopefully you'll see some good faith in this argument or i've got to ask why did philadelphia pull out dram shop as an exclusion think about the general policy if it's not pulled out it's probably an occurrence my position is is that not an implicit admission that dram shop an occurrence because otherwise if a car insurance policy doesn't cover a certain risk there's no duty to disclaim it's not covered if they're if they're if they truly believe that this was not an occurrence why would you  have a separate premium payment for dram shop that's that's one issue i want to discuss with you and and besides it they charge an s exter premium for buffel center trauma got all over the place g l policy of late dram shop and fund raising event policy basically they're getting nothing for their bargain here second point what's assume  that they wanted to make it specific and they could have by doing this judges in the mount vernon insurance company case which was discussed discussed by just wesley and it got ok's i'm sorry for my mispronunciation looking at the mount vernon case in one thousand nine hundred six case in that case there was an assault and battery exclusion and judge wesley distinguished the case before the bench at that time in the appeals by saying in mount vernon when it said what it took out the salt and battery from the g l policy what they did in mount vernon was the carrier said that we will not pay and will be no coverage for a claim arising out of us assault and battery brought about by or at the direction of the insured and in that case they further stated and battery is not an accident now that telling the insured by that exclusion it's not an accident that's expressing their opinion here they didn't do that they could have very easily done it in the accident telling them what they're getting for their money they didn't do that so let's assume by virtue of what they did do an argument there's an ambiguity clearly at the worst case it's an ambiguity i i feel  agree with the court to the extent i can glean from the arguments here that it should have been specific and exclude it by not doing it i take the position at least implicitly and by picking the coverage taking it out of the g l policy they're conceding or believe that it was in the courts and there's no other reason to pull it out if you want so that's their portion and by the way you know nine hundred seventy six was the mt vernon case the year two thousand was the mavericks case so as of two thousand philadelphia insurance and its lawyers should have known that at least two dissenting opinions were made in the second department be based on those two they would be on notice that would it behoove us to avoid litigation by explicitly stating in our indorsements what's not included it what is an occurrence what isn't and current and secondly that a virtue of that maverick's case in the dissent as of two thousand they knew that there was an argument that could be made but rejected by the by every other court that you could claim to the dram shop was not in the current take care that your policy say they did finally just the clark cardozo to this day forward the new york court of appeals has set forth case after case of arson murder that they are covered and finally i don't think any of you or any of us need a crystal ball to rebuttal story with the unintended act in the unintentional consequence new york doesn't recognize a tort a common law tortured negligent provision of alcohol this is a dram shop claim in fact if anything the foreseeability analysis does not even apply that under the un and if central terminal is considered the act to or that caused the injury now and that and that hypothetically speaking because they did not they were not the operator of the vehicle they are not liable for the automobile accident or the conduct of the driver this is not vicarious liability this is a statu and if anything the new york state legislature cast aside this whole idea about well if you act intentionally but an intense something the legislature went further they basically said you serve a drunk and they go out on the highway and cause harm you are liable no matter what and that's why i say the district court by saying that there was in a car and we don't know like something i'd really want to get insurance about exactly and your honor where it's so do you have a policy that just covers dram shop yes it's yes absolutely x and that's what i want to speak to secondly is the structure of this policy central terminal for the dram shop exposure which again as the court of appeals you have to have a commercial sale if you don't have a liquor license you can't be bought you can't violate the dram shop back they bought liquor liability coverage and again when you look at the structure of this policy for the one day for one day they paid nine hundred seventy five dollars for a liquor liability coverage for general liability coverage judge walker with what under the fund raising indorsement that's general liability coverage they paid five hundred dollars so they had they were protected for general liability exposure and again your honor to your point about the landlord and that's responsible for an intruder that gets in well under the common law they owed a duty to that person we don't owe a duty to some stranger out on the highways and byways fifty miles away the that's why it's an abrogation of the common law the new york state legislature said we're going to make you liable not because of it's unintended intended or anything we're not the act or they're going to make us strictly liable by operation of a statutory violation and when i say they're also arguing that they're that you're not responsible even under the liquor coverage i will defer your honor that is will be decided in the underlying court whether or not our insured is liable has not been decided to meet with the insured is liable you're saying you don't have to pay if they are liable if they are in this case under these pleadings where there's only a single cause of action in the dram shop if they are found liable under the dram shop philadelphia pays under the liquor liability coverage part they bought that coverage with they're trying to con flate and sweep over is put say ok i bought liquor liability coverage for liquor liability claims we're going to pretend it's a general liability claim and we're going to and we want general liability coverage it's the structure of this policy is it there's no ambiguity it's very clear that you and that's why under the fund raising important to the general policy that's right and that's for because that was  the fund raising indorsement is actually an exclusion but they purchased it they brought bought back coverage for general liability claims for instance like you said in the dog with the landlord hypothetical if there was an accident at the event and let's say somebody assaulted somebody and that's you know the people on your premise a common law a duty that's a general liability claim that's an occurrence that's covered under the fund raising indorsement to the general at the argument that they're making that i think makes some sense though as you wouldn't buy this extra coverage which would then have the effect of limiting your general coverage that i would not make sense no it doesn't but it's because it's not a limitation it's in addition they bought liquor liability coverage because they knew they had a liquor license and they and it's scheduled and they said for the for two events they bought liquor liability coverage because again under a dram shop act there has to be a commercial or they intended to get the additional coverage and that's right your honor they bought additional coverage they have one million liquor liability and that's the additional coverage for nine hundred seventy five dollars and they purchased for five hundred dollars the general liability coverage for the fund raising event that day so you're absolutely correct your honor they purchased two i don't think i'm saying what you think i'm saying ok but you're out of time in any event we will reserve decision and thank you i thank you your honest for taking the time to hear the argument