SIGMA CHI AND ITS UGA CHAPTER SUED BY INJURED GUEST; INSURER FILES SUIT FOR DECLARATION OF NON-COVERAGE OF INSURANCE

Daniel McCarthy, Manley Burke

On April 9, 2009, a lawsuit was filed in the Superior Court of Athens-Clarke County, Georgia, against Sigma Chi, its Delta Chapter at the University of Georgia, Sigma Chi’s Risk Management Foundation, the Delta Chapter House Association, Forrest Sylvester, who was an undergraduate member of the Chapter, and several John Doe defendants.¹

The suit alleges that the Plaintiff, then a 19-year-old female student at UGA, attended a party at the Delta Chapter’s fraternity house on the evening of September 26, 2008.  When she entered the party, her left hand was marked with a large red stripe to indicate that she was under 21 and therefore could not be served any alcoholic beverages.  The complaint states, “That in complete disregard of the markings on her hand, [Plaintiff] was served numerous alcoholic beverages by the Defendants and/or their agents to the extent she became highly and obviously intoxicated to a dangerous extent.”

The Complaint continues that Mr. Sylvester knew the Plaintiff and was dancing with and kissing her at the party.  Once he allegedly knew the Plaintiff was highly intoxicated, he took her to his room, removed her dress, placed her in his loft bed with no rails, which was several feet above the floor, and left her for approximately 45 minutes.  Upon his return to his room, he discovered that the Plaintiff had fallen from the loft and was severely injured.

The Complaint alleges that the Plaintiff was bleeding from her mouth and ear, there were teeth fragments embedded in the carpet, and the carpet was soaked with blood.

After taking her pulse to confirm that she was still alive, a pledge of the Chapter dropped the Plaintiff off at the hospital.  Meanwhile, Mr. Sylvester stayed behind and removed “evidence of the fall by cutting the bloody area out of the carpet and disposing of it.  The cut out portion of the carpet was retrieved from a waste management dump site by police authorities the following day.”

The Complaint alleges that “the Plaintiff has suffered general damages for temporary and permanent injuries including, but not limited to, broken jaw, scaring, loss of three teeth, damage to 16 teeth (requiring root canal work and crowns), loss of feeling in her facial area of her mouth (with likely drooling effect), condyle bone displacement (affecting her ability to chew food properly and likely affecting the shape of her face) having her jaw wired shut for months, severe weight loss, and other pain and suffering in an amount to be determined by the enlightened consciences of the jury.”

At the time of filing, the Plaintiff’s medical damages were approximately $100,000.  Her medical bills are far from over, not to mention her pain and suffering, lost wages, and other potential damages she may be entitled to.

To make matters worse for the Defendants, Liberty Corporate Capital, LTD., who is currently defending the Chapter in the case brought by the injured student, filed a “Suit for declaration of non-coverage on insurance contract” on July 14, 2009, in the United States District Court for the Middle District of Georgia.²  In its suit, Liberty is seeking a declaration that the Delta Chapter is not an insured because, among other reasons, “The Delta Chapter and its members were not acting in accordance with The Risk Management Foundation’s policies or the Fraternity’s policies, to the extent that [the Plaintiff]’s allegations are proven true.”  Further, the suit alleges because the Chapter failed to follow Georgia law and Sigma Chi policies, “the Delta Chapter is not an insured within the meaning of the [insurance] Contract, and Liberty does not owe a duty to defend the Delta Chapter in the Underlying Lawsuit and/or indemnify the Delta Chapter for damages sought by [the Plaintiff].

The suit contains additional reasons for exclusion of coverage, including that “The Delta Chapter’s conduct was intentional and/or the injury sustained was expected” (Count II); the “Delta Chapter violated the Fraternity Alcohol Policy” (Count III); the “Sexual abuse of misconduct exclusion bars coverage” (Count IV); “The assault and/or battery exclusion bars coverage” (Count V); “The punitive damages endorsement” exempts coverage for punitive damages (Count VI).

Both of these cases are in the very early stages of litigation.  Answers have not yet been filed in either case.  We will keep you updated as the cases progress.

These cases again demonstrate the need to strictly enforce the alcohol policies that all organizations have in place.  Alcohol policies are in place to not only prevent the type of injuries that the Plaintiff sustained, but also to provide protection against liability should another accident occur in the future.  It is important for students to know that insurance coverage can often be denied if the applicable alcohol policies are not strictly followed.

¹  Booth v. Sigma Chi et al., Superior Court of Athens-Clarke County, Case No. SU-09-CV-0822-SW.

²  Liberty Corporate Capital, LTD. v. Delta Chapter of Sigma Chi, et al.  U.S. Dist. Court, Md. Dist. Of GA., Case No. 3:09-cv-87(CDL).