Key COVID-19 Insurance Coverage Cases Tracker (US): 2020 and 2021

Practical Law Practice Note w-024-9391 (Approx. 160 pages)

Key COVID-19 Insurance Coverage Cases Tracker (US): 2020 and 2021

by Practical Law Commercial Transactions

Law stated as of 25 Jan 2022 • USA (National/Federal)

A tracker of key insurance coverage cases to recover losses related to the ongoing 2019 novel coronavirus disease (COVID-19) pandemic. The tracker lists the cases in reverse chronological order, summarizes each case, and identifies the insurance coverage and policy provisions each case implicates, including business interruption coverage, civil authority provisions, ingress and egress provisions, communicable disease provisions, virus exclusions, contamination exclusions, pollution exclusions, and "acts or decisions" exclusions.

Companies attempting to recover COVID-19-related losses filed thousands of insurance coverage cases in 2020 and 2021, including claims for:

Lost profits and other lost business income.
Extra expenses incurred because of COVID-19.
Property damage caused by COVID-19.
Amounts paid or allegedly due to third parties for COVID-19 related personal injury or property damage for which the business is allegedly liable.

This resource tracks key cases filed in 2020 and 2021 seeking insurance proceeds for COVID-19 related losses. The cases on this tracker illustrate:

The types of arguments policyholders used to procure insurance coverage.
Procedural mechanisms policyholders used to pool resources and bring a quicker resolution to their cases, including class actions, consolidation, and multidistrict litigation.
Trends in coverage determinations, including:
- what substantive coverage arguments were successful;
- what venues courts considered proper for hearing COVID-19 related coverage claims; and
- whether COVID-19 coverage claims proved good candidates for dispositive motions.

The tracker:

Lists key pleadings for cases filed between 2020 and 2021 in reverse chronological order.
Links to key pleadings.
Identifies the insurance coverage implicated in each case.
Provides a summary of each case.

Another resource, Key COVID-19 Insurance Coverage Cases Tracker (US): 2022, tracks COVID-19-related insurance coverage cases filed after January 1, 2022.

This tracker does not include COVID-19-related securities cases that implicate the availability of Directors and Officers (D&O) insurance for corporate defendants. For trackers of key COVID-19-related securities cases, see:

For additional guidance on the availability of insurance coverage for COVID-19 losses, including information on how to file a successful claim for business interruption insurance, see:

For additional guidance on the commercial impacts of COVID-19, see Commercial Global Coronavirus Toolkit and Practical Law's COVID-19: Pandemic Response page.

