Mark Dzielski fell from a nightclub's loading dock as he was carrying sound equipment from the nightclub to his truck after a concert ended. Dzielski alleged that defects in the loading dock caused the accident. Essex Insurance Company (Essex) insured the nightclub. Dzielski sued the nightclub and Essex denied coverage. The nightclub then sued Essex seeking a declaration that it was obligated to indemnify the nightclub.

The Essex policy's "Restaurant, Bar, Tavern, Night Clubs, Fraternal, and Social Clubs Endorsement" contained a "stage hand" exclusion. It provided, in relevant part: "(t)he coverage under this policy does not apply to "bodily injury, or any injury, loss, or damage arising out of (i)njury to any entertainer, stage hand, crew, independent contractor, or spectator, patron, or customer who participates in or is a part of any athletic event, demonstration, show, competition, or contest." The lower court determined that the exclusion did not apply, found in the nightclub's favor, and awarded it $950,000. Essex appealed.

On appeal, Essex argued that the policy language could be construed broadly to include all persons who performed any tasks in connection with a show, including loading and unloading sound equipment. Essex specifically argued that the phrase "arising out of" required this broader interpretation.

The Supreme Court, Appellate Division, Fourth Department, New York disagreed. It found that the policy could also be read narrowly to include only those persons who performed in the show or only the activity that occurred during the show. It emphasized the fact that a property defect in a location completely unrelated to the concert performed that night caused the accident. The Supreme Court agreed with the lower court's decision but noted that the policy had a limit of $500,000 per occurrence with a $500 deductible. As a result, it modified the lower court's judgment by reducing it to $499,500 plus interest and costs.

The lower court's decision was affirmed with modifications.

Dzielski vs. Essex Insurance Company. Supreme Court, Appellate Division, Fourth Department, New York. December 23, 2011. 90 Atlantic Reporter 3d 1493