Bad-faith deal after bar assault clears insurer

Trial court rulings in favor of an insurer finding it had no duty to pay the victim of a punch in the jaw at a New Castle bar were affirmed Thursday. The Indiana Court of Appeals ruled a consent judgment between the tavern, the victim, and the man convicted of the crime was executed in bad faith.

The appeals panel affirmed rulings for the insurer in Thomas A. Carpenter, et al. v. The Cincinnati Specialty Underwriters Insurance Company, 33A01-1602-CT-265. Carpenter was injured more than four years ago when he was punched by Jerry Dean Johnson after he walked into Lovell’s Lounge. Johnson was charged and convicted of Class C felony battery resulting in serious bodily injury.

Carpenter sued Lovell’s and Johnson, but Cincinnati Specialty Underwriters Insurance Co. denied coverage to Lovell’s, citing the policy’s exclusion for assault and battery. Afterward, Lovell’s and Carpenter submitted a consent judgment to the trial court that was approved and sought damages of $1.125 million for Carpenter for Johnson’s negligence. Jeremy Lovell, an agent of Lovell’s Lounge, and Carpenter also later agreed that Jeremy Lovell would receive the first $7,000 of any recovery from CSU by Carpenter.

The insurer sued seeking the declaratory judgment, which was granted and affirmed by the COA.

“Because there is clear and convincing evidence that the Consent Judgment was obtained by bad faith or collusion, we conclude that collateral estoppel does not apply and therefore CSU is not bound by the Consent Judgement,” Judge Terry Crone wrote for the panel. “Accordingly, we affirm the trial court’s grant of CSU’s summary judgment motion, its denial of Appellant’s cross-motion for summary judgment, and judgment in favor of CSU on its declaratory judgment action.”