Jan. 5, 2022	Terry Blacks’s Barbecue, LLC, et. al. v. State Auto. Ins. Co., No. 21-50078 (5th Cir. Jan. 5, 2022)	Insurance Coverage Implicated: Business Interruption, Extra Expense, and Restaurant Extension Endorsement Key Decision: On January 5, 2022, the 5th Circuit joined the 2nd, 6th, 7th, 8th, 9th, 10th, and 11th Circuits in holding that when used in commercial property policies, the phrase “physical loss of property” requires a tangible alteration or deprivation of property, and “cannot mean something as broad as the ‘loss of use of property for its intended purpose;’” therefore, COVID-19-related damages are not covered (Op. at pp. 9 and 11). The policyholder, the owner of several Terry Black's Barbecue restaurants ("Terry Black's"), suffered business income losses when it had to scale back its business to comply with emergency orders issued during the COVID-19 pandemic. Terry Black's attempted to recoup its losses by filing a claim with its insurer, State Auto, under the business interruption, extra expense, and restaurant extension endorsement of its commercial property policy. (Op. at pp. 2-3.) Terry Black's filed suit when State Auto denied its claim. The Western District of Texas granted State Auto's Motion to Dismiss, and Terry Black's appealed. Applying Texas law, the 5th Circuit affirmed the decision of the district court. It noted that although Texas courts had not interpreted the specific language at issue in the business interruption and extra expense provisions, they had interpreted similar language in different policies. Specifically, it stated that both provisions are only triggered when there is "physical loss or damage," and noted that Texas courts have interpreted “physical” to mean “tangible,” and “loss” to mean “a state of fact of being lost or destroyed, ruin or destruction.” (Op. at pp. 7.) Applying that definition of physical loss to this case, the 5th circuit held that the policy's business interruption and extra expense provisions did not provide coverage because: Terry Black's did not allege any tangible or physical alteration or deprivation of its property. Terry Black's had ownership of, access to, and ability to use all physical parts of its restaurants at all times. The prohibition on dine-in services did nothing to physically deprive Terry Black's of any property at its restaurants. (Op. at pg. 8.) The 5th Circuit also held that policy's restaurant extension endorsement did not provide coverage because the COVID-19-related orders of civil authority at issue did not result from the actual or alleged exposure to COVID-19 at a Terry Black's location; instead, the orders resulted from “the global pandemic and the need to take measures to contain and prevent the spread of COVID-19” (Op. at pg. 12). For more information on COVID-19-related insurance coverage cases filed after January 1, 2022, see Key COVID-19 Insurance Coverage Cases Tracker (US): 2022. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage and Filing a Business Interruption Claim Checklist.
Dec. 27, 2021	10012 Holdings Inc. v. Sentinel Insurance Co. Ltd., No. 21-80, (2d Cir. Dec. 27, 2021)	Insurance Coverage Implicated: Business Interruption, Extra Expense, and Civil Authority Key Decision: On December 27th, 2021, applying New York law, the 2d Circuit Court of appeals held there was no coverage for COVID-19-related damages under the business interruption, extra expense, or civil authority provision of an art gallery because the policyholder's property did not suffer direct physical damage. 10012 Holdings Inc., the policyholder, argued that its COVID-19-related business income losses were covered because its policy provided coverage for physical loss or damage, in the disjunctive, therefore "physical loss" include "loss of physical possession and/or direct physical deprivation" ( at 4). The 2d Circuit rejected the argument that 10012 Holding's commercial property policy covered damages for loss of use without any accompanying direct physical damage. It held: The business interruption and extra expenses provisions did not apply, because "under New York law the terms 'direct physical loss' and 'physical damage' in the Business Income and Extra Expense provisions do not extend to mere loss of use of a premises, where there has been no physical damage to such premises; those terms instead require actual physical loss of or damage to the insured's property" ( at 3 -4, relying on Roundabout Theatre.* Entron, Inc. v. Affiliated FM Ins. Co., 749 F.2d 127, 132 (2d Cir. 1984)). The civil authority provision did not apply, because: the policy's civil authority provision requires a showing that the COVID-19-related emergency orders at issue resulted from a direct physical loss to property in the vicinity of the gallery, but instead the orders were the result of the harm COVID-19 posed to human beings; and even if COVID-19 itself qualified as a "risk of direct physical loss," here 10012 Holdings' complaint "did not plausibly alleged that the potential presence of COVID-19 in neighboring properties directly resulted in the closure of [its] propert[y]; rather, [the complaint] alleges that closure was the direct result of the risk of COVID-19 at [its] property." ( at 4 -5.) For more information on COVID-19-related insurance coverage cases filed after January 1, 2022, see Key COVID-19 Insurance Coverage Cases Tracker (US): 2022. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage and Filing a Business Interruption Claim Checklist.
Dec. 9, 2021	Bradley Hotel dba Quality Inn & Suites Bradley v. Aspen Specialty Ins., No. 21-1173 (7th Cir. Dec. 9, 2021) Crescent Plaza Hotel Owner v. Zurich American Ins., No. 21-1316 (7th Cir. Dec. 9, 2021) Mashallah et al. v. West Bend Mutual Ins., No. 21-1507 (7th Circ. Dec. 9, 2021) Three cases against Cincinnati Insurance that were consolidated for appeal: Sandy Point Dental v. Cincinnati Ins., No. 21-1186 (7th Cir. Dec. 9, 2021) TJBC Inc. v. Cincinnati Ins., No. 21-1203 (7th Cir. Dec. 9, 2021) Bend Hotel Development v. Cincinnati Ins., No. 21-1559 (7th Cir. Dec. 9, 2021)	Insurance Coverage Implicated: Business Interruption. Key Decision: On Dec. 9, 2021, the 7th Circuit Court of Appeals issued six decisions holding that damages related to COVID-19-related restrictions on the use of property were not covered by the policyholders' commercial property policies because the policyholders' loss of use was not accompanied by any physical alteration of property. In each of the decisions, policyholders had to either close their business or severely limit their business operations as a result of COVID-19-related emergency governmental orders. Each policyholder sued its insurer. Federal district courts in Illinois ruled for the insurers in all six cases, and the policyholders appealed. The 7th Circuit Court of Appeals affirmed the lower courts. In its decisions, the 7th Circuit held that the commercial property insurance policies at issue did not cover the policyholders' damages because: Loss of use that is "not tethered to any direct physical loss or damage" cannot serve as a covered cause of loss. The COVID-19-related emergency closure orders at issue were "indisputably caused by the coronavirus," and, even if the emergency closure orders and the coronavirus are considered two different causes, neither one is a covered loss. (Bradley Hotel dba Quality Inn & Suites Bradley v. Aspen Specialty Ins., No. 21-1173, slip. op. at 6-7 (7th Cir. Dec. 9, 2021), citing Mashallah, Inc. v. West Bend Mutual Ins. Co., No. 21-1507, slip op. at 10 (7th Cir. Dec. 9, 2021) and Sandy Point Dental v. Cincinnati Ins., No. 21-1186, slip. Op. at 7-14 (7th Cir. Dec. 9, 2021).) The cases are: Bradley Hotel dba Quality Inn & Suites Bradley v. Aspen Specialty Ins., No. 21-1173 (7th Circ. Dec. 9, 2021) Crescent Plaza Hotel Owner v. Zurich American Ins., No. 21-1316 (7th Circ. Dec. 9, 2021) Mashallah et al. v. West Bend Mutual Ins., No. 21-1507 (7th Circ. Dec. 9, 2021) Sandy Point Dental v. Cincinnati Ins., No. 21-1186 (7th Circ. Dec. 9, 2021) TJBC Inc. v. Cincinnati Ins., No. 21-1203 (7th Circ. Dec. 9, 2021) Bend Hotel Development v. Cincinnati Ins., No. 21-1559 (7th Circ. Dec. 9, 2021) For more information on COVID-19-related insurance coverage cases filed after January 1, 2022, see Key COVID-19 Insurance Coverage Cases Tracker (US): 2022. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage and Filing a Business Interruption Claim Checklist.
October 12, 2021	Legal Update: Recent Federal Circuit Courts of Appeal Decisions and Federal District Court Decisions Regarding COVID-19-related Business Interruption Insurance Claims Hinge on Whether Losses Qualify as Direct Physical Loss or Damage	Insurance Coverage Implicated: Business Interruption. Update: On October 11, 2021, Practical Law Commercial Transactions published a Legal Update discussing recent federal court decisions regarding whether insurers are liable for COVID-19-related losses under business interruption insurance policies. The Update discusses recent opinions issued by the 6th, 8th, 9th, and 11th Circuit Courts of Appeal and federal district courts decisions in North Carolina and Missouri.
September 23, 2021	Novant Health Inc. v. Am. Guarantee & Liability Ins. Co., 21-CV-00309 (M.D. N. Carolina, Sept. 23, 2021)	Insurance Coverage Implicated: Business Interruption. Key Decision: Order denying insurer's motion to dismiss policyholder's complaint. On September 23, 2021, the Middle District of North Carolina denied American Guarantee's motion to dismiss Novant Health's complaint seeking business losses its healthcare centers incurred during the COVID-19 pandemic. The Court held it was inappropriate to dismiss Novant's complaint because: "Novant adequately alleged direct physical damage or loss." "Whether COVID-19 has resulted in direct physical damage or loss to Novant, and if so to what extent, are questions better evaluated on a developed factual record." (Order at pp. 1 and 6.) Novant's insurer, American Guarantee, also argued: The policy's virus exclusion barred Novant's claim. The court should dismiss Novant's claim for coverage under the policy's communicable disease provision of its policy because that argument was not yet ripe. The court rejected these arguments. It held that: There was a question regarding whether the virus exclusion was even a part of the policy at issue and therefore American Guarantee had not yet met its burden of showing the exclusion applied (Order at pg. 11). The communicable disease dispute is ripe (Order at pg. 13). For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
September 22, 2021	Santo’s Italian Café, LLC v. Acuity Ins. Co., 21-3068 (6th Cir. Sept. 22, 2021)	Insurance Coverage Implicated: Business Interruption. Key Decision: Order affirming dismissal of policyholder's complaint. On September 22, 2021, the 6th Circuit followed the 8th, 9th, and 11th Circuits in holding that COVID-19-related business interruption losses do not trigger coverage under commercial property insurance policies. Each of these courts held that busines interruption coverage required "direct physical loss of or damage to property," and COVID-19-related losses caused by "pandemic-triggered government order[s]" did not qualify (Order at pg. 2). Santo's Italian Café, the policyholder, filed a claim for business interruption damages it suffered when the COVID-19 pandemic and related governmental orders forced it to "halt ordinary operations" (Order at pg. 2). It sued its insurer, Acuity, after Acuity denied its claim. Santo's argued that although COVID-19 did not physically affect or directly alter the property, Ohio shut-down orders and orders prohibiting all but take-out dining deprived Santo's of a specific use of its property, and the phrase "physical loss of or damage" covered that type of loss (Order at pg. 8). The Court held that COVID-19-related governmental orders "simply prohibited one type of dining," they did not create the required "direct physical loss of property" or "direct physical damage to" property "that is a precondition for the business suspension coverage in the policy" (Order at pp. 5 and 9). For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
September 21, 2021	K.C. Hopps, Ltd. v. The Cincinnati Ins. Co., Inc., 20-cv-00437 (W.D. Missouri, Sept. 21, 2021)	Insurance Coverage Implicated: Business Interruption. Key Decision: Order granting in part and denying in part Defendant's Motion for Summary Judgment On September 21, 2021, the Western District of Missouri denied an insurer's motion for summary judgment and refused dismiss a restaurant chain's lawsuit seeking COVID-19-related business interruption losses from its insurer, Cincinnati Insurance. K.C. Hopps, Inc. operates bars, restaurants, catering services, and event spaces in the Kansas City Metropolitan area. On March 24, 2020, it submitted a claim to Cincinnati seeking coverage under the business interruption provision of its commercial property policy for business losses it incurred as a result of Stay-at-Home orders issued by civil authorities in Missouri and Kansas. Cincinnati denied the claim and K.C. Hopps filed suit. Both parties filed motions for summary judgment. The Court denied Cincinnati's motion. In doing so, it directly addressed the 8th Circuit's Oral Surgeons, P.C. v. Cincinnati Ins. Co., in which the 8th Circuit held that "the COVID-19 pandemic and the related government-imposed restrictions" do not constitute "direct 'accidental physical loss or accidental physical damage' under the policy" (Order at pg. 11; for more information on Oral Surgeons, see the July 2, 2021 entry below). The Court held that Oral Surgeons did not preclude coverage in this case, because the 8th Circuit only answered the narrow question of whether COVID-19 emergency orders constituted "direct physical loss" under the policy. The 8th Circuit did not determine, however, that COVID-19 could never cause "physical loss" or "physical damage" (Order at pg. 11). In fact, Oral Surgeons supports the position that "proof of physical contamination is sufficient to meet the Policy's requirement for physical loss or damage (Id.). Unlike the Plaintiff in Oral Surgeons, K.C. Hopps submitted evidence supporting the allegation that COVID-19 is "physical, contaminated its premises, and made [its] property unsafe." According to the Court, "[t]his theory of 'loss' is recoverable under the plain language of the Policy," which contemplates that "physical loss" or "physical damage" includes not only "actual, tangible physical alteration of property," but also "physical contamination which renders the property unsafe" (Order at pg. 14). The Court did, however, grant Cincinnati's motion for summary judgment on K.C. Hopps' civil authority and ingress and egress claims. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist
August 31, 2021	Gilreath Family & Cosmetic Dentistry Inc. v. Cincinnati Insurance Co., No. 21-11046, Slip. Op. (11th Cir. Aug. 31, 2021)	Insurance Coverage Implicated: Business Interruption. Key Decision: Order affirming dismissal of policyholder's complaint. On August 31, 2021, the 11th Circuit became the second federal appellate court to hold that COVID-19-related business interruption losses do not trigger coverage under commercial property policies because they do not involve physical damage to property. The policyholder, Gilreath Family & Cosmetic Dentistry, lost a substantial portion of its usual income when state orders and CDC guidelines forced it to cancel routine and elective dental procedures. Gilreath filed a claim to recover its losses under the business income, extra expense, and civil authority provisions of its commercial property policy. Gilreath's insurer, Cincinnati Insurance Co., argued that Gilreath's COVID-19-related business interruption losses were not covered because: Its policy only covered expenses that resulted from "direct loss to property" at the insured property. Gilreath didn't assert that it suffered physical loss or damage. The court agreed with Cincinnati. It held that neither the state's shelter in place orders nor any alleged COVID-19 particles in the air caused physical damage; therefore, Gilreath failed to state a claim under its commercial property policy. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
August 18, 2021	Mashantucket Pequot Tribal Nation v. Factory Mutual Insurance Co., Case No. 21-6140378 (Superior Court of Connecticut, Judicial District of Hartford, August 18, 2021)	Insurance Coverage Implicated: Business Interruption. Key Decision: Order denying insurer's motion to strike policyholder's complaint. On August 18, 2021, the Connecticut Superior Court (District of Hartford) denied Factual Mutual Insurance Company's (FM) motion to strike the Mashantucket Pequot Tribal Nation's complaint seeking $76 million in business losses the Foxwoods Resort Casino and other tribal-owned businesses incurred during the COVID-19 pandemic. FM argued that the virus exclusion in the tribe's policy specifically denied coverage for contamination caused by diseases, including COVID-19. The tribe argued that its policy expressly included coverage for business interruption losses caused by a communicable disease and coverage for communicable disease response costs and cleanup. The court held that the tribe's policy covered communicable disease business interruption and cleanup costs; however, a $2M sublimit applied. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
August 17, 2021	Dianoia's Eatery, LLC, d/b/a Dianoia's and Pizzeria Davide, et. al. v. Motorists Mutual Ins. Co., Case No. 20-2954 (3rd Cir., August 17, 2021).	Insurance Coverage Implicated: Business Interruption Key Decision: Order vacating district court removal orders and remanding cases for renewed consideration of the district courts' decisions to abstain from hearing the cases based on their authority under the Declaratory Judgment Act (DJA). On August 17, 2021, a divided panel of the Third Circuit Court of Appeals issued a ruling directing federal district courts in New Jersey and Pennsylvania to reconsider their decisions to remand COVID-19-related declaratory judgment actions to state court. Previously, the district court judges had used their authority under the Declaratory Judgment Act (DJA) to abstain from hearing the cases because the cases involved "novel and important issues" of state law that should be determined by state courts. The Third Circuit held that the district courts erred in weighing factors relevant to the exercise of their discretion to abstain from hearing the cases under the DJA. Specifically, the Third Circuit found that the district courts: Misinterpreted some of the factors that the Third Circuit has stated should be considered when declining to exercise jurisdiction. Did not squarely address the alleged novelty of state law issues. Did not create a record sufficient to permit thoughtful abuse of discretion review. The Third Circuit did not say where the cases should ultimately be heard. For more information, see the entry at August 27, 2020 (providing a discussion and procedural history for Dianoia's Eatery, LLC, d/b/a Dianoia's and Pizzeria Davide v. Motorists Mutual Ins. Co.). For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
July 2, 2021	Oral Surgeons, P.C. v. Cincinnati Ins. Co., Case No. 20-3211, Order Affirming District Court's Decision Granting Insurer's Motion to Dismiss (8th Circuit, July 2, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order affirming district court's dismissal of policyholder's breach of contract and bad faith claims. Key Pleadings and Court Orders: July 2, 2021: Order affirming district court's dismissal of policyholder's case. Oct. 21, 2020: Oral Surgeons, P.C.'s Notice of Appeal to 8th Circuit (Case No. 20-3211) Sept. 29, 2020: Order granting Cincinnti's Motion to Dismiss policyholder's breach of contract and bad faith claims (Oral Surgeons, P.C. v. Cincinnati Insurance Company, 491 F.Supp.3d 455 (S.D.Iowa, 2020)). Case Summary: The 8th Circuit Court of Appeals ruled in favor of Cincinnati Insurance in the first federal appellate ruling on a COVID-19-related business interruption coverage dispute. Oral Surgeons, P.C. stopped performing non-emergency procedures in late March, 2020, after the governor of Iowa issued a COVID-19-related emergency order imposing restrictions on dental practices. It submitted a claim to Cincinnati, its insurer, for lost business income and extra expenses. Cincinnati denied its claim, and Oral Surgeons filed a breach of contract and bad faith suit. The Southern District of Iowa granted Cincinnati's Motion to Dismiss and Oral Surgeons appealed to the 8th Circuit. Oral Surgeons argued that it suffered a "direct loss" to its property because the "policy's disjunctive definition of 'loss' as 'physical loss' or 'physical damage' " must be interpreted as providing coverage for both physical losses amounting to "lost operations or inability to use the business" and physical damage amounting to physical alteration to property (Order at pg. 3). The 8th Circuit rejected Oral Surgeon's argument an affirmed the District Court's dismissal of Oral Surgeons' complaint. It held: The policy required direct physical loss. Physical loss requires physical alteration of property. Oral Surgeons did not allege any physical alteration of property. (Order at pp. 3-5.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
June 15, 2021	Schleicher & Stebbins Hotels, LLC v. Starr Surplus Lines Ins. Cos., No. 217-2020-CV-00309, Order granting Plaintiff's Motion for Summary Judgment and denying Defendants' Motion for Partial Summary Judgment (N.H. Super. Ct. Merrimack Cty. June 15, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order granting policyholder's Motion for Summary Judgment and denying insurers' Motion for Partial Summary Judgment. Key Pleadings and Court Orders: June 15, 2021: Order granting policyholder's Motion for Summary Judgment and denying insurers' Motion for Partial Summary Judgment June 19, 2020: Complaint Case Summary: On June 15, 2021, the Superior Court of Merrimack County, New Hampshire granted the policyholder's Motion for Summary Judgment and denied the defendant insurers' Motion for Partial Summary Judgment in the COVID-19-related business interruption coverage case of its insured, a chain of hotels. The policyholder, the owner of a hotel chain with locations in New Hampshire, Massachusetts, and New Jersey, sought coverage for losses it suffered when it was unable to "continue normal business operations" due to "loss or damage" to its properties caused by COVID-19" (Compl. at pg. 13). The insurers denied the hotel chain's claim. The owner filed suit and both parties filed motions for summary judgment. The court granted the policyholder's motion for summary judgment. It held: The presence of COVID-19 caused "physical loss or damage" to the owner's property, because: "physical loss" in an insurance agreement includes "not only tangible changes to an insured property," but also changes "that exist in the absence of structural damage" so long as the changes are "distinct and demonstrable" (citing Mellin v. Northern Security Insurance Co., 115 A.3d 799 (N.H. 2015)); and COVID-19 is detectable, as shown by both the fact that various government authorities issued orders stating COVID-19 was widespread in the locations of the covered properties and the fact that COVID-19 can survive on surfaces within and around the covered properties. The policies' microorganism exclusion did not bar coverage because: courts hold competing views as to whether a virus is a "microorganism"; and exclusions must be construed narrowly against the insurer. The court did grant the motion for partial summary judgment of one insurer, Axis Surplus Insurance Co., based on a virus exclusion in its policy (none of the other policies at issue had a virus exclusion). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
May 5, 2021	Cinemark Holdings, Inc. v. Factory Mutual Insurance Co., No. 4:21-CV-00011, Order denying FM's Motion for Judgment on the Pleadings (E.D. Tex. May 5, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order agreeing to consider certified question Key Pleadings and Court Orders: May 5, 2021: Order denying FM's Motion for Judgment on the Pleadings April 5, 2021: FM's Answer to Cinemark's Amended Complaint March 30, 2021: FM's Motion for Judgment on the Pleadings March 19, 2021: Cinemark's Second Amended Complaint Feb. 8, 2021: Cinemark's Amended Complaint Dec. 22, 2020: FM's Answer to Cinemark's Complaint Dec. 22, 2020: Cinemark's Complaint Dec. 22, 2020: FM's Notice of Removal Case Summary: On May 5, 2021, the Eastern District of Texas denied Factory Mutual's (FM) Motion for Judgment on the Pleadings in a COVID-19-related business interruption coverage case. The policyholder, Cinemark, sought coverage for losses it suffered when, "as a direct result of the damage caused by COVID-19 to its property," including "changing the content of air and the character of surfaces," it "was forced to close its theaters" (Order at pg. 2). FM denied Cinemark's claim and Cinemark filed suit. In its Motion for Judgment on the Pleadings, FM argued its denial was proper because Cinemark did not allege physical loss or damage and the policy's Contamination Exclusion barred the claim. FM also argued that the court should follow its recent decision to dismiss an insured's COVID-19-related business interruption claim in Selery Fulfillment, Inc. v. Colony Ins Co., 4:20-CV-853, (E.D. Tex. March 15, 2021). The court denied FM's motion. In doing so, it acknowledged that " 'mandatory authority' suggests that 'physical loss' requires a physical alteration of the property" (Order at pg. 5). However, it held that because Cinemark "alleged that COVID-19 was actually present and actually damaged the property by changing the content of the air," it met its burden to defeat FM's motion (Id.). It distinguished Selery because: Selery never alleged that COVID-19 entered its property, only that the pandemic prevented it from fully utilizing its property. Cinemark's policy: is broader than Selery's; and expressly covers loss and damage caused by communicable disease. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
April 30, 2021	Philadelphia Eagles Limited Partnership v. Factory Mut. Ins. Co., Case. No. 21-cv-01776, Motion to Remand (E.D. Penn, April 30, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order agreeing to consider certified question Key Pleadings and Court Orders: April 15, 2021: Factory Mutual's Notice of Removal (Philadelphia Eagles' filed its Complaint on March 11, 2021, in the Pennsylvania Court of Common Pleas, Philadelphia County, Civil Case No. 210301454) April 22, 2021: Factory Mutual's Motion to Dismiss April 30, 2021: Eagles' Motion to Remand Case Summary: On March 11, 2021, the Philadelphia Eagles sued their insurer, Factory Mutual, for wrongful denial of its claim for COVID-19-business interruption losses. When it denied the Eagles' claim, Factory Mutual stated that the policy's contamination exclusion barred the claim. Factory Mutual removed the case to the Eastern District of Pennsylvania on April 15 and filed a Motion to Dismiss the Eagles' Complaint on April 22. On April 30, the Eagles filed a Motion to Remand. The team argued the case belonged in Philadelphia County so that: "The state court can resolve the novel questions of state insurance law at issue," including, "the interpretation of a property insurance policy covering, as here, 'all risks of physical loss or damage' versus 'direct physical loss or damage' " (emphasis in original). "[The district court] can avoid interference in the delicate state regulatory issues involved and give appropriate respect to the important state interests implicated by this action." (Motion to Remand at pg. 1.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
April 27, 2021	Related Appeals Case Nos. 21-10190, No. 20-14812, and 21-10490, Order granting Motion to Consolidate Related Appeals for Oral Argument (11th Cir., April 27, 2021) Emerald Coast Restaurants, Inc. v. Aspen Specialty Ins. Co., Case No. 21-10190. Sa Palm Beach, LLC. v. Certain Underwriters at Lloyd's, Case No. 20-14812. R.T.G. Furniture Corp. v. Aspen Specialty Ins. Co., Case No. 21-10490	Insurance Coverage Implicated: Business Interruption Case Type: Order granting Motion to Consolidate Related Appeals for Oral Argument Key Pleadings and Court Orders: January 15, 2021: Emerald Coast's Notice of Appeal to the 11th Circuit filed. January 19, 2021: Appeal docketed at 11th Circuit. March 31, 2021: Emerald Coast's Appellant Brief filed. March 31, 2021: Emerald Coast's Motion to Consolidate Appeals No. 20-14812 and 21-10190. April 27, 2021: Order granting Motion to Consolidate Related Appeals for Oral Argument. Case Summary: On April 27, 2021, the 11th Circuit granted insured Emerald Coast's motion to consolidate for oral argument its appeal of the dismissal of its COVID-19-related business interruption coverage suit with two related appeals: Sa Palm Beach, LLC. v. Certain Underwriters at Lloyd's, Case No. 20-14812. R.T.G. Furniture Corp. v. Aspen Specialty Ins. Co., Case No. 21-10490. The related cases concern the question of whether, under Florida law, "all-risk" commercial policies that include coverage for business interruption losses triggered by "direct physical loss of or damage to property" cover losses insureds incurred when COVID-19-related orders of civil authority forced insureds to close or severely restrict their business activities (see Emerald Coast's Appellant Brief at pg. 3). In each of the consolidated cases, the district court ruled that the policies require "actual physical damage" to trigger coverage, therefore COVID-19-related orders that "caused direct physical loss of property by detrimentally reducing the capabilities and function" of the insureds' businesses, "but did not cause any physical damage to insured property," did not trigger coverage (Id.). The briefing will continue to proceed separately in each appeal. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
April 14, 2021	Neuro-Communication Services, Inc. v. Cincinnati Ins. Co., et. al., Case No. 2021-0130 (Supreme Court of Ohio, April 14, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order agreeing to consider certified question Key Pleadings and Court Orders: January 28, 2021: Order certifying question from United States District Court Northern District of Ohio, Eastern Division. April 14, 2021: Order agreeing to consider the certified question from the United States District Court, Northern District of Ohio, Eastern Division. Case Summary: On April 14, 2021, the Ohio Supreme Court agreed to consider agreed to consider Neuro-Communication Services, Inc. v. Cincinnati Insurance Co., et. al. (three justices dissented). The fact that the Ohio Supreme court agreed to hear this case is already having ripple effects on Ohio COVID-19 coverage cases, and its decision on the merits will be coverage determinative for many Ohio policyholders. In its brief April 14, 2021 Order, the Court stated that it would answer this certified question from the Northern District of Ohio: Does the presence in the community, or on surfaces at a premises, of the novel coronavirus known as SARS-CoV-2, constitute direct physical loss or damage to property; or does the presence on a premises of a person infected with COVID-19 constitute direct physical loss or damage to property at that premises? The Neuro-Communication Services, the policyholder, argued that the question presented was not a pure question of law; therefore, the Supreme Court should not decide it before discovery. The Cincinnati Insurance Company, the insurer, argued that the legal effect of language in a contract of insurance is a question of law, and that the Court should take up the case to provide certainty to Ohio policyholders regarding the extent of coverage for COVID-19-related business interruption damages. The court's decision to take up these certified questions had immediate impacts on other pending COVID-19-related coverage disputes related to the same Cincinnati insurance policy forms. For example, in a consolidated case pending in Cuyahoga County (Case No. 20-931683) against Cincinnati Insurance based on policy language similar to the language at issue in Neuro-Communication Services, the court granted Cincinnati’s Motion to Stay Proceedings pending the Ohio Supreme Court’s determination of the certified question. For more information on the underlying case, see the entry below at January 21, 2021, discussing Neuro-Communication Services, Inc. v. Cincinnati Ins. et. al., Case No. 20-cv-01275, Northern District of Ohio (Eastern Division). For more information on Cincinnati's Motion to Stay in the consolidated cases pending in Cuyahoga County, see the entries below at June 25, 2020 (discussing Dante Ristorante v. Cincinnati Ins. Co., Eastside Metals v. Cincinnati Ins. Co., and Saucy Brew Works v. Cincinnati Ins. Co.). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
April 13, 2021	Blue Coral v. West Bend Mutual Insurance Co., No. 20 cv 496, Opinion and Order granting West Bend's Motion to Dismiss (E.D.N.C. Apr. 13, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: April 13, 2021: Order and Opinion granting West Bend's Motion to Dismiss October 20, 2020: West Bend's Motion to Dismiss September 22, 2020: West Bend's Notice of Removal from Superior Court, Wake County, Case No. 20 CVS 8024. Case Summary: On April 13, 2021, the Eastern District of North Carolina granted West Bend Insurance Company's (West Bend) motion to dismiss the complaint of its insured, Blue Coral, for damages it sustained when it closed its businesses pursuant to COVID-19-related shutdown orders. Blue Coral, the North Carolina-based franchises of a chain of spas and massage parlors, sought coverage under the communicable disease provision of the policies it purchased for each of its locations. The communicable disease provision provides coverage for losses resulting from: Temporary suspension of business. Due to a governmental order. Issued in response to an outbreak of communicable disease at the insured premises. After West Bend denied its claims, Blue Coral filed breach of contract and declaratory judgment claims against West Bend. (Order at pp. 2 and 6). The Court held that although "COVID-19 is a plausibly-alleged communicable disease within the meaning of the Communicable Disease Provision," Blue Coral's breach of contract claim failed because: Blue Coral did not "plausibly alleged that COVID-19 was ever present 'at the insured premises.' " Blue Coral's argument that because COVID-19 was present within the state generally, it was also present at their premises, was not reasonable because that interpretation of the communicable disease provision would "impermissibly render the phrase 'at the insured premises' entirely meaningless." (Order at pp. 6 and 8.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
March 31, 2021	Thor Equities, LLC v. Factory Mutual Ins. Co., Order Denying the Parties' Cross Motions for Judgment on the Pleadings (S.D.N.Y., March 31, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order Denying the Parties' Cross Motions for Judgment on the Pleadings Key Pleadings and Court Orders: March 31, 2021: Order denying Factory Mutual's Motion for Judgment on the Pleadings September 14, 2020: Factory Mutual's Cross-Motion for Judgment on the Pleadings and Denying Thor's Motion for Partial Judgment on the Pleadings August 17, 2020: Thor's Motion for Judgment on the Pleadings July 1, 2020: Factory Mutual's Answer April 30, 2020: Complaint Case Summary: On March 31, 2021, the Southern District of New York denied the parties' cross-motions for judgment on the pleadings. The policyholder, a commercial landlord, is seeking coverage for its COVID-19-related business income losses, including more than $20 million in rental income (Order at pg. 2). FM and Affiliated FM, its sister company, use the policy form at issue regularly, so this decision – which indicates that the policy might provide coverage for COVID-19-related business interruption damages – could have far-reaching ramifications. The policyholder, Thor Equities, LLC (Thor), and the insurer, Factory Mutual (FM), filed cross-motions for judgement on the pleadings. The FM policy at issue affirmatively provides coverage for communicable disease. However, it also includes a contamination exclusion that excludes coverage of "any cost due to contamination, including the inability to use or occupy property" (Order at pg. 7). Both Thor and FM argued that the policy's contamination exclusion was coverage determinative, but: FM argued that the phrase "including the ability to use or occupy property" in the contamination exclusion unambiguously excluded Thor's claim for COVID-19-related lost rental income. Thor argued that "the Contamination Exclusion’s failure to mention any loss 'due to contamination,' while explicitly referencing 'any cost due to contamination,' " indicates that the exclusion unambiguously does not bar coverage for Thor’s losses. (Order at pg. 7.) The court held that both parties were wrong: "the language of the exclusion is ambiguous, and judgment on the pleadings is inappropriate" (Order at pg. 6). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
March 25, 2021	Timothy A. Ungarean d/b/a Smile Savers Dentistry P.C. v. CNA and Valley Forge Insurance Co., Memorandum and Order Granting Plaintiff's Motion for Summary Judgment (Allegheny Cty Court of Common Pleas, March 22, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order Granting Policyholder's Motion for Summary Judgment Key Pleadings and Court Orders: March 22, 2021: Order granting Plaintiff's Motion to Dismiss Dec. 4, 2020: Insurer's Cross Motion for Summary Judgment October 5, 2020: Insurer's Motion for Summary Judgment July 30, 2020: Insurer's Answer June 5, 2020: Complaint Case Summary: On March 22, 2021, a state court in Pennsylvania (the Allegheny Court of Common Pleas) granted a policyholder's motion for summary judgment for coverage of its COVID-19-related business interruption damages. In a very policyholder friendly decision, the court determined that: Smile Savers demonstrated it was reasonable to believe the Business Income, Extra Expense, and Civil Authority provisions provided coverage. CNA failed to demonstrate the applicability of any policy exclusions or coverage limitations. The policyholder, Smile Savers Dentistry, shutdown the majority of its business operations as a result of the spread of COVID-19 and several emergency orders issued by Governor Wolf. As a result, Smile Savers "experienced a dramatic decrease in business income." It filed a claim for coverage under the Business Income and Extra Expense provisions of the insurance policy it purchased from CNA. (Memo. and Order at pp. 2-3 and 9.) CNA denied the claim and Smile Savers filed a Complaint for breach of contract and bad faith. The parties filed cross motions for summary judgment. The court noted that "the interpretation of the phrase 'direct physical loss of or damage to property' was the key point of the parties' dispute. CNA argued that it required "some type of physical alteration of or demonstrable harm to Plaintiff's property." Smile Savers argued that "direct physical loss of or damage to property" includes "loss of use." (Memo. and Order at pp. 10-11.) The court applied the general rules of construction that words used in insurance contracts should be: Given their "natural, plain, and ordinary sense" "Considered in the context of the insurance contract and the specific facts of the case;" and Not treated as "mere surplusage" (construed in a manner that gives effect to all the contract's language). It concluded that "due to the presence of the disjunctive 'or,' whatever 'direct physical loss of' means, it must mean something different than 'direct physical … damage to.'" It further held that " 'loss' reasonably encompasses the act of losing possession [and/or] deprivation, which includes the loss of property absent any harm to property." (Memo and Order at pp. 11-12, 13.) The court further held that the contract's definition for "period of restoration does not "require repairs, rebuilding, replacement, or relocation of Plaintiff's property" in order for Smile Savers to be entitled to business interruption and extra expense coverage. Instead, " 'period of restoration' merely imposes a time limit on available coverage, which ends . . . when Plaintiff's business is once again operating at normal capacity, or reasonably could be operating at normal capacity," and CNA could not avoid providing coverage simply because in the context of COVID-19, the "period of restoration" is difficult to pinpoint (Memo and Order at pp. 15-16.) The court also held that Smile Savers was entitled to civil authority coverage because: "Even absent any damage to property," COVID-19 resulted in a serious public health crisis that "directly and physically cause the loss of use of property all across the Commonwealth." "Although Plaintiff's business was technically permitted to remain open to conduct certain limited emergency procedures, this does not change the fact that an action of civil authority effectively prevented" the public from accessing Smile Savers "in any meaningful way." Finally, the Court held that none of the policies exclusions applied, including exclusions for: Contamination. Fungi, wet rot, dry rot, and microbes. Consequential loss. Acts or decisions and ordinance. (Memo and Order at pp. 18-19.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
March 15, 2021	Back2Health Chiropractic Center LLC v. Sentinel Insurance Co. Ltd., No. 20-cv-6717, (D.N.J. Mar. 15, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Class action (declaratory judgment and breach of contract) Key Pleadings and Court Orders: March 15, 2021: Order denying Insurer's Motion to Dismiss July 17, 2020: Sentinel's Motion to Dismiss July 17, 2020: Sentinel's Answer June 1, 2020: Complaint Case Summary: On March 15, 2021, the District Court of New Jersey denied Sentinel Insurance Co.'s motion to dismiss the nationwide class action complaint of its insured, Back2Health Chiropractic Center. Back2Health filed a class action complaint against Sentinel after Sentinel denied its claim for business income losses related to New Jersey's COVID-19 shutdown orders. Sentinel moved to dismiss. It argued that the court lacked specific personal jurisdiction over non-resident class members that did not have an adequate link to New Jersey and that Back2Health did not have standing to bring common law breach of contract claims for breaches that did not expressly harm Sentinel and that arose under the laws of other states. The Court rejected both of Sentinel's arguments; specifically: It was not appropriate to address the issue of personal jurisdiction over unnamed class members until class certification stage. Prospective class members do not need to establish standing. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
March 10, 2021	Denison University et al. v. Certain Underwriters at Lloyd’s et al., Case No. 21-cv-01010, Complaint (S.D. Ohio March 10, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Declaratory judgment and breach of contract Key Pleadings and Court Orders: March 10, 2021: Complaint May 17, 2021: Plaintiffs' Notice of Voluntary Dismissal without Prejudice (Denison University, Kenyon College, Ohio Wesleyan University, and the College of Wooster) Case Summary: On March 10, 2021, Denison University, Kenyon College, Ohio Wesleyan University, and the College of Wooster filed a lawsuit against their insurers after the insurers denied the colleges' claims for COVID-19-related damages. The four private liberal arts colleges, all located in Ohio, have all risk policies that expressly include both communicable disease coverage and “interruption by communicable disease” coverage (for business interruption caused by a governmental agency’s order). The coverage trigger is "direct physical loss of or damage to property." They allege that the interruptions caused by Ohio's Stay at Home Order and Stay Safe Order led to significant losses. The colleges argue that their COVID-19-related claims are covered because: The inability to access or use all or a portion of the insured locations counts as "direct physical loss of or damage to property." The colleges met the physical loss requirements in numerous ways, including: the actual or potential presence of coronavirus in the air; the necessity of modifying physical behaviors and physical interior spaces to reduce the potential for viral transmission; and government orders that shut down or restricted the use of physical spaces; and the need to mitigate the threat or actual presence of coronavirus on assorted surfaces, in heating and air conditioning symptoms, and "any other of the multitude of places virus has or could be found." (Compl. at ¶¶ 219-220.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
March 8, 2021	Florexpo LLC and Kendal Floral Supply, LLC v. Travelers Property Casualty Co., Case No. 20-CV-1024, Order Granting Defendant's Motion to Dismiss (S.D. Cal., March 8, 2021)	Insurance Coverage Implicated: Business Interruption; Extra Expense Case Type: Order Granting Insurer's Motion to Dismiss (without prejudice) Key Pleadings and Court Orders: May 3, 2021: Travelers' Motion to Dismiss for Lack of Prosecution March 8, 2021: Order Granting Travelers' Motion to Dismiss (without prejudice) July 1, 2020: Travelers' Motion to Dismiss June 3, 2020: Complaint May 7, 2021: Florexpo's Response in Opposition to Motion to Dismiss for Lack of Prosecution Case Summary: On March 8, 2021, the Southern District of California granted Travelers' Motion to Dismiss the COVID-19 business interruption and extra expense claim of its insureds, Florexpo and Kendal Floral Supply. Floroexpo and Kendal Floral Supply, flower importers and distributors, purchased a "Deluxe Property Coverage" policy from Travelers. The policy provided coverage for loss or damage to "stock," including cut flowers Floroexpo and Kendal Floral Supply kept at various locations. They filed a claim for loss of stock after COVID-19 orders of civil authority prevented them from entering two of their warehouses, resulting in a total loss of stock at those locations. Travelers denied the claim, and Floroexpo and Kendal Floral Supply filed suit for breach of contract, breach of the duty of good faith and fair dealing, and declaratory relief (Order at pp. 1-2). Travelers moved to dismiss the Complaint. It argued the policy's "Acts of Decisions Exclusion" excludes losses caused by the acts or decisions of any governmental body, not just losses that were "sole and direct cause" of the damage, and therefore barred the claim (Order at pp. 4 and 9). The Court granted Traveler's motion. It held: The COVID-19 government shutdown orders were the direct cause of Plaintiffs' loss, which brought their claim within the Acts or Decisions Exclusion. The plain language of the Acts of Decisions Exclusion excludes losses caused by both the intentional acts and the careless omissions of governmental authorities (it was not limited to only negligent acts). (Order at pp. 11-13.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
