American Legion Post 49 v. Jefferson Insurance

In this declaratory judgment action, we must decide whether a clause in an insurance contract, which excludes from coverage injury resulting from the sale of alcoholic beverages by an *759organization engaged in the business of selling alcoholic beverages, applies to a non-profit organization which derives substantial revenue from the regular sale of alcohol.

The facts in this case are not in dispute. The plaintiff, American Legion Post #49 (the Legion) is a private veterans’ association granted non-profit status by the federal government for income tax purposes. The Legion operates a bar which…