In a decision issued on April 18, 2025, the US Court of Appeals for the Eleventh Circuit revived a bad faith lawsuit against Kinsale Insurance Company, ruling that a jury should decide whether the insurer mishandled its response to a catastrophic shooting claim.
The dispute began after a violent night at Pride of St. Lucie Lodge 1189, a fraternal club in Fort Pierce, Florida. On March 1, 2015, the Lodge hosted a weekend social event that turned chaotic. Around 1am, two groups of female patrons broke into a fight on the dance floor. Volunteer security personnel separated the groups and escorted them out of the building, one through the front door and the other through the back.
Minutes later, in the Lodge’s dark and unmonitored rear parking lot, the groups encountered each other again. A second fight erupted. Shortly after, a vehicle blocked a car occupied by members of the second group, and shots were fired. Tanya Oliver, a 25-year-old woman seated in the car, was shot in the forehead. She remained in critical condition for more than a year before dying in July 2016.
The Estate of Tanya Oliver, represented by Teaira Nicole Reed, sued the Lodge for negligent security in Florida state court. A jury found the Lodge 70 percent liable and awarded damages of $3,348,623.89, far exceeding the Lodge’s available insurance coverage.
At the time, the Lodge carried a general liability policy issued by Kinsale Insurance Company with $1 million in coverage. However, the policy contained a $50,000 sublimit for claims "arising out of assault and battery." In addition, a separate liquor liability policy from Mount Vernon Fire Insurance Company excluded coverage for any injuries resulting from the use of firearms.
Mount Vernon disclaimed coverage, relying on its firearms exclusion. Kinsale acknowledged the applicability of the $50,000 assault and battery sublimit but did not offer to settle the claim within that limit until August 18, 2016 - six days after the Estate filed its lawsuit, and nearly eight months after Kinsale had first learned of the shooting. By that time, the Estate rejected the offer.
The Lodge and the Estate then sued Kinsale for bad faith, claiming the insurer should have recognized the Lodge’s exposure early and acted to protect its insured by offering the policy limits before litigation commenced.
A federal district court in Florida initially sided with Kinsale, granting summary judgment and holding that no reasonable jury could find bad faith. But the Eleventh Circuit reversed, finding that a jury could reasonably conclude Kinsale knew, or should have known, that liability was clear and that damages would far exceed the policy limits.
The appellate court pointed to several factors supporting potential bad faith: the Lodge’s volunteer security allowed two hostile groups into an unmonitored and dark parking lot, a second fight erupted almost immediately, and the fatal shooting happened within ten to fifteen minutes of their removal from the Lodge. The court noted that under Florida law, when liability is obvious and injuries are catastrophic, an insurer has an affirmative duty to initiate settlement negotiations, even without a formal settlement demand.
The decision means Kinsale will face trial over its handling of the claim, with a jury to decide whether the insurer failed to act in good faith toward its insured.
The case is Kinsale Insurance Company v. Pride of St. Lucie Lodge 1189, Inc., and Teaira Nicole Reed, No. 22-12675, decided April 18, 2025, in the United States Court of Appeals for the Eleventh Circuit.