March 4, 2021	Kingray Inc., et. al. v. Farmers Group Inc., et. al., Case No. EDCV 20-963, Order Granting in Part and Denying in Part Defendant's Motion to Dismiss (C.D. Cal., March 4, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order Granting in Part and Denying in Part Insurer's Motion to Dismiss Key Pleadings and Court Orders: May 4, 2020: Complaint September 4, 2020: Farmer's Motion to Dismiss September 28, 2020: First Amended Complaint October 21, 2021: Farmer's Motion to Dismiss First Amended Complaint March 4, 2021: Order Granting in Part and Denying in Part Farmer's Motion to Dismiss April 14, 2021: Kingray’s Answer to Amended Complaint April 28, Plaintiff/Counter-Defendant Nora's Style Salon's Answer to Defendant's Counterclaim Case Summary: On March 4, 2021, the Central District of California granted in part and denied in part Farmers Group Inc.'s Motion to Dismiss the Complaint of its insureds, Kingray Inc. and Nora's Style Salon, Inc., for COVID-19-related business interruption losses. Both Kingray and Nora's had Farmers' all risk policies that provided coverage for losses "caused by direct physical loss of or damage to property." Kingray's policy also included a provision which excludes “loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease.” (Order at pg. 6.) Kingray and Nora argued that "either the coronavirus itself has caused 'direct physical loss of or damage to property' " or, in the alternative, "state-mandated closures and new social distancing rules count as such direct physical loss or damage." (Order at p. 8.) The Court held that when COVID-19 emergency orders prevented Nora's from operating or inviting others onto its property, "it was disposed in some way," and "dispossession is a form of loss" that constitutes "direct physical loss" under both California and New York law (Order at pg. 10). Therefore, it denied Farmers' motion to dismiss Nora's claims. However, the Court granted Farmer's motion to dismiss Kingray's claims. It held that even if Kingray suffered damages similar to those suffered by Nora's, the virus exclusion in Kingray's policy excluded coverage. (Order at pg. 8). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist
February 26, 2021	Sunstone Hotel Investors Inc. v. Endurance American Specialty Ins. Co., Case No. 20-02185, Order denying Defendant's Motion to Dismiss (February 26, 2021, C.D. Cal.)	Insurance Coverage Implicated: Environmental Liability Coverage Case Type: Declaratory judgment and breach of contract Key Pleadings and Court Orders: November 13, 2020: Complaint January 8, 2021: Endurance American's Motion to Dismiss February 26, 2021: Order denying Defendant's Motion to Dismiss March 12, 2021: Endurance American's Answer May 17, 2021: Sunstone's Motion for Judgment on the Pleadings as to Edurance's 11th Defense (the policy's definition of "Interruption Period") Case Summary: On February 26, 2021, the Central District of California denied Endurance American's Motion to Dismiss in Sunstone in Sunstone Hotel Investors Inc. v. Endurance American Specialty Ins. Co. The policyholder, an investment trust with 20 hotel properties, purchased an environmental impairment liability policy from Endurance American. In February 2020 one of its hotels, the Marriott Boston Long Wharf, hosted the international conference of a biotech company called Biogen. The Mariott closed in March 2020 after the CDC notified it that three attendees tested positive for COVID-19. Eventually the CDC deemed the conference a superspreader event and concluded that it led to more than 20,000 cases of COVID-19. Sunstone filed a claim with Endurance American under its environmental policy for its COVID-19-related business losses. After Endurance denied its claim, Sunstone filed suit against it in the District Court in Central California. Endurance filed a Motion to Dismiss. The Court denied Endurance's Motion. It held that the policy: Did not state in "clear, explicit, and unambiguous" language that the policy's self-insured retention for cleanup coverage applied to business interruption coverage. Included "express indications" that the self-insured retention does not apply to business interruption coverage. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
February 25, 2021	Egg and I, LLC v. U.S. Specialty Ins. Co., No. 20-cv-00747, Order granting Insurer's Motion to Dismiss (D. Nev. Feb. 25, 2020) Egg and I, LLC v. U.S. Specialty Ins. Co., Motion to Dismiss, No. 2:20-cv-00747 (D. Nevada, May 26, 2020) Egg and I, LLC v. U.S. Specialty Ins. Co., No. 2:20-cv-00747 (Nev. Dist. Ct., April 24, 2020)	Insurance Coverage Implicated: Business Interruption (included in a Restaurant Recovery policy) Case Type: Class action; declaratory judgment and breach of contract Key Pleadings and Court Orders: April 24, 2020: Complaint May 26, 2020: Motion to Dismiss February 25, 2021: Order granting U.S. Specialty's Motion to Dismiss March 25, 2021: Plaintiffs' Notice of Appeal to the 9th Circuit (Case No. 21-15545) Case Summary: This is one of a growing number of COVID-19-related business interruption lawsuits in which the insurer filed a motion to dismiss on the basis that COVID-19 related damages, including claims for lost income due to COVID-19-related shutdown orders, do not trigger coverage. Unlike most COVID-19 business interruption lawsuits, however, this plaintiff is pursuing a claim under a food contamination policy. Plaintiff is a chain of restaurants in Las Vegas ("Egg Works"). On April 24, 2020, Egg Works filed a class action lawsuit seeking business interruption damages under a "Restaurant Recovery" policy. Egg Works claims U.S. Specialty Insurance Co. ("U.S. Specialty") wrongfully denied its claims for business income losses it suffered after orders of civil authority in Nevada closed all non-essential businesses and limited its restaurants to takeout and delivery service only. The policy provides business interruption coverage for insured events, including "Accidental Contamination," which it defines as an accidental or unintentional contamination, impairment, or mislabeling of any "restaurant offerings" (Compl. at ¶¶ 3 and 28-31). The policy also includes coverage for "Extra Expense" and "Rehabilitation Expenses" (Id. at ¶¶ 33-36). The policy contains an exclusion for "any form of Avian Influenza Viruses," but not an exclusion for COVID-19 specifically, coronaviruses generally, or any virus other than Avian Influenza Viruses. The complaint includes counts for: Breach of Contract. Breach of the Implied Covenant of Good Faith and Fair Dealing. Declaratory Relief. U.S. Specialty filed a Motion to Dismiss on May 26, 2020. It claims that Egg Works' suspension of business operations due COVID-19 shutdown orders does not qualify as an insured event because they did not suffer any losses or incur any extra expenses "directly and solely" as the result of an insured event such as accidental contamination or accidental impairment. Instead, Plaintiffs' suffered losses and incurred extra expenses because "they were forced to suspend business operations at their restaurants" in accordance with the shut-down orders. (Motion to Dismiss at pp. 6 and 10-12 (emphasis added).) On February 25, 2021, the Court granted U.S. Specialty's Motion to Dismiss. It rejected Plaintiffs' argument that the term "insured products" included service to onsite customers. According to the Court, the policy defined insured products as "ingestible products for human consumption or any of their ingredients or component," and that definition did not include serving food to customers onsite. On March 25, 2021, the Plaintiffs' filed a Notice of Appeal to the 9th Circuit. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
February 22, 2021	In re: Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, Case No. 1:20-cv-05965, Order denying in part and granting in part Insurer's Motions to Dismiss and Summary Judgment Motions (N.D. Ill, Feb. 22, 2021) In re: Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, Case No. 1:20-cv-05965, Order Reassigning Cases (N.D. Ill, Oct. 8, 2020) In re: Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, No. 2964, JPMDL, Transfer Order (Doc. 88, Oct. 2, 2020)	Insurance Coverage Implicated: Business interruption insurance. Case Type: Order denying in part and granting in part Insurer's dispositive motions in In re: Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation. Key Pleadings and Court Orders: October 2, 2020: JPMDL Order: establishing MDL No. 2964, In re: Society Insurance; and transferring MDL No. 2964 to the Northern District of Illinois (Case No. 1:20-cv-05965) October 8, 2020: Order reassigning all cases falling within the scope of MDL 2694 to Hon. Edmond E. Chang (includes a list of all cases included in MDL 2964) November 2, 2020: Minute entry setting various deadlines and designating bellwether motions to dismiss (all other cases are stayed and discovery in all cases is stayed): Big Onion, 20-cv-2005; Valley Lodge, 20-cv-2813; and Rising Dough, 20-cv-5981. January 14, 2020: Oral argument on two issues: does the term "direct" in the Society policy's definition of "direct physical loss" imply a proximate cause analysis; and when will the insured properties be "repaired, rebuilt, or replaced" if the coronavirus caused a loss within the meaning of the policy coverage? February 22, 2021: Order denying in part and granting in part Society's dispositive motions March 23, 2021: Motion to Certify Questions for Interlocutory Appeal: "Whether a loss of use, or a partial loss of use, of a policyholder’s covered property constitutes “direct physical loss of” covered property under the Society policy terms;" and "Whether, as a matter of law, Plaintiffs’ claims can be maintained under 215 ILCS 5/155 when the court found that the term “direct physical loss” is genuinely in dispute and “[a] reasonable jury could find for either side based on the arguments and factual record presented so far in the litigation." May 6, 2021: Society's Motion for leave to file Motion to Dismiss all Claims in MDL Action Premised upon Civil Authority and/or Contamination Provisions of the Society Policies. June 15, 2021: Order denying Society's Motion to Certify an Interlocutory Appeal. Case Summary: On February 22, 2021, the Northern District of Illinois granted in part and denied in part Society Insurance Company's dispositive motions in three bellwether cases that are part of an MDL consolidating all COVID-19 coverage actions against Society (MDL 2964). The Court held that the policyholders in the bellwether cases, Big Onion Tavern Group, LLC, Rising Dough Inc., and Valley Lodge Corp., adequately alleged they suffered a "direct physical loss of or damage to" their property caused by the COVID-19 pandemic. It rejected Society's argument that the policyholders' business losses were caused by governmental orders, not COVID-19. According to the Court, a reasonable jury could find: The COVID-19 pandemic was the proximate cause of the policyholders' losses. The policyholders suffered "direct physical loss" of their properties because COVID-19 closure orders imposed a physical limit. However, the Court: Granted summary judgment to Society on Big Onion's and Valley Lodge's claims that their losses were covered under the civil authority and contamination provisions of their policies. Granted Society's motion to dismiss Rising Dough's claim that its losses were covered under the sue-and-labor provision of its policy. For a discussion of the creation of the Society MDL and earlier pleadings in In re Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, see the Oct. 2, 2020 entry below. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
February 18, 2021	Ceres Enterprises, LLC v. Travelers Insurance Co., Case No. 20CV01925, Order Granting Defendant's Motion to Dismiss (N.D. Ohio Feb 18, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: August 28, 2020: Notice of Removal from Cuyahoga County Court of Common Pleas (CV20935219) September 4, 2020: Defendant Travelers' Motion to Dismiss February 18, 2021: Order Granting Defendant Travelers' Motion to Dismiss Case Summary: On February 18, 2021, the Northern District of Ohio granted defendant Travelers Insurance Co.'s Motion to Dismiss the claim of its insured, Ceres Enterprises. Ceres operates hotels in Ohio and neighboring states. It filed a claim for COVID-19-related business income losses with its insurer, Travelers. When Travelers denied the claim, Ceres filed suit. Ceres alleged that COVID-19 and COVID-19-related orders of civil authority caused it direct physical loss and triggered its policy. Travelers filed a motion to dismiss. The Court granted Travelers' motion. It held: The policy at issue was not ambiguous. The phrase "physical loss of or damage to" property "intends a tangible loss of or harm to the insured property" and "excludes financial or monetary losses." For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
February 16, 2021	NeCo Inc. v. Owners Insurance Co., No. 20-cv-4211, Order Denying in part and Granting in part Insurer's Motion to Dismiss (W.D. Mo. Feb. 16, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Order Denying in part and Granting in part Insurer's Motion to Dismiss Key Pleadings and Court Orders: October 28, 2020: Notice of Removal (from Circuit Court of Boone County, Missouri, Case No. 20BA-CV03022) November 4, 2020: Owners' Motion to Dismiss December 4, 2020: Order granting NeCo ten days to file an amended complaint and denying Owners' Motion to Dismiss without prejudice December 28, 2020: NeCo's Amended Complaint Jan. 11, 2021: Owners' Motion to Dismiss the Amended Complaint February 16, 2021: Order Denying in part and Granting in part Insurer's Motion to Dismiss. March 2, 2021: Answer to First Amended Complaint Case Summary: On February 16, 2021, the Western District of Missouri denied in part and granted in part Owners Insurance Co.'s Motion to Dismiss the business interruption claim of its policyholder, NeCo Inc. NeCo filed a claim for business interruption losses to recover money it lost when it closed for several month to comply with COVID-19-related stay-at-home orders. Its insurer, Owners Insurance Co., denied the claim. NeCo filed suit and Owners moved to dismiss the claim. The Court held that NeCo: Adequately alleged that it suffered "physical loss of or damage to" its property by pleading that the COVID-19 virus was present on its premises and impaired the value and the use of its property (including by presenting detailed allegations regarding the volume of customers in the store and the nature of COVID-19 and COVID-19 aerosoles). Did not adequately alleged that the COVID-19 stay-at-home orders caused "direct physical loss of or damage to" NeCo's property. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist
February 10, 2021	Soundview Cinemas v. Great American Insurance Group, et al., No. 605985/2020 (Sup. Ct. Nassau Cty. New York Feb. 10, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: August 21, 2020: Complaint filed. February 10, 2021: Order Granting Insurer's Motion to Dismiss. Case Summary: On February 10, 2021, the New York Supreme Court (Nassau County) granted an insurer's motion to dismiss the COVID-19-related business interruption claim of its insured, Soundview Cinemas. Soundview operates a movie theatre. In March of 2020, the Governor of New York issued an Executive Order forcing the theatre to close, and Executive Orders are still preventing it from reopening. Soundview filed a claim with its insurer, Great American, to recover its business interruption losses. Great American denied the claim and Soundview filed a suit against it. Soundview argues that its losses were covered by its business interruption policy. Its insurer, Great American, filed a motion to dismiss. It argued: Soundview did not allege direct physical damage to property – only that it was forced to closed due to Executive Orders – and that its policy did does not cover economic loss unaccompanied by physical damage. The policy's virus exclusion bars coverage. (Order at pg. 7.) The Court granted Great American's motion, stating that while it "is sympathetic to the economic consequences" resulting from COVID-19 closure orders, loss of use due to government orders does not constitute "direct physical loss of or damage to the property" that would trigger business interruption coverage (Order at pp. 13-14). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
February 9, 2021	McKinley Development Leasing Co. Ltd., et al v. Westfield Insurance Co., 2020CV00815, Order Denying Insurer's Motion to Dismiss (Stark Cty Ohio Feb. 9, 2021)	Insurance Coverage Implicated: Business interruption Case Type: Order Denying Insurer's Motion to Dismiss Or, in the Alternative, For a Stay Key Pleadings and Court Orders: May 21, 2020: Complaint August 27, 2020: Westfield's Motion to Dismiss Or, in the Alternative, For a Stay February 9, 2021: Order Denying Insurer's Motion to Dismiss Or, in the Alternative, For a Stay February 23, 2021: Westfield’s Answer March 5, 2021: Westfield’s Motion for Partial Judgment on the Pleadings March 19, 2021: McKinley’s Response to Motion for Partial Judgment on the Pleadings April 20, 2021: Westfield's Motion to Stay pending ruling on the certified question before the Ohio Supreme Court (for more information, see the entry at April 14, 2021) Case Summary: On February 9, 2021, the Court of Common Pleas in Stark County, Ohio denied Westfield Insurance's Motion to Dismiss the COVID-19-related business interruption insurance claim filed by its insured, McKinley Development Leasing Company. McKinley's policy covers lost business income caused by "direct physical loss of damage to property at premises," and has a virus exclusion. McKinley, a development and leasing company, argued that the policy covered losses it suffered when COVID-19-related shutdown orders issued by Ohio Governor Mike Dewine closed its tenants' businesses and they were unable to pay rent they owed to McKinley. McKinley further argued that the virus exclusion did not apply because its losses were caused by the pandemic, and not the COVID-19 virus itself. Westfield argued that McKinley's losses were not covered because: "Physical loss" means tangible, physical damage that alters the structural integrity of a property. The virus exclusion bars recovery for any COVID-19 related damages. The Court denied Westfield's motion to dismiss, holding: The policy language was ambiguous and therefore it must be construed in favor of the insured (Order at pp. 5-6). McKinley pled facts sufficient to entitle it to recovery (Id.). The virus exclusion did not exclude coverage because: a virus is not is not the same as a pandemic; and if Westfield "intended for a 'pandemic' to be excluded from coverage," then it should have "explicitly excluded" pandemics from coverage. (Id. at pp. 9-10.) The Court also denied McKinley's motion to stay the proceedings, noting that "many local realtors, developers, landlords, and businesses are hanging on a thread as a result of government orders, shutdowns, and pandemic protocols," and "Westfield has not established a hardship or an equity that would overcome McKinley's right to address its claims through the court" (Order at pg. 11). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
February 4, 2021	Ja-Del, Inc. v. Zurich Am. Ins. Co., et. al., 2016-CV11209, Order Denying Insurer's Motion to Dismiss (16th Cir., Jackson Cty Mo., February 4, 2021) Ja-Del, Inc. v. Zurich Am. Ins. Co., et. al., 2016-CV11209, Complaint (16th Cir., Jackson Cty Mo., April 28, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Order Denying Insurer's Motion to Dismiss Key Pleadings and Court Orders: April 28, 2020: Complaint June 1, 2020: Zurich American's Motion to Dismiss February 4, 2021: Order Denying Insurer's Motion to Dismiss March 4, 2021: Insurer's Answer March 5, 2021: Order Vacating its ruling of Feb. 4, 2021 Case Summary: On February 4, 2021, a state court in Jackson County, Missouri denied Zurich American's Motion to Dismiss its insured's claim for COVID-19-related business interruption losses. The insured, Ja-Del, runs a chain of barbeque restaurants. In its Complaint, Ja-Del claimed that Zurich American wrongfully denied its coverage claim after it suffered lost income and direct physical losses when COVID-19 related orders of civil authority forced it to close its restaurants. Zurich American filed a motion to dismiss. It argued that Ja-Del did not suffer the type of tangible, physical loss required to trigger coverage under its policy. The Court denied Zurich's motion. It held that the policy language was ambiguous; therefore, it had to construe the policy in favor of finding coverage for Ja-Del. However, the Court later vacated its judgment in favor of Ja-Del. The case is ongoing. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
January 29, 2021	The Cherokee Nation, et. al. v. Lexington Ins. Co., et. al., Case No. cv-2020-150, Order and Opinion granting Plaintiff's Motion for Partial Summary Judgement (Cherokee Cty, Okla., Jan. 29, 2021) The Cherokee Nation, et. al. v. Lexington Ins. Co., et. al., Case No. CV-2020-150, Order granting Plaintiff's Motion for Partial Summary Judgement (Cherokee Cty, Okla., Jan. 14, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order and Opinion Granting The Cherokee Nation's Motion for Partial Summary Judgment Key Pleadings and Court Orders: April 13, 2020: Complaint June 24, 2020: Insurers' Answer (filed by multiple defendant insurers) July 9, 2020: Insurers' Motion to Dismiss July 24, 2020: Amended Complaint August 17, 2020: The Cherokee Nation's Motion for Partial Summary Judgment November 19, 2020: Order denying Insurers' Motion to Dismiss January 14, 2021: Order granting The Cherokee Nation's Motion for Partial Summary Judgment January 29, 2021: Order and Opinion granting The Cherokee Nation's Motion for Partial Summary Judgment February 26, 2021: Cherokee Nation's Voluntary Dismissal of Certain Claims March 1, 2021: Matter retained for disposition in the Oklahoma Supreme Court (Case No. 119359) March 19, 2021: Order making Cherokee Nation et. al. v. Lexington Ins. Co., et. al. and Choctaw Nation of Oklahoma v. Lexington Ins. Co., et. al. companion cases. Case Summary: On January 14, 2021, an Oklahoma state court granted the Cherokee Nation's motion for partial summary judgment in a coverage case seeking damages for COVID-19 related business interruption damages. Two weeks later, on January 29, 2021, the Court issued a full opinion explaining its decision. The Cherokee Nation argued: The phrase "all risk of direct physical loss or damage" in its policy must be read to give a distinct meaning to both "physical loss" and "physical damage" and that its policy provided coverage for both risks. It suffered "physical damage" because the physical presence of COVID-19 at its premises deprived it of the intended use of those properties. Communicable disease exclusions would be superfluous if the policy did not cover damages caused by communicable disease. The Court held: The Cherokee Nation provided the only reasonable explanation of the phrase "direct physical loss or damage": if property could not be used for its intended purpose, the losses were covered even without "physical altercation" of the property; and the disjunctive "or" in the phrase signified that the policy covered more than "mere" physical alteration. The Cherokee Nation made a plausible claim for business interruption coverage. The insurers did not show that an exclusion barred coverage. For a discussion of the January 14, 2021 order granting Cherokee's partial motion for summary judgment, see Westlaw Today, Insurers owe Cherokee Nation coverage for COVID-19 losses, judge rules, 2021 INSDBRIEF 0037. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
January 28, 2021	Goodwill Industries of Orange County, California v. Philadelphia Indemnity Ins. Co., Order Overruling Defendant's Demurrer, Jan. 28, 2021	Insurance Coverage Implicated: Business interruption. Case Type: Order Overruling Insurer's Demurrer. Key Pleadings and Court Orders: November 6, 2020: Complaint December 23, 2020: Certain Underwriters at Lloyd's Answer December 23, 2020: Philadelphia Indemnity's Demurrer January 28, 2021: Order Denying Philadelphia Indemnity's Demurrer February 8, 2021: Philadelphia's Answer April 19, 2021: Certain Underwriters at Lloyd's London's Motion for Judgment on the Pleadings On January 28, 2020, the Orange County Superior Court denied an insurer's demurrer and criticized California federal courts for granting insurers' motions to dismiss in COVID-19-related business interruption matters. Instead, the Court said: "given the high standard that must be met" to grant a dispositive motion in favor of an insurer, "any doubts must be resolved in favor of the Plaintiff [the policyholder]" (Order at pg. 3). The policyholder in this case, Goodwill Industries of Orange County, argued that COVID-19 and the coronavirus caused "direct physical loss and damages to its property" because: Coronavirus was present at its properties when state and local authorities issued closure orders. When Goodwill reopened its properties: its employees tested positive; and public health orders required it to "conduct additional cleaning and sanitization to respond to and remove" the virus from physical surfaces in its properties. (Order at pg. 3.) The Court held that these allegations sufficiently alleged coverage and that it was impossible to make the determination at this stage, without a more fully developed factual record, that the coronavirus and COVID-19 "have not, in some manner, caused physical damage to property" (Order at pg. 3). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
January 27, 2021	OTG Management PHL LLC, et. al. v. Employers Ins. Co. of Wausau, Case No. 2:21-cv-01240 (N.D. NJ, January 27, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Complaint seeking declaratory relief and damages for breach of contract, bad faith, and violations of consumer fraud statutes. Key Pleadings and Court Orders: January 27, 2021: Complaint Case Summary: Operators of several airports sued their insurer, Employers Insurance Company of Wausau, in New Jersey District Court. The airports have an "all risk" policy. The Complaint alleges: The policy provides time element, attraction property, order of civil or military authority, imminent threat, and ingress/egress coverage. COVID-19 was present at the airports' properties and it caused physical loss or damage. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
January 21, 2021	Neuro-Communication Services, Inc. v. Cincinnati Ins. Co., et. al., Case No. 20CV01275, Order Certifying Question to the Supreme Court of Ohio (N.D. Ohio Jan. 21, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Order Certifying Question to the Supreme Court of Ohio. Key Pleadings and Court Orders: June 10, 2020: Complaint August 3, 2020: Cincinnati's Motion to Dismiss August 3, 2020: Cincinnati's Motion to Certify Questions to the Supreme Court: Does the general presence in the community of a virus, such as the novel coronavirus known as SARS-CoV-2, constitute direct physical loss to property; Does the presence on a premises of a person infected with a virus, such as the novel coronavirus known as SARS-CoV-2, constitute direct physical loss to property at that premises; and Does the presence on surfaces of a virus, such as the novel coronavirus known as SARS-CoV-2, constitute direct physical loss to property at that premises? August 21, 2020: Answer January 4, 2021: Court indicates it will grant Cincinnati's Motion to Certify and orders parties to work together to reach a stipulation regarding the specific language of the questions to be certified. January 21, 2021: Order of Certification to the Supreme Court of Ohio (certifying one question: Does the general presence in the community, or on surfaces at a premises, of the novel coronavirus known as SARS-CoV-2, constitute direct physical loss or damage to property; or does the presence on a premises of a person infected with COVID-19 constitute direct physical loss or damage to property at that premises?) April 14, 2021: Order of the Ohio Supreme Court agreeing to hear the certified question. Case Summary: Plaintiff Neuro-Communication Services, Inc., an audiology practice, filed a claim to recover its business interruption losses after it had to shutdown temporarily in response to Ohio's COVID-19-related emergency orders. Although its policy was all-risk and did not contain a virus exclusion, Cincinnati Insurance Company rejected Neuro-Communication's claim. Cincinnati alleged that the Neuro-Communications did not suffer direct physical loss to property. Neuro-Communications filed suit in the Northern District of Ohio. Cincinnati filed a motion to dismiss and a motion to certify three questions to the Ohio Supreme Court. On January 21, 2021, Judge Benita Pearson certified one question to the Ohio Supreme Court: Does the general presence in the community, or on surfaces at a premises, of the novel coronavirus known as SARS-CoV-2, constitute direct physical loss or damage to property; or does the presence on a premises of a person infected with COVID-19 constitute direct physical loss or damage to property at that premises? (Order at pg. 2.) In explaining her decision, she noted that "dozens if not hundreds" of insurance coverage claims seeking COVID-19-related losses had been filed in Ohio courts, and the Supreme Court should resolved the certified question to "bring uniformity to the application of state law" to the common policy language at issue. (Order at pg. 4.) On April 14, 2021, the Ohio Supreme Court agreed to hear the certified question. For more information on the proceedings at the Ohio Supreme Court, see the entry above at April 14, 2021. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
January 19, 2021	Henderson Road Restaurant Systems, Inc. dba Hyde Park Grille, et. al. v. Zurich American Ins. Co., Case No. 1:20CV1239, Order granting Plaintiffs' Motion for Summary Judgment (N.D. Ohio Jan. 19, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Order granting Plaintiffs' Motion for Summary Judgment. Key Pleadings and Court Orders: June 5, 2020: Notice of Removal from Cuyahoga County Court of Common Pleas, Case No. 20CV932243 June 9, 2020: Answer October 30, 2020: Zurich American's Motion for Summary Judgment October 30, 2020: Hyde Park's Motion for Summary Judgment January 19, 2021: Order granting Hyde Park's Motion for Summary Judgment Case Summary: Hyde Park Grille sued its insurer, Zurich American, after Zurich rejected its claim for business interruption damages it suffered when Ohio's COVID-19-related emergency orders forced it to temporarily close. Hyde Park argued that its policy covered "direct physical loss of property;" therefore, coverage was triggered when they lost physical use of their property due to state orders of civil authority preventing them from serving customers inside their properties (Order at pp. 8-10). Hyde Park further ordered that the virus exclusion in its policy did not apply, because its loss was not caused by the coronavirus; instead, its loss was caused by Ohio's shutdown orders (Order at pg. 10). Judge Dan Polster held that Ohio law required ambiguity in insurance contracts had to be construed in favor of the policyholder. Since Hyde Park's policy "is susceptible to [the] interpretation" that "they lost their real property when the state governments ordered that the properties could not be used for their intended purposes," then "the policy must be construed liberally" in Hyde Park's favor (Order at pp. 18-23). Additionally, Judge Polster certified the question of whether the policy covers Hyde Park's damages for interlocutory appeal, which allows the 6th Circuit to review his decision. (Order at pg. 2.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
January 8, 2021	Humans & Resources LLC, d/b/a Cadence Restaurant v. Firstline National Insurance Co., No. 20-cv-2152, , Order Denying Insurer's Motion to Dismiss (E.D. Pa. Jan. 8, 2021) Humans & Resources LLC v. Firstline National Insurance Co., No. 20-cv-2152, , Memorandum and Order Denying Insurer's Motion to Dismiss (E.D. Pa. Jan. 8, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order Denying Insurer's Motion to Dismiss Key Pleadings and Court Orders: May 4, 2020: Complaint June 19, 2020: Firstline National Ins. Co.'s Answer October 29, 2020: Amended Complaint November 11, 2020: Firstline National Ins. Co.'s Motion to Dismiss Amended Complaint January 8, 2021: Order Denying Firstline National Ins. Co.'s Motion to Dismiss Amended Complaint January 21, 2021: Firstline's Answer to Amended Complaint Case Summary: On January 8, 2021, the Eastern District of Pennsylvania denied an insurer's motion to dismiss the COVID-19-related business interruption claim of its insured, a Philadelphia restaurant called Cadence. Cadence submitted a business interruption claim to its insurer, Firstline, after COVID-19-related emergency orders forced it first to close, and then reopen only on a limited basis. Firstline denied its claim and on May 4, 2020, Cadence sued Firstline in the Eastern District of Pennsylvania. Cadence argued that it had a reasonable expectation that its all risk policy would provide coverage if it suffered a business interruption like the one COVID-19 caused, including coverage when a civil authority forced it to close due to a public safety issue (Memo. at pp. 25-28). In denying Firstline's motion to dismiss, the Court held that even though Cadence's coverage claim failed under the policy "as written," because the Complaint did not allege "direct physical loss or damage to property," (Memo. at pp. 17-19), Cadence's reasonable expectations allegations "plausibly allege facts which could give rise to a basis to afford coverage" (Id. at pg. 28). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
January 8, 2021	Digital Age Marketing Group, IMC. v. Sentinel Ins. Co. Lmtd. d/b/a the Hartford, 20-cv-61577, Order Granting Insurer's Motion to Dismiss (S.D. Fla. January 8, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: May 15, 2020: Complaint filed in the 17th Judicial Circuit in Broward County, Florida (Case No. CACE-20-008167 DIV 18) August 4, 2020: Defendant's Notice of Removal to the Southern District of Florida August 8, 2020: Defendant's Motion to Dismiss September 8, 2020: Plaintiff's Amended Motion to Remand December 1, 2020: Order Denying Plaintiff's Motion to Remand January 8, 2021: Order Granting Defendant's Motion to Dismiss (with leave to file amended complaint) Case Summary: On January 8, 2021, a federal district court in Florida granted defendant Sentinel Insurance Company's motion to dismiss the COVID-19-related business interruption claim of its insured, Digital Age Marketing Group. Digital Age sought coverage for COVID-19-related property damage and business income losses including the policy's business interruption provision, civil authority provision, extra expense provision, and a special endorsement for loss or damage caused by fungi, wet rot, dry rot, bacteria, or virus (Order at pp. 2-3). The policy also included a virus exclusion barring direct or indirect damage caused by a virus (Id. at pg. 7). Sentinel denied Digital Age's claim. Digital Age filed suit against Sentinel, and Sentinel filed a Motion to Dismiss. The Court granted Sentinel's motion. It held: The policy's virus exclusion was unambiguous and barred coverage. Digital Age failed to allege direct physical loss. (Order at pp. 9-10.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
January 7, 2021	Sylvester and Sylvester Inc., d/b/a Nick Sylvester's North End Italian v. State Auto. Mut. Ins. Co., 2020-cv-00817, Order Denying Insurer's Motion for Judgment on the Pleadings (Court of Common Pleas Stark Cty. Ohio, January 7, 2021)	Case Type: Order Denying Insurer's Motion for Judgment on the Pleadings Case Summary: On January 7, 2021, the Common Pleas Court in Stark County, Ohio, denied an insurer's motion for judgment on the pleadings, which sought to dismiss its insured's case seeking coverage for COVID-19-related business interruption expenses. Key Pleadings and Court Orders: May 21, 2020: Complaint November 25, 2020: Amended Complaint January 7, 2021: Order Denying Insurer's Motion to Dismiss The insured, Sylvester and Sylvester, runs a restaurant in Columbus, Ohio that suffered business interruption losses after COVID-19-related orders of civil authority forced it to shut down. It filed a claim with State Auto. State Auto issued a denial that stated that Sylvester and Sylvester did not suffer direct physical loss of, or damage to, the premises. The Court cited to several policy provisions in its decision, including the policy's food-borne illness endorsement and civil authority provision. It explicitly rejected State Auto's arguments that: The food-borne illness endorsement covered risks only emanating from food. The COVID-19 emergency orders cited in the Complaint were not specifically targeted at Sylvester and Sylvester. Sylvester and Sylvester's claim failed because it didn't allege the "actual" presence of coronavirus on the premises. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
January 7, 2021	The Riverwalk Seafood Grill Inc. d/b/a Riverside Banquets v. Travelers Casualty Ins. Co. of America, 1:20-cv-03768, Order Granting Insurer's Motion to Dismiss (N.D. Ill. January 7, 2021)	Insurance Coverage Implicated: Business Interruption Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: June 26, 2020: Complaint filed October 13, 2020: Insurer's Motion to Dismiss January 7, 2021: Order Granting Insurer's Motion to Dismiss Case Summary: On January 7, 2021, a federal district court in Illinois granted defendant Charter Oak Fire Insurance Company's motion to dismiss the COVID-19-related business interruption claim of its insured, Riverside Banquets (the entity that issued the policy at issue was Charter Oak Fire Insurance Company, not the named defendant, Travelers Casualty Insurance Company of America). Riverside Banquet sought coverage under its policy's business expense provision, civil authority provision, and ingress or egress provision for business losses due to COVID-19 (Order at pp. 2-3). Riverside's policy also included a virus exclusion excluding loss or damage "caused directly or indirectly" by "[a]ny virus, bacterium, or other microorganism that induces or is capable of inducing physical distress, illness or disease" (Order at pg. 3, emphasis in original). Charter Oak denied Riverside's claim. Riverside filed suit against Charter Oak and Charter Oak filed a Motion to Dismiss. The Court granted Charter Oak's motion with prejudice (Order at pg. 8). It held that "the plain language of the Virus Exclusion is dispositive" and requires the Court to dismiss Riverside's Complaint (Id. at pg. 5). The Court also stated: Other federal courts that had considered COVID-19-related business interruption claims where policyholders claimed their losses resulted either from the presence of the virus or from orders of civil authority that were intended to slow the spread of the virus also held virus exclusions barred any recovery (Id. at pg. 5). The policy's virus exclusion was unambiguous with "clear, sweeping, and all-encompassing" language that covered "any virus" and all claims arising "directly or indirectly" from a virus (Id. at pg. 6). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
January 6, 2020	Fitness International LLC v. Zurich American Insurance Co. et al., No. 21-2-00261-3, (Wash. Super. Ct., King Cty. Jan. 6, 2021)	Case Type: Breach of contract and declaratory judgment. Key Pleadings and Court Orders: January 6, 2021: Complaint filed January 29, 2021: Fitness International’s Motion to Enjoin Defendants April 19, 2021: Defendants’ Motion to Dismiss Case Summary: Fitness International, which operates LA Fitness health clubs throughout North America, sued its insurers to recover business interruption losses it suffered after COVID-19 related emergency orders forced it to close its gyms. Fitness International argues that its insurers denied its claim without any meaningful investigation. The complaint asks the court to determine that Fitness International suffered direct physical loss or damage to its property because: It is "statistically certain" that coronavirus was present at each of its health clubs (¶ 56), including: hundreds of its employees were diagnosed with COVID-19 and COVID-19 rates of transmission were exceedingly high in cities with LA Fitness locations (¶¶ 60-62); the virus physically altered the air inside its gym (¶ 50); and the virus caused a tangible, physical change to its property, "transforming everyday surfaces" in their gyms into a "transmission vehicle for disease" and making physical contact with them "unsafe for their ordinary and customary use" (¶¶ 52-53 and 55). It continues to incur extra expenses related to the COVID-19 pandemic, including providing PPE to its employees, installing social distancing barriers, and upgrading ventilation systems (¶ 73). The polices at issue do not include a bacteria and virus exclusion. For more information on Fitness International, see Westlaw Insurance Daily Briefing, January 13, 2021 (2021 INSDBREF 0020). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
December 30, 2020	Drama Camp Productions, Inc. and J&M, LLC d/b/a Shades v. Mt. Hawley Ins. Co., 20-cv-266, Order Granting Insurer's Motion to Dismiss (S.D. Ala. Dec. 30, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: May 8, 2020: Complaint filed May 22, 2020: First Amended Complaint June 9, 2020: Insurer's Motion to Dismiss December 30, 2020: Order Granting Insurer's Motion to Dismiss with Prejudice Case Summary: On December 30, 2020, a federal district court in Alabama granted defendant Mount Hawley Insurance Company's motion to dismiss the COVID-19-related business interruption claim of its insureds, Drama Camp Productions and Shade. Drama Camp and Shade argued they suffered a substantial loss of business income when Alabama's Governor and Health Officer implemented measures to stop the spread of COVID-19, including closure orders and orders to operate well below capacity (Order at pg. 4). They filed a claim for insurance coverage with Mount Hawley. Mount Hawley denied the claim and Drama Camp and Shade filed a Complaint for breach of contract and declaratory relief. They asserted that because the COVID-19-related orders prevented them from using their property for its intended purpose, they had suffered direct physical loss that triggered coverage. They also argued that the policy's "period of restoration" provision contemplates their interpretation of the policy (that "a reasonable insured would understand a loss of usability of property to qualify as a direct physical loss of property") because the COVID-19-related orders first rendered their properties unusable, and then required them to repair their properties by returning them to a "sound or healthy" state (Id. at pp. 6 and 12-13). Finally, Drama Camp and Shade argued that if the Court should certify the question of whether they suffered a direct physical loss when COVID-19-related orders rendered them unable to use their property for its intended use to the Alabama Supreme Court (Order at pg. 5). Mount Hawley filed a Motion to Dismiss. It argued that coverage required a "direct physical loss" and plaintiffs alleged only that they lost the ability to use their properties for their intended purpose. It also argued that exclusions in the policy barred any recovery of COVID-19-related business income losses (Order at pg. 5). The court held: It would not certify the case to the Alabama Supreme Court because "the question presented is not sufficiently close" (Order at pp. 7-8). Drama Camp and Shade failed to allege that direct physical loss caused its business income losses (Id. at pp. 8-9). A reasonable insured would not understand that Alabama's closure orders: caused "direct physical loss of property"; or required a "repair" under the policy's "period of restoration" provision. (Id. at pp. 10-13.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
December 30, 2020 and December 28, 2020	Atma Beauty, Inc. v. HDI Global Specialty SE, et. al., 20-cv-21745, Order Granting Defendants' Motion to Dismiss (S.D. Fla. Dec. 30, 2020) Sun Cuisine, LLC d/b/a Zest Restaurant and Market v. Certain Underwriters at Lloyd's London, 20-cv-21827, Order Granting Defendant's Motion to Dismiss (S.D. Fla. Dec. 28, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: Atma Beauty v. HDI April 27, 2020: Complaint filed July 14, 2020: Defendant's Motion to Dismiss December 30, 2020: Order Granting Defendant's Motion to Dismiss without prejudice January 25, 2021: Atma Beauty's Amended Complaint filed February 16, 2021: Defendant's Motion to Dismiss Amended Complaint Sun Cuisine v. Certain Underwriters May 1, 2020: Complaint filed August 10, 2020: Insurer's Motion to Dismiss October 20, 2020: Plaintiff's Motion for Coordination of Related Actions (following the JPML's denial of petition to transfer and consolidate more than a dozen Lloyd's-related actions and its recommendation to consolidate similar actions pending in the same federal districts (see In re: Certain Underwriters at Lloyd's London, Covid-19 Bus. Interruption Prot. Ins. Litig., MDL No. 2961 (Oct. 2, 2020)) December 28, 2020: Order Granting Insurer's Motion to Dismiss without prejudice. January 28, 2021: Sun Cuisine's First Amended Complaint. February 17, 2021: Certain Underwriter's Motion to Dismiss Case Summary: On December 30, 2020, a federal district court in Florida granted defendant HDI Global Specialty SE's motion to dismiss the COVID-19-related business interruption claim of its insured, Atma Beauty. Atma suspended business operations after the City of Miami Beach, Miami-Dade County, and the Governor of Florida issued emergency orders requiring residents to stay at home and closing all non-essential retail and commercial establishments (Order at pg. 4). It filed a claim for its business interruption losses with its insurer, HDI, citing the business income, extra expense, and civil authority provisions of its policy. HDI denied its claim, and Atma filed a Complaint for damages and seeking a declaratory judgment. HDI filed a motion to dismiss. It argued: Atma did not allege it suffered a "direct physical loss of or damage to" the insured property under the business income, extra expense, or civil authority provisions of the policy. Even if Atma did suffer direct physical loss or damage, the policy's pollution exclusion precluded coverage. (Order at pg. 5.) The court held: Atma failed to allege "direct physical loss or damage," the policy's "threshold requirement" for coverage (Order at pg. 7). The damage or loss "must be actual" and none of plaintiff's alleged losses qualify as "actual physical loss or damage" (emphasis in original), including: loss of business income; extra expense; and diminished value and use of the covered property. (Id., citing Mama Jo's Inc. v. Sparta Ins. Co., 823 F. App'x 868, 879 (11th Cir. 2020).) The court did not reach the question of whether the pollution exclusion applied. The Southern District of Florida issued a similar decision granting an insurer's motion to dismiss in a COVID-19-related business interruption case on December 28, 2020. See Sun Cuisine, LLC d/b/a Zest Restaurant and Market v. Certain Underwriters at Lloyd's London, 20-cv-21827, Order Granting Defendant's Motion to Dismiss at pp. 6-7 (S.D. Fla. Dec. 28, 2020) (holding plaintiff-insurer's COVID-19-related losses did not trigger coverage under a business interruption policy provision because under Florida law and the plain language of the policy loss of functionality and intended use do not constitute physical loss or damage). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
