Bar, sued over fatal accident, files suit against insurance company

By John O'Brien | May 8, 2013

MARTINSBURG – A Berkeley County bar is suing insurance companies that refuse to defend or indemnify it in a 2011 lawsuit over a fatal car accident.

Sparky’s Lounge, doing business as Iffie’s Sports Bar, filed a lawsuit against several insurance companies on May 2 in Berkeley Circuit Court. The two sides have been arguing over when the bar’s liquor liability policy went into effect.

Iffie’s says the policy began May 6, 2011, but the defendants claim it went into effect 11 days later.

In between the two dates, Harry Lee Franks Jr. was killed in a car driven by David W. McDaniel, who had been drinking at Iffie’s and was found to have a blood-alcohol content of .336.

The defendants are Fargo Insurance Financial Service, Delaware Valley Underwriting Agency, Founders Insurance and H. Lee Earehart.

Iffie’s Sports Bar’s policy lapsed sometimes before January 2011, and it began a conversation with Earehart, its insurance agent, on a new policy, according to a complaint.

In January, Iffie’s signed a new policy that excluded liquor liability, even though it had requested it, it says. Iffie’s also claims it was a “surplus lines” policy, a type that Earehart was not licensed to solicit or obtain.

“Further, despite improperly obtaining the policy, which did not provide coverage for the plaintiff’s business operations, Earehart failed to disclose to the plaintiff that it was not insured and that the policy issued to D. Ronnie DeHaven did not provide any coverage to it for any risks, including liquor liability,” the complaint says.

On May 6, 2011, Iffie’s applied for hospitality/liquor liability coverage, the complaint says. The bar says it was issued a policy that same day with a May 6, 2011, effective date.

Founders has refused to indemnify or defend Iffie’s, the bar says, arguing the effective date was May 17, 2011.

According to his obituary, Franks was 46 at the time of his death. He is survived by his parents, three sisters and two daughters.

Two auto insurers have settled with his estate. Nationwide agreed to pay $50,000, and National Casualty Company recently agreed to a confidential settlement.

Franks’ estate’s attorneys – Mark Jenkinson and Ronald M. Harman of Burke, Schultz, Harman & Jenkinson in Martinsburg – are working on a 33 percent contingency fee, court records show.

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