An insurer has no duty to defend a bowling center against claims that it overserved alcohol to a patron who then drove and killed another motorist, a New Mexico federal court ruled, finding that the policy's liquor liability exclusion bars coverage.

In an order Friday, U.S. District Judge Kea W. Riggs granted Employers Mutual Casualty Co.'s motion for summary judgment as to the duty to defend Ruidoso Bowling Center, but denied the insurer's duty to indemnify claim as moot and dismissed it without prejudice.

The coverage dispute stems from the death of George Fitzgibbon, who was killed in the drunken driving crash involving Jadyn Mow in June 2024.

Fitzgibbon's estate and his family sued the bowling center in New Mexico state court in February, claiming that Ruidoso negligently provided alcohol to Mow before the accident.

The suit, which asserted claims for liquor license liability, negligence, loss of consortium and wrongful death, further claimed that the bowling center knew Mow engaged in frequent excessive drinking and was intoxicated on the night of the accident.

Employers Mutual, which insured the bowling center under a commercial general liability policy, agreed to defend Ruidoso subject to a reservation of rights. The insurer then filed the present action in March, seeking a declaration that it has no duty to defend or indemnify the bowling center in the underlying suit.

Because the estate subsequently dismissed the underlying suit without prejudice in July, Ruidoso contended that the insurer's action is moot.

Judge Riggs held Friday that the dismissal of the underlying suit does not moot the insurer's duty to defend claim.

"A lawsuit has been brought, an insurance claim has been filed, insurance coverage has been disputed, and the threat of the lawsuit being refiled looms large considering the dismissal was without prejudice," the judge said.

However, the dismissal does leave the court without a judgment that would trigger Employers Mutual's indemnity obligation, the judge found.

Judge Riggs added that the policy's liquor liability exclusion ultimately precludes the insurer's duty to defend.

The exclusion bars coverage for bodily injury for which an insured may be held liable by reason of causing or contributing to the intoxication of any person; furnishing alcohol to someone under the influence; or any statute, ordinance or regulation relating to the sale of alcohol, according to court filings.

"All the claims are unambiguously precluded by the liquor-liability exclusion and finding otherwise would circumvent the intent of the parties," Judge Riggs said.

Representatives of the parties did not immediately respond to requests for comment Tuesday.

Employers Mutual is represented by Amy M. Samberg and Justin S. Hepworth of Clyde & Co US LLP.

Ruidoso is represented by David M. Houliston of the Law Offices of David M. Houliston.

The estate and the Fitzgibbons are represented by Nicholas Pena and Pedro Levya of Glasheen Valles & Inderman.

The case is Employers Mutual Casualty Co. v. Dana Enterprises Inc. et al., case number 2:25-cv-00314, in the U.S. District Court for the District of New Mexico.