December 23, 2020	1210 McGavok St. Hospitality Partners, LLC d/b/a Adele's Restaurant v. Admiral Indemnity Co., 20-cv-694, Order Granting Insurer's Motion to Dismiss (M.D. Tenn., Dec. 23, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: July 15, 2020: Complaint filed in the Chancery Court for Davidson County, Tennessee (Case No. 20-289- III) August 14, 2020: Notice of Removal to Middle District of Tennessee December 23, 2020: Order Granting Defendant's Motion to Dismiss with prejudice Case Summary: On December 23, 2020, a federal district court in Tennessee granted defendant Admiral Indemnity Company's motion to dismiss the COVID-19-related business interruption claim of its insured, Adele's restaurant, with prejudice. Adele's filed suit against its insurer, Admiralty, after it denied Adele's claim for business interruption losses when COVID-19-related closure orders issued by the Mayor of Nashville substantially interrupted Adele's business operations (Order at pg. 3). In its Complaint, Adele's argued: Its policy did not define the phrase "direct physical loss of or damage to covered property," and that phrase "may reasonably be interpreted to occur when a covered cause of loss threatens or renders property unusable or unsuitable for its intended purpose or unsafe for normal human occupancy and/or continued use" (Compl. at ¶ 25). Nashville's closure orders triggered civil authority coverage because they: were made "in direct response to the continued and increasing presence of the coronavirus" on or around Adele's premises; prohibited the public from accessing Adele's; and caused Adele's to suspend its operations. (Id. at ¶¶ 39-43.) The policy's virus exclusion did not apply and, even if it did, the court should estop Admiralty from enforcing it based on "principles of regulatory estoppel, as well as general public policy" (Id. at ¶¶ 49-57). Admiralty filed a motion to dismiss. The court dismissed Adele's Complaint with prejudice. It held: The policy's virus exclusion precluded all Adele's claims for coverage (Order at pp. 8-12). There is no business interruption coverage because: the phrase "direct physical loss of or damage to property" requires physical damage to property and does not include mere loss of use; and Adele's did not allege that "direct physical loss of or damage to property" caused its suspension of operations. (Id. at pp. 12 – 17.) There is no civil authority coverage because: the virus did not cause physical damage to the property; the COVID-19-related closure orders that caused Adele's business interruption losses were issued to control the spread of COVID-19, not because of "dangerous physical conditions"; and the COVID-19 related closure orders did not prohibit physical access to Adele's. (Order at pg. 18.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
December 15, 2020	In re: Erie Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, No. 2969, JPMDL, Transfer Order (Doc. 96, Dec. 15, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Multidistrict litigation. Case Summary: On December 15, 2020, the Judicial Panel on Multidistrict Litigation (JPMDL or "the Panel") issued a transfer order immediately consolidating 13 cases against units of Erie Insurance group. Prior to consolidation the cases were pending in five different judicial districts. The Western District of Pennsylvania will hear the consolidated cases. In August, the Panel refused to centralize all COVID-19 business interruption coverage cases but agreed to consider arguments to centralize litigation against individual insurers (see the August 12, 2020 entry below). The Panel considered show cause orders with respect to five insurers at its September hearing session. On October 2, 2020, the Panel issued a transfer order consolidating 34 actions against Society Insurance Company to the Northern District of Illinois; however, it refused to consolidate the cases pending against the other four insurers: Lloyd's of London, Cincinnati Insurance Company, The Hartford, and Travelers (see the October 2, 2020 entry below). In its December 15, 2020 Order, the Panel concluded that centralization of the Erie actions "will serve the convenience of the parties and witnesses and further the just and efficient conduct of this litigation." It noted that: Erie, like Society, is a regional carrier. The centralized actions have a defined geographical scope and implicate only 13 jurisdictions. The actions against Erie present common factual and legal questions; therefore, "discovery of Erie regarding the drafting and interpretation of policies is needed, it will be common to all actions." Business interruption coverage cases "demand efficiency" because many of the policyholder-plaintiffs are "on the brink of bankruptcy as a result of business lost due to the COVID-19 pandemic," and centralization presents the most efficient means of resolving the cases. The only difference Erie identified in the policies at issue is that some include a virus exclusion while others do not. At most, the centralized litigation will expand to encompass 25 total actions pending in six states and the District of Columbia. (Transfer Order at pp. 3-4.) For more information on the Panel's August order, see the August 12, 2020 entry below. For more information on the transfer order centralizing the cases pending against Society Insurance, see the October 2, 2020 entry below. For more information on motions to transfer and the transfer process in MDL cases, see Practice Note, Product Liability Multidistrict Litigation. For more For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
December 14, 2020	Henry's Louisiana Grill, Inc., et. al. v. Allied Ins. Co., No. 20-14156, Appellant's Brief (11th Cir. Dec. 14, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Insured's appeal of dismissal of its coverage case. Key Pleadings and Court Orders: June 12, 2020: Complaint filed in the Superior Court of Cobb County, Georgia July 14, 2020: Defendant's Notice of Removal October 6, 2020: Order Granting Defendant's Motion to Dismiss November 4, 2020: Plaintiff's Notice of Appeal to the 11th Circuit December 14, 2020: Appellant's Brief (Case No. 20-14156) December 16, 2020: Jurisdictional Question issued as to whether the pleadings sufficiently alleged the of Henry’s Uptown LLC where the pleadings do not list the identity and citizenship of each member. April 8, 2021: Order remanding appeal on a limited basis to determine citizenship of each member of Henry’s Uptown LLC to establish whether diversity jurisdiction exists. Case Summary: In one of the first COVID-19-related coverage disputes to reach a federal court of appeals, Henry's Louisiana Grill, an Atlanta-area restaurant, asked the 11th Circuit to either reverse the district court's decision to dismiss its claim for COVID-19-related business losses or, in the alternative, to certify the following questions to the Georgia Supreme Court: Can "physical loss of" and "damage to" property be interpreted the same way an insurance policy, despite the fact that Georgia courts refuse to read surplusage into insurance policies? Do executive orders declaring public health emergencies constitute acts of civil authority sufficient to trigger civil authority coverage? (Brief at i-ii.) Henry's filed a complaint against its insurer, Allied, on June 12, 2020, alleging claims for declaratory judgment and breach of contract related to Allied's denial of its claim for COVID-19-related business interruption coverage. Henry's argued that because its policy included distinct provisions for loss of property and damage to property, property damage was not required to trigger coverage. Instead, "loss of" property alone could trigger coverage in scenarios where, as here, "an insured has lost the functional use of its space due to circumstances beyond its control." (Brief at pp. 5-6 and 12-13.) Allied filed a motion to dismiss. The trial court granted the motion. It held that policy provisions for "loss," "loss of," and "damage to" property all mean the same thing: "change in the insured property resulting from an external event rendering the insured property, initially in a satisfactory condition, unsatisfactory." In so holding, the court relied primarily on one case, AFLAC, Inc. v. Chubb & Sons, Inc. 260 Ga. App. 306 (2003). (Brief at pg. 7.) Henry's filed its Appellate Brief on December 14, 2020. It argued that the trial court erred when it: Interpreted its insurance policy as only covering property damage Dismissed the "loss of" language in its policy as "mere surplusage." (Brief at pp. 6-7) Henry's Brief cited several COVID-19-related insurance rulings in favor of insureds, including Elegant Massage LLC v. State Farm Mut. Auto. Ins. Co. et al., No. 20-cv-265, Order, (E.D. Va. Dec. 9, 2020). For more information on Elegant Massage, see the Dec. 9, 2020 entry below. For more For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
December 9, 2020	Elegant Massage LLC v. State Farm Mut. Auto. Ins. Co. et al., No. 20-cv-265, Order, (E.D. Va. Dec. 9, 2020) Elegant Massage LLC v. State Farm Mut. Auto. Ins. Co. et al., No. 20-cv-265, Complaint, (E.D. Va. May 27, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Order Denying in Part and Granting in Part Insurer's Motion to Dismiss. Key Pleadings and Court Orders: May 27, 2020: Complaint filed July 21, 2020: Amended Complaint August 11, 2020: State Farm's Motion to Dismiss December 9, 2020: Order denying in part and granting in part State Farm's Motion to Dismiss December 23, 2020: State Farm's Answer to First Amended Complaint December 31, 2020: State Farm's Motion to alter judgment Denying State Farm's Motion to Dismiss or, in the alternative, for § 1292(b) Certification March 31, 2021: Order denying State Farm’s Motion to Alter or Amend the Order denying its Motion to Dismiss or, in the alternative, for § 1292(b) Certification Case Summary: On December 9, 2020, a district court in Virginia denied State Farm's motion to dismiss the COVID-19-related business interruption claim of its insured, a massage parlor called Elegant Massage. Elegant Massage filed a claim against its insurer, State Farm, after it denied Elegant Massage's claims for business interruption losses it suffered when orders from the CDC and from the Virginia Governor closed all spas and massage parlors. Elegant Massage's policy provided coverage for business income loss and extra expenses due to "direct physical loss" to property, including additional coverage when an order of civil authority physical prohibits access to the covered property. The policy also included a virus exclusion. (Compl. at ¶¶ 4-7, 34-36, and 40.) State Farm filed a motion to dismiss. It argued: Suspension of operation and income loss due to the CDC's social distancing order and the governor's closure order did not constitute "direct physical loss" because a "direct physical loss" requires "actual, tangible structural damage to property." The policy's virus exclusion, and other policy exclusions, precluded coverage. (Order at pp. 14 and 22-23.) The Court held that Elegant Massage made a plausible claim that it suffered "direct physical loss" triggering business income and extra expense coverage when its property was deemed "uninhabitable inaccessible, and dangerous to use by the Executive Orders because of its high risk for spreading COVID-19," even though the property was not structurally damaged (Order at pp. 19-20). In reaching that conclusion, the Court relied upon the principal of insurance contract interpretation requiring that ambiguities in a policy "must be construed against the insurer" (Id. at ). It noted that other courts have interpreted the phrase "direct physical loss" in various ways, including that "direct physical loss": Requires structural damage. Includes incidents when an insured cannot physically use the covered property, even without tangible structural damage, if the insured can show a distinct and demonstrable physical alteration to the property. Includes incidents that make the covered property uninhabitable, inaccessible, and dangerous to use for owners and business clients. (Order at pp. 15-19.) Given this "spectrum of accepted interpretations," the Court found it, "plausible that [Elegant Massage] experienced a direct physical loss," because "the facts of this case are similar to those where courts found that asbestos, ammonia, odor from methamphetamine lab, or toxic gasses from drywall, which caused properties uninhabitable, inaccessible, and dangerous to use, constituted a direct physical loss" (Order at pg. 20). The Court also found that the policy's virus exclusion did not apply because Elegant Massage did not allege that: Coronavirus was present at the covered property. Coronavirus was the direct cause of its loss. Civil authorities issued executive orders as a result of the "spread or presence" of coronavirus contamination at the covered property. Instead, Elegant Massage alleged that orders of civil authority were "the sole cause" of its loss of business income and extra expense. (Order at pg. 25.) The court did grant defendant's motion in part. It held that civil authority coverage did not apply because Elegant Massage did not show the necessary causal link between actual physical damage to its own property or surrounding property and the Executive Orders issued because of COVID-19. The CDC and the governor issued those orders because "COVID-19 presents an ongoing threat to [Virginia] communities," not because of actual physical damage. (Order at pg. 21.) For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
December 8, 2020	Wagner Shoes LLC v. Auto-Owners Ins. Co. and Owners Ins. Co., No. 20-cv-00465, Order, (N.D. Ala. Dec. 8, 2020) Wagner Shoes LLC v. Auto-Owners Ins. Co. and Owners Ins. Co., No. 20-cv-00465, Plaintiff's Response to Defendants' Motion to Dismiss Fourth Amended Complaint (N.D. Ala. August 25, 2020) Wagner Shoes LLC v. Auto-Owners Ins. Co. and Owners Ins. Co., No. 20-cv-00465, Defendants' Motion to Dismiss Fourth Amended Complaint (N.D. Ala. July 21, 2020) Wagner Shoes LLC v. Auto-Owners Ins. Co. and Owners Ins. Co., No. 20-cv-00465, Fourth Amended Complaint (N.D. Ala. June 8, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Order Denying Insurer's Motion to Dismiss Key Pleadings and Court Orders: April 6, 2020: Complaint filed April 14, 2020: Amended Complaint June 8, 2020: Second Amended Complaint June 22, 2020: Third Amended Complaint July 7, 2020: Fourth Amended Complaint July 21, 2020: State Farm's Motion to Dismiss Fourth Amended Complaint December 8, 2020: Order denying State Farm's Motion to Dismiss Fourth Amended Complaint Dec. 29, 2020: Owner Insurance Co.’s Motion for Phased Discovery (to bifurcate discovery in two phases, first on the claims for breach of contract and declaratory judgment, and second on the bad faith claim) December 30, 2020: State Farm's Answer to Fourth Amended Complaint January 21, 2021: Order granting Owner Insurance Co.’s Motion for Phased Discovery April 13, 2021: Owner Insurance Co.’s Answer to Fourth Amended Complaint Case Summary: On December 8, 2020, a district court in Alabama denied defendants Auto-Owners Insurance Company's and Owners Insurance Company's motion to dismiss the COVID-19-related business interruption claim of their insured, Wagner Shoes. The court also granted Wagner's voluntary motion to dismiss its claims against Auto-Owners. Wagner Shoes filed a Complaint against its insurer, Auto Owners, after it denied Wagner's claim for business interruption losses when the state of Alabama and the Mayor of Tuscaloosa issued orders requiring nonessential businesses to cease operations due to the COVID-19 pandemic. Wagner added Owners Insurance Company as a defendant in its Fourth Amended Complaint. (4th Amend. Compl. at ¶ 32.) The insurers filed a motion to dismiss. They argued that the policy requires "direct physical loss of or damage to property to trigger coverage." Wagner did not allege either physical injury to its property or the presence of the virus on its property; therefore, according to the insurers, Wagner failed to state a claim for which relief can be granted. (Motion at pg. 2.) In its Response, Wagner stated that contrary to the defendants contention that it had not pled direct physical loss or damage, the Fourth Amended Complaint included "an exhaustive review of why the COVID-19 novel coronavirus is considered to be a cause of physical loss or property damage" (Response at pg. 6, citing 4th Amend. Compl. at ¶¶ 7-23). Wagner also noted that "Alabama courts have consistently held that undefined or ambiguous terms in an insurance policy must be construed in favor of the insured." Here the policy did not define "direct physical loss" or "damage," no Alabama court has held that physical loss or damage requires physical alteration of the property, and the majority of cases nationwide find that "physical damage to property is not necessary where the property has been rendered unsuitable" (Response at pg. 8). The Court, "after careful consideration of the briefs and cited authority," denied the insurers motion to dismiss in a brief opinion following a September 22, 2020 telephone conference (Order at pg. 1). It also granted Wagner's voluntary motion to dismiss all its claims against Auto-Owners with prejudice. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
November 30, 2020	Whiskey River on Vintage, Inc. v. Ill. Casualty Co., No. 4:20-cv-185, Order Granting Insurer's Motion on the Pleadings (S.D. Iowa, Nov. 30, 2020) Whiskey River on Vintage, Inc. v. Ill. Casualty Co., Case No. 20-3707 (7th Cir. Jan. 4, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion on the Pleadings Key Pleadings and Court Orders: May 12, 2020: Complaint filed in Polk County District Court June 2020: Removed to Southern District of Iowa September 25, 2020: Defendant's Motion for Judgment on the Pleadings November 30, 2020: Order Granting Defendant's Motion on the Pleadings January 4, 2021: Plaintiff's Notice of Appeal to the 8th Circuit (Case No. 20-3707) February 5, 2021: Appellant's Brief filed (Founders on Main, Inc., Whiskey on Main, Inc., and Whiskey River on Vintage, Inc.) March 12, 2021: Appellee’s Brief (Illinois Casualty Co.) Case Summary: On November 30, 2020, the Southern District of Iowa granted Illinois Casualty Company's motion for judgment on the pleadings in a COVID-19-related business interruption claim. Plaintiffs, a group of restaurants and bars, filed a complaint for declaratory judgment against Illinois Casualty. Their Complaint alleges they are entitled to coverage under the business income, extra expense, and civil authority provisions of their insurance policy with Illinois Casualty because an order of civil authority issued by the Governor of Iowa: Resulted in the necessary suspension of their operations because economically they could not operate their businesses solely on a take-out or delivery basis. Caused "direct physical loss of or damage to" Plaintiffs' property by precluding Plaintiffs' from conducting their business operations and precluding customers from patronizing their business. Prohibited access to Plaintiff's property. None of Plaintiffs' customers or employees contracted COVID-19 and the Complaint did not allege that Plaintiffs' properties were infected with COVID-19. (Order at pp. 5-6.) Illinois Casualty Company filed a Motion for Judgment on the Pleadings. It argued: Plaintiffs' policy does not provide coverage because they did not allege direct physical loss or damage. Even if the policy did provide coverage, the policy's virus exclusion precludes coverage. (Order at pg. 9.) In reply, Plaintiffs argued the phrase "direct physical loss of or damage to" property encompasses two distinct concepts – loss and damage – and that the Governor's order itself amount to a direct physical loss since it caused their businesses to close. They also argued that policy's civil authority provision covers loss of use and does not requires complete loss of access to trigger coverage. (Order at pg. 9.) The Court held that under Iowa law and several recently decided COVID-19-related business interruption cases, including Diesel Barbershop, LLC v. State Farm Lloyds, Malaube, LLC v. Greenwich Ins. Co., and Sandy Point Dental, PC v. The Cincinnati Ins. Co.: "Physical loss or damage generally requires some sort of physical invasion" (Order at 14). Loss of use is not sufficient to establish a direct physical loss (Id. at 14). The civil authority provision unambiguously requires that the order of civil authority be issued in response to a dangerous physical condition. Here, the order was issued to limit the spread of COVID-19. (Id. at pp. 14-15 and 18.) The policy's virus exclusion "unambiguously applies" because the Plaintiffs' losses "were directly or indirectly caused by or resulted from COVID-19," not by the Governor's closure orders (Id. at pp. 19-20). For a discussion of Diesel Barbershop, LLC v. State Farm Lloyds, Malaube, LLC v. Greenwich Ins. Co., and Sandy Point Dental, PC v. The Cincinnati Ins. Co., see the entries below at August 13, 2020, August 26, 2020, and April 6, 2020, respectively. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
November 19, 2020	Robert E. Levy D.M.D. LLC, et al. v. Hartford Financial Services Group Inc., et al., No. 20-643, Order Granting Insurer's Motion to Dismiss (E.D. Mo. Nov. 10, 2020) Robert E. Levy D.M.D. LLC, et al. v. Hartford Financial Services Group Inc., et al., No. 20-643, Second Motion for Leave to File Second Amended Complaint (E.D. Mo. Nov. 19, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss and Motion for Leave to File Amended Complaint Case Summary: On November 10, 2020, the Eastern District of Missouri granted Hartford Financial Services Group Inc.'s motion to dismiss, holding that although the plaintiffs had standing to bring breach of contract and bad faith claims against Hartford Financial, dismissal was proper because the insureds failed to sufficiently allege that Hartford Financial was a party to their insurance policies. Plaintiffs, a group of dental practices, shut down either entirely or only saw a few emergency patients during the COVID-19 pandemic to protect themselves against catastrophic losses. They each filed insurance claims with Hartford Financial and the other Defendants, and Hartford Financial and the other Defendants denied them. Plaintiffs sued for breach of contract and bad faith. Hartford Financial filed a motion to dismiss arguing, amongst other things, that Plaintiffs: Did not have standing to bring a claim because Plaintiffs did not purchase their insurance policies from Hartford Financial; rather, they bought the policies from three Hartford Financial subsidiaries and Hartford Financial is not a party to the insurance contracts. (Order at pp. 4-5.) Failed to state a claim because the Plaintiffs only asserted contract-based claims but failed to show that they contracted with Hartford Financial (Order at pg. 6). The Court found that the Plaintiffs had standing. It held that their Complaint sufficiently alleged they had contracts with Hartford Financial and that they suffered harm when Hartford Financial denied coverage. Therefore, it would be improper for the Court to proceed to the merits of the case by evaluating the breach of contract claim. (Order at pg. 5.) However, the Court also found that the Plaintiffs failed to state a claim. In their Complaint, the Plaintiffs alleged they purchased insurance policies from Hartford Financial, doing business as "The Hartford," and that the references to "The Hartford" in the policies refer to Hartford Financial and denotes that Hartford Financial as a party to the contract (Order at pg. 7). The Court held "the plain language of the policies contradict this assertion" because they "explicitly state the party to the contract," and in each case that is the entity that issued the policy, not Hartford Financial (Id.). Finally, the Court noted it would consider a timely motion seeking leave to amend with an accompanying amended complaint (Order at pg. 9). Plaintiffs filed their Motion for Leave to File a Second Amended Complaint on November 19, 2020. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
November 17, 2020	Mattdog, Inc. d/b/a Pure Focus Sports, v. Philadelphia Indem. Ins. Co., No. 000820-20 (N.J. Super. Ct. Nov. 17, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: April 27, 2020: Complaint filed in Superior Court of New Jersey June 5, 2020: Defendant files Notice of Removal (District of New Jersey, Case No. 20-cv-06889) June 22, 2020: Defendant's Motion to Dismiss (District of New Jersey, Case No. 20-cv-06889) September 23, 2020: Plaintiff's Motion to Remand (filed in federal court) October 16, 2020: Order Granting Plaintiff's Motion to Remand and Denying Defendant's Motion to Dismiss as moot October 21, 2020: Defendant's Motion to Dismiss (re-filed in state court) November 17, 2020: Order Granting Defendant's Motion to Dismiss with Prejudice Case Summary: On November 17, 2020, the Superior Court of New Jersey in Mercer County granted Philadelphia Indemnity's motion to dismiss the COVID-19-related business interruption claim of its insured, a health club called Pure Focus Sports. On April 27, 2020, Pure Focus Sports filed a lawsuit in the Superior Court of New Jersey against Philadelphia Indemnity seeking a declaration that COVID-19-related emergency orders triggered business interruption and extra expense coverage under the civil authority provision of its insurance policy. It also argued that the virus exclusion in its policy did not apply and, even if it did, the court should not enforce it because it is contrary to public policy. (Order at pp. 1-2.) Philadelphia Indemnity filed a Notice of Removal and the case was removed to the District of New Jersey (Mattdog, Inc. v. Philadelphia Indemnity Ins. Co., 3:20-CV-06889 (D.N.J. June 5, 2020). Philadelphia Indemnity filed a motion to dismiss. It argued that Pure Focus Sports' complaint failed to state a claim for relief because Pure Focus Sports: Did not allege: any physical loss or damage; or any connection between the Governor's COVID-19 emergency orders and any physical loss. Cannot overcome the virus exclusion. Did not establish that regulatory estoppel precludes application of the virus exclusion. (Compl. at pg. 5.) On September 23, 2020, Pure Focus Sports filed its Response in Opposition to the Motion to Dismiss and a motion to remand the case back to New Jersey state court. On October 16, 2020, the District of New Jersey granted Pure Focus Sport's Motion to Remand and denied Philadelphia's Motion to Dismiss as moot. The case was remanded to state court and on October 21, 2020, Philadelphia Indemnity re-filed its Motion to Dismiss. The Court granted the motion and dismissed Mattdog's claim with prejudice. It held: Pure Focus Sports' claims could not survive the virus exclusion because the Governor issued his orders "as a direct result of COVID-19." By its "plain terms," the civil authority provision does not apply because Plaintiff did not allege any facts establishing a nexus between damage to nearby property and the Governor's orders. Pure Focus Sports did not allege facts in support of its regulatory estoppel argument and, even if it had, regulatory estoppel does not void clear and unambiguous provisions. (Compl. at pp. 8-9.) For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
November 13, 2020	Chattanooga Professional Baseball LLC, et al., Plaintiffs, v. National Casualty Co., et al., Order Granting Insurer's Motion to Dismiss, (D.Ariz. Nov. 13, 2020) Chattanooga Professional Baseball LLC, et. al. v. National Cas. Co., et. al., Case No. 20-17422 (9th Cir., Dec. 12, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: July 2, 2020: Complaint filed August 21, 2020: Amended Complaint filed September 11, 2020: Defendants' Motion to Dismiss November 13, 2020: Order Granting Defendants' Motion to Dismiss December 11, 2020: Plaintiffs' Notice of Appeal to 9th Circuit (Case No. 20-17422) December 12, 2020: Case docketed at 9th Circuit February 10, 2021: Appellants' Brief Filed March 11, 2021: Appellees' Brief Filed Case Summary: On November 13, 2020, the District of Arizona granted National Casualty Co.'s motion to dismiss the COVID-19 related business interruption claim of its insureds, twenty-four entities that provide services for minor league baseball teams. The entities sued National Casualty seeking a declaratory judgment that National Casualty owed them coverage for losses they sustained after minor league baseball suspended its season due to the COVID-19 pandemic. National Casualty filed a motion to dismiss. It argued that the entities' policies included a virus exclusion that barred coverage for any COVID-19 related damages (Order at pg. 2). The entities agreed that the virus exclusion was unambiguous and that it barred losses stemming from or relating to a virus. They contended, however, that: Whether their losses were caused by COVID-19 is a question of fact that should go to a jury. The Court should estop the insurers from applying the virus exclusion. (Order at pg. 3.) The Court held that the policyholders' argument that "a factual dispute exists as to the cause of their loss is not plausible" and their "attempt to create a question of fact by arguing it is unclear whether their losses were caused by the government's orders in response to the virus or the virus itself" is unavailing (Order at pg. 4). It also noted that several other courts rejected "similar COVID-19 causation arguments," including Diesel Barbershop v. State Farm Lloyds (Id.). The Court also rejected the policyholders' estoppel argument. It held: "Plaintiffs' estoppel theory – that Defendants should not be able to apply the virus exclusion because it allegedly came into being following misrepresentations made by Defendants to state commissions to avoid premium reductions" is not cognizable. Therefore, the virus exclusion applied and barred the policyholders' claims. (Order at pp. 6-7.) The policyholders' appealed the decision to the 9th Circuit. For a discussion of the allegations in the policyholders' Complaint, see the July 2, 2020 entry below. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
November 10, 2020	Dime Fitness, LLC DBA: Anytime Fitness v. Markel Insurance Co., No. 20-CA-5467, Order Granting Insurer's Motion to Dismiss (Hillsborough Cty, Fla. Nov. 10, 2020) DAB Dental PLLC D/B/A Sunshine Dentistry v. Main Street Am. Protection Ins. Co., No. 20-CA-5504, Order Granting Insurer's Motion to Dismiss (Hillsborough Cty, Fla. Nov. 10, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss Case Summary: On November 10, 2020, the 13th Judicial Circuit Court in Hillsborough County, Florida granted insureds' motions to dismiss in two COVID-19-related business interruption insurance coverage disputes. In Dime Fitness, LLC D/B/A Anytime Fitness v. Markel Insurance Co. the plaintiff/insured, Anytime Fitness, sued its insurer, Markel Insurance, seeking a declaratory judgment that Markel owed it coverage for losses they sustained after minor league baseball suspended its season due to the COVID-19 pandemic. Markel filed a motion to dismiss in which it argued: The civil authority provision in the Anytime Fitness policy requires direct physical loss to property and does not cover either purely economic losses, but Anytime Fitness alleged only economic loss and loss of use. Anytime Fitness based its claim for civil authority coverage on an Executive Order the governor issued to address public health concerns surrounding COVID-19; however, civil authority coverage is only triggered by orders of civil authority issued to address property damage. The policy's virus exclusion barred coverage. (Anytime Fitness Order at pg. 2.) The Court granted Markel's motion to dismiss. It held: The policy "does not provide for coverage of purely economic losses resulting from the COVID-19 pandemic." Instead, the policy defines a "covered cause of loss" as a "risk of direct physical loss," and a "direct physical loss" requires a "physical alteration of the property" (Anytime Fitness Order at pp. 3-4). Coverage under the policy's civil authority provision required an order issued "in response to dangerous physical conditions" resulting from the direct physical loss, but here there was no direct physical loss (Id. at pg. 5). The policy's virus exclusion barred any recovery and the plaintiff entities' argument that it should not apply because their properties were not actually contaminated by COVID-19 was not persuasive (Id. at pp. 6-7). The Court issued a similar ruling in DAB Dental PLLC D/B/A Sunshine Dentistry v. Main Street America Protection Insurance Company. Sunshine Dentistry argued that COVID-19 emergency orders prohibited access to its premises "due to COVID-19 being present at other businesses. This constituted "direct physical loss of or damage to property" and, because it was caused by or resulted from a covered cause of loss – the presence of COVID-19 – it triggered coverage under Sunshine Dentistry's business interruption policy. (Sunshine Dentistry Order at pp. 4-5.) The Court rejected Sunshine Dentistry's argument. It held that the mere presence of harmful substances which render property uninhabitable or unusable does not constitute direct physical loss or damage; instead, direct physical loss requires tangible or structural damage (Sunshine Dentistry Order at pg. 5). In reaching this conclusion, the Court cited several recently decided COVID-19 coverage cases, including Diesel Barbershop v. State Farm Lloyds. (Sunshine Dentistry Order at pp. 5-6.) Finally, the Court again held that even if Sunshine Dentistry's policy covered its business income losses, the virus exclusion applied and barred recovery (Sunshine Dentistry Order at pg. 7). For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
November 9, 2020	Goodwill Indust. of Central Okla., Inc. v. Philadelphia Indemnity Ins. Co., Order Granting Insurer's Motion to Dismiss, (W.D. Okla., Nov. 9, 2020) Goodwill Indust. of Central Okla., Inc. v. Philadelphia Indemnity Ins. Co., Case No. 21-6054 (10th Cir., April 13 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: May 6, 2020: Complaint filed in the District Court of Cleveland County, Case No. CV-20-00798 June 1, 2020: Defendant's Notice of Removal to the Western District of Oklahoma June 8, 2020: Defendant's Motion to Dismiss June 29, 2020: Plaintiff's Motion to Remand November 9, 2020: Order Denying Plaintiff's Motion to Remand November 9, 2020: Order Granting Insurer's Motion to Dismiss December 7, 2020: Plaintiff's Motion to Alter Judgment March 11, 2021: Order denying Goodwill’s Motion to Alter Judgment April 9, 2021: Notice of Appeal to Tenth Circuit (Case No. 21-6045) as to Order on Motion to Alter Judgement and Motion to Dismiss April 13, 2021: Case docketed at Tenth Circuit. Case Summary: On November 9, 2020, the Western District of Oklahoma granted Philadelphia Indemnity's motion to dismiss the COVID-19 related business interruption claim of its insured, Goodwill Industries of Central Oklahoma. Goodwill alleges its policy provides coverage for business interruption losses caused by direct physical loss of or damage to property, including interruptions by orders of civil authority. It sought a declaratory judgment that: It "sustained a 'direct physical loss' and/or 'risk of direct physical loss' " when COVID-19-related orders of civil authority required "suspension of non-essential businesses" and rendered its property "unusable for its intended purpose." The virus exclusion in its policy is void because it was added to Goodwill's policy without consideration. (Order at pp. 3-4.) Philadelphia Indemnity filed a motion to dismiss. It argued that: A direct physical loss is "a demonstrable physical alteration of the property" [emphasis in original], and excludes any losses that are intangible, incorporeal, or unaccompanied by a distinct alteration of the property. Even if Goodwill had suffered a direct physical loss, the policy's virus endorsement precludes coverage. (Order at pp. 3-4.) The Court granted Philadelphia's motion. It rejected Goodwill's argument that a direct physical loss includes a loss that renders "property unusable for its intended purpose." Instead, citing several other recently decided COVID-19 cases (see, for example, Turek Enterprises, Inc. v. State Farm Mutual Automobile Ins. Co., Mudpie, Inc. v. Travelers Casualty Ins. Co., and Malaube, LLC v. Greenwich Insurance Co.), it held that "direct physical loss" requires showing "some tangible damage," such as "that a substance entered its premises or attached to its surfaces." Because Goodwill did not allege that COVID-19 infected its premises, it failed to make this showing. (Order at pp. 6-8.) Finally, the Court held that even if Goodwill had adequately pled the direct physical damage requirement, the policy's virus exclusion was not void and precluded coverage (Order at pg. 9). For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
November 6, 2020	Brian Handel, D.M.D. v. Allstate Ins. Co., 20-cv-03198, Order Granting Insurer's Motion to Dismiss (E.D. Penn. Nov. 6, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss Case Summary: On November 6, 2020, the Eastern District of Pennsylvania granted Allstate's motion to dismiss the COVID-19 related business interruption claim of its insured, a dentist who had to close his office for all non-emergency dental services pursuant to COVID-19-related emergency orders (Order at 3). After Allstate rejected his claim, Handel filed a Complaint. He argued that COVID-19 caused his dental practice direct physical damage as well as indirect, non-physical damage, including that: COVID-19 rendered his property "unsafe, uninhabitable, or otherwise unfit for its intended use." COVID-19 restricted the use of his property, resulting in "direct physical lost." The "COVID-19 Effect," "or the public's social anxiety about public health and the safety of indoor spaces, is the functional equivalent of damage of a material nature or an alteration in physical composition." (Order at pg. 6.) Philadelphia filed a motion to dismiss Goodwill's Complaint. It argued that: Goodwill failed to plead facts showing it suffered direct physical loss or damage. The mere risk of contamination cannot constitute property damage and, even if it did, sanitization would cure the damage. (Order at pg. 6.) The Court granted Philadelphia's motion. It held that: Handel "failed to please plausible facts that COVID-19 caused damage or loss in any physical way to the property." No order of civil authority required dental offices to close completely; therefore, Handel's property remained usable, "albeit in limited ways." Even if Handel had pleaded sufficient facts for physical damage or loss as a result of COVID-19, the policy's virus exclusion excluded his claims. (Order at pp. 7-10). For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
November 4, 2020	Independence Barbershop, LLC v. Twin City Fire Ins. Co., Order Denying Insurer's Motion to Dismiss in Part (W.D. Tex. Nov. 4, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Denying Insurer's Motion to Dismiss in Part Key Pleadings and Court Orders: May 22, 2020: Complaint filed August 20, 2020: First Amended Complaint September 17, 2020: Twin City's Motion to Dismiss First Amended Complaint November 4, 2020: Order granting in part and denying in part Twin City's Motion to Dismiss First Amended Complaint November 18, 2020: Twin City's Answer to First Amended Complaint Case Summary: On November 4, 2020, the Western District of Texas denied in part and granted in part Twin City Fire Ins. Co.'s motion to dismiss the COVID-19 related business interruption claim of its insured, Independence Barbershop. Independence Barbershop filed a complaint against its insurer, Twin City, after Twin city denied its claim for COVID-19 related business income losses on the grounds that COVID-19 did not cause property damage at Independence Barbershop and, even if it had, the policy's virus endorsement applied and excluded Independence Barbershop's claimed COVID-19 related claims (Order at 3). The Court held that Twin City's interpretation of the policy's virus exclusion improperly conflated COVID-19 with the term "virus." Instead, "SARS-CoV-2, COVID-19, the COVID-19 Pandemic, and government shutdowns related to the COVID-19 Pandemic," might be four separate things (Order at 6). Based on this reading of the virus endorsement, the Court granted Twin City's motion to dismiss in part and denied it in part. It held that the virus endorsement: Barred Independence Barbershop's general business interruption claim because it applied when, as here, a virus is only a contributing cause of an insured's business interruption losses (Order at pg. 6). Did not bar Independence Barbershop's claim for time element coverage, which allows for up to 30 days of coverage for business losses, because the policy's time element coverage: specifically includes coverage for viruses; and does not limit application of the time element coverage even if a virus is a contributing cause of the claimed losses. (Order at pg. 7). For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
November 4, 2020	Real Hospitality, LLC v. Travelers Casualty Ins. Co. of America, Order Granting Insurer’s Motion to Dismiss, (S.D. Miss. Nov. 4, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: May 8, 2020: Complaint filed June 22, 2020: Insurer's Motion to Dismiss November 4, 2020: Order Granting Insurer's Motion to Dismiss December 4, 2020: Final Judgment in favor of Travelers and dismissing Real Hospitality's claims with prejudice. Case Summary: On November 4, 2020, the Southern District of Mississippi granted Travelers Casualty Insurance Company's motion to dismiss the COVID-19 related business interruption claim of its insured, Real Hospitality, a restaurant in Hattiesburg, Mississippi doing business as Ed's Burger Joint. In its Motion to Dismiss, Travelers argued that Ed's Burger Joint's COVID-19 related business interruption losses were not covered because: Ed's Burger Joint did not allege facts showing physical loss of property or physical damage to property that would trigger business interruption coverage. The policy's virus exclusion expressly excluded coverage. (Order at 3.) Ed's Burger Joint argued: The disjunctive "or" in the phrase "direct physical loss of or damage to property" denotes a choice between alternatives and provides coverage for "direct physical loss," including loss of use, even if there is no physical damage to the property. The policy's virus exclusion does not unambiguously exclude coverage. (Order at 3.) The court granted Travelers Motion to Dismiss. It held: In the context of the phrase "direct physical loss," "loss" means permanent dispossession of property. Here, COVID-19 orders of civil authority only temporarily restricted access to Ed's Burger Joint (Order at 5), and Ed's Burger Joint did not allege that its property suffered any direct physical damage (Order at 6). The policy's virus exclusion precludes coverage because all of Ed's Burger Joint's damages resulted from COVID-19 (Order at 8). In reaching this conclusion, the court cited several other recently decided COVID-19 related business interruption cases, including: Mark's Engine Company No. 28 Restaurant, LLC v. The Travelers Indemnity Company of Connecticut, et al., No. 20-04423, Order (C.D. Calif. Oct. 2, 2020) (see the October 5, 2020 entry below). 10E, LLC v. Travelers Indemnity Company of Connecticut, et al., 2:20CV04418, Amended Order Granting Defendant's Motion to Dismiss (C.D. Cal., Sept. 2, 2020) (see the Sept. 2, 2020 entry below). Malaube LLC v. Greenwich Ins. Co., No. 20-22615, Recommendation to Grant Insurer's Motion to Dismiss (S.D. Fla. August 26, 2020) (see the August 26, 2020 entry below). (Order at 7.) For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
October 27, 2020	Boxed Foods Co., LLC v. Cal. Capital Ins. Co., Order Granting Insurer’s Motion to Dismiss, (N.D. Cal. October 27, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss Case Summary: On October 27, 2020, the Northern District of California granted an insurer's motion to dismiss the COVID-19 related business interruption claim of its insured, Boxed Foods Co., with prejudice. Boxed Foods owns and operates two restaurants in the San Francisco area. It shut those restaurants in March 2020 after California issues several COVID-19 related emergency orders, including one requiring all businesses to cease non-essential operations. It submitted a claim to its insurer, California Capital Insurance, alleging it could not operate its restaurants as a direct consequence of COVID-19 and California's civil authority orders. California Capital concluded the policy didn't cover COVID-19 losses and denied the claim. Thereafter, Boxed Foods filed suit. (Order at pg. 1.) California Capital filed a motion to dismiss. It argued that the policy's virus exclusion excluded coverage for all of Boxed Foods' COVID-19 related losses. (Order at pg. 3.) The court agreed that the virus exclusion bars Boxed Foods' claim. In doing so, the court explicitly rejected Boxed Foods' arguments that: The virus exclusion did not apply to the policy's civil authority provision because: "the payout for civil authority coverage comes from business income or extra expense caused by Civil Authority orders, not solely the property damage caused by the virus" (emphasis in original); and civil authority orders caused Boxed Foods' loss of business income and extra expense, not COVID-19. (Order at pg. 3.) The virus exclusion is ambiguous because it does not include the word pandemic (Order at pg. 5). Finally, the court concluded that "any attempt to amend the Complaint would be futile considering the breadth of the Virus Exclusion" and dismissed the complaint with prejudice (Order at pg. 7). For further discussion of the Court's order, see Westlaw Insurance Daily Briefing, October 30, 2020, 2020 INSDBREF 0563. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
October 26, 2020	Taps & Bourbon on Terrace, LLC v. Underwriters at Lloyds London, No. 20093502, Order denying Insurer's Motion to Dismiss (1st. Div. Civ. Dist. Ct., Philadelphia Cty Penn., Oct. 26, 2020) Taps & Bourbon on Terrace, LLC v. Underwriters at Lloyds London, No. 20093502, Response to Insurer's Motion to Dismiss (Oct. 19, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Denying Insurer's Motion to Dismiss Key Pleadings and Court Orders: July 8, 2020: Complaint filed October 26, 2020: Order denying Defendant's Motion to Dismiss Case Summary: On October 26, 2020, a state court in Pennsylvania denied an insurer's motion to dismiss the COVID-19 business interruption insurance claim filed by its insured, Taps & Bourbon. Taps & Bourbon submitted a business interruption claim to Lloyds after orders of civil authority forced it to close its restaurant and cease all business operations. Taps & Bourbon filed suit after Lloyds denied its claim. Lloyd's filed a Motion to Dismiss, claiming: Taps & Bourbon didn't suffer "direct physical loss or damage" as required by the policy and, even if it had, the COVID-19 orders of civil authority did not prohibit access to the property. The policy's virus exclusion barred coverage. In its response, Taps & Bourbon argued: A "physical loss" is any loss resulting "immediately and proximately from an event," including inhabitability. Because COVID-19 emergency orders of civil authority resulted in the restaurant immediately closing and ceasing all business operations, it had suffered exactly the type of "direct physical loss" required by the policy's physical loss requirement (Response at Section IV, Parts A and B, citing several other COVID-19 related business interruption cases). The virus exclusion could not mean what Lloyd's said it meant, because if a virus per se could not cause physical damage, then the policy would not need to include a virus exclusion (Response at Section IV, Part C). The virus exclusion was removed from the policy by a later endorsement that removed all exclusions unless specifically excepted (Response at Section IV, Part C). The court denied Lloyd's Motion; however, it did not provide a substantive decision explaining its reasoning. It did note that Lloyd's arguments raised factual issues not appropriate for a preliminary dispositive motion. (Order at pp. 1-2, footnote 1.) For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
October 21, 2020	Hillcrest Optical, Inc. v. Continental Casualty Co., No. 20-cv-275, Order Granting Insurer's Motion to Dismiss (S.D. Ala., Oct. 21, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: May 15, 2020: Complaint filed October 21, 2020: Order Granting Insurer's Motion to Dismiss Case Summary: On October 21, 2020, the Southern District of Alabama granted Continental Casualty's motion to dismiss the COVID-19 business interruption insurance claim filed by its insured, Hillcrest Optical. Hillcrest claims that it suffered a substantial loss of business income as a consequence of a statewide order postponing all medical procedures in Alabama beginning March 28, 2020, to prevent the spread of COVID-19. Hillcrest's Complaint does not allege that COVID-19 was present on its premises. Instead, it alleges that Hillcrest suffered a direct physical loss of its property because it lost the ability to use its property for its intended purposes as a consequence of the statewide shutdown order. (Order at pp. 4-5.) In its Motion to Dismiss, Continental argued that Hillcrest did not allege a direct physical loss of its property because Hillcrest's inability to use its property for its intended purpose did not constitute a direct physical loss, and Hillcrest did not allege any other direct physical loss (Order at pp. 6-7). The Court held that while a "permanent physical dispossession of covered property" might constitute a direct physical loss, Hillcrest only alleged a "temporary inability to use property" (See Order at pp. 8 and 9, respectively). It went on to say that Alabama Supreme Court precedent, including State Farm Fire & Cas. Co. v. Slade, 747 So.2d 293 (Ala. 2000), indicated that in the phrase "direct physical loss," the word "direct" means "immediate" or "proximate," and it does not require a physical component (Id. at pg. 12). However, the Court then noted that in most contexts, Alabama courts require "some tangible alteration or disturbance to property to demonstrate physicality" (Id.). Ultimately the Court held that because Hillcrest was only temporarily precluded from performing medical procedures, and Hillcrest's loss of use did not result from an immediate occurrence which tangibly altered its property, it did not suffer a "direct physical loss" (Id. at pp. 13-14). Finally, the Court also noted that in several other business interruption coverage cases relating to COVID-19 closure orders, policyholders could not survive a motion to dismiss absent an allegation of "some tangible alteration to property," such as "a physical intrusion" of COVID-19 into the covered premises (Order at pg. 14, citing Malalube, LLC v. Greenwich Ins. Co., , at 8 (S.D. Fla., 2020)). For more information on Malalube*, including relevant pleadings, see the entry below at August 26, 2020. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
October 16, 2020	Kenneth Seifert d/b/a The Hair Place and Harmar Barbers, Inc. v. IMT Ins. Co., 20-cv-1102, Order granting Insurer's Motion to Dismiss (D.Minn. Oct. 16, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss Key Pleadings and Court Orders: May 6, 2020: Complaint filed May 29, 2020: Defendant's Motion to Dismiss October 16, 2020: Order Granting Defendant's Motion to Dismiss Case Summary: On October 16, 2020, a Minnesota federal court granted IMT Insurance Company's motion to dismiss the COVID-19 business interruption insurance claim filed by Kenneth Seifert, the owner of a hair salon and barbershop. However, the court gave Seifert leave to amend the complaint and noted that if he properly alleged his claim, he might be "entitled to coverage for lost business income" (Order at pg. 11). The court noted that while Minnesota case law does not require a showing of structural damage to qualify for coverage," "this is not to say that a qualifying loss is established 'whenever property cannot be used for its intended purpose" (emphasis in original). Instead, "actual physical contamination of the insured property is still required." (Order at pg. 7.) The court dismissed Seifert's complaint because "he has not pleaded any facts demonstrating his businesses were contaminated by the novel coronavirus." Instead, the complaint alleges that Seifert's business losses were "not because of the presence of a virus" at the properties; rather, COVID-19 related closure orders "are alleged to be the sole cause of his losses." However, "governmental action prohibiting the use of property, by itself, is not enough" to satisfy the physical loss requirement. (Order at pp. 8-9.) The court also held that the policy's virus exclusion meant that the policy excluded coverage for any loss where a virus was even a contributing factor since it came with an anti-concurrent clause (Order at pp. 10-11). For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
October 9, 2020	North State Deli, LLC v. Cincinnati Ins. Co., 20-cv-02569, Order granting Motion for Summary Judgment (N.C. Sup. Ct., Oct. 9, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Policyholder's Motion for Summary Judgment Case Summary: On October 9, 2020, a state court in North Carolina issued the first substantive victory to policyholders in a COVID-19-related business interruption coverage case. In an Order granting plaintiffs' Motion for Summary Judgement, the court held that the term "direct physical loss" covers business income losses caused by COVID-19 shutdown orders (previous policyholders have survived motions to dismiss). The plaintiffs, which operate sixteen restaurants in North Carolina, filed suit against their common insurer, Cincinnati, after Cincinnati denied their claims for business interruption losses they suffered after COVID-19 shutdown orders forced them to close their restaurants. On August 3, 2020, they filed a Motion for Summary Judgment in which they argued that the COVID-19 related shutdown orders forced Plaintiffs to lose the physical use of and access to their restaurants, which constitutes a "direct physical loss" covered by their all-risk property policies. (Order at pg. 4). Cincinnati argued that the policies are triggered by a "direct physical loss," which requires "some form of physical alteration to property." The policies "do not provide coverage for pure economic harm" that does not include physical alteration. Applying two well-settled principles of insurance policy interpretation, the Court held that: "Even if Cincinnati's proffered ordinary meaning [of the phrase 'direct physical loss'] is reasonable," the policyholders' interpretation of that phrase is also reasonable, "rendering the Policies at least ambiguous," and "any ambiguity or uncertainty as to the words used in the policy should be construed against the insurance company" (Order at pg. 6). Moreover, "it is well-accepted that 'the various terms of the policy are to be harmoniously construed,' " and "every word and every provision is to be given effect." Here the policies provide coverage for "accidental physical loss or accidental physical damage," and the use of the conjunction or "means-at the very least-that a reasonable insured could understand the terms 'physical loss' and 'physical damage' to have distinct and separate meanings" (Order at pg. 7, emphasis in original). "In the context of the policies at issue," said the Court, " 'direct physical loss' describes the scenario where business owners and their employees, customers, vendors, suppliers, and others lose the full range of rights and advantages of using or accessing their business property. This is precisely the loss caused by the government orders. Plaintiffs were expressly forbidden by government decree from accessing and putting their property to use for the income-generating purposes for which the property was insured." (Order at pg. 6.) Finally, the Court held that the policy did not include a virus exclusion and no exclusions in the policy applied to Plaintiffs' losses as a matter of law (Order at pg. 7). For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
October 9, 2020	Harvest Moon Distributors, Inc. v. Southern-Owners Ins. Co., No. 6:20-cv-1026, Order (M.D. Fla. Oct. 9, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss Case Summary: On October 9, 2020, September 28, 2020, the Middle District of Florida granted Southern-Owner Insurance Co.'s motion to dismiss a COVID-19 related business interruption coverage case. Harvest Moon, a beer and wine distributor, had a contract with Walt Disney Co. Disney voluntarily closed on March 15, 2020, due to the COVID-19 pandemic. Subsequently, Disney refused to accept the beer it had contracted for from Harvest Moon. The beer spoiled, and Harvest Moon filed a claim with its insurer, Southern-Owner's, for loss of business income, extra expense, inventory, and accounts receivable. (Order at 1-2.) Southern-Owners denied the claim and Harvest Moon filed suit. Harvest Moon argued that it suffered a "direct physical loss" to its property when its beer spoiled, that it unable to sell the beer, and that because its inability to sell its beer to Disney was a suspension of business operations. Together, these events triggered its business interruption coverage. (Order at pp. 5-7.) The Court agreed that Harvest Moon's allegation that its beer had spoiled raised a plausible claim that it had suffered "direct physical loss" (Order at 7). However, according to the Court, Harvest Moon did not adequately allege that it had suspended its business operations. Harvest Moon "merely states that Disney suspended operations" (emphasis in original). It "never explicitly alleges" that it suspended its own operations. (Order at pp. 7-8.) The Court went on to explain that it could not "infer from the mere assertion that Plaintiff's product spoiled that Plaintiff's operations were suspended." For example, found there were no allegations in the Complaint that: Harvest Moon "was unable to purchase beer from its suppliers, sell bear to willing buyers, or deliver beer to such buyers." "Disney is Plaintiff's only buyer, and, therefore, Disney's unwillingness or inability to purchase the beer effectively terminated all of Plaintiff's business activities." (Order at pp. 8-9.) Therefore, Harvest Moon failed "to allege enough factual matter to plead coverage for lost business income and extra expense." (Order at 9). The Court granted Southern Owner's Motion to Dismiss without prejudice and gave Harvest Moon until October 23, 2020 to file an Amended Complaint (Order at pg. 13). For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
October 5, 2020	Mark's Engine Company No. 28 Restaurant, LLC v. The Travelers Indemnity Company of Connecticut, et. al., Case No. No. 20-56031 (9th Cir., Oct. 6, 2020) Mark's Engine Company No. 28 Restaurant, LLC v. The Travelers Indemnity Company of Connecticut, et al., No. 20-04423, Notice of Appeal (C.D. Calif. Oct. 5, 2020) Mark's Engine Company No. 28 Restaurant, LLC v. The Travelers Indemnity Company of Connecticut, et al., No. 20-04423, Order (C.D. Calif. Oct. 2, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss and Notice of Appeal Key Pleadings and Court Orders: April 15, 2020: Complaint filed in Los Angeles Superior Court May 15, 2020: Removed to federal court May 22, 2020: Defendant's Motion to Dismiss October 2, 2020: Order Granting Defendant's Motion to Dismiss October 4, 2020: Plaintiff's Notice of Appeal to 9th Circuit October 6, 2020: Case docketed at the 9th Circuit (No. 20-56031) April 9, 2021: Order granting in part Appellant’s Motion of Time to File the Opening Brief and stating the opening brief is due May 10, 2021 May 10, 2021: Appellant Brief Case Summary: On October 5, 2020, insured Mark's Engine Company No. 28 Restaurant LLC (Mark's), filed a Notice of Appeal to the 9th Circuit after a federal judge in the Central District of California granted the defendant insurer's motion to dismiss its COVID-19 business interruption coverage case. In its Complaint, Mark's argued that it lost business income when the mayor of Los Angeles closed all non-essential business and ordered restaurants to serve only carry out and delivery to prevent the spread of COVID-19 (¶¶ 18 and 22). It submitted a claim to its insurer, Travelers, under civil authority and business income and extra expense provisions of its policy. When Traveler's denied its claim Mark's filed suit against it, arguing that the Mayor's order caused "physical loss" of its property and that the policy's virus exclusion did not apply because the "physical loss" resulted from the orders of civil authority, not coronavirus. (Order at pg. 3.) The court rejected these arguments. It held that: Mark's didn't plausibly allege it suffered "physical loss" as defined by the policy (Order at pp. 5-8). Even if Mark's could plausibly allege "physical loss," the policy's virus exclusion precluded coverage. (Order at pp. 8-9.) On October 5, 2020, Mark's filed a Notice of Appeal to the 9th Circuit. It was docketed as Case No. No. 20-56031 on October 6, 2020. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
October 2, 2020	In re: Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, No. 2964, JPMDL, Transfer Order (Doc. 88, Oct. 2, 2020) In re: Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, Case No. 1:20-cv-05965, Order Reassigning Cases (N.D. Ill, Oct. 8, 2020)	Insurance Coverage Implicated: Business interruption insurance. Case Type: Establishment of MDL in the Northern District of Illinois Key Pleadings and Court Orders: October 2, 2020: JPMDL Order: establishing MDL No. 2964, In re: Society Insurance; and transferring MDL No. 2964 to the Northern District of Illinois (Case No. 1:20-cv-05965) October 8, 2020: Order reassigning all cases falling within the scope of MDL 2694 to Hon. Edmond E. Chang (includes a list of all cases included in MDL 2694) November 2, 2020: Minute entry setting various deadlines and designating bellwether motions to dismiss (all other cases are stayed and discovery in all cases is stayed): Big Onion, 20-cv-2005; Valley Lodge, 20-cv-2813; and Rising Dough, 20-cv-5981. January 14, 2020: Oral argument on two issues: does the term "direct" in the Society policy's definition of "direct physical loss" imply a proximate cause analysis; and when will the insured properties be "repaired, rebuilt, or replaced" if the coronavirus caused a loss within the meaning of the policy coverage? February 22, 2021: Order denying in part and granting in part Society's dispositive motions March 23, 2021: Society's Motion to Certify Interlocutory Appeal Case Summary: On October 2, 2020, the Judicial Panel on Multidistrict Litigation (JPMDL) created an insurer-specific MDL but declined to create MDLs with respect to four other insurers. Previously, on August 12, 2020, the Panel issued an order denying a motion to transfer and centralize all federally filed COVID-19-related business interruption cases. However, the Panel agreed to consider creating mini-MDLs with respect to five insurers that together accounted for about one-third of the cases. The Panel agreed to transfer and centralize over 30 federal cases against Society Insurance Co. to the U.S. District Court for the Northern District of Illinois. With respect to Society, the Panel found that a consolidated action would be manageable because it implicated the law of only six states and would "serve the convenience of the parties and witnesses and further the just and efficient conduct of this litigation." However, the Panel ruled against creating mini-MDLs for the cases filed against four other insurers: Certain Underwriters at Lloyds, Cincinnati Ins. Co., Hartford Financial Services Group Inc., and Travelers Cos. The Panel found that it would not be more efficient to consolidate the cases against those insurers because the lawsuits were pending in too many different jurisdictions and were too far flung geographically. For more information on the Panel's August 12th Order, see the August 12, 2020 entry below. For more information on the arguments the insureds presented in the motion to transfer that initiated this MDL, see the June 16, 2020 entry below. For more information on transferring cases to the JPMDL, generally, see Standard Document, Motion for a Multidistrict Litigation (MDL) Transfer.
October 2, 2020	In Re: National Ski Pass Insurance Litigation, No. 2955, JPMDL	Insurance Coverage Implicated: Travel insurance. Case Type: Multidistrict litigation. Case Summary: On October 2, 2020 the Judicial Panel on Multidistrict Litigation (JPMDL) granted insureds' request to create defendant-specific MDL's against two insurers seeking coverage under policies that the insured and similarly-situated insureds purchased simultaneously with season ski passes that they were unable to use due to COVID-19. The Panel transferred the cases to the U.S. District Court in Western Missouri and the Northern District of California, respectively. The Panel issued its decision after hearing oral on the insureds' motion to transfer and coordinate all COVID-19 ski pass coverage lawsuits that took place on arguments that took place on September 24, 2020. For more information on the arguments the insured presented in the motion to transfer that initiated this MDL, see the June 16, 2020 entry below. For more information on transferring cases to the JPMDL, generally, see Standard Document, Motion for a Multidistrict Litigation (MDL) Transfer.
September 28, 2020	Infinity Exhibits Inc. v. Certain Underwriters at Lloyd's London known as Syndicate PEM 4000 et al., No. 20-cv-1605, , Order (M.D. Fla. Sept. 28, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss. Case Summary: On September 28, 2020, a federal judge in Florida granted an insurer's motion to dismiss a COVID-19 business interruption coverage case with prejudice. Infinity argued that it lost income when it was forced to cancel trade shows because Florida's governor issued an order mandating the closure of all non-essential businesses (Compl. at ¶ 44). Infinity did not, however: Allege that it could not access its property as a result of the governor's order. Describe how its property suffered "direct physical loss or damage." (Order at 2.) The court characterized the plaintiff's argument as a contention that "economic damage is synonymous with 'physical loss' " (Order at 3). It rejected plaintiff's argument. The court held that the recent case of Mama Jo's Inc. v. Sparta Insurance Company, No. 18-12887, , at 8 (11th Cir. Aug. 18, 2020), although not based on COVID-19 closures, controlled. In that case, the 11th Circuit held that business interruption coverage is only triggered if the insured's suspension of business operations is "caused by direct physical loss of or damage to" covered property (Id.). The court reasoned that Infinity, like the plaintiff in Mama Jo's, could not procure business interruption insurance by "artfully pleading" that impairment to an insured's use of its property amounted to physical loss or damage (Id.). In reaching this conclusion, the court also cited several other recent opinions denying business interruption claims for COVID-19 losses, including: Turek Enterprises, Inc. v. State Farm Mutual Automobile Insurance Co., No. 20-11655, (E.D. Mich. Sept. 3, 2020). 10E, LLC v. Travelers Indemnity Co. of Connecticut, No. 2:20-cv-04418-SVW-AS, (C.D. Cal. Sept. 2, 2020). Malaube, LLC v. Greenwich Insurance Co., No. 1:20-cv-22615-KMW, (S.D. Fla. Aug. 26, 2020). (Order at 4.) For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
September 14, 2020	Mudpie, Inc. v. Travelers Casualty Ins. Co., 20-CV-03213, Order granting Insurer's Motion to Dismiss (N.D. Cal., Sept. 14, 2020) Mudpie, Inc. v. Travelers Casualty Ins. Co., 20-16858 (9th Cir. Oct. 1, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss (Class action complaint included counts for declaratory judgment and breach of contract). Key Pleadings and Court Orders: May 11, 2020: Complaint filed June 3, 2020: Defendant's Motion to Dismiss September 14, 2020: Order granting Defendant's Motion to Dismiss and stating Amended Complaint due by October 5, 2020 September 22, 2020: Plaintiff's Notice that no Amended Complaint will be filed September 23, 2020: Order dismissing case with prejudice September 23, 2020: Notice of Appeal to the 9th Circuit (Case No. 20-16858) January 8, 2021: Opening Brief filed by Appellant Mudpie February 8, 2021: Appellee's Brief filed by Traveler's March 19, 2021: Mudpie's and Travelers' Joint Motion to hear this case before the panel that will hear Selane Products, Inc. v. Continental Casualty Ins. Co. (No. 21-55123) March 23, 2021: Order granting the Joint Motion to hear this case before the panel that will hear Selane Products, Inc. v. Continental Casualty Ins. Co. (No. 21-55123) October 1, 2021: 9th Circuit's Opinion affirming the judgment of the district court. Case Summary: On October 1, 2021, the 9th Circuit Court of Appeals affirmed the September 14, 2020, decision of a federal judge in Northern District of California granting an insurer's motion to dismiss a COVID-19 business interruption coverage case. The policyholder, a clothing and home accessory store called Mudpie, argued: It suffered a "direct physical loss" of property because COVID-19 emergency orders made it inaccessible The policy did not require physical alteration or damage to trigger coverage under a "direct physical loss" provision; rather, either direct physical loss or loss of use could trigger coverage The policy's virus exclusion did not apply (because the policyholder did not allege the presence of the virus on the covered property). (Compl. at ¶ 5.) The court agreed that under California law, a policyholder did not need to show physical damage to recover under a "direct physical loss" provision (citing Total Intermodal Servs. Inc. v. Travelers Prop. Cas. Co. of Am., , at 3-4 (C.D. Cal. July 11, 2018) (Compl. at ¶¶ 5-6). However, the court also found that Mudpie's policy only covered loss of use damages under its civil authority and extra expense provisions if a "physical force" prompted the shutdown orders. In its complaint, Mudpie alleged that the relevant shutdown orders were issued to prevent the spread of COVID-19, but prevention is not a physical force. Therefore, Mudpie did not estalish a direct physical loss. (Compl. at ¶¶ 7-10.) The court cited Studio 417, a case in which a federal district court in Missouri denied an insurer's motion to dismiss a COVID-19-related business interruption claim, favorably. But unlike Mudpie, the plaintiffs in that case alleged that both emergency orders restricting access and the presence of the COVID-19 virus inside their properties made them unusable. Because Mudpie's "sole focus is on the shelter-in-place orders that prevented it from opening, a distinctly less physical phenomenon" than the presence of COVID-19, Mudpie's complaint was fatally deficient (Compl. at ¶¶ 9-10.) The court gave Mudpie 21 days to file an amended complaint. Mudpie's counsel indicated it would likely do so (see 9/15/20 Alison Frankel's On The Case 22:31:29, citing an email statement from Mudpie's counsel). However, Mudpie declined to file an Amended Complaint and instead appealed the decision. The case is currently pending before the 9th Circuit Court of Appeals. For a discussion of Studio 417*, see the August 12, 2020 entry below. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
September 3, 2020	Turek Enterprises Inc., d/b/a Alcona Chiropractic v. State Farm Mutual Automobile Insurance Co., Order Granting Insurer's Motion to Dismiss, No. 20-11655 (E.D. Mich., September 3, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss (Complaint included counts for declaratory judgment and breach of contract). Key Pleadings and Court Orders: June 23, 2020: Complaint filed July 15, 2020: Defendant's Motion to Dismiss September 3, 2020: Order Granting Defendant's Motion to Dismiss Case Summary: On September 3, 2020, a federal judge in the Eastern District of Michigan granted an insurer's motion to dismiss a COVID-19 business interruption coverage case. The policyholder, a chiropractor, argued: The policy did not require direct physical loss to trigger coverage; rather, either direct physical loss or loss of use could trigger coverage. The policy's virus exclusion did not apply (because the policyholder did not allege the presence of the virus on the covered property). The court rejected Plaintiff's arguments. It held: Plaintiff's argument that the phrase "physical loss to Covered Property" (emphasis added) can be triggered by either direct physical loss of physical property or the inability to use the covered property "[U]ltimately renders the word 'to' meaningless. 'To' is used here as a preposition indicating contact between two nouns, 'direct physical loss' and ‘Covered Property.' " (Order at pp. 11-12.) If the policy provided coverage for "direct physical loss of covered property (emphasis added)," then the policy could provide coverage for loss of use alone (without direct physical loss). (Order at pg. 12.) The policyholder did not allege that COVID-19 was physically present and that the presence of COVID-19 constituted a direct physical loss; instead, Plaintiff is adamant that: COVID-19 never entered its premises; and its loss of income and extra expense arise only from its suspension of operations in compliance with orders of civil authority. (Order at pp. 12-13.) Even if the policy did provide coverage for loss of use, the policy's virus exclusion barred coverage. In so holding, the court noted that Michigan courts had not previously interpreted the phrase "direct physical loss." Other courts interpreting that language in COVID-19-related cases, however, had come to the same conclusion when interpreting the phrase, including Diesel Barbershop, LLC v. State Farm Lloyds, (W.D. Tex. August 13, 2020). The court also distingued a recent COVID-19 business interrutpion case that held loss of use along could trigger coverage, Studio 417 Inc. v. Cincinnati Insurance Co., Order Denying Defendant's Motion to Dismiss (W.D. Mo, Aug. 12, 2020), because the policy at issue in that case used the disjunctive "or" in its triggering language and the policyholders in that case “plausibly alleged thatCOVID-19 particles attached to and damaged their property" (Order at pp. 13-14.) For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
September 2, 2020	Mauricio Martinez, DMD, P.A. v. Allied Ins. Co. of America, No. 20-00401, Order Granting Insurer's Motion to Dismiss (M.D. Fla., Sept. 2, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Insurer's Motion to Dismiss (Complaint included counts for declaratory judgment and breach of contract) . Case Summary: On September 2, 2020, a federal judge in the Middle District of Florida granted an insurer's motion to dismiss a COVID-19 business interruption coverage case because "the plain language of the policy's [virus] exclusion" excluded coverage damages caused by COVID-19 (Order at pg. 5). The policyholder, a dental practice, argued that the business income and civil authority provisions of its policy covered its loss of business income as a result of orders of civil authority that limited dental services to only emergency procedures during the COVID-19 pandemic (Order at pg. 5). The court acknowledged that the policy at issue provided coverage for "direct physical loss or damage to covered property." It did not, however, address the issue of whether loss of use alone, without direct physical damage, could trigger coverage. Instead, it held that even if the policy covered loss of use, the dental practice's damage was not due to a "covered cause of loss" because: The policy's virus exclusion "expressly excludes insurer liability for loss or damage caused 'directly or indirectly' by any virus." The dental practice's damages "resulted from COVID-19, which is clearly a virus." (Order at pp. 5-6.) For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
September 2, 2020	10E, LLC v. Travelers Indemnity Company of Connecticut, et al., 2:20CV04418, Amended Order Granting Defendant's Motion to Dismiss (C.D. Cal., Sept. 2, 2020) 10E, LLC v. Travelers Indemnity Company of Connecticut, et. al., Case No. 20-56206 (9th Cir., Nov. 17, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Amended Order Granting Defendant Insurer's Motion to Dismiss Key Pleadings and Court Orders: April 10, 2020: Complaint filed in Los Angeles Superior Court May 15, 2020: Defendant's Notice of Removal June 12, 2020: Plaintiff's Motion to Remand June 26, 2020: Defendant's Motion to Dismiss August 28, 2020: Order Granting Defendant's Motion to Dismiss and Denying Plaintiff's Motion to Remand September 2, 2020: Amended Order Granting Defendant's Motion to Dismiss September 16, 2020: Second Amended Complaint September 30, 2020: Defendant's Motion to Dismiss Second Amended Complaint November 13, 2020: Order Granting Defendant's Motion to Dismiss without Leave to Amend November 16, 2020: Notice of Appeal to the 9th Circuit (Case No. 20-56206) November 17, 2021: Docketed at the 9th Circuit. December 21, 2020: Order releasing case from the mediation program April 9, 2021: 10E’s Motion for Extension of Time to file its opening brief granted in part. May 10, 2021: Appellant Brief Case Summary: On September 2, 2020, a federal judge in the Central District of California issued an Amended Order Granting Defendant's Motion to Dismiss that superseded its August 28 Order Granting Defendant's Motion to Dismiss. The Amended Order, like the original order, found the policyholder's complaint seeking coverage for COVID-19-related business interruption damages fatally deficient; however, it granted the policyholder 14 days to file an amended complaint addressing the deficiencies. The amended order discusses each of the insurer's three arguments: The policyholder failed to alleged it suffered "direct physical loss of or damage to property" as required for business income and extra expense coverage. The policyholder failed to allege COVID-19 emergency orders prohibited access to Plaintiff's restaurant as required for civil authority coverage. The policy's virus exclusion precludes coverage. (Amended Order at pg. 6.) The policyholder argued that because the phrase "direct physical loss of or damage to property" includes the disjunctive "or," temporary impairment to economically valuable use of property constitutes physical loss or damage (Amended Order at pg. 7). It alleged it suffered precisely this type of loss when orders of civil authority limited its access to its restaurant. The court rejected that argument. It held that even if the policy can be triggered by loss of use alone, under California law the alleged loss must be a "permanent dispossession" of the insured property, not temporary impairment of use (Id. at pg. 8, citing Total Intermodal Servs. Inc. v. Travelers Prop. Cas. Co. of Am., (C.D. Cal. 2018)). Therefore, because plaintiff did not plead either direct physical loss or permanent loss of use, its complaint was fatally deficient. The court further found that there was no civil authority coverage because the order of civil authority that results in loss of business income and extra expense "must be due to direct physical loss of or damage" to property within 100 miles of the insured property. Plaintiff's complaint did not contain those allegations; instead, it only "points to a mere possibility" of such damage. (Amended Order at pg. 8.) Finally, the court noted that the policyholder's complaint did not "articulate a theory of coverage clearly enough" to allow the court to reach the issue of whether the virus exclusion applied (Amended Order at p. 9). It also expressed skepticism "that Plaintiff can evade application of the Policy's virus exclusion" and specifically stated that it likely would not accept a theory that rested on the "potentially implausible allegation" that the orders of civil authority that impaired plaintiff's access to its property "are not attributable to any virus" (Id.). The court did, however, grant plaintiff 14 days to file an amended complaint to cure its deficiencies. For a discussion of the court's original Order Granting Defendant's Motion to Dismiss, see the August 28, 2020 entry below. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
August 28, 2020	10E, LLC v. Travelers Indemnity Company of Connecticut, et al., 2:20CV04418, Order Granting Defendant's Motion to Dismiss (C.D. Cal., August 28, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Defendant Insurer's Motion to (Complaint included counts for declaratory judgment, breach of contract, and bad faith). Key Pleadings and Court Orders: April 10, 2020: Complaint filed in Los Angeles Superior Court May 15, 2020: Defendant's Notice of Removal June 12, 2020: Plaintiff's Motion to Remand June 26, 2020: Defendant's Motion to Dismiss August 28, 2020: Order Granting Defendant's Motion to Dismiss and Denying Plaintiff's Motion to Remand September 2, 2020: Amended Order Granting Defendant's Motion to Dismiss September 16, 2020: Second Amended Complaint September 30, 2020: Defendant's Motion to Dismiss Second Amended Complaint November 13, 2020: Order Granting Defendant's Motion to Dismiss without Leave to Amend November 16, 2020: Notice of Appeal to the 9th Circuit (Case No. 20-56206) December 21, 2020: Order releasing case from the mediation program Case Summary: On August 28, 2020, a federal judge in the Central District of California granted an insurer's motion to dismiss a COVID-19 business interruption coverage case. 10E, the policyholder, is represented by high-profile plaintiff's attorney Mark Geragos, who is prosecuting a number of COVID-19-related coverage cases, including one on behalf of his law firm. The motion to dismiss argued: The policy's virus exclusion applied and barred coverage. Plaintiff failed to allege orders of civil authority prohibited access to its property (not merely limited access). Plaintiff did not "plausibly allege" direct physical loss. The court held that the plaintiff failed to allege that the actual presence of COVID-19 on its property caused direct physical loss; instead, the plaintiff alleged "in-person dining restrictions interfered with the use or value of its property – not that the restrictions caused direct physical loss or damage” (Order at page 7). Despite California case law to the contrary (see, e.g., Intermodal Services, Inc. Travelers Prop Cas. Co. of Am., (C.D. Cal. 2018), the court also rejected the Policyholder’s argument that since its policy covered "direct physical loss of or damage to" property – in the disjunctive – plaintiff's loss of the use of its property alone – without direct physical damage – triggered coverage. The court did, however, suggest that if the plaintiff had sufficiently alleged physical damage, it might have survived the motion to dismiss. (Order at pp. 7-8.) The court did reach the issues of whether the policy's virus exclusion applied or whether orders of civil authority needed to prohibit – not merely limit – access to trigger coverage under a civil authority provision. On September 2, 2020, the Court issued an order amending its order granting Traveler's motion to dismiss in which it gave 10E fourteen days to file an amended complaint addressing the deficiencies that led to the case's dismissal. For a discussion of that order, see the September 2, 2020 tracker entry above. For further discussion of other COVID-19 coverage cases Mark Geragos is prosecuting, see the July 20, 2020, April 20, 2020, and April 9, 2020 and entries. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
August 27, 2020	Dianoia's Eatery, LLC, d/b/a Dianoia's and Pizzeria Davide v. Motorists Mutual Ins. Co., , Order to Remand (W.D.Pa., August 27, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Plaintiff Policyholder's Motion to Remand (Complaint includes counts for declaratory judgment and breach of contract). The insurer appealed the decision and the case is currently pending before the Third Circuit Court of Appeals (Case No. 20-2954). Key Pleadings and Court Orders: May 29, 2020: Motorist Mutual's Notice of Removal (from Court of Common Pleas of Allegheny County) June 2, 2020: Motorist Mutual's Answer June 16, 2020: Dianoia's Motion to Remand August 27, 2020: Order Granting Dianoia's Motion to Remand August 28, 2020: Motorist Mutual's Motion for Reconsideration September 24, 2020: Order Denying Motion for Reconsideration September 24, 2020: Motorist Mutual's Notice of Appeal to the Third Circuit from the Court's decision remanding the case to Allegheny County, Case No. 20-2954 November 12, 2020: Order granting Appellants' Unopposed Motion to Consolidate Appeals (consolidating the appeal with Case No. 20-2958, Umami Pittsburgh v. Motorists Mutual) December 22, 2020: Brief of Appellant Motorist Mutual January 24, 2021: Brief of Appellee Dianoia's February 11, 2021: Appellant's Reply Brief Feb. 24, 2021: Order consolidating Appeals of Case Nos. 20-2958 (Umami Pittsburgh v. Motorists Mut.), 20-2954 (Dianoia's v. Motorists Mut.), and 20-3122 (Mark Daniel Hospitality v. Amguard Ins. Co.) Case Summary: On August 27, 2020, a federal judge in the Western District of Pennsylvania remanded a policyholder's case to the Court of Common Pleas of Allegheny County. This was the third time the defendant, Motorists Mutual Insurance Co., tried to remove the case to federal court, and the Court found this attempt "fares no better" than the previous attempts (Order at 1). The court further noted: Federal courts are of limited jurisdiction. This case "raises novel insurance issues under Pennsylvania law," and federal courts should "step back" and be "particularly reluctant" to exercise jurisdiction under the Declaratory Judgment Act (DJA) where "state law is uncertain or undetermined." If it accepted jurisdiction, any declaration it issued as to the parties’ rights under the insurance policy "would be merely predicting how Pennsylvania courts would decide these novel issues arising from the COVID-19 pandemic, a matter of great public concern, with little persuasive authority from state courts on these issues." It is "neither practical nor wise" for a federal court to predict how Pennsylvania would resolve the novel issue of insurance liability related to the COVID-19 pandemic when the discretion exists to allow Pennsylvania courts to address the matter for themselves. (Order at 2-3.) For further discussion of this case, see the entry at May 29, 2020. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
August 26, 2020	Malaube LLC v. Greenwich Ins. Co., No. 20-22615, Recommendation to Grant Insurer's Motion to Dismiss (S.D. Fla. August 26, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Recommendation to Grant Insurer's Motion to Dismiss (Complaint included counts for declaratory judgment and breach of contract) Key Pleadings and Court Orders: April 23, 2020: Complaint filed (Circuit Court for of the 11th Judicial Circuit for Miami-Dade County, Case No. 2020-008378-CA-01) June 24, 2020: Notice of Removal August 26, 2020: Recommendation to Grant Insurer's Motion to Dismiss September 8, 2020: Plaintiff's Voluntary Dismissal without Prejudice Case Summary: On August 26, 2020, a magistrate judge in Southern District of Florida recommended that the court grant an insurer's motion to dismiss a COVID-19 business interruption coverage case; however, the magistrate's order also suggested that had the policyholder alleged "direct physical harm," the complaint likely would have survived the motion to dismiss. The insurer argued the policyholder's complaint should be dismissed for three reasons: The policy was not triggered because its virus exclusion excludes coverage for COVID-19-related damages. The policyholder did not allege direct physical loss or damage to property (instead, it argued that it suffered significant businesses losses due to the orders of civil authority that limited the full use of its restaurant). No order of civil authority prohibited access to the policyholder's property (rather, access was merely limited). (Order at pp. 4-5.) The court cited several recent COVID-19 business interruption cases approvingly, including Studio 417, Inc. v. Cincinnati Ins. Co., (W.D. Mo. Aug. 12. 2020). In that case, like this one, the policy stated that coverage is triggered by "direct physical loss or damage." The court also concluded, as did the court in Studio 417, that it had to give meaning to both "loss" and "damage." (Order at pg. 13.) The court went on to state, however, that since the phrase "direct physical" modifies both "loss" and "damage," "any interruption in business must be caused by some physical problem with the covered property" (Id. at pg. 16) (emphasis added). Here – unlike in Studio 417 – the policyholder did not allege any physical damage – "there was no allegation, for example, that COVID-19 was physically present on the premises. (Id. at 15). The court concluded, therefore, the policyholder's complaint could not survive the motion to dismiss. (Id. at 20.) Finally, the court held that even if it accepted the policyholder's argument that "direct physical loss" occurred if a property was rendered uninhabitable or substantially unusable, plaintiff's complaint failed to state a claim because the orders of civil authority at issue did not make the restaurant "uninhabitable" (it merely mandated that the restaurant close its indoor dining spaces). (Order at pp. 20-21.) For a discussion of Studio 417, see the August 12, 2020 entry below. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
August 18, 2020	Vandelay Hospitality Group v. The Cincinnati Ins. Co., et. al., 3:20-CV-01348, Order Granting Swingle Collins' Motion to Dismiss (N.D. Tex., August 18, 2020) Vandelay Hospitality Group v. The Cincinnati Ins. Co., et. al., 3:20-CV-01348, Swingle Collins' Motion to Dismiss (N.D. Tex., June 12, 2020) Vandelay Hospitality Group v. The Cincinnati Ins. Co., et. al., 3:20-CV-01348, Cincinnati Ins. Co.'s Motion to Dismiss (N.D. Tex., June 2, 2020) Vandelay Hospitality Group v. The Cincinnati Ins. Co., et. al., 3:20-CV-01348, Order Granting Cincinnati Ins. Co.'s Motion to Dismiss (N.D. Tex., Feb. 9, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Defendant Insurer's Motion to Dismiss (February 9, 2021) and Order Granting Defendant Insurance Broker's Motion to Dismiss (August 18, 2020). Key Pleadings and Court Orders: May 26, 2020: Notice of Removal from 68th Judicial District Court, Dallas Cty, Case No. DC-20-05999 June 2, 2020: Cincinnati Ins. Co.'s Motion to Dismiss. June 12, 2020: Swingle Collins' Motion to Dismiss. August 18, 2020: Order granting Swingle Collins' Motion to Dismiss. February 9, 2021: Order granting Cincinnati Ins. Co.'s Motion to Dismiss March 9, 2021: Vandelay’s Third-Amended Complaint March 23, 2021: Cincinnati’s Motion to Dismiss Vandelay’s Third-Amended Complaint Case Summary: In a COVID-19 business interruption coverage matter, a Texas federal court granted an insurance broker's motion to dismiss and an insurer's motion to dismiss. The policyholder, Vandelay Hospitality Group, operates three restaurants. It sued its insurer, Cincinnati, and its broker, Swinger Collins, after Cincinnati denied its claim for COVID-19-related business interruption losses. Both Cincinnati and Swinger Collins filed motions to dismiss. Swinger Collins' Motion to Dismiss Vandelay brought two claims against Swinger Collins: Negligent misrepresentation. Declaratory judgment. The court dismissed both claims. It held: Vandelay failed to state a negligent misrepresentation claim against Swinger Collins because: in a misrepresentation claim the only recoverable damages are those resulting from the plaintiff's justifiable reliance on the misrepresentation ("reliance damages"); but Vandelay is trying to recover the amount of coverage it should have received under the policy ("benefit of the bargain" damages). (Order at pp. 11-13.) Vandelay's declaratory judgment claim fails as a matter of law because: it is duplicative of the breach of contract claims against Cincinnati; and Swinger Collins demonstrated that there is no reasonable basis for predicting that Vandelay might be entitled to a declaratory judgment against it in state court. (Order at pp. 15-18). Cincinnati's Motion to Dismiss In its motion to dismiss, Cincinnati argued: There is no coverage for business interruption losses related to COVID-19, including coverage under civil authority provisions, because: none of the insured properties suffered "direct physical loss;" and access to the covered properties was "just limited," not prohibited. (Motion at pg. 6-16.) Vandelay's bad faith claim and claims that Cincinnati violated the Texas Insurance Code fail because: the parties merely had a "good faith dispute about the scope of coverage;" and Vandelay didn't plead its statutory unfair claims settlement practices claims with the required specificity. (Motion at pg. 12 and 16.) Vandelay's misrepresentation claim fails because they concern Cincinnati's alleged failure to fulfill its contractual duties and therefore "are more properly raised as a breach of contract claim" (Motion at pp. 16-17.) Vandelay did not properly plead a violation of Texas' Prompt Payment Act because it did not show that Cincinnati's policy covered its damages (Motion at pg. 17). On February 9, 2021, the court granted Cincinnati's motion to dismiss. It held that Vandelay's claim did not trigger coverage because although Vandelay pled that COVID-19 "infected" its premises and caused damage or loss, Vandelay failed to allege that the presence of COVID-19 caused "distinct, demonstrable physical alteration" of its property (Order at pg. 2). However, the Court did grant Vandelay leave to re-plead. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
August 18, 2020	In re: National Ski Pass Insurance Litigation, MDL No. 2955, Notice of Hearing (Doc. 54, August 18, 2020) In re: National Ski Pass Insurance Litigation, MDL No. 2955, Brief in Support of Motion to Transfer (Doc. 1, June 16, 2020)	Insurance Coverage Implicated: Travel insurance. Case Type: Multidistrict litigation. Case Summary: On August 18, 2020, the Judicial Panel on Multidistrict Litigation (JPMDL) issued an order stating that on September 24, 2020 it will hear oral arguments on an insured's motion to transfer and coordinate all lawsuits seeking coverage under insurance policies that the insured and similarly-situated insureds purchased simultaneously with season ski passes that they were unable to use due to COVID-19 related travel restrictions and closure orders. The MDL implicates six related actions. For more information on the arguments the insured presented in the motion to transfer that initiated this MDL, see the June 16, 2020 entry below. For more information on transferring cases to the JPMDL, generally, see Standard Document, Motion for a Multidistrict Litigation (MDL) Transfer.
August 14, 2020	In Re: National Travel Insurance Litigation, MDL No. 2968, Plaintiff's Brief in Support of Motion for Transfer and Coordination of Actions (Doc. 1, August 14, 2020)	Insurance Coverage Implicated: Travel insurance. Case Type: Multidistrict litigation. Case Summary: On August 14, 2020, the plaintiff in a COVID-19-related travel insurance coverage case pending in federal court (E.D. Texas) petitioned the Judicial Panel on Multidistrict Litigation (JPMDL) to coordinate all COVID-19-related travel insurance coverage cases filed by insureds that purchased a Generali travel insurance plan and transfer them to the Eastern District of Texas. As of the date of the filing, seven related action had been filed nation-wide. The plaintiff argues that all of the related actions: Involve "almost identical" factual allegations as to Generali's breach of their insurance contracts. Involve the same legal issues regarding the same policy language. Seek declaratory relief. (Brief in Support at pp. 8-9.) The Plaintiff further argues that the Panel's recent order in In re: COVID-19 Business Interruption Protection Insurance Litigation suggested that "there is a significant possibility" that consolidation of insurer-specific MDL's could achieve "convenience and efficiency benefits" and avoid inconsistent rulings regarding insurance policies that shared the same language, endorsement, and exclusions. Therefore, according to Plaintiff, the Panel should consolidate all of the COVID-19 related travel insurance cases pending in federal courts against Generali insurance (Brief in Support at pg. 13.) For more information on In re: COVID-19 Business Interruption Protection Insurance Litigation, MDL 2942, see the August 12, 2020 entry below. For more information on transferring cases to the JPMDL, see Standard Document, Motion for a Multidistrict Litigation (MDL) Transfer.
August 13, 2020	Diesel Barbershop LLC et al. v. State Farm Lloyds, Case No. 5:20-cv-00461, Order Granting Defendant's Motion to Dismiss (W.D. Texas, August 13, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Order Granting Defendant Insurer's Motion to Dismiss (Complaint included counts for declaratory judgment, breach of contract, breach of the duty of good faith and fair dealing, and noncompliance with the Texas Insurance Code). Key Pleadings and Court Orders: April 8, 2020: Complaint filed August 13, 2020: Order granting Defendant's Motion for Summary Disposition Case Summary: On August 13, 2020, a Texas federal court granted defendant State Farm Lloyds' motion to dismiss a suit brought by six of its policyholders to obtain coverage for COVID-19-related business interruption losses. The court held: The policy required "accidental, direct physical loss" to trigger coverage and while some courts do not require "tangible destruction" to an insured's property to satisfy that requirement, in the 5th Circuit "the loss needs to have been a 'distinct, demonstrable physical alteration of the property.'" (Order at pp. 11-14). The plaintiffs did not plead a direct physical loss (Id. at pg. 15). Even if the plaintiffs had shown a direct physical loss, the policies' virus exclusion barred both their: business interruption claims; and civil authority claims. (Id. at pp. 15-18). The plaintiffs, six barbershops, argued that their COVID-19-related business interruption losses were covered because: The policies at issue do not require that the covered properties suffer a "tangible and complete physical loss" to trigger coverage; rather, they allow for a partial loss to the properties, including loss of use. The plaintiffs' lost the use of their properties when COVID-19-related orders of civil authority restricted their use of the properties. The policies' virus exclusion does not apply because the COVID-19 virus did not cause their losses; rather, the orders of civil authority that restricted access caused their losses. (Order at pg. 11.) The court rejected each of these arguments, but it is significant that the plaintiffs did not allege that COVID-19 was physically present in their barbershops and that its presence in the properties caused direct physical damage. The court's holding, therefore, does not foreclose the possibility that the actual physical presence of COVID-19 is a covered loss. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
August 12, 2020	In re COVID-19 Business Interruption Protection Ins. Litigation, MDL No. 2942, Order Denying Transfer and Directing Issuance of Show Cause Orders (Doc. 772, August 12, 2020) ()	Insurance Coverage Implicated: Business interruption. Case Type: Multidistrict litigation. Case Summary: On August 12, 2020, the Judicial Panel on Multidistrict Litigation (JPMDL) issued an order denying an all-encompassing industry-wide consolidation of COVID-19 business interruption coverage cases, but finding that insurer-specific MDLs might be appropriate. The panel heard oral arguments on motions to centralize all federally filed COVID-19-related business interruption cases on July 30, 2020 in MDL No. 2942, In re COVID-19 Business Interruption Protection Ins. Litigation (see a discussion of the hearing at the July 30, 2020 entry below). The insureds argued that some form of consolidation was necessary to resolve the high volume of business interruption coverage cases in time for businesses to receive the insurance proceeds they need to survive the COVID-19 pandemic. The insurers argued any form of consolidation would be untenable because the facts of the cases were not similar, the insurance policies at issue were all unique, and the disputes were covered by many different state laws. The Panel held that the proposed one over-arching MDL and the proposed state-specific MDLs raised "significant managerial and efficiency concerns" because: The cases didn't share common defendants. There was little potential for common discovery. The insurance policies were all different. The Panel also held, however, that insurer-specific MDLs might be appropriate because insurers would likely use the same policy language, which: Increased the likelihood of common discovery. Provided the opportunity for pre-trial rulings on common policy language (which would decrease the likelihood of inconsistent rulings). The Panel did not issue a final ruling with respect to insurer specific MDLs. Instead, it ordered expedited briefing from four insurers – Lloyd's, Cincinnati, the Hartford, and Society – to show cause why the cases against them should not be centralized and scheduled the issue of insurer-specific MDLs for consideration at its next hearing on September 24, 2020. For a discussion of the Panel's Order, see Westlaw Today, Alison Frankel's On the Case: JPML Rejects Nationwide Consolidation of Business Insurance Cases. Now What? (August 13, 2020). For information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage
August 12, 2020	Studio 417 Inc. v. Cincinnati Insurance Co., Order Denying Defendant's Motion to Dismiss (W.D. Mo, Aug. 12, 2020) Studio 417 Inc. v. Cincinnati Insurance Co., Defendant's Motion to Dismiss (W.D. Mo., June 22, 2020) Studio 417 Inc. v. Cincinnati Insurance Co., Complaint (W.D. Mo., April 27, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment. Key Pleadings and Court Orders: April 27, 2020: Complaint filed June 1, 2020: Amended Complaint June 22, 2020: Cincinnati Ins. Co.'s Motion to Dismiss August 12, 2020: Order denying Cincinnati Ins. Co.'s Motion to Dismiss August 26, 2020: Answer to Amended Complaint December 18, 2020: Order granting Motion to Consolidate with Case No. 20-cv-00681, Jacob Reiger & Co., LLC v. the Cincinnati Ins. Co. All future pleadings and orders regarding the consolidated cases will be filed in Case No. 20-cv-00681 February 15, 2021: Amended Complaint filed on behalf of all Plaintiffs March 1, 2021: Answer to Amended Complaint Case Summary: On August 12, 2020, a federal district court in Missouri denied Defendant Cincinnati Insurance Co.'s motion to dismiss, holding that COVID-19 can cause physical loss and trigger coverage under business interruption policies. The plaintiff policyholders operate restaurants and hair salons. Their complaint alleges: Some of their customers, employees, and visitors were likely COVID-19 positive and infected the insured premises with the COVID-19 virus. The insured premises were unsafe and unusable because of the presence of COVID-19. The presence of COVID-19 and state-issued COVID-19 emergency orders caused "direct physical loss or direct physical damage" to their premises by: denying use of property; damaging property; and causing a necessary suspension of operations during a period of restoration. In its motion to dismiss, Cincinnati argued that the plaintiffs' COVID-19 damages were not tied to physical damage to property and, therefore, did not satisfy the policies' direct physical loss requirement (Motion to Dismiss at pg. 2). The judge did not rule on the merits of the plaintiffs' allegations, but he held that plaintiffs' allegations that COVID-19 particles are a "physical substance" that damaged their property and made it unusable meant that they "adequately alleged a direct physical loss" (Order at pg. 8). The court further held that the policy at issue provides coverage for "accidental physical loss or accidental physical damage," (emphasis in original) and Cincinnati's attempt to conflate "loss" and "damage" to impose a requirement of "tangible, physical alteration" of property in order to trigger coverage was improper. Instead, "the Court must give meaning to both terms." (Order at pp. 8-9.) For a discussion of the Court's Order, see Westlaw Today, Business Owners Can Sue Insurer Over Coronavirus Losses, Missouri Judge Rules (August 12, 2020). For information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
August 6, 2020	Rose’s 1 LLC, et. al. v. Erie Insurance Exchange, Order Denying Plaintiff's Motion for Summary Judgment and Granting Defendant's Cross-Motion for Summary Judgment, Case No. 2020 CA 002424B (D.C. Sup. Ct. August 6, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment. Key Pleadings and Court Orders: May 4, 2020: Complaint filed August 6, 2020: Order denying Plaintiffs' Motion for Summary Judgment and granting Erie Insurance Exchange's Cross-Motion for Summary Judgement September 4, 2020: Plaintiff's Notice of Appeal to District of Columbia Court of Appeals October 23, 2020: Appellant's Brief December 7, 2020: Reply Brief Case Summary: On August 6, 2020, a Washington D.C. Superior Court judge granted Defendant Erie Insurance's motion for summary judgment, holding that the plaintiff restaurant's insurance policy did not provide coverage for COVID-19-related business interruption coverage losses because: The policy required "direct physical loss" to the insured premises to trigger coverage (Order at pp. 7-8). The plaintiff did not offer any evidence that COVID-19 was actually present on the covered property and, therefore, COVID-19 could not have caused direct physical loss to the property (Id. at pg. 9-10). The plaintiffs, a group of D.C. restaurants, argued that their COVID-19-related business interruption losses satisfied the policy's "direct physical loss" requirement because: Loss included loss of use. Its loss was direct because the Mayor's COVID-19-related closure orders, which included restaurants, were the direct cause of its losses. Its loss was physical because the COVID-19 virus is tangible (that is, the loss was not due to mere fears of contagion). The court rejected each of these arguments, but it is significant that the court decided the motion based on the unique facts of the case, including that: The insured argued that COVID-19 is a real "physical" cause of loss; however, it failed to allege that COVID-19 was physically present in its restaurants. The court's holding, therefore, does not foreclose the possibility that the actual presence of COVID-19 is a covered loss. The court did not address the question of whether COVID-19 satisfies "direct physical loss" coverage triggers like the one in the policy at issue because a business cannot open during the COVID-19 pandemic without the very real threat that immediately its property will be rendered unfit for use due to the presence of COVID-19. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
July 30, 2020	In re COVID-19 Business Interruption Protection Ins. Litigation, MDL No. 2942, Notice of Hearing Session on July 30, 2020 (Document 564, June 26, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Multidistrict litigation. Case Summary: The Judicial Panel on Multidistrict Litigation (JPMDL) heard oral arguments on motions to centralize federally filed COVID-19-related business interruption cases on July 30, 2020 in MDL No. 2942, In re COVID-19 Business Interruption Protection Ins. Litigation. The hearing took place via zoom videoconference. The MDL implicates more than 400 COVID-19-related business interruption coverage suits, 200 of which are class actions. The insureds argued that some form of consolidation was necessary to resolve this number of cases in time to provide the insureds with the insurance proceeds they need to survive the pandemic. They proposed at least three different ways the panel could consolidate the cases: One MDL. State-specific MDLs. Insurer-specific MDLs. The insurers argued any form of consolidation would be untenable given variations between: State law governing insurance disputes. The nature, type, and duration of COVID-19-related public emergency declarations. Policy language. Each insured's individual circumstances. The panel will issue a ruling in the coming weeks. For a discussion of the issues presented in the COVID-19 business interruption MDL, see the June 26, 2020 Tracker entry below. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
July 29, 2020	State Auto Property And Casualty Insurance Co. v. Classic Dining Group LLC, et al., No. 20-04434, Complaint for Declaratory Judgment (N.D. Ill., July 29, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment. Key Pleadings and Court Orders: June 24, 2020: Complaint September 23, 2020: Amended Complaint July 29, 2020: Motion to Dismiss on Forum Non Conveniens Case Summary: On July 29, 2020, State Auto filed a complaint in the Northern District of Illinois against a class of its policyholders comprised of 31 restaurants located in Indiana, Illinois, and Wisconsin. The complaint seeks a declaratory judgment that the insurance policies at issue "were not designed to cover the economic fallout from a global pandemic," and therefore do not cover the restaurants COVID-19-related business interruption losses (Compl. at ¶ 4). Contemporaneously, State Auto filed a motion to dismiss a case that the same class of insureds filed against it in Ohio state court seeking coverage for the same COVID-19-related business interruption losses at issue in the Illinois litigation. State Auto argues that this Ohio litigation should be dismissed in favor of the newly filed Illinois litigation because: The plaintiff restaurants are located in Indiana, Illinois, and Wisconsin – not Ohio. The plaintiffs received the insurance policies at issue at an Illinois address through an Illinois broker. The dispute requires the application of Illinois contract law. Ohio has no localized interest in resolving the dispute. (See State Auto's Illinois complaint at ¶ 76.) The complaint alleges that State Auto has no duty to provide business interruption coverage for losses the restaurants suffered when orders issued by the governors of Indiana, Illinois, and Wisconsin forced the restaurants to close. Specifically, State Auto argues: The policies at issue are narrow and only cover losses that result from a suspension of the insureds' business operations due to "direct physical loss of or damage to property" (Compl. at ¶¶ 4, 81-84, and 89-93). The restaurant's losses were a direct consequence of COVID-19-related governmental orders; however, none of the orders were issued in response to "direct physical loss or damage to" the insureds' property (Compl. at ¶¶ 5 and 51-66). The presence (or suspected presence) of COVID-19 in the community does not constitute a "direct physical loss of or damage to" the insureds' premises (Compl. at ¶¶ 6, 96, and 98). State Auto's complaint seeks a declaratory judgment on these coverage issues. For more information on the Ohio case implicated by this complaint, see the restaurants' complaint (Classic Dining Group LLC v. State Auto Ins. Cos., No. 20CV004107 (Franklin Cty., Ohio, June 24, 2020) and the June 24, 2020 entry below. For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
July 24, 2020	Northwell Health Inc. v. Illinois Union Insurance Co., Complaint (N.Y. Sup. Ct., July 24, 2020)	Insurance Coverage Implicated: Healthcare Premises Pollution Liability. Case Type: Declaratory judgment and breach of contract. Key Pleadings and Court Orders: July 24, 2020: Complaint filed August 26, 2020: Illinois Union's Notice of Removal to the Southern District of New York, Case No. 1:20-CV-06893 September 18, 2020: Northwell Health's Motion for Partial Summary Judgment (on the issue of whether as a matter of law, Northwell suffered a "facility-borne illness event") September 25, 2020: Illinois Union's Motion to Dismiss Case Summary: On July 24, 2020, Northwell Health Inc., a hospital system that operates 23 hospitals in New York and has treated more than 50,000 COVID-19 cases, filed suit against its insurer. Northwell incurred significant COVID-19-related costs and losses, including costs associated with: Treating the respiratory effects of COVID-19. Suspending elective procedures. Closing physician's practices. Fewer hospital admissions and visits or uses of Northwell's medical facilities. (Compl. at §§ 37-39.) Northwell claims that the healthcare premises pollution liability policy it purchased from Illinois Union Insurance (a unit of Chubb) provides coverage for: Costs associated with pollution conditions and facility-borne illness events, including the cost of: remediation; emergency response; and decontamination. Business interruption caused by pollution conditions. (Compl. at §§ 45-53.) The insurer, however, denied Northwell's claim. In its denial letter it stated that COVID-19 pandemic is not a facility-borne illness event or pollution condition (as the policy defines those terms), therefore the policy didn't cover Northwell's damages. (Compl. at §§ 61-61.) Northwell filed suit after Illinois Union denied its claim. The complaint includes three counts: Breach of contract. Declaratory judgment. Breach of the implied covenant of good faith and fair dealing. Deceptive businesses Practice (violations of N.Y. General Business Law § 349). For more information on pollution liability insurance, see Insurance Coverage for COVID-19 Losses Chart: Coverage Under Third-Party Liability Polices. For information on bad faith coverage actions, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
July 23, 2020	Joseph Tambellini, Inc. v. Erie Ins. Exchange, Motion to Coordinate Granted, No. 52-WM-2020 (Penn. Sup. Ct., July 23, 2020) Joseph Tambellini, Inc. v. Erie Ins. Exchange, Memorandum in Support of Motion to Coordinate, No. 52-WM-2020 (Penn. Sup. Ct., June 24, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment, injunctive relief, and breach of contract. Case Summary: On July 23, 2020, the Allegheny Court of Common Pleas ordered that all suits filed in Pennsylvania against Erie Insurance will be consolidated before it and any new cases filed against Erie in Pennsylvania will become part of the coordinated proceedings. Plaintiff Joseph Tambellini, Inc. (Tambellini) owns and operates a restaurant in Pittsburgh. On April 29, 2020, Tambellini sued its insurer, Erie, after Erie denied its claim for business interruption losses sustained after various COVID-19-related governmental orders forced Tambellini to close its business and furlough its employees (Compl. at ¶ 24). Tambellini filed an Emergency Application for Extraordinary Relief on April 29, 2020, in which it urged the Pennsylvania Supreme Court to accept jurisdiction so that it could issue a ruling that would clarify for all Pennsylvania insureds whether business interruption insurance is available for COVID-19-related losses. On May 14, 2020, the Pennsylvania Supreme Court denied that motion, implicitly accepting Erie's argument that it would be inappropriate for one court to issue "sprawling industry-wide rulings" that purport to adjudicate "thousands of unknown disputes" and involving "myriad contract forms, and exponential number of different types of businesses, and varying underlying facts" (Answer to Application for Extraordinary Relief at pg.4). On June 24, 2020, Tambellini filed a Motion for Coordination on its behalf and on behalf of a class of similarly situated plaintiffs in which it argued that the court should consolidate all the cases in Pennsylvania involving COVID-19-related business interruption insurance coverage issues into one matter since the same policy provisions were at issue (currently there are about 20 such cases). Erie argued that coordination would not be fair or efficient because each case involved a unique fact pattern specific to each individual insured and each insured's policy. On July 23, 2020, the court granted the Motion to Consolidate and ordered: Erie must notify the court of any future COVID-19-related business interruption insurance cases filed against it. Those cases will be transferred to Allegheny County and become part of the coordinated proceedings. The pending cases against Erie in Philadelphia County and Lancaster County are coordinated in the Allegheny County Court of Common Pleas. For a discussion of the court's order granting consolidation, see Pennsylvania court orders coordination of some COVID-19 coverage suits, . For information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
July 20, 2020	Geragos & Geragos Fine Arts Building, LLC v. Travelers Indemnity Company of Connecticut, Order Re: Plaintiff's Motion to Remand, , at 1 (C.D.Cal., July 20, 2020) Geragos & Geragos Fine Arts Building, LLC v. The Travelers Indemnity Co. of Connecticut*, No. 20-0406 (Cal. Sup. Ct., Los Angeles County, April 17, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Bad faith and declaratory judgment. Case Summary: The policyholder, owner of four residential units in Pasadena, California, sued its insurer in state court after the insurer denied the policyholder's claim for business interruption losses sustained after the Mayor of Los Angeles issued a series of rent relief orders that made it impossible for the policyholder to collect rent payments. The policyholder argues that it is losing $6,800 per month in lost rental income. The complaint includes three counts: Declaratory judgment (including that the Mayor's orders trigger coverage under the civil authority provision of the policyholder's business interruption policy). Bad faith breach of implied covenant of good faith & fair dealing. Violation of California Insurance Code Section 790.03. The insurer removed the action to federal district court on May 15, 2020. It argued that: The policyholder, Geragos, joined another party for the sole purpose of defeating diversity jurisdiction. Geragos' claim for lost rental income would eventually exceed $75,000 (because the city's rent relief orders were likely to remain in effect for a year). Geragos filed a motion to remand, arguing in part that because it would not seek an amount in excess of $75,000, the defendant could not meet the satisfy the jurisdictional threshold for federal court. July 20, 2020, the judge granted the policyholder's motion. He held: It was "too speculative" to assume lost rental income would ever reach the $75,000 needed to hit the minimum amount in controversy for federal jurisdiction, including because: the rent relief orders expressly state they do not eliminate the obligation to pay rent; and nothing in the record suggests the rent relief orders will last for year. For a discussion of the Order on Plaintiff's Motion to Remand, see COVID-19 rent coverage dispute heads back to California state court, . For more information on business interruption insurance, generally, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
July 20, 2020	Tulalip Tribes of Washington v. Lexington Ins. Co., 20-2-0360431, Complaint (Wash. Sup. Ct., Snohomish Cty., July 20, 2020)	Insurance Coverage Implicated: Business interruption Case Type: Breach of contract, negligence, violations of Washington's consumer protection act, and declaratory judgment. Key Pleadings and Court Orders: July 10, 2020: Complaint filed September 28, 2020: Amended Complaint Case Summary: On July 20, 2020, the Tulalip Tribes of Washington sued their primary insurers and their excess insurer for COVID-19-related business interruption losses on their behalf and on behalf of their gaming organization. The complaint alleges that the primary policies at issue are all-risk and cover "direct physical loss" at covered locations, and none of the policies require that a direct physical loss involve structural damage to insured properties. Thus, when COVID-19 made "the air inside [the covered properties] unsafe to breathe" and the virus was transferred onto the covered properties, the Tribes suffered direct physical loss. The tribes further allege that the primary insurers were "aware of the Virus Exclusion," but did not use it and that the excess policy at issue was follow-form, and contained no language that made excess coverage more restrictive than the coverage provided by the primary policies (Compl. at §§ 27, 40, and 51.) According to the Tribes, its insurers used unfair and deceptive acts to belatedly attempt to modify the insurance policies to include a virus exclusion that was not a part of the original insurance contracts (Compl. at §§ 24 and 45-47.) The insurers also developed a strategy to resist claims for COVID-19-related business interruption losses and acted in concert with one another to deny the Tribes' claims (Compl. at §§ 68-69.) The complaints include counts for: Breach of contract. Negligence. Washington Consumer Protection Act violations. Declaratory judgment. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on bad faith coverage actions, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
July 13, 2020	1 S.A.N.T., Inc., et. al. v. Bershire Hathaway Inc. and Nat'l Fire & Marine Ins. Co., No. 2:20-cv-00862, Berkshire Hathaway's Brief in Support of Motion to Dismiss (W.D. Penn. July 13, 2020) 1 S.A.N.T., Inc., et. al. v. Bershire Hathaway Inc. and Nat'l Fire & Marine Ins. Co., No. 2:20-cv-00862, National Fire & Marine's Brief in Support of Motion to Dismiss (W.D. Penn. July 13, 2020) 1 S.A.N.T., Inc., et. al. v. Bershire Hathaway Inc. and Nat'l Fire & Marine Ins. Co., No. 2:20-cv-00862, Complaint (W.D. Penn. June 11, 2020)	Insurance Coverage Implicated: business interruption Case Type: Class action; declaratory judgment and breach of contract Key Pleadings and Court Orders: June 11, 2020: Complaint August 4, 2020: First Amended Complaint August 18, 2020: National Fire and Marine's Motion to Dismiss; and Berkshire Hathaway's Motion to Dismiss September 22, 2020: Plaintiffs' Notice of Voluntary Dismissal as to Berkshire Hathaway January 15, 2021: Order Granting Defendant National Fire and Marine's Motion to Dismiss (with prejudice) Case Summary: The insurers implicated in this COVID-19-related business interruption lawsuit each filed motions to dismiss on the basis that the insured's COVID-19 related damages, including claims for lost income due to COVID-19-related shutdown orders, do not trigger coverage. Plaintiff 1 S.A.N.T., Inc. filed a class action lawsuit against its insurers, Berkshire Hathaway and National Fire & Marine, on June 11, 2020 after they denied its claim for COVID-19-related business interruption damages. 1 S.A.N.T., Inc. argued its policy covered COVID-19 business interruption damages because: The governmental shut-down orders constituted direct physical loss of damage to covered property, thus triggering coverage (Compl at. ¶¶ 44 and 46). The virus exclusion the insurers relied upon when denying coverage, which has been in use since 2006, is invalid because the insurance industry trade groups that obtained permission to use the exclusion made material misrepresentations to insurance regulatory bodies that the virus exclusion would not change the scope of coverage. These material misrepresentations "effectively narrowed the scope of the insuring agreement without a commensurate reduction in premiums charged" (Compl at. ¶¶ 47-54). The class action complaint includes counts for: Declaratory relief. Breach of Contract. Berkshire Hathaway and National Fire and Marine each filed a Motion to Dismiss on July 13, 2020. Berkshire Hathaway's motion argues: The court does not have personal jurisdiction over Berkshire Hathaway. 1 S.A.N.T. Inc.'s Complaint: lacks any facts or allegations that justify adding Berkshire Hathaway as a defendant; and fails to assert any improper actions or omissions by Berkshire Hathaway (instead, all the allegations pertained to National Fire & Marine's actions or inactions). (Motion to Dismiss at pp. 3-5 and 11-12.) National Fire and Marine's Motion to Dismiss argues 1 S.A.N.T., Inc.'s policy does not cover COVID-19-relatd damages because: The policy includes a virus exclusion that: excludes COVID-19 damages; and is not voided by 1 S.A.N.T. Inc.'s meritless estoppel arguments. The policy includes a direct physical loss or damage requirement and 1 S.A.N.T. Inc.'s losses didn't trigger that requirement. 1 S.A.N.T. Inc.'s losses were due to the government shutdown orders, not direct physical loss or damage. (Motion to Dismiss at pp. 7-12 and 13-15.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
July 6, 2020	Troy Stacy Enterprises Inc. v. The Cincinnati Ins. Co., No. 1:20-cv-312-MWM, Brief of Amici Curiae in Support of Plaintiff and Opposing Motion to Certify (S.D. Ohio, July 6, 2020) Troy Stacy Enterprises Inc. v. The Cincinnati Ins. Co., No. 1:20-cv-312-MWM, Defendant's Motion to Dismiss (S.D. Ohio, July 1, 2020) Troy Stacy Enterprises Inc. v. The Cincinnati Ins. Co., No. 1:20-cv-312-MWM, Defendant's Memorandum in Support of Motion to Certify to the Ohio Supreme Court (S.D. Ohio, June 1, 2020) Troy Stacy Enterprises Inc. et. al. v. The Cincinnati Ins. Co., No. 1:20-cv-312-MWM, Complaint (S.D. Ohio, April 19, 2020)	Insurance Coverage Implicated: business interruption Case Type: Class action; Declaratory judgment and breach of contract Key Pleadings and Court Orders: April 19, 2020: Complaint June 1, 2020: Cincinnati Ins. Co.'s: Motion to Dismiss; and Motion to Certify Questions to the Ohio Supreme Court June 22, 2020: Amended Complaint July 1, 2020: Cincinnati's Motion to Dismiss Amended Complaint October 5, 2020: Panel on Multidistrict Litigation's Order denying transfer to MDL No. 2692 October 15, 2020: Troy Stacy Enterprise's Motion to Consolidate Cases (against the Cincinnati Ins. Co. pending in the Southern District of Ohio) January 15, 2021: Order Consolidating Cases (the docket in Troy Stacy Enterprises, 1:20-cv-312MWM is the master docket for the Consolidated Action) February 26, 2021: Troy Stacy's Amended Complaint against all Defendants April 12, 2021: Cincinnati’s Motion to Dismiss April 30, 2021: Motion to Stay Pending Resolution of Certified Questions to the Ohio Supreme Court Case Summary: On July 6, 2020, a group of almost 40 Ohio businesses that had each filed suit seeking a declaratory judgment for business interruption coverage for COVID-19-related business interruption damages filed a brief of amici curiae in support of the plaintiffs in this matter. The group filed its brief after defendant Cincinnati Insurance filed a motion to certify the question of whether the general presence of a virus, including COVID-19, constitutes direct physical loss to property to the Ohio Supreme Court. In its Complaint, Troy Stacy Enterprises contends that "the presence of virus or disease can constitute physical damage to property" and that "the presence of COVID-19 caused direct physical loss of or damage to" its property (Compl. at ¶¶ 20 and 30). The complaint seeks coverage for COVID-19-related losses under its business interruption policy, including coverage provided under the extra expense, civil authority, and sue and labor clauses and includes claims for: Declaratory judgment. Breach of contract. Cincinnati Insurance filed a motion to dismiss, arguing, amongst other things, that: Plaintiff's policy only covers losses "tied to direct physical loss or damage to property." COVID-19 did not cause direct physical loss. Plaintiff did not allege that COVID-19 caused direct physical loss to its property. (Motion to Dismiss at pp. 5-6.) Cincinnati also filed a motion to certify questions of law to the Supreme Court of Ohio, arguing that: The question of whether a virus can cause direct physical loss to property is outcome-determinative (Memorandum in Support of Motion to Certify at pg. 2). All the coverages implicated in the Plaintiff's complaint require direct physical loss (Id. at pg. 5). The Ohio Supreme Court should decide the issue under Ohio law for the benefit of Ohio citizens and businesses (many of whom have filed coverage suit implicating this issue) (Id. at pg. 6). Shortly after Cincinnati filed its Motion to Certify, the group of Ohio commercial insureds filed its Brief of Amici Curiae in support of the Plaintiff. In it, they argue that Cincinnati's Motion to Certify: Does not present a novel issue of law. Implicates issues that are: rooted in well-settled contract law; and require the application and analysis of differing factual scenarios for varying types of businesses and policies. If granted, would harm amici by "severely hindering" their ability to pursue claims for COVID-19-related business interruption losses. (Brief of Amici Curiae at pg. 1). On October 15, 2020, Troy Stacy Enterprises moved to consolidate its case with several other COVID-19 related business interruption coverage claims pending in the Southern District of Ohio. Cincinnati opposed the motion. It argued that consolidating the cases would cause confusion because of the unique facts of each plaintiff's case, and this outweighed the risk of inconsistent judgment over claims for COVID-19 related shutdown losses. On January 15, 2020, the court issued an order granting Troy Stacy's motion and consolidated the cases (). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist
July 2, 2020	Chattanooga Professional Baseball LLC, et. al. v. National Casualty Co., etc. al., No. 2:20-cv-01312 (D. Az. July 2, 2020) 7th Inning Stretch LLC, et. al. v. Arch Ins. Co., et. al., No. 2:20-cv-08161 (D. N.J. July 2, 2020) Nostalgic Partners LLC, et. al. v. Philadelphia Indemnity Ins. Co., No. 200700054 (Philadelphia Cty. Ct. of Common Pleas July 2, 2020)	Insurance Coverage Implicated: Business interruption Case Type: Breach of contract, anticipatory breach of contract, and declaratory judgment. Key Pleadings and Court Orders: Chattanooga Professional Baseball, et. al. v. National Casualty, et. al.: July 2, 2020: Complaint filed August 21, 2020: Amended Complaint filed September 11, 2020: Defendants' Motion to Dismiss November 13, 2020: Order Granting Defendants' Motion to Dismiss December 11, 2020: Plaintiffs' Notice of Appeal to 9th Circuit (Case No. 20-17422) 7th Inning Stretch, et. al. v. Arch, et. al.: July 2, 2020: Complaint filed August 31, 2020: Amended Complaint filed October 14, 2020: Insurer's Motion to Dismiss January 19, 2020: Letter Opinion granting Insurer's motion to dismiss as to Counts II and III February 26, 2021: Insurer's Motion for Judgment on the Pleadings March 4, 2021: 7th Inning Stretch's Opposition to Insurer's Motion for Judgment on the Pleadings March 26, 2021: Order granting Insurer's Motion for Judgment on the Pleadings April 5, 2021: 7th Inning Stretch's Notice of Appeal to 3rd Circuit, Case No. 21-01644 Nostalgic Partners, et. al. v. Philadelphia Indemnity: July 2, 2020: Complaint filed July 8, 2020: Notice of Removal to Eastern District of Pennsylvania (Case No. 20-CV-3346) August 21, 2020: Amended Complaint September 15, 2020: Defendant's Motion to Dismiss December 7, 2020: Order granting United Policyholders' and National Independent Venue Association's Motion for Leave to File a Brief as Amicus Curiae December 31, 2020: Order granting American Property Casualty Insurance Association's and National Association of Mutual Insurance Companies' Motion for Leave to File a Brief as Amicus Curiae February 5, 2021: Notice that this matter is stayed pending the resolution of the COVID-19 business interruption insurance cases currently on appeal to the Third Circuit. Case Summary: On July 2, 2020, 22 minor league baseball teams sued their insurers in three different jurisdictions for COVID-19-related business income losses they suffered when the Minor League baseball season was cancelled. 15 of the teams had filed a similar lawsuit in the Eastern District of Pennsylvania on June 23, 2020; however, they voluntarily dismissed that suit on July 2, 2020. 14 of the 15 teams joined one of the newly filed suits. The three complaints filed July 2, 2020 and the complaint filed June 23, 2020 are not identical, but they share similarities. Generally, the policies at issue are all risk policies that cover "direct physical loss" at covered locations, including coverage for: Lost business income, including lost earnings. Extra expense. Loss of rental value. Losses related to orders of civil authority that restrict access to covered properties. Some of the policies at issue also have a virus exclusion. The teams argue: The COVID-19 virus, the governmental response to it, and/or the Teams' inability to obtain players constitute direct physical loss or damage, including property damage and loss of use. The virus exclusion in some policies does not preclude coverage because it is "void, unenforceable, and inapplicable" (7th Inning Stretch Compl. at ¶¶ 69 and 57.) The complaints include counts for: Breach of contract. Anticipatory breach of contract. Declaratory judgment. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
July 1, 2020	Gavrilides Management Co., LLC v. Michigan Ins. Co., Case No. 20-000258-CB, Order Granting Defendant's Motion for Summary Disposition (Ingham Cty Circuit Court, Mich., July 1, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Breach of contract and declaratory judgment. Key Pleadings and Court Orders: July 1, 2020: Order granting Defendant's Motion for Summary Disposition August 4, 2020: Plaintiff appeals to the Court of Appeals, State of Michigan Case Summary: Judge Joyce Draganchuk, a state court judge in Ingham County, Michigan, granted an insurer's motion to dismiss in a business interruption coverage case. This is the first substantive decision on a COVID-19-related coverage case and while it was decided under Michigan law, it could have far-reaching effects. The plaintiff, Gavrilides Management Co. owns two restaurants that it alleges lost business due to COVID-19-related closure orders and related restrictions. Gavrilides filed a lawsuit against its insurer after the insurer rejected its claim for business interruption coverage. Gavrilides argued that loss of use qualified as "direct physical loss or damage" under its policy and that the policy's virus exclusion didn't apply. Michigan Insurance filed a motion to dismiss. It argued that the policy was not triggered because the restaurants did not suffer physical damage and, even if they had, the virus exclusion precluded coverage. The judge granted the insurer's motion. She held: Government acts like the COVID-19-closure orders were covered by the policy if they caused the insured to suffer direct physical loss or damage. The policy required "direct physical loss of or damage to property." That damage had to be: something tangible with material existence; and something that alters the physical integrity of the property. There was no coverage because Gavrilides only alleged loss of use, not physical loss or damage (nor did the restaurants suffer any physical loss or damage). The judge called the argument that loss of use alone could trigger coverage "just nonsense." The virus exclusion would apply (if there had been direct physical loss or damage). Gavrilides could not amend its complaint, because it would not be able to allege any facts showing direct physical damage. The judge did not address the issue of whether COVID-19 could cause the type of physical loss or damage that would trigger coverage. The oral argument was on Zoom and posted to YouTube. The court’s decision begins at the 23:13.
June 26, 2020	In re COVID-19 Business Interruption Protection Ins. Litigation, MDL No. 2942, Notice of Hearing Session (Document 564, June 26, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Multidistrict litigation. Case Summary: The Judicial Panel on Multidistrict Litigation (JPMDL) set a remote hearing for July 30, 2020 in MDL No. 2942, In re COVID-19 Business Interruption Protection Ins. Litigation. The court will hear arguments on a pending motion to centralize all business interruption insurance litigation cases (and all responses to that motion). LH Dining, LLC and Newchops Restaurant Comcast, LLC filed the motion to centralize all federally filed business interruption lawsuits to the Eastern District of Pennsylvania (E.D. Pa.) on April 20, 2020. The July 30 oral argument on that motion implicates several other pleadings in the MDL, including: Seven Chicago-area businesses filed a petition with the JPMDL to transfer and consolidate all federally filed COVID-19 business interruption insurance cases to the Northern District of Illinois (N.D. Ill.), not E.D. Pa, on April 21, 2020. A restaurant in Southern Florida, El Novillo, filed a response to those motions on April 24, 2020 in which it argues that the related actions should be transferred and consolidated, but the most appropriate forum is the Southern District of Florida (S.D. Fla.), not E.D. Pa. or N.D. Ill.
June 25, 2020	Dante Ristorante v. Cincinnati Ins. Co., No. CV 20 933919 (Cuyahoga Cty, Ohio, June 25, 2020) Eastside Metals v. Cincinnati Ins. Co., No. CV 20 933869 (Cuyahoga Cty, Ohio, June 25, 2020)	Insurance Coverage Implicated: Business interruption Case Type: Declaratory judgement and breach of contract. Key Pleadings and Court Orders: June 25, 2020: Complaints filed in Dante and Eastside Metals August 18, 2020: Order granting Cincinnati Insurance Co.'s Motion to Consolidate in Dante Ristorante (consolidated with Case No. CV-20-931683 and transferred to Judge Nancy Fuerst's docket) August 19, 2020: Order granting Cincinnati Insurance Co.'s Motion to Consolidate in Eastside Metals (consolidated with Case No. CV-20-931683 and transferred to Judge Nancy Fuerst's docket) August 26, 2020: Cincinnati Insurance Co.'s Motion to Dismiss in Dante and Eastside Metals January 6, 2021: Cincinnati Insurance Co.'s Motion to Stay in Dante and Eastside Metals April 16, 2021: Order granting Cincinnati’s Motion to Stay Proceedings pending the Ohio Supreme Court’s determination of the certified question presented in Neuro-Communication Services v. Cincinnati Ins. Co. (regarding the meaning of “direct physical loss or damage” in the relevant Cincinnati Ins. Co. standard commercial property insurance policies). For more information on Neuro-Communication Services, see the entry above at April 14, 2021. Case Summary: A law firm in Cleveland, Ohio filed two nearly identical complaints in state court (Cuyahoga County Court of Common Pleas) for wrongful denial of claims for COVID-19-related losses on behalf of: Several commonly owned and operated restaurants (collectively, Dante's). Eastside Metals, a scrap metal business. Both complaints state that due to COVID-19 closure orders, the plaintiffs suffered various covered losses, including losses triggered by coverage extensions for: Business income. Extra expense. Extended business income. Civil authority. Business income from dependent property. The complaints allege that: The "insurance industry recognizes that viruses can cause physical loss of or physical damage to property." The plaintiffs' insurers "chose not to use [an] ISO drafted and approved exclusion, or any other expressly stated and applicable alternative policy language, to eliminate coverage for loss or damage caused by viruses or bacteria in Plaintiffs’ policy." (Dante Compl. at ¶¶ 1 and 15 and Eastside Compl. at ¶¶ 1 and 15, respectively.) Both complaints include counts for: Declaratory judgment. Breach of contract. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
June 25, 2020	Chattanooga Professional Baseball LLC v. Philadelphia Indemnity Ins. Co., No. 20-03032, Notice of Voluntary Dismissal (E.D. Penn. July 2, 2020) Chattanooga Professional Baseball LLC, v. Philadelphia Indemnity Ins. Co., No. 20-03032, Order Severing Claims (E.D. Penn. June 25, 2020) Chattanooga Professional Baseball LLC v. Philadelphia Indemnity Ins. Co., No. 20-03032 (E.D. Penn. June 23, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Breach of contract, anticipatory breach of contract, and declaratory judgment. Key Pleadings and Court Orders: June 23, 2020: Complaint June 25, 2020: Order severing the causes of action of each of the Plaintiffs July 2, 2020: Plaintiffs' Notice of Voluntary Dismissal Case Summary: On June 23, 2020, 15 minor league baseball teams located throughout the U.S. sued their insurers under the business interruption provisions of their insurance policies for business income losses they suffered when the Minor League baseball season was cancelled. The teams voluntarily dismissed the lawsuit on July 2, 2020; however, 14 of the 15, plus an additional 8 teams not involved in the initial lawsuit, filed new suits against the insurers in three jurisdictions: the District of Arizona, the District of New Jersey, and the Philadelphia Court of Common Pleas. In their June 23, 2020 Complaint, Plaintiffs claim that they have "materially similar" all risk policies that provide coverage for: Business income. Extra expense. Expenses to extract pollutants. Loss of rental value. The policies also include a virus exclusion. (Compl. at ¶¶ 66-83.) The plaintiffs allege that the policies cover the minor league teams for business interruptions because the all risk policies are triggered "where, as here, there has been direct physical loss or damage, including but not limited to loss of use to the team's ballparks or elsewhere." The teams further argue that "[as] a result of the virus, the governmental response, and Major League Baseball's failure to provide baseball players, the Teams have been deprived of their primary source of revenue – fans coming to the ballpark and paying for game tickets, merchandise, food and beverage, and partaking in other amenities." Finally, the teams argue that the virus exclusion does not apply because it is "void, unenforceable, and inapplicable." (Compl. at ¶¶ 7, 60, and 83.) The complaint includes counts for: Breach of contract. Anticipatory breach of contract. Declaratory judgment. The court severed the claims and ordered the plaintiffs to file separate civil actions, noting that the original complaint was filed by "fifteen plaintiffs located in eleven different states against five insurance companies involving different contracts of insurance." (Order at pg. 2.) For more information on the later filed cases, see the July 2, 2020 entry above. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
June 25, 2020	Saucy Brew Works, LLC v. The Cincinnati Ins. Co., No. 20-933932 (Cuyahoga Cty, Ohio, June 25, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Class action; declaratory judgment and breach of contract. Key Pleadings and Court Orders: June 25, 2020: Complaint August 14, 2020: Cincinnati Insurance Co.'s Motion to Consolidate (consolidated with Case No. CV-20-931683 January 7, 2021: Cincinnati Insurance Co.'s Motion to Stay Proceedings April 16, 2021: Order granting Cincinnati’s Motion to Stay Proceedings pending the Ohio Supreme Court’s determination of the certified question presented in Neuro-Communication Services v. Cincinnati Ins. Co. (regarding the meaning of “direct physical loss or damage” in the relevant Cincinnati Ins. Co. standard commercial property insurance policies). For more information on Neuro-Communication Services, see the entry above at April 14, 2021. Case Summary: A Cleveland restaurant, Saucy Brew Works, filed a class action in Ohio state court (Cuyahoga County) against its insurer, Cincinnati Insurance, individually and on behalf of a class of similarly situated plaintiffs, after Cincinnati denied its claim for business interruption losses due to COVID-19-related closure orders. Saucy Brew's all risk policy provides coverage for: Business income. Extra expense. Civil authority. According to Saucy Brew, any physical loss, including loss of use and/or loss of utilization triggers coverage; tangible "physical damage" is not required (Compl. at ¶¶ 10, 12, and 14). Saucy Brew argues that COVID-19 is a "physical thing, not an abstract fear," and that "COVID-19's actual or suspected physical presence at or near the vicinity of [its] Properties and/or the mandated Government Ordered stay-at-home orders(s)" triggers coverage because it "prevents and has prevented" Saucy Brew from making full use of the insured properties. Saucy Brew also argues that Cincinnati chose not to use a coverage form that specifically excluded losses related to pandemics, and instead "knowingly, purposely, and intentionally used inapplicable exclusions to deny claims for Business Interruption, Extra Expense, and Civil Authority claims related to the COVID-19 pandemic." (Compl. at ¶¶ 13, 33, and 35.) The complaint includes counts for: Declaratory judgment. Breach of contract. The proposed class includes "all businesses and entities throughout the United States who, from January 1, 2020 to the present have been insured by Commercial and/or Business Owner Policies issued by CIC and denied Business Income loss, Extra Expense and/or Civil Authority coverage due to COVID-19" (Compl. at ¶ 40). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
June 24, 2020	Classic Dining Group LLC v. State Auto Ins. Cos., No. 20CV004107 (Franklin Cty., Ohio, June 24, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Declaratory judgement, breach of contract, and bad faith. Case Summary: The owners and operators of franchised Denny's and Ruby Tuesday restaurants in Indiana, Illinois, and Wisconsin filed suit against their insurer after they suffered COVID-19-related business interruptions that caused: Caused plaintiffs to incur "millions of dollars in lost revenue" and "staggering additional losses every day." Pose "an existential threat to these small, local businesses that employ thousands of people whose livelihoods are now at risk." (Compl. at ¶ 1.) The restaurants all purchased the same all risk policies. The policies provide coverage for: Business income. Extra expense. Civil authority. (Compl. at ¶¶ 66-71.) The plaintiffs argue that the coronavirus "created invisible, dangerous conditions that rendered Plaintiffs’ locations unsuitable for normal business operations," and these conditions are sufficient to trigger the "direct physical loss" requirement in their policies. (Compl. at ¶¶ 12-13.) Further, COVID-19-related closure orders forced the restaurants to "halt their ordinary operations, resulting in substantial lost revenues" (Id. at ¶ 9.) The plaintiffs also allege that their insurer engaged in bad faith when it: Issued "cursory 'cut and paste' coverage denials" that are "arbitrary and unreasonable, and inconsistent with the facts and plain language of the policies it issued." Denied the restaurants' claims citing a virus exclusion even though the restaurants' policies, "unlike many insurance policies issued by State Auto," "does not contain the Virus Exclusion." Chose not to add a readily available express exclusion to its policy to exclude pandemic-related losses and instead "waited until after it collected Plaintiffs' premiums for years and, after a pandemic and the resulting closure orders caused catastrophic business losses, to try to limit its exposure on the back-end through its false assertion that the presence of coronavirus is not 'physical loss' and therefore is not a covered cause of loss." (Id. at ¶¶ 11, 16-17 (emphasis in original)). The complaint includes counts for: Declaratory judgment. Breach of contract. Bad faith denial of coverage. On July 29, 2020, the defendant insurer, State Auto, filed a motion to dismiss based on forum non conveniens and contemporaneously it filed a complaint for declaratory judgment in Illinois. In both the motion and the complaint State Auto argues that this Ohio litigation should be dismissed in favor of the newly filed Illinois litigation because: The plaintiff restaurants are located in Indiana, Illinois, and Wisconsin – not Ohio. The plaintiffs received the insurance policies at issue at an Illinois address through an Illinois broker. The dispute requires the application of Illinois contract law. Ohio has no localized interest in resolving the dispute. (See State Auto's Illinois complaint at ¶ 76.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on bad faith claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
June 19, 2020	Kennedy Hodges & Assoc. Ltd., LLP v. The Hartford, et. al. No. 20-cv-852 (D. Conn., June 19, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Class action; declaratory judgment and breach of contract. Key Pleadings and Court Orders: June 19, 2020: Complaint September 29, 2020: Kennedy Hodges's Voluntary Dismissal of Hartford only September 30, 2020: Twin City Fire Ins. Co.'s Answer January 9, 2021: Order declining Hartford's request to consolidate eleven COVID-19-related insurance coverage cases against Hartford pending in the District of Connecticut before a single judge April 8, 2021: Order denying Twin City’s Motion for Judgment on the Pleadings without prejudice. May 5, 2021: Twin City's Motion for Judgment on the Pleadings Case Summary: Kennedy Hodges, a Texas law firm, filed a class action lawsuit against its insurers alleging wrongful denial of claims for COVID-19-related business interruption losses. The firm has an all risk policy that includes business income and extra expenses coverages, including coverage for business income losses resulting from an action of civil authority that prohibits access to the covered property. The policy also contains a virus exclusion. (Compl. at ¶¶ 18, 23-25.) The complaint alleges that: "Direct physical loss of or physical damage to" covered property triggers coverage, and: the use of the disjunctive "or" means coverage is triggered if either a physical loss of property damage or damage to property occurs; and physical loss or damage to property "may be reasonably interpreted to occur" when a covered cause of loss renders property unusable or unsuitable for its intended purpose. Closure orders issued by Texas authorities triggered the policy because those orders, "in and of themselves, constitute direct physical loss of or damage to Plaintiffs' Covered Property." The firm's insurers "should be estopped from enforcing the Virus Exclusion on principles of regulatory estoppel as well as general public policy" to the extent coverage "derives from the direct physical loss or damage caused by the COVID-19 virus." (Compl. at ¶¶ 59-60.) The complaint includes counts for: Declaratory judgment. Breach of contract. The proposed class includes "all policyholders who purchased commercial property coverage, including business interruption or interruption income (and extra expense) coverage from Defendant and who have been denied coverage" for business income losses related to COVID-19-related orders (Compl. at ¶ 70). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
June 16, 2020	In re National Ski Pass Insurance Litigation, MDL No. 2955, Brief in Support of Motion for Transfer and Coordination of Actions (June 16, 2020)	Insurance Coverage Implicated: Travel insurance. Case Type: Multidistrict litigation. Case Summary: Plaintiff James Bradley moved the Judicial Panel on Multidistrict Litigation (JPMDL) to transfer and centralize at least seven related actions alleging wrongful denial of coverage for canceled ski trips, including the coverage for the cost of season-long ski passes, to the Eastern District of Arkansas (E.D. Ark.). If the motion succeeds, all pending federal cases and any later-filed federal cases raising the same issues will be transferred to the E.D. Ark. The petition argues that the cases, which include Parker v. Arch, are appropriate for coordinated adjudication because: Each suit arises out of "virtually identical factual circumstances." There is clear overlap between the claims and allegations in the related actions. (Brief in Support at pg. 4.) For more information on transferring cases to the JPMDL, see Standard Document, Motion for a Multidistrict Litigation (MDL) Transfer.
June 16, 2020	Parker v. Arch Ins., No. 2:20-cv-00377 (D. Utah, June 16, 2020)	Insurance Coverage Implicated: Travel Insurance Case Type: Class action; breach of contract and declaratory relief. Key Pleadings and Court Orders: June 16, 2020: Complaint June 23, 2020: Plaintiff's Motion for Transfer and Coordination of Actions to the JPMDL October 5, 2020: Order of Conditional Transfer re National Ski Pass Insurance Litigation, MDL 2955, Western District Missouri, Case No. 4:20-cv-00798 (consolidating three COVID-19-related ski pass insurance cases against Arch Ins.) Case Summary: Plaintiff Earl Parker filed a class action for breach of contract against his travel insurers, Red Sky Travel Insurance, after Red Sky denied Parker's claim for reimbursement of the cost of a ski pass that was rendered valueless after COVID-19 closure orders shut down the more that 40 ski resorts in Utah that honor the pass. The Complaint includes two counts: Breach of Contract. Declaratory Relief. Parker purchased optional travel insurance when he bought a season "Ikon" ski pass, which provides access to all the skiing and snowboarding resorts owned by Alterra Mountain Company ("Alterra") and to Alterra's partnership resorts from October 2019 until the end of the ski season. As a result of various orders of civil authority limiting human contact, restricting travel, and closing non-essential businesses, Parker could not use the Ikon pass at any of the resort property he would have otherwise been allowed to visit. (Complaint at ¶¶ 14, 16-19.) Parker's travel insurance policy includes coverage for "Season Pass Interruption," which promises to reimburse the policyholder "for the pro-rated cost of the remaining portion of the Covered Season Pass" if the policyholder cancels the due to an "Unforeseen reason" including the policyholder being quarantined. The policy includes no virus exclusion or other applicable exclusion. Parker alleges that the COVID-19-related orders of civil authority trigger coverage because they caused him to "quarantined" according to the ordinary meaning of that word. (Complaint at ¶¶ 28, 34.)
June 11, 2020	Butter Nails and Waxing Inc. v. Underwriters at Lloyd's of London, 20-cv-22288 (Cal. Sup. Ct., Los Angeles Cty., June 11, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Declaratory relief, breach of contract, and bad faith. Key Pleadings and Court Orders: June 11, 2020: Complaint October 19, 2020: Amended Complaint November 20, 2020: Underwriters' Demurrer to Butter Nails' First Amended Complaint January 21, 2021: Order sustaining Underwriters' Demurrer without leave to amend February 8, 2021: Butter Nails' Notice of Appeal (California Second District Court of Appeal) April 27, 2021: Order holding Butter Nails in default for failure to file a complete case information statement (Butter Nails must file complete case information statement within 15 days) May 12, 2021: Appeal dismissed (case information statement not filed) Case Summary: Butter Nails, a nail salon in Los Angeles, sued Lloyd's, its insurer, for wrongful denial of its business interruption claim. According to the complaint, Lloyd's issued an all-risk policy to Butter Nails that includes coverage for business interruption losses due to orders of civil authority, and when COVID-19 shutdown orders forced Butter Nails to close, it triggered the policy (Compl. at ¶¶ 7-10). Butter Nails submitted a claim for business income loss on April 12, 2020. Lloyd's denied the claim on May 29, 2020 based solely upon the position that "limited restriction of access to your property does not qualify as an eviction" (Compl. at ¶ 11). Butter Nails argues that California law requires insurers to provide their insureds with a written statement listing all bases for denial of a claim within forty days of receiving a claim, therefore Lloyd's is barred from raising any other factual or legal basis for denying Butter Nails' claim (Id. at ¶¶ 11-12). It further argues that Lloyd's breached the duty of good faith and its quasi-fiduciary obligation to fully investigate, consider, and not deceive Butter Nails while handling the claim (Compl. at ¶ 28). The complaint includes counts for: Declaratory judgment. Breach of contract. Bad faith. For more information on business interruption coverage, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on bad faith claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
June 5, 2020	Hakkasan USA, Inc. v. Endurance Am. Specialty Ins. Co., A-20-816145-B (Clark Cty., Nevada, June 5, 2020)	Insurance Coverage Implicated: Business interruption (included in a time-element cancellation coverage endorsement) Case Type: Declaratory relief, breach of contract, bad faith, civil conspiracy, fraud, intentional interference with contract, and negligence. Key Pleadings and Court Orders: June 5, 2020: Complaint July 20, 2020: Endurance American's Motion to Dismiss July 27, 2020: Sompo International's Motion to Dismiss August 10, 2020: Willis Towers Watson's Motion to Dismiss September 15: 2020: Order re: Endurance American's Motion to Dismiss; and Sompo International's Motion to Dismiss September 28, 2020: Amended Complaint October 12, 2020: Endurance American's Answer October 20, 2020: Order Denying Willis Towers Watson's Motion to Dismiss December 16, 2020: Answer of Will Towers Watson Case Summary: Plaintiff Hakkasan USA, a hospitality company that operates restaurants and bars, sued Endurance American, its insurer for business income losses and property damage it sustained when orders of civil and health authorities forced it to close its businesses. Hakkasan also sued its broker, Willis. With Willis' help, Hakkasan purchased a Commercial Property Surplus Lines Insurance Policy from Endurance. The Policy provides Hakkasan's U.S. locations with $350,000,000 per occurrence coverage. The policy also included a "Specialty Clause Endorsement" that extends coverage to include "Time Element – Cancellation coverage" that covers business interruption losses (Compl. at ¶¶ 30 and 36). Endurance American acknowledges that Hakkasan's claim triggered this endorsement (Id. at ¶ 36). Hakkasan alleges that Endurance American and Willis conspired to issue a back-dated endorsement to the policy after Hakkasan notified Willis of its claim, which was almost one year after the Policy was issued. The endorsement purported to reduce the limits of the "Specialty Clause Endorsement" from the full policy limits of $350,000,000 per occurrence to a sublimit of $1,500,000. (Compl. at ¶¶ 9-10 and 59.) According to Hakkasan, Endurance American submitted the backdated endorsement to Willis, and Willis "accepted" the backdated endorsement, without Hakkasan's knowledge or consent and knowing that Hakkasan had a pending claim and would "never agree to a retroactive modification" of the policy to its detriment (Compl. at ¶¶ 60 and 65). Endurance and Willis then conspired to fraudulently conceal the circumstances upon which the backdated endorsement was created to induce Hakkasan to accept a lower limit and settlement than it would otherwise be entitled to under the Policy. (Compl. at ¶ 11.) The complaint includes counts for: Declaratory relief. Violations of Nevada's Unfair Claims Practices Act. Breach of contract. Contractual and tortious breach of the implied covenant of good faith and fair dealing. Civil conspiracy. Constructive fraud. Negligence. Intentional interference with contractual relations. For more information on time-element endorsements covering business losses, see Practice Note, First-Party Property Insurance Policies: Time Element Coverage for Financial Losses: Policyholder's Property. For information on bad faith claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
May 29, 2020	DiAnoia's Eatery, LLC v. Motorists Mutual Ins. Co., Notice of Removal, No. 2:20-cv-00787 (W.D. Pa., May 29, 2020) DiAnoia's Eatery, LLC v. Motorists Mutual Ins. Co., Order Dismissing for Lack of Jurisdiction, No. 2:20-cv-00706 (W.D. Pa., May 19, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Declaratory judgment and breach of contract Key Pleadings and Court Orders: May 29, 2020: Motorist Mutual's Notice of Removal (from Court of Common Pleas of Allegheny County) June 2, 2020: Motorist Mutual's Answer June 16, 2020: Dianoia's Motion to Remand August 27, 2020: Order Granting Dianoia's Motion to Remand August 28, 2020: Motorist Mutual's Motion for Reconsideration September 24, 2020: Order Denying Motion for Reconsideration September 24, 2020: Motorist Mutual's Notice of Appeal to the Third Circuit from the Court's decision remanding the case to Allegheny County, Case No. 20-2954 November 12, 2020: Order granting Appellants' Unopposed Motion to Consolidate Appeals (consolidating the appeal with Case No. 20-2958, Umami Pittsburgh v. Motorists Mutual) December 22, 2020: Appellants' Brief January 21, 2021: Appellee’s Brief February 24, 2021: Order Consolidating the following appeals: Dianoia’s v. Motorists Mutual (No. 20-2954); Umami Pittsburgh v. Motorists Mutual (No. 20-2958); and Mark Daniel Hospitality v. Motorists Mutual (No. 20-3122) Case Summary: This case is one of the first in which a federal court ruled on the issue of whether federal court or state court is the proper venue for disputed COVID-19-related business interruption claims. Plaintiff Di'Anoia's Eatery filed suit against its insurer, Motorists Mutual, in state court in Pennsylvania (Allegheny County Court of Common Pleas, Case No. GD-20-5273). It sought declaratory relief and money damages based on Motorists Mutual's alleged breach of contract when it denied Di'Anoia's claim for business interruption coverage based on COVID-19-related closure orders. Motorists Mutual removed the court to federal court on May 14, 2020 on the basis of diversity jurisdiction (Case No. 2:20-cv-00706). Thereafter, on May 19, 2020, Judge Nora Barry Fischer remanded the case to state court sua sponte. In her Order, Judge Fischer held: Removal was deficient under the relevant removal statutes because Motorists Mutual did not demonstrate the parties were completely diverse. Even if removal had been proper, the Court declined to exercise subject matter jurisdiction over the case under the Declaratory Judgment Act because Di'Anoia's complaint "raises novel insurance coverage issues under Pennsylvania law which are best reserved for the state court to resolve in the first instance" (Order at pg. 5). She further explained: "[T]here is not yet a body of caselaw developed by Pennsylvania courts on these issues due to the recency of the COVID-19 pandemic" (citing the Supreme Court of Pennsylvania's decision in Tambellini v. Erie Insurance Exchange, in which it declined to consolidate all COVID-19 business interruption litigation and left the cases to be decided by the state trial courts). "[A]ny declaration issued by this Court as to the parties' rights under the insurance policy would be merely predicting how Pennsylvania courts would decide these novel issues arising from the COVID-19 pandemic, a matter of great public concern, with little persuasive authority from state courts on these issues." (Order at pg. 5). Motorists Mutual filed an amended notice of removal addressing the deficiencies in its first notice, including: Demonstrating that the parties are completely diverse. Asserting that although styled as a declaratory judgment, the complaint actually seeks money damages for breach of contract and can be adjudicated without issuing a declaratory judgment applicable to further conduct or obligations. Judge Fischer declined to review the amended notice based on lack of jurisdiction (since her May 19, 2020 Order remanding the case had already been mailed to state court). Motorists Mutual then filed a notice of removal in the remanded case that included all of its arguments from its previous amended removal, and on May 29, 2020 the case was again removed to federal court (Case No. 2:20-cv-00787), where it is proceeding. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
May 28, 2020	Treasure Island, LLC v. Affiliated FM Ins. Co., No. 2:20-cv-00965 (D. Nevada, May, 28, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Breach of contract, bad faith, and declaratory judgment Key Pleadings and Court Orders: May 28, 2020: Complaint July 9, 2020: FM's Answer November 2, 2020: FM's Motion for Partial Judgment on the Pleadings November 16, 2020: Response to Motion for Judgment on the Pleadings December 3, 2020: Treasure Island’s Motion for Leave to File Supplemental Authority re: Response to Motion for Judgment on the Pleadings March 4, 2021: FM’s Motion for Leave to File Supplemental Authority re: Response to Motion for Judgment on the Pleadings March 30, 2021: FM’s Second Motion for Leave to File Supplemental Authority re: Response to Motion for Judgment on the Pleadings May 5, 2021: Treasure Island's Motion for Leave to File Supplemental Authority Case Summary: Plaintiff Treasure Island, a casino in Las Vegas, sued its insurer, Affiliated FM, after it denied a claim the Treasure Island brought for COVID-19-related income losses it suffered after orders of civil authority forced it to close. Treasure Island also alleges that Affiliated FM handled its claim in bad faith, including by using a process "designed to limit or altogether deny" recovery. (Compl. at ¶ 2.) The Complaint includes counts for: Breach of contract. Breach of the covenant of good faith and fair dealing. Violation of the Nevada Unfair Claims Practices Act; and Declaratory relief. Treasure Island purchased an all-risk policy with a $1M premium from Affiliated FM. The policy provides various coverages each with its own sublimit, including coverage for: Property damage. Business interruption losses resulting from property damage. Business interruption losses resulting from orders of civil authority; Extra expenses; Ingress/egress; Attraction property; Supply chain coverage; and Property damage and business interruption caused by communicable disease. (Compl. at ¶¶ 11-14 and 40.) Treasure Island submitted a claim for the combined limit of all of these coverages, which totals over $1.1B. It argued that that actual presence of COVID-19 triggered coverage because it caused physical loss and physical damage, interrupted its business, and is a communicable disease. Affiliated FM denied Treasure Island's property damage and business interruption claims but acknowledged that the policy's communicable disease extension, which has a $100,000 sublimit, might be available to cover clean-up costs. (Compl. at ¶¶ 43 and 76). Treasure Island further alleges that Affiliated FM devised a company-wide bad-faith claims handling plan based on Talking Points distributed to all claims adjusters. It designed the Talking Points "to steer its policyholders, including Treasure Island," into the sublimited communicable disease coverage for their COVID-19 losses. Pursuant to that plan, Affiliated FM's entire investigation consisted of a few phone calls, during which the insurer focused only on whether Treasure Island could confirm that any of its employees or customers had COVID-19. After Treasure Island stated that it could not disclose the personnel medical information of its clients due to privacy concerns, Affiliated FM determined that there was no coverage except for clean-up costs under the communicable disease extension because Treasure Island could not confirm it had suffered physical loss or damage. (Compl. at ¶¶ 83-94). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
May 22, 2020	Social Life Magazine, Inc. v. Sentinel Ins. Co., Plaintiff’s Dismissal without Prejudice, 20-CV-03311 (S.D.N.Y. May 22, 2020) Social Life Magazine, Inc. v. Sentinel Ins. Co., Telephonic Conference, 20-CV-03311 (S.D.N.Y. May 14, 2020) Social Life Magazine, Inc. v. Sentinel Ins. Co., Plaintiff’s Reply in Support of Application for Preliminary Injunction, 20-CV-03311 (S.D.N.Y. May 13, 2020) Social Life Magazine Inc. v. Sentinel Ins. Co. Lmtd., Complaint, 20-CV-03311 (S.D.N.Y. April 29, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Preliminary injunction, breach of contract, and bad faith. Key Pleadings and Court Orders: April 29, 2020: Complaint filed May 14, 2020: Judge denies Plaintiff's Motion for Preliminary injunction May 18, 2020: Plaintiff files notice of appeal May 22, 2020: Plaintiff's Dismissal without Prejudice Case Summary: This case is one of the first in which a federal court spoke to the merits of a COVID-19-related business interruption claims. In denying the plaintiff's motion for a preliminary injunction, the Southern District of New York indicated COVID-19 likely did not trigger business interruption coverage because it did not cause direct physical loss or damage. On April 29, 2020, Plaintiff Social Life Magazine (Social Life) sued its insurer, Sentinel Insurance (Sentinel), for breach of contract after Sentinel denied its claim for business interruption losses sustained when COVID-19-related orders of civil authority prevented Social Life and its vendors from accessing the insured premises. Social Life amended its complaint to add a claim for bad faith based on Sentinel's failure to investigate and settle Social Life's claims in a fair manner in violation of the New York Unfair Claims Settlement Practices Act and the New York Insurance Code. (Compl. at ¶¶ 20, 41-42.) Not quite a week later, on May 4th, Social Life filed an application for a preliminary injunction to force Sentinel to immediately cover the cost of publishing Social Life's next issue. In its Reply in Support of Application for Preliminary Injunction (Reply), Social Life argued that "the SARS-Cov-2 virus, which causes the COVID-19 disease," triggered coverage because it "caused [Social Life's] business interruption and physical loss and damage to [Social Life's] property" (Reply at pp. 5-6) (emphasis in original)). In support of this position, Social Life argued: Sentinel chose not to add a virus exclusion to Social Life's policy. The SARS-Cov-2 virus can cause physical damage to Social Life's office building and equipment because it can attach to surfaces. The orders of civil authority that prevented Social Life and its vendors from accessing the insured property "are clear that their purpose is to prevent the spread of the SARS-Cov-2 virus." (Reply at pp. 4-6.) The judge held a hearing on the application for preliminary injunction on May 14, 2020, via telephone. The judge denied Social Life's application. She held: New York law requires damage to the property to trigger business interruption coverage (citing Roundabout Theatre Co. v Continental Cas. Co., No. 1830, 302 A.D.2d 1 (N.Y.A.D. 1 Dept., Nov. 26, 2002)). The SARS-Cov-2 virus does not damage physical property. Social Life appealed the decision to the Second Circuit on May 18, 2020. On May 22, however, the parties filed a stipulation withdrawing the appeal and Social Life dismissed its complaint without prejudice. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For more information on bad faith claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
May 21, 2020	Hutch & Associates, Inc. v. Erie Ins. Co. of New York (N.Y. Sup. Ct., Erie Cty., May 21, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Class action; breach of contract, declaratory relief, breach of contract, violations of New York General Business Law § 349. Key Pleadings and Court Orders: May 21, 2020: Complaint July 15, 2020: Notice of Removal to the Western District of New York (downloaded) August 12, 2020: Amended Complaint September 2, 2020: Cincinnati's Motion to Dismiss Amended Complaint November 5, 2020: Hutch & Associates' Motion to Consolidate January 20, 2021: Multidistrict Conditional Litigation Transfer Order transferring the action to the Western District of Pennsylvania, Case No. 1:21-CV-00056 Case Summary: On May 21, 2020, Plaintiff Hutch and Associates (Hutch) filed a class action complaint on behalf of itself and others similarly situated against its insurer, Erie, seeking coverage for business interruption losses it sustained due to COVID-19-related orders of civil authority and alleging that Erie made coverage decisions concerning policyholder claims related to COVID-19 "without consideration of the unique facts or circumstances of each loss and, rather, adopted a pattern and/or practice to deny such claims" (Compl. at ¶ 81). The complaint includes counts for: Breach of contract and declaratory relief. Violations of New York General Business Law § 349. Hutch argues that: Hutch's policy does not include a virus exclusion or any other exclusion limiting coverage for losses it experienced from COVID-19 or closure orders related to COVID-19 (Compl. at ¶¶ 38-40). COVID-19 caused direct physical loss because Hutch's employees, customers, vendors, premises, and property in the immediate area of the premises were exposed to the virus and contaminated with the virus (Compl. at ¶¶ 41-44). Hutch suffered business interruption losses when orders of civil authority forced it to cease operations (Compl. at ¶¶ 41-44). Hutch's losses constitute an occurrence under the policy and trigger coverage (Compl. at ¶¶ 49-50). Erie engaged in a uniform practice to deny coverage for losses related to COVID-19 in violation of New York law and in violation of directives from the New York State Department of Financial Services (DFS) directing insurers to provide their policyholders, including Hutch, with detailed on the business interruption coverage provided under its policy for COVID-19 losses (Compl. at ¶¶ 56-69). For more information on COVID-19-related DFS directives, see Practice Note, Insurance for COVID-19 Related Business Income Losses: Key Legislative and Regulatory Developments Tracker (US): New York. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
May 20, 2020	Bulldog Yoga Holdings LLC v. Cincinnati Ins. Co., No. 2:20-cv-02358-TJS (E.D. Pa., May 20, 2020)	Insurance Coverage Implicated: Business Interruption and Crisis Event Coverage. Case Type: Class action, declaratory relief, and breach of contract Key Pleadings and Court Orders: May 20, 2020: Complaint June 29, 2020: Bulldog Yoga's Notice of Voluntary Dismissal Case Summary: Plaintiff Bulldog Yoga filed a class action complaint on behalf of itself, additional insureds under the policy at issue, and others similarly situated against Cincinnati Insurance Co., its insurer, after Cincinnati denied its claim for business interruption losses related to COVID-19 civil authority closure orders. Cincinnati claims Bulldog Yoga's policy does not provide coverage because there was no evidence of direct physical loss or damage to the premises or property" (Compl. at ¶ 38). The complaint alleges Bulldog Yoga's "Business Protection Policies" policy provides: Business income coverage. Extra expense coverage. Civil authority coverage. Crisis expense endorsement coverage. The complaint includes counts for: Declaratory relief. Breach of contract. Bulldog Yoga argues that: "State and local governmental authorities, and public health officials around the Country, acknowledge that COVID-19 and the Pandemic cause direct physical loss and damage to property" (Compl. at ¶ 36, citing numerous public health orders). "The Pennsylvania Supreme Court determined that the Pandemic should be included as a natural disaster" (Compl. at ¶ 37, citing Friends of Danny Devito, et. al. v. Tom Wolf, Governor, et. al.). The policy's crisis event endorsement includes a virus exclusion, but Bulldog Yoga argues it doesn't apply because "the exclusion DOES NOT include or reference civil authority" (Compl. at ¶¶ 12 and 14, emphasis in original). The business income and extra expense coverages do not contain a virus exclusion (Compl. at ¶ 15). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
May 18, 2020	M Distillery, Inc. v. Philadelphia Consolidated Holding Corp., No. 2020-003187-3 (Tarrant Cty., Texas, May 18, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Breach of contract, violation of the Texas Insurance Code, bad faith, fraudulent inducement, and punitive damages Key Pleadings and Court Orders: May 18, 2020: Complaint June 19, 2020: Notice of Removal June 25, 2020: Philadelphia Consolidating Holding Corp.'s Motion to Dismiss July 14, 2020: M Distillery's Motion to Remand August 3, 2020: M Distillery's Motion to Dismiss without Prejudice August 4, 2020: Order granting M Distillery's Motion to Dismiss without Prejudice Case Summary: Plaintiff M Distillery sued its insurer, Philadelphia Insurance Co., after it denied its claims for business income losses due to the COVID-19 pandemic and related closure orders. The complaint alleges that prior to renewing its policy, M Distillery inquired about business interruption insurance and Philadelphia stated it was "probably your most important coverage" and fraudulently misrepresented that it would provide business interruption insurance to M Distillery (Compl. at ¶¶17-18). The complaint includes counts for: Breach of contract. Violation of the Texas Insurance Code (Chs. 541-542). Breach of the duty of good faith and fair dealing. Fraudulent inducement. M Distillery argues that: It detrimentally relied on Philadelphia's statements and "was fraudulently induced to renew the subject policy following a very specific and pointed inquiry regarding business interruption insurance Defendant now denies is covered under said Policy." Philadelphia now takes the position that M Distillery did not suffer a "direct physical loss" and therefore its COVID-19-related losses do not trigger business interruption coverage, but that interpretation of the policy "ignores its own agent's statements in inducing coverage specifically concerning coverage of business interruption insurance." M Distillery is also seeking punitive damages. (Compl. at ¶¶18-19). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For more information on bad faith claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
May 15, 2020	Broadway 104, LLC v. Axa Financial, Inc., No. 1:20-cv-03813 (S.D.N.Y., May 15, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Class action; breach of contract, breach of duty of good faith and fair dealing, and unjust enrichment. Key Pleadings and Court Orders: May 15, 2020: Complaint October 8, 2020: First Amended Complaint October 22, 2020: Motion to Dismiss First Amended Complaint Case Summary: Plaintiff Broadway 104, LLC, doing business as Café Du Soleil, filed a class action complaint on behalf of itself and others similarly situated against AXA, its insurer, after AXA denied its claim for business interruption losses related to COVID-19 civil authority orders that forced Café Du Soleil to close. The complaint alleges Café Du Soleil's all risk provides: Business income coverage. Extra expense coverage. Civil authority coverage. The complaint includes counts for: Breach of contract. Breach of duty of good faith and fair dealing. Unjust enrichment. The policy includes a virus exclusion, but Café Du Soleil argues it does not apply because: "The COVID-19 pandemic is such a devastating, far-ranging, and unforeseen event that it does not fall within a reasonable interpretation of the 'virus' exclusion." "The COVID-19 pandemic is much closer to a natural disaster than a 'loss due to virus or bacteria.' " (Compl. at ¶ 36). Café Du Soleil also argues that its loss of business profits "constituted direct damage to its business property" (Compl. at ¶ 36). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
May 14, 2020	Robert A. Levy, D.M.D. LLC v. Hartford Casualty Ins. Co., No. 4:20-cv-00643 (E.D. Mo., May 14, 2020)	Insurance Coverage Implicated: Business Interruption Case Type: Class action; declaratory judgment, breach of contract, and breach of duty of good faith and fair dealing. Case Summary: Robert A. Levy, D.M.D., LLC, a dental practice, sued its insurer, Hartford, on its own behalf and on behalf of all other similarly situated Missouri dental practices after Hartford denied its claim for business losses it suffered after orders of civil authorities forced it to close. The Complaint includes counts for: Breach of contract. Breach of the implied covenant of good faith and fair dealing. Declaratory judgment. Although the policy at issue is all risk, it has a virus exclusion. The dental practice argues, however, that the virus exclusion is not applicable because: The dental practice did not suffer the type of loss excluded by the virus exclusion. The COVID-19 worldwide pandemic and the orders of civil authority that closed all Missouri dental practices, not the presence of the virus in the dental practices' premises, caused the dental practice's damages. (Compl. at ¶¶ 9, 68, and 71). The dental practice also takes issue with Hartford's argument that viruses cannot cause property loss or damage. "If viruses could not cause property loss or damage, there would have been no reason to exclude them from the policy because they wouldn't have been covered to begin with" (Compl. at ¶ 9). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For more information on bad faith claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
May 14, 2020	Joseph Tambellini, Inc. v. Erie Ins. Exchange, Order Denying Response to Emergency Application for Extraordinary Relief, No. 52-WM-2020 (Penn. Sup. Ct., May 14, 2020) Joseph Tambellini, Inc. v. Erie Ins. Exchange, Answer to Application for Extraordinary Relief, No. 52-WM-2020 (Penn. Sup. Ct., May 7, 2020) Joseph Tambellini, Inc. v. Erie Ins. Exchange, Emergency Application for Extraordinary Relief, No. 52-WM-2020 (Penn. Sup. Ct., April 29, 2020) Joseph Tambellini, Inc. v. Erie Ins. Exchange, Complaint, No. GD-20-005137 (Penn. Sup. Ct., April 29, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment, injunctive relief, and breach of contract. Case Summary: Plaintiff Joseph Tambellini, Inc. (Tambellini) owns and operates a restaurant in Pittsburgh. On April 29, 2020, Tambellini sued its insurer, Erie, after Erie denied its claim for business interruption losses sustained after various COVID-19-related governmental orders forced Tambellini to close its business and furlough its employees (Compl. at ¶ 24). Tambellini also alleges that the COVID-19 pandemic has caused "damage and the risk of further harm to the property" because its business: "[O]perates in a 'closed environment' where many persons, including employees and customers, cycle in and out thereby creating a risk of contamination to the insured premises" (Compl. at ¶ 26). Is susceptible to person to person, person to property, and property to person transmittal and contamination. (Compl. at ¶¶ 24-27.) The complaint includes counts for: Declaratory judgment. Injunctive relief. Breach of contract. The policy at issue is all risk. The same day it filed its Complaint against Erie in state court, Tambellini sought to move the case directly to the Pennsylvania Supreme Court. In its Emergency Application for Extraordinary Relief, Tambellini argued that its case presented issues of importance to all Pennsylvania citizens who are "seeking recompense from their insurers for the losses, damage, and expenses caused by the COVID-19 pandemic and the related governmental Orders." In its answer, Erie claimed that it was "unthinkable" and inappropriate for any one court to issue "sprawling industry-wide rulings" that purport to adjudicate "thousands of unknown disputes" and involving "myriad contract forms, and exponential number of different types of businesses, and varying underlying facts" (Answer at pg.4). On May 14, 2020, the court denied Tambellini's emergency application in a one-paragraph opinion that did not contain any substantive analysis. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For more information on invoking the Pennsylvania Supreme Court's extraordinary jurisdiction over issues of immediate public importance, see Practice Note, Pennsylvania State Court Structure: Extraordinary Jurisdiction.
May 13, 2020	Magna Legal Services, LLC v. Hartford Fire Ins. Co., No. 200500735 (Philadelphia C.P., May 13, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment, injunctive relief, bad faith (common law and statutory), negligence, and misrepresentation. Case Summary: A legal support services firm, Magna Legal Services (Magna), sued its insurer, Hartford Fire Insurance Company (Hartford), and its insurance brokers, Nottingham Agency, Inc. and Jonathon Crook (Nottingham and Crook, collectively), after Hartford denied its claim for COVID-19-related business income losses when orders of civil authority forced it to cease all business activities and operations at its physical offices and other locations where it transacts business. A week later, on May 20, 2020, Magna dismissed the case without prejudice. In its complaint, Magna claimed: Hartford wrongfully denied its claims for loss of business income, contingent business income, and losses caused by orders of civil authority because its policy: is all risk; and includes limited virus coverage. (Compl. at ¶¶ 53-60.) Nottingham and Crook never explained their all-risk policy would preclude coverage for losses related to viruses, pandemics, or related orders of civil authority. Magna reasonably assumed Nottingham had procured as broad as possible coverage for lost business income without exclusions for viruses, pandemics, or related orders of civil authority. But for the negligence of Crook, acting on behalf of Nottingham, Magna would have purchased as broad as possible coverage for lost business income. (Compl. at ¶¶ 36-52.) The Complaint includes: Counts against Hartford for: declaratory judgment; breach of contract; injunctive relief; breach of the covenant of good faith and fair dealing; and violation of 41 Pa.C.S.A. 8371 (imposing a duty to act in good faith). Counts against Nottingham and Crook for: negligence; negligent supplying of information for the guidance of others; and misrepresentation. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For more information on bad faith claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
May 13, 2020	Ambulatory Care Ctr., PA v. Sentinel Ins. Co., 20-cv-05837 (D. N.J., May 13, 2020)	Insurance Coverage Implicated: Business interruption Case Type: Declaratory judgment Case Summary: Plaintiff Ambulatory Care Center (Ambulatory Care) filed a declaratory judgment action against its insurer, Sentinel, for COVID-19-related losses it experienced after orders of civil authority prohibited all elective medical and surgical procedures. Ambulatory Care's all-risk policy provides coverage for business interruption, extra expense, and losses related to orders of civil authority. The policy does not include an exclusion for viruses, "and in fact includes a specific endorsement for coverage in the event of a virus" (Compl. at ¶ 21). Ambulatory Care also argues that: The scientific community recognizes COVID-19 as a cause of real physical loss or damage. Contamination of its property would be a direct physical loss. (Compl. at ¶ 22.) Finally, Ambulatory Care cites President Trump's April 10, 2020 statement. In it, Trump said that if he had business interruption insurance, he'd "expect to get paid;" therefore, he would "like to see the insurance companies pay." He went on to say that companies have been paying premiums for business interruption insurance for years without seeking business interruption coverage, but now that they need it, insurance companies "don't want to pay up." According to Ambulatory Care, the President's statement means that if insurers deny coverage for COVID-19 business interruption losses, then they are acting in bad faith. (Compl. at ¶¶ 33-34.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
May 11, 2020	Cynthia's Ristorante v. The Cincinnati Ins. Co., 20-CI-00335 (McCracken Circuit Ct., May 11, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment. Case Summary: Plaintiff Cynthia's Ristorante (Cynthia's) filed a declaratory judgment action against both its insurer, Cincinnati Insurance, and against various public officials that issued COVID-19 related orders of civil authority, including the order that required Cynthia's to cease all on-site dining and led to its business income losses. Cynthia's claims that Cincinnati denied its claim for COVID-19-related business income losses in bad faith because: Cincinnati relied on the policy's pollution exclusion to deny coverage, but Cincinnati: "knew and understood at the time it relied on the pollution exclusion that was not a virus exclusion;" and "knew that because it has included a specific virus exclusion in other policies but did not include a specific virus exclusion in [Cynthia's] policy." (Compl. at ¶ 9.) Cincinnati claimed there was no evidence the order of civil authority that closed Cynthia's business "was entered because of direct damage to property at other locations or dangerous physical conditions at other locations," but at the time it denied coverage for this reason, Cincinnati knew that: COVID-19 was an airborne virus that settled on surfaces and was capable of causing dangerous physical conditions; there was a large body of legal authority which held that property damage need not be visible, physical destruction of property; and the order of civil authority that closed Cynthia's was based upon substantial evidence of the widespread presence of the virus in Kentucky. (Compl. at ¶ 10.) For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
May 11, 2020	ABC Daycare & Learning Center v. West Bend Mutual Ins. Co., 20-CI-00220 (Madison Circuit Ct., May 11, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment, breach of contract, and bad faith. Case Summary: ABC Daycare & Learning Center (ABC) sued its insurer, West Bend Mutual, after West Bend denied ABC's claim for business income losses related to orders of civil authority that closed all licensed childcare centers in Kentucky due to COVID-19. ABC claims it is entitled to coverage under its policy's business income provision, which specifically provides coverage for lost business income and extra expenses: "as a result of your 'operations' being temporarily shut down or suspended" by a governmental order issued in relation to "an outbreak of a 'communicable disease' or a 'waterborne pathogen' at the insured premises" (Compl. at ¶ 13). West Bend claims the phrase "at the insured premises" means that ABC's policy is not triggered unless there is a confirmed case of COVID-19 in a child (or the family of a child) served by ABC; ABC claims coverage is triggered because its premises are part of the COVID-19 pandemic in Madison County, Kentucky, in which there have been confirmed cases of COVID-19. (Compl. at ¶¶ 19 and 14, respectively.) The Complaint includes counts for: Declaratory judgment. Breach of contract. Bad faith. Violation of the Kentucky Insurance Code, including the Kentucky Unfair Claims Settlement Act (KRS 304.12-230). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For more information on bad faith claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
May 6, 2020	Goodwill Indust. Of Central Okla., Inc. v. Philadelphia Indemnity Ins. Co., CV-20-798 (Cleveland Cty Dist. Ct., Oklahoma, May 6, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment Case Summary: Goodwill filed a declaratory judgment against its insurer, Philadelphia Indemnity, seeking coverage for COVID-19-related business income losses under the business income, extra expense, and civil authority provisions of its all-risk policy. Goodwill admits that its policy includes an endorsement "that purports to exclude coverage for loss due to virus or bacteria." Goodwill claims, however, that the endorsement is "void or invalid" because: No consideration was provided to Goodwill in exchange for the addition of this endorsement. Philadelphia Indemnity failed to obtain consent from Goodwill before adding the endorsement. (Compl. at ¶ 12.) Goodwill also alleges that the various orders of civil authority that prohibited it from accessing its property triggered business interruption coverage because they were issued in response to "dangerous physical conditions" (Compl. at ¶ 16). Finally, Goodwill cited President Trump's April 10, 2020 press conference, in which he stated: If he had business interruption insurance "I'd expect to be paid" (emphasis in original). He would "like to see the insurance companies pay" because companies have been paying premiums for business interruption insurance for years, "all of the sudden they need it," and now insurance companies "don't want to pay up." (Compl. at ¶ 17). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
May 4, 2020	Legal Sea Foods LLC v. Strathmore Ins. Co., 1:20-CV-10850 (D. Mass. May 4, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment and breach of contract. Case Summary: Plaintiff Legal Sea Foods sued its insurer, Strathmore, after Strathmore denied its claim for business interruption losses sustained after "myriad civil authority orders" forced Legal Sea Foods to close. Legal Sea Foods sued under the business interruption, extra-expense, and civil authority provisions of its all-risk policy. Strathmore issued the policy to Legal Sea Foods on March 1, 2020, when the COVID-19 pandemic was already widespread, yet the it does not include a virus or pandemic exclusion. According to Legal Sea Foods, because Strathmore had the "opportunity to use standard insurance industry forms or language to specifically exclude virus losses like those resulting from COVID-19 from coverage" but failed to do so, Strathmore cannot claim that it intended to include losses related to viruses like COVID-19 from coverage. (Compl. at ¶¶ 4, 50, and 58.) The complaint includes counts for: Breach of contract. Declaratory judgment. Legal Sea Foods also alleges that it suffered direct physical loss of or damage to its property because: Numerous studies show that the COVID-19 virus is detectable on the surfaces Legal Sea Foods uses in preparing and serving food – including stainless steel, plastic, and cardboard – for up to three days, which constitutes property damage. Orders of civil authority that banned on-premises dining left Legal Sea Foods unable "to use its insured premises to operate its business," and that inability constitutes a loss of property that triggers coverage. (Compl. at ¶¶ 25 and 85). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
May 1, 2020	Food for Thought Caterers Corp. v. Hartford Financial Services Group, Inc., No. 1:20-cv-03418 (S.D.N.Y, May 1 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Class action; declaratory judgment and breach of contract. Case Summary: Food For Thought Caterers filed a class action lawsuit against Hartford after Hartford denied Food for Thought's claim for business interruption losses related to COVID-19 civil authority orders that forced Food for Thought to suspend its business operations. The Complaint alleges that the policy at issue provides: Business Income coverage. Extra Expense coverage. Civil Authority coverage. The policy does not include an exclusion for losses caused by viruses but does include a pollution exclusion. Food for Thought argues the pollution exclusion does not apply to its COVID-19-related losses because: "COVID-19 is not a Pollutant or Contaminant." "Plaintiff’s or other Class members’ losses were not caused directly or indirectly by any of the actions set forth in the exclusion;" rather, the proximate cause of their losses "were precautionary measures taken by their respective states to prevent the spread of COVID-19 in the future." (Compl. at ¶ 39.) Food for Thought also alleges that "Hartford has, on a widescale and uniform basis, refused to pay its insureds" for COVID-19-related business interruption losses, and that "no insurer intends to cover any losses caused by the COVID-19 pandemic" (Compl. at ¶¶ 44-45). For more information on pollution exclusions, see Practice Note, Environmental Liability Coverage and Exclusions Under Commercial General Liability Insurance Policies: Pollution Exclusions. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
May 1, 2020	Musso & Frank Grill Co. v. Mitsui Sumitomo Ins. USA Inc., No. CV-16681 (Cal. Sup. Ct., L.A. County, May 1, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Breach of contract, bad faith, and negligence Case Summary: Musso & Frank, a popular Hollywood restaurant, sued both its insurer, Mitsui Sumitomo, and the broker that helped it purchase insurance, HUB International Insurance Services, after the insurer denied Musso & Frank's claim for business interruption losses sustained after a COVID-19-related order issued by the Mayor of Los Angeles forced it to close (Compl. at ¶¶ 9-10). The policy at issue is all-risk and includes an exclusion for virus or pandemic. The Complaint includes: Counts against Mitsui Sumitomo for: breach of contract; and bad faith. A count against HUB International for "negligent procurement" (Compl. at ¶ 16). Musso & Frank alleges that Mitsui Sumitomo denied its claim in bad faith, including refusing to abide by the "well established and non-controversial California insurance claims handling standards" that the California Insurance Commissioner cited in a recent Notice warning insurers that they had a duty to diligently pursue COVID-19-related business interruption claims and that if they denied such claims, they were required to communicate that denial in writing, and list all the legal and factual bases for the denial (Compl. at ¶¶ 12-14 and 67). Musso & Frank also alleges that Mitsui's conduct "represents an ongoing pattern and practice, which they apply to all of their policyholders, that is specifically designed by Mitsui … to earn illicit profits at the expense of their policyholders'' rights" (Compl. at ¶ 71). Musso & Frank further alleges that HUB International held themselves out as "experts in the field of insurance for restaurants," including "business interruption coverage for restaurants," and therefore should have known that "any business interruption policy with an exclusion for virus-related losses is of suspect value to a restaurant," yet HUB did not alert Musso & Frank that "the policy being offered included such an exclusion" (Compl. at ¶¶ 87, 89, and 92). For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For more information on bad faith claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
April 29, 2020	O'Brien Sales and Marketing, Inc. v. Transportation Ins. Co., No. 20-2951 (N.D. Cal, April 29, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Class action; declaratory judgment Key Pleadings and Court Orders: April 29, 2020: Complaint July 28, 2020: First Amended Complaint November 2, 2020: Second Amended Complaint November 23, 2020: Transportation Insurance Co.'s Motion to Dismiss Second Amended Complaint January 12, 2021: Order Granting Transportation Insurance Co.'s Motion to Dismiss Second Amended Complaint with prejudice February 10, 2021: Notice of Appeal to the 9th Circuit, Case No. 21-15241 April 30, 2021: Order granting Appellee Transportation Ins. Co.'s Motion to Stay Proceedings until resolution of Selane Products, Inc. v. Continental Cas. Co., Case No. 21-55123 Case Summary: O'Brien, a sales and marketing company, filed a declaratory judgment action against its insurer, Transportation, on its behalf and on behalf of a class of all similarly situated plaintiffs after Transportation denied its claim for business interruption losses. O'Brien claims that COVID-19 triggered coverage under three provisions of its all-risk policy: Business income. Extra expense. Civil authority. O'Brien further claims that: Its property was "physically damaged by the presence of the virus that causes COVID-19" because the presence of COVID-19 is "a physical interaction with property" that makes the property "dangerous and less valuable;" therefore, "the physical presence of COVID-19 causes 'direct physical loss or damage' " to O'Brien's property (Compl. at ¶¶ 8, 32, and 39). COVID-19-related governmental orders prohibited O'Brien from accessing its property and forced it to shut down (Compl. at ¶¶ 40-44). According to O'Brien, Transportation "denied COVID-19-related claims en masse," and these denials "were not made on the basis of any of Plaintiff or Class Members' individual circumstances;" rather, "the refusal to pay is uniform and is part of [Transportation's] business strategy" (Compl. at ¶¶ 79 and 9). Transportation filed a Motion to Dismiss. On January 12, 2020, the Court granted Transportation's Motion. It held: "Direct physical loss" requires "physical alteration of the property." The presence of coronavirus does not constitute direct physical loss. The COVID-19-related governmental orders cited by O'Brien were not the result of physical loss or damage to the property; rather, they were issued to stop the spread of COVID-19. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
April 29, 2020	Alliance Radiology v. CNA Financial Corp., No. 20-2218 (D. Kan., April 29, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Class action; declaratory judgment, injunctive relief, and breach of contract. Key Pleadings and Court Orders (Egg Works Holding Co. v. Acuity): April 29, 2020: Complaint May 15, 2020: Amended Complaint July 31, 2020: Second Amended Complaint filed August 14, 2020: CNA's Motion to Dismiss December 15, 2020: Alliance Radiology's Notice of Voluntary Dismissal Case Summary: Alliance, a radiology practice, sued its insurer, CNA, on its behalf and on behalf of a class of all similarly situated plaintiffs after CNA denied its claim for business interruption losses sustained after various COVID-19-related governmental orders forced Alliance to stop all elective procedures and greatly reduce its operations. Alliance also alleges that the hospitals in which its physicians practice suffered "direct physical damage" because they were "infected with COVID-19" (Compl. at ¶ 17). Additionally, Alliance claims it is "not unique;" instead, "[t]he insurance industry appears to be taking a uniform approach to the current pandemic: deny coverage even when the policy they drafted and offered to insureds, and the policy paid for by the insureds, does not contain an exclusion for pandemic- or virus-related losses" (Compl. at ¶ 4). Therefore, the complaint asks the court to recognize three plaintiff classes (a nationwide declaratory and injunctive relief class, a nationwide breach of contract class, and a Kansas subclass). The complaint includes counts for: Declaratory judgment. Injunctive relief. Breach of contract. The policies at issue were all risk policies. Alliance claims its business interruption losses are covered under various policy provisions, including provisions providing coverage for: Business interruptions caused by orders of civil authority. Extra expenses. Sue and labor costs. Alliance also claims that coverage for COVID-19 losses is not excluded because its policy does not include a virus- or pandemic-related exclusion, even though at the time Alliance purchased its policy: The risk of a virus like COVID-19 "was foreseeable to, if not foreseen by," insurance companies including Defendant CNA. A specific virus exclusion was available when CNA sold Alliance its policy, yet CNA sold the policy to Alliance without that exclusion. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
April 25, 2020	Egg Works Holding Co., LLC v. Acuity, No. 2:20-cv-00748 (Nev. Dist. Ct., April 25, 2020) Egg and I, LLC v. U.S. Specialty Ins. Co., No. 2:20-cv-00747 (Nev. Dist. Ct., April 24, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Class action; declaratory judgment, injunctive relief, and breach of contract. Key Pleadings and Court Orders (Egg Works Holding Co. v. Acuity): April 25, 2020: Complaint June 25, 2020: Acuity's Motion to Dismiss July 20, 2020: First Amended Complaint August 3, 2020: Acuity's Second Motion to Dismiss March 16, 2021: Minute Order in Chambers Denying Acuity’s Motion to Dismiss without prejudice March 24, 2021: Order Denying Acuity’s Motion to Dismiss without prejudice April 9, 2021: Answer to Amended Complaint Case Summary: Egg Works, a family owned and operated group of restaurants in Las Vegas, filed separate class action complaints against two of its insurers, Acuity and U.S. Specialty Insurance, after the insurers denied Egg Works' claims for COVID-19-related business interruption losses sustained when the governor of Nevada issued a series of orders that closed all non-essential businesses and instructed Nevada residents to stay at home. Both class action complaints include claims for: Declaratory and injunctive relief. Breach of contract. Breach of the covenant of good faith and fair dealing. The complaint against U.S. Specialty Insurance seeks coverage under the policy's provisions for: Business interruption. Extra expense. Rehabilitation expense. (Compl. at ¶¶ 35-36.) The policy includes an exclusion for Avian Influenza Viruses, but Egg Works argues that exclusion "is entirely silent as to losses relating to COVID-19, coronaviruses, generally, or any other virus other than the Avian Influenza Viruses specifically delineated in the Policy" (Compl. at ¶¶ 38-39). U.S. Specialty Insurance filed a motion to dismiss the claims on May 26, 2020. For more information, see Egg and I, LLC v. U.S. Specialty Ins. Co., Motion to Dismiss, No. 2:20-cv-00747 (D. Nevada, May 26, 2020). The complaint against Acuity seeks coverage under all risk policies with provisions for losses related to: Business interruption. Extra expense. Orders of civil authority. (Compl. at ¶¶ 34-38.) The policy includes an exclusion for losses related to virus or bacteria "that induces or is capable of inducing physical distress, illness or disease" (Compl. at ¶ 41). Egg Works alleges the exclusion does not apply because at the time that the governor's order closing restaurants went into effect, "Egg Works was not aware of the presence of COVID-19 virus on its premises and no employee or customer had reported a COVID-19 infection" (Compl. at ¶ 43). On March 24, 2021, the Court denied Acuity’s Motion to Dismiss without prejudice. For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For more information on bad faith claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
April 24, 2020	In re COVID-19 Business Interruption Protection Ins. Litigation, MDL No. 2942, Plaintiff El Novillo Restaurants’ Response in Partial Support of Motion to Transfer (Document 9, April 24, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Multidistrict litigation. Case Summary: After El Novillo Restaurants filed a breach of contract and declaratory judgment class action suit against its insurer in federal court (S.D. Fla.) on April 9, 2020: Seven Chicago-area businesses filed a petition with the Judicial Panel on Multidistrict Litigation (JPMDL) to transfer and consolidate all federally filed COVID-19 business interruption insurance cases to the Northern District of Illinois (N.D. Ill.) LH Dining, LLC and Newchops Restaurant Comcast, LLC petitioned the JPMDL to transfer and consolidate all federally filed business interruption lawsuits to E.D. Pa., not N.D. Ill. In response to these motions, El Novillo argues that while it agrees the related actions should be transferred and consolidated, the most appropriate forum is the Southern District of Florida (S.D. Fla.), not E.D. Pa. or N.D. Ill., because: The first nationwide class action regarding the applicability of business interruption coverage for COVID-19 damages is pending in S.D. Fla. Three class actions regarding the applicability of business interruption coverage for COVID-19 damages are pending in S.D. Fla. The JPMDL put the petitions to transfer and any responses to the petitions on its July 20, 2020 hearing docket. For more information on transferring cases to the JPMDL, see Standard Document, Motion for a Multidistrict Litigation (MDL) Transfer.
April 21, 2020	In re COVID-19 Business Interruption Protection Ins. Litigation, MDL No. 2942, Plaintiffs' Brief in Support of Their Subsequent Motion to Transfer (Document 4-1, April 21, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Multidistrict litigation. Case Summary: Seven Chicago-area businesses filed a petition with the Judicial Panel on Multidistrict Litigation (JPMDL) to transfer and consolidate all COVID-19 business interruption insurance cases to the Northern District of Illinois (N.D. Ill.). If the motion succeeds, all pending federal cases and any later-filed federal cases raising the same issues will be transferred to the N.D. Ill. The petition argues that the COVID-19 business interruption insurance coverage cases proliferating across the US are appropriate for coordinated adjudication because: They share common features, including similar: contract language; claims-handling practices; and causes of loss (the COVID-19 pandemic and related shut-down and stay-at-home orders). Consolidation will eliminate: duplicative discovery; duplicative proceedings; and the risk of inconsistent results. Two Philadelphia restaurants filed a similar petition arguing that the Eastern District of Pennsylvania (E.D. Pa.), not the N.D. Ill, should hear the consolidated cases. The JPMDL asked insurers to file consolidated responses by May 12, 2020 and placed both petitions on its July 20, 2020 hearing docket. For more information on transferring cases to the JPMDL, see Standard Document, Motion for a Multidistrict Litigation (MDL) Transfer.
April 20, 2020	In re COVID-19 Business Interruption Insurance Coverage Litigation, MDL No. 2942, Plaintiffs' Brief in Support of Motion for Transfer and Coordination or Consolidation (Document 1-1, April 20, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Multidistrict litigation. Case Summary: Two Philadelphia restaurants filed a petition with the JPMDL to transfer and consolidate all COVID-19 business interruption insurance cases to the E.D. Pa. If the motion succeeds, all pending federal cases and any later-filed federal cases raising the same issues will be transferred to the E.D. Pa. The petition argues that the COVID-19 business interruption insurance coverage cases proliferating across the US are appropriate for coordinated adjudication because: They share common issues, including similar: contract language; claims-handling practices; and causes of loss (the COVID-19 pandemic and related shut-down and stay-at-home orders). Consolidation will eliminate: duplicative discovery; duplicative proceedings; and the risk of inconsistent results. Seven Chicago-area businesses filed a similar petition on April 21, 2020, arguing that the N.D. Ill., not the E.D. Pa., should hear the consolidated cases. The JPMDL asked insurers to file consolidated responses by May 12, 2020 and placed both petitions on its July 20, 2020 hearing docket. For more information on transferring cases to the JPMDL, see Standard Document, Motion for a Multidistrict Litigation (MDL) Transfer.
April 20, 2020	Travelers Casualty Insurance Co. of America v. Geragos & Geragos, PC, No. 20-3619, (C.D. Cal., April 20, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment Key Pleadings and Court Orders: April 20, 2020: Complaint filed by Travelers August 12, 2020: Order: denying Geragos & Geragos' Motion to Dismiss; denying Geragos & Geragos' Motion to Remand in the related case pending, Geragos & Geragos, APC v. Travelers Indem. Co. of Conn., et. al., Case No. 20-4414 (C.D. Cal.); and consolidating both actions and ordering all future pleadings to be filed in Travelers Cas. Ins. Co. v. Geragos & Geragos, Case No. 20-3619. September 9, 2020: Traveler's Motion to Dismiss Counterclaim of Geragos & Geragos October 5, 2020: Order Denying Motion to Transfer to the Judicial Panel on Multidistrict Litigation, MDL No. 2965 October 19, 2020: Order Granting Traveler's Motion to Dismiss Counterclaim of Geragos & Geragos without leave to amend November 5, 2020: Traveler's Motion to Reopen Case December 3, 2020: Order granting Traveler's Motion to Reopen Case March 22, 2021: Travelers’ Motion for Judgment on the Pleadings April 1, 2021: Geragos' Opposition to Travelers' Motion for Judgment on the Pleadings Case Summary: Travelers Insurance Company (Travelers) denied the business interruption claims of a Los Angeles law firm that had previously sought business interruption coverage from Travelers for COVID-19 related losses. The law firm sued Travelers on its behalf and on the behalf of several other Travelers' policyholders (including a downtown Los Angeles restaurant, a cafe and deli in Montrose, and a business center in Glendale) after Travelers denied their business interruption claims (see, for example, Geragos & Geragos, PC v. Travelers and Geragos & Geragos Fine Arts Building, LLC v. Travelers). Travelers is seeking a declaratory judgment that it has no obligation under the law firm's policy for the firm's COVID-19 related business interruption losses. The complaint asks the court to determine that: The firm's losses are not covered because they were not caused by "direct physical loss" at the law offices. The COVID-19 pandemic is not a covered cause of loss. The shut-down and stay-at-home orders that closed the law offices do not trigger civil authority coverage. The firm's policy has an exclusion for "loss due to virus and bacteria." For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
April 17, 2020	Gio Pizzeria & Bar Hospitality LLC v. Certain Underwriters at Lloyd’s, London, No. 1:20-cv-03107 (S.D.N.Y, April 17, 2020) (also discussed at the April 17, 2020 entry below) Rising Dough, Inc. v. Society Insurance, No. 2:20-cv-00623 (E.D. Wis., April 17, 2020) Bridal Expressions LLC v. Owners Insurance Co., No. 1:20-vc-00833-SO (N.D. Ohio, April 17, 2020) Caribe Restaurant & Nightclub, Inc. v. Topa Insurance Co., No. 20-3570 (C.D. Cal., April 17, 2020) Dakota Ventures, LLC v. Oregon Mutual Insurance Co., No. 20-0630 (Or. Cir. Ct., April 17, 2020) Christie Jo Berkseth-Rojas DDS v. Aspen American Insurance Co., No. 3:20-cv-00948 (N.D. Tex., April 17, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Class action; breach of contract and declaratory judgment. Case Summary: A group of law firms filed six class-action lawsuits in various federal district courts seeking coverage for COVID-19-related losses on behalf of several classes of insureds. All the named plaintiffs: Closed their businesses due to shut-down or stay-at-home orders. Lost business income as a result. Sought insurance coverage under business interruption policies. Had their claims denied. The law firms filed the complaints on behalf of several classes, including: A business income breach class. A civil authority breach class. An extra expense breach class. All the complaints have two counts: Breach of contract Declaratory judgment All of the policies at issues are all risk and none contain a virus or communicable disease exclusion. For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
April 17, 2020	Gio Pizzeria & Bar Hospitality LLC v. Certain Underwriters at Lloyd’s, London, No. 1:20-cv-03107 (S.D.N.Y, April 17, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Class action; breach of contract and declaratory judgment. Key Pleadings and Court Orders: April 17, 2020: Complaint July 29, 2020: Certain Underwriter's Motion to Dismiss July 29, 2020 : Certain Underwriter's Motion to Change Venue August 12, 2020: Amended Complaint August 26, 2020: Order transferring case to S.D. Fla., Case No. 0:20-cv-61741 September 11, 2020: Certain Underwriter's Motion to Dismiss Amended Complaint October 5, 2020: Order of JPMDL denying transfer to MDL 2961 October 26, 2020: Second Amended Complaint November 16, 2020: Certain Underwriter's Motion to Dismiss Second Amended Complaint For more information on business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For information on filing a business interruption claim, see Filing a Business Interruption Claim Checklist.
April 15, 2020	Maillard Tavern LLC v. Soc'y Ins., Inc., No. 2020-CH-03843 (Ill. Circ. Ct., Cook Cty, April 15, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment. Key Pleadings and Court Orders: April 14, 2020: Complaint June 18, 2020: Society's Answer and Counterclaim August 3, 2020: Maillard's First Amended Complaint October 5, 2020: Society's Answer to First Amended Complaint March 4, 2021: Motions to Consolidate Granted as to Case Nos. 2020-CH-04391, 2020-CH-04517, 2020-L-006410, 2020-CH-04763, 2020-L-007653, 2020-L-008543, 2020-M2-001451, 2020-CH-04178, 2020-CH-04149, 2020-L-00511, 2020-CH-04101, 2020-CH-04065; 2020-CH-04004, 2020-L-004464, 2020-CH-03916 (all insureds with COVID-19-related claims against Society Insurance) April 7, 2021: Amended Complaint Allowed Case Summary: A Chicago restaurant that was forced to shut down after the Illinois governor issued an order closing all restaurants and bars due to the COVID-19 pandemic filed a declaratory judgment action after its insurer denied its business interruption claim. The complaint asks the court to determine that: The restaurant sustained direct physical loss or damage to property as a result of COVID-19. COVID-19 is a covered loss under the policy. The governor's and health department's orders constitute orders of civil authority that trigger business interruption coverage under the policy's civil authority extension. For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
April 9, 2020	Geragos & Geragos, PC v. The Travelers Indemnity Co. of Connecticut, No. 20 ST CV 14022, (Cal. Sup. Ct., Los Angeles County, April 9, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment. Key Pleadings and Court Orders: May 15, 2020: Complaint May 15, 2020: Notice of Removal to C.D. Cal., Case No. 2:20CV04414 May 15, 2020: Traveler's Notice of Related Case, Travelers Casualty Insurance Company of America v. Geragos & Geragos, APC, Case No. 2:20-cv-03619-PSG-E, filed on April 20, 2020, in the United States District Court for the Central District of California May 22, 2020: Traveler's Motion to Dismiss or Stay June 12, 2020: First Amended Complaint June 12, 2020: Geragos & Geragos' Motion to Remand June 26, 2020: Traveler's Motion to Dismiss First Amended Complaint August 12, 2020: Order: denying Geragos & Geragos' Motion to Remand; denying Traveler's Motion to Dismiss or Stay; and consolidating this action with Travelers Casualty Insurance Company of America v. Geragos & Geragos, APC, directing all pleadings to be filed in the low-numbered case, and closing the high numbered case. For more information on the consolidated case, see the entry for Travelers Casualty Insurance Company of America v. Geragos & Geragos, APC, at April 20, 2020. Case Summary: The policyholder, a Los Angeles law firm, incurred a substantial loss of business income and additional expenses after the Mayor of Los Angeles and Governor of California issued shut-down and stay-at-home orders that limited "access to and business in connection with" the law firm's offices. The law firm sought coverage under the civil authority extension of its business interruption policy and the insurer denied coverage. The law firm then filed a declaratory judgment action asking the court to determine that: The mayor's shut down order is an order of civil authority that triggers coverage. The firm's policy does not exclude coverage for a viral pandemic like COVID-19. The law firm's policy is all-risk. For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage
April 9, 2020	El Novillo Rest. v. Certain Underwriters at Lloyd's London, 1:20-cv-21525 (S.D. Fla., April 9, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Class action; declaratory judgment and anticipatory breach of contract. Key Pleadings and Court Orders: April 9, 2020: Complaint filed October 20, 2020: Plaintiff's Motion to Coordinate Related Actions against Lloyd's (following the JPML's denial of petition to transfer and consolidate more than a dozen Lloyd's-related actions and its recommendation to consolidate similar actions pending in the same federal districts (see In re: Certain Underwriters at Lloyd's London, Covid-19 Bus. Interruption Prot. Ins. Litig., MDL No. 2961 (Oct. 2, 2020)) December 7, 2020: Order Granting Defendant's Motion to Dismiss and denying Plaintiff's Motion to Consolidate as moot. Case Summary: The plaintiff filed a lawsuit on its behalf and on behalf of a class of similarly situated all-risk commercial property insurance policyholders. The plaintiff class is seeking a declaratory judgement that the defendant insurance companies are obligated to provide business interruption and extra expenses coverage for business income losses resulting from civil authority orders meant to slow the spread of COVID-19. The complaint includes two counts: Declaratory judgment (including that the plaintiff class suffered a direct physical loss due to both the orders of civil authority and their suspension of business operations) Anticipatory breach of contract (based in part on insurance industry statements and state department of insurance advisories indicating business interruption policies do not cover damages related to COVID-19). For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
April 8, 2020	Proper Ventures, LLC v. Seneca Ins. Co. (D.C. Sup. Ct., April 8, 2020) Proper Ventures, LLC v. Seneca Ins. Co., Case No. 2020 CA 002194, Order Granting Defendant's Cross-Motion for Summary Judgement (D.C. Sup. Ct., February 18, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Breach of contract and declaratory judgment. Key Pleadings and Court Orders: April 8, 2020: Complaint June 4, 2020: Seneca Insurance's Answer June 17, 2020: Proper Ventures' Motion for Partial Summary Judgment July 1, 2020: Seneca Insurance's Cross-Motion for Summary Judgment February 18, 2021: Order denying Proper Venture's Motion for Partial Summary Judgment and granting Seneca's Cross-Motion for Summary Judgment Case Summary: The policyholder, Proper Ventures LLC, closed its Washington D.C. restaurant and furloughed most of its employees after the mayor signed an order prohibiting table seating at any restaurants or taverns in the city. The policyholder submitted a claim to recover its lost business income under the civil authority extension of its business interruption policy. After its insurer denied coverage, the policyholder filed a complaint alleging two counts: Declaratory judgment (including that the mayor's order prohibited the restaurant from remaining open and that the order caused the restaurant's business losses, not the COVID-19 virus). Breach of contract. Proper Ventures filed a motion for partial summary judgment and Seneca filed a cross-motion for summary judgment. On February 18, 2021, the court denied Proper Ventures' motion for summary judgment and granted Seneca's motion for cross-summary judgment. It accepted Proper Ventures' argument that "loss of property" is not be the same as "damage to property." However, it did not agree that it necessarily followed that "loss of property" must therefore cover loss of physical property and loss of use (Order at pg. 5). Instead, according to the Court, a "natural reading" of a coverage trigger that provided coverage for both "loss of property" and "damage to property" is that "one covers direct losses from property loss or damage," and the other "covers subsequent loss of business income as a result of property loss or damage." Since Proper Ventures did not allege any damage or destruction to the physical property, its coverage claim failed. (Order at pp. 5-6.) For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
April 7, 2020	Sharecropper LLC v. Farmers Ins. Exch., 01-cv-2020-901319 (Ala. Circ. Ct., Jefferson Cty., April 7, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment. Case Summary: The owner of a restaurant in Mountain Brook, Alabama, was forced to shut down for a short time and re-open offering curbside pick-up only after various governmental entities issued orders directing all nonessential businesses to cease activities, reducing the size of "non-work related gatherings," and prohibiting on-premises consumption of food and beverages during the COVID-19 pandemic. The owner sought coverage under the civil authority extension of its business interruption policy, and the insurer denied coverage the next day. The owner filed a declaratory judgment action asking the court to determine that: The various governmental orders trigger civil authority coverage. The owner's loss of the value and function of its covered property constituted a direct physical loss under the policy. The policy contains a virus exclusion. For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
April 6, 2020	Mace Marine Inc. v. Tokio Marine Specialty Ins. Co., No. 105911474 (Fla. Cir. Ct., Monroe Cty., April 6, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Breach of contract, bad faith, and declaratory judgment. Key Pleadings and Court Orders: April 6, 2020: Complaint filed in Monroe County, Florida April 30, 2020: Defendant's Notice of Removal to Southern District of Florida (Case No. 20-cv-10044) May 18, 2020: Plaintiff's Motion to Remand June 9, 2020: Order granting Plaintiff's Motion to Remand to Monroe County October 8, 2020: Order Granting Defendant's Motion to Dismiss Case Summary: The policyholder, the owner and operator of a dive shop business in the Florida Keys, sued its insurer in state court after the insurer denied its claim for business interruption losses sustained when it was forced to close because the Governor of Florida and Monroe County officials issued orders closing all non-essential businesses. The complaint includes three counts: Declaratory judgment (including that a pandemic is a covered loss and that COVID-19 contamination constitutes a direct physical loss or damage to property). Breach of contract. Bad faith denial of coverage (premised in part on the fact that the insurer issued blanket denials "within a very short period," indicating the insurer did not conduct any meaningful investigation). For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For more information regarding bad faith denial of claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
April 6, 2020	Sandy Point Dental P.C. v. The Cincinnati Ins. Co., 1:20-cv-02160 (N.D. Ill, April 6, 2020) Sandy Point Dental P.C. v. the Cincinnati Ins. Co., Case No. Case No. 21-1186 (7th Cir., Jan. 29, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Breach of contract, bad faith, and declaratory judgment. Key Pleadings and Court Orders: April 6, 2020: Complaint filed July 7, 2020: Amended Complaint filed July 31, 2020: Defendant's Motion to Dismiss September 21, 2020: Order Granting Defendant's Motion to Dismiss October 16, 2020: Plaintiff's: Motion to file instanter a Second Amended Complaint; and Motion for Reconsideration. January 10, 2021: Order Denying Plaintiff's Motion for Leave to file a Second Amended Complaint and Motion to Reconsider. January 28, 2021: Sandy Point’s Notice of Appeal to the 7th Circuit, Case No. 21-1186 April 16, 2021: Brief of Appellant Sandy Point Dental April 26, 2021: United Policyholders' Amicus Brief May 17, 2021: Appellee Brief (Cincinnati Insurance) Case Summary: A dental office in Lake Zurich, Illinois, sued its insurer in federal district court after the insurer denied its claim for business interruption losses sustained after it was forced to close because the Governor of Illinois issued an executive order closing all non-essential operations. State authorities deemed elective dental work was nonessential, which constituted 95% of the dental office's business. The complaint includes three counts: Declaratory judgment (including that the dental office's business losses are covered under the civil authority extension of its business interruption policy). Breach of contract. Bad faith denial of coverage (premised in part on the fact that the insurer issued blanket denials "within a very short period," indicating the insurer did not conduct any meaningful investigation). The dental office's policy has an exclusion for bacteria, but not for viruses. For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For more information regarding bad faith denial of claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
April 6, 2020	Toney v. Walmart, Inc., 2020-L-003938 (Ill. Cir. Ct., Cook Cty., April 6, 2020)	Insurance Coverage Implicated: Commercial General Liability (CGL); other liability lines. Case Type: Wrongful death and negligence. Key Pleadings and Court Orders: April 6, 2020: Complaint June 25, 2020: Motion to Dismiss Case Summary: The family of a Walmart employee at a store in Illinois who died after contracting COVID-19 filed a wrongful death and negligence lawsuit against Walmart alleging that the retailer failed to adequately screen and protect workers, including specific allegations that: Walmart did not properly clean the store. Walmart did not give employees masks, gloves, antibacterial wipes, or other protective equipment. Another employee at the same store died four days later from complications due to COVID-19. For more information regarding commercial general liability insurance, see Practice Note, Commercial General Liability Insurance Policies: Property Damage and Bodily Injury Coverage (Coverage A).
April 2, 2020	Prime Time Sports Grill, Inc. v Certain Underwriters at Lloyds, 20-cv-00771 (M.D. Fla., April 2, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment. Key Pleadings and Court Orders: April 2, 2020: Complaint filed April 8, 2020: Amended Complaint filed December 17, 2020: Order granting Defendant's Motion to Dismiss with prejudice. Case Summary: A restaurant filed a declaratory judgment action after its insurer denied its claim for business interruption losses sustained after the Governor of Florida ordered all bars and restaurants closed in response to the COVID-19 pandemic. The complaint asks the court to determine that its policy covers the restaurant's business interruption losses and extra expenses stemming from the governmental order closing bars and restaurants. The defendant, Lloyd's, filed a motion to dismiss. The court granted the motion with prejudice on December 17, 2020. For more information, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
April 1, 2020	Scratch Rests. LLC v. Farmers Grp. Inc., 20 ST CP 0133 (Cal. Sup. Ct., Los Angeles Cty., April 1, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment. Key Pleadings and Court Orders: April 1, 2020: Complaint July 22, 2020: Insurers' Petition for Coordination of COVID-19-related insurance coverage cases pending against them in various California state courts October 2, 2020: First Amended Complaint November 5, 2020: Order granting Petition for Coordination (the coordinated case is pending in Los Angeles Superior Court, JCCP No. 5125) April 1, 2021: Farmers’ Second Petition to Coordinate Add-On Cases Case Summary: A restaurant group closed three of its well-known restaurants and furloughed 55 employees after the Mayor of Los Angeles and the cities of Los Angeles and Santa Barbara issued several orders due to COVID-19, including stay-at-home orders and orders prohibiting dine-in food service. It submitted a claim to its insurers seeking coverage for lost business income under a policy that includes civil authority and extra expense extensions and filed a declaratory judgment action to determine whether: The orders that closed the group's restaurants constitute orders of civil authority that prohibit access to the insured premises as defined by the policy. The orders that closed the group's restaurants trigger business interruption coverage under the policy's civil authority extension if the group can prove there has been physical loss and damage to the property in the immediate area of the insured properties. Claim preparation coverage is available for making a claim under the policy. For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
March 31, 2020	Billy Goat Tavern I v. Soc'y Ins., 1:20-cv-02068 (N.D. Ill., March 31, 2020) In re: Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, Case No. 1:20-cv-05965, Order Reassigning Cases (N.D. Ill, Oct. 8, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Breach of contract and declaratory judgment. Key Pleadings and Court Orders: March 31, 2020: Complaint October 8, 2020: reassigned to In re: Society Ins. Co. MDL No. 2964, Case No. 1:20cv-05965, N.D. Illinois Case Summary: Multiple restaurants under common ownership closed after the Governor of Illinois issued executive orders shutting down all restaurants. The group filed a class action in federal district court on behalf of all Illinois businesses offering food or beverages for on-premises consumption that: Are covered under the same Society Insurance “all-risk" insurance policies. Made a claim for lost business income as a result of COVID-19 and Executive Orders 2020-07 and 2020-10 issued by the Governor of Illinois. Were denied coverage. The complaint includes two counts. Breach of contract. Declaratory judgment (including that plaintiffs sustained a direct physical loss of the premises because of COVID-19 and the Governor's executive orders). On October 8, 2020, the case was reassigned to MDL No. 2964, In re Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, Case. No. 1:20cv05965 (N.D. Ill.). For more information on the MDL No. 2964, see the entry at October 2, 2020. For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
March 27, 2020	Big Onion Tavern Grp., LLC v. Soc'y Ins., Inc., No. 1:20-cv-02005 (N.D. Ill., Mar. 27, 2020) In re: Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, Case No. 1:20-cv-05965, Order Reassigning Cases (N.D. Ill, Oct. 8, 2020)	Coverage Implicated: Business interruption. Case Type: Breach of contract, bad faith, and declaratory judgment. Key Pleadings and Court Orders: March 27, 2020: Complaint October 8, 2020: reassigned to In re: Society Ins. Co. MDL No. 2964, Case No. 1:20cv-05965, N.D. Illinois Case Summary: A group of restaurant and theater owners in Chicago and the Chicago suburbs sued their insurer after the insurer denied their claim for business interruption losses sustained due to a COVID-19 shutdown order issued by the Illinois Governor. The complaint includes three counts: Breach of contract. Bad faith denial of coverage. Declaratory judgment (including that the presence of a dangerous substance in a property constitutes physical loss or damage). The policies at issue were all risk policies and did not include a virus exclusion. The bad faith claim is premised in part on the fact that the insurer issued blanket denials "within hours," indicating the insurer did not conduct a meaningful investigation. On October 8, 2020, the case was reassigned to MDL No. 2964, In re Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, Case. No. 1:20cv05965 (N.D. Ill.). For more information on the MDL No. 2964, see the entry at October 2, 2020. For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For more information regarding bad faith denial of claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
March 26, 2020	Snowden v. Twin City Fire Ins. Co., 2020-19538 (Harris Cty. Texas, March 26, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Breach of contract and bad faith. Key Pleadings and Court Orders: March 26, 2020: Complaint September 29, 2020: Snowden's Voluntary Dismissal with prejudice Case Summary: A wig store in Harris County, Texas filed a lawsuit against its insurer after the insurer denied the store's claim for business interruption losses sustained due to a stay at home order issued in response to the COVID-19 pandemic. The complaint alleges: Breach of contract. Bad faith denial of coverage. Violations of Texas's Unfair Settlement Act and Prompt Payment /Act. The bad faith claims and claims that the insurer violated the Unfair Settlement Act are premised in part on the insurer's rapid denial of the claim, indicating there was little or no investigation. For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage. For more information regarding bad faith denial of claims, see Practice Note, Insurance Bad Faith Law: Bad Faith Denial of Claims.
March 26, 2020	French Laundry Partners LP v. Hartford Fire Ins. Co., (Ca. Sup. Ct., Napa Cty., March 25, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory Judgment. Key Pleadings and Court Orders: March 25, 2020: Complaint filed in Superior Court, Napa County July 8, 2020: Notice of Removal to the N.D. Cal., Case No. 3:20CV04540 August 4, 2020: French Laundry Partners' Motion to Remand September 10, 2020: Order denying French Laundry Partners' Motion to Remand November 30, 2020: Amended Complaint January 8, 2021: Hartford's Motion to Dismiss Amended Complaint Case Summary: French Laundry & Bouchon Bistro, both located in Yountville, California, were forced to shut down and furlough 300 employees after Napa County's health officer issued a March 18, 2020 order directing all nonessential businesses to cease activities during the COVID-19 outbreak. They filed a declaratory judgment action asking the court to determine that: The Health officer's order, which cited evidence that the COVID-19 causes physical damage to property, triggered coverage under the civil authority extension of their all-risk insurance policy. COVID-19 presents a "dangerous condition to property" and satisfies the policies physical damage requirement. Hartford moved to dismiss French Laundry's amended complaint, and on January 8, 2021, the court granted its motion. For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
March 24, 2020	Chickasaw Nation Dep't of Commerce v. Lexington Ins. Co., CV-20-35 (Pontotoc Cty. Dist. Ct., Oklahoma, March 24, 2020) Choctaw Nation Dep't of Commerce v. Lexington Ins. Co., CV-20-42 (Pontotoc Cty. Dist. Ct., Oklahoma, March 24, 2020)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment. Case Summary: Two native American tribes, the Chickasaw and Choctaw nations, shut down their casinos, restaurants, and other businesses after local and state officials issued various orders in response to the COVID-19 pandemic. They filed two separate declaratory judgment actions against their insurers in which they asked the court to determine that: The orders that closed their businesses constitute orders of civil authority that trigger business interruption coverage under the policy's civil authority extension. The tribes' properties suffered (and continue to suffer) direct physical losses due to COVID-19. The complaint does not mention whether the policies have bacteria and virus exclusions. For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.
March 16, 2020	Cajun Conti, LLC v. Certain Underwriters at Lloyd's of London (La. Dist. Ct., Orleans Parish, March 16, 2020) Cajun Conti, LLC v. Certain Underwriters at Lloyd's of London, Notice of Judgment (La. Dist. Ct., Orleans Parish, February 10, 2021)	Insurance Coverage Implicated: Business interruption. Case Type: Declaratory judgment. Key Pleadings and Court Orders: March 16, 2020: Complaint filed. February 10, 2021: Judgment in favor of insurer after trial on the merits. Case Summary: The owner of Oceana Grill, a popular restaurant in the French Quarter, closed his restaurant after the New Orleans mayor and Louisiana Governor issued orders banning large gatherings and closing restaurants due to the COVID-19 pandemic. The owner filed a declaratory judgment action asking the court to determine that: The governor's and mayor's orders constitute orders of civil authority that trigger business interruption coverage under the policy's civil authority extension. COVID-19 contamination satisfies the policy's physical damages requirement. The owner's insurance policy did not include a bacteria and virus exclusion. The court held a bench trial in December. The restaurant owner argued: Lloyds knew viruses could cause physical damages (as evidenced by ISO statements to insurance departments in support of virus exclusions) and Lloyd's failure to include a virus exclusion in the restaurant's policy indicated an intent to provided coverage. The insured property was physically damaged by the presence of COVID-19 on surfaces and in the air. The restaurant lost use of its property due to COVID-19 and loss of use constitutes physical loss. The judge ruled in favor of the insurer. For more information regarding business interruption insurance, see Practice Note, First-Party Property Insurance Policies: Business Interruption Coverage.

Key COVID-19 Insurance Coverage Cases Tracker (US): 2020 and 2021 | Practical Law