By Gabrielle Sigel, Jan A. Larson, Sara M. Stappert and Anna W. Margasinska
CAMDEN, N.J. — No coverage is afforded for business income losses sustained by a restaurant as a result of shutdown orders issued in the wake of the novel coronavirus pandemic because a policy’s virus exclusion clearly precludes coverage for the losses, a New Jersey federal judge said Nov. 5 in granting an insurer’s motion to dismiss (N&S Restaurant LLC v. Cumberland Mutual Fire Insurance Co., No. 20-5289, D. N.J., 2020 U.S. Dist. LEXIS 206972).
MIAMI — A homeowners insurer in a Nov. 4 docket entry moved for a rehearing of a Florida appeals panel’s grant of attorney fees to insureds in their successfully appeal of a Hurricane Irma coverage dispute, seeking a reconsideration of the “unconditional nature” of the order (Walter Gonzalez, et al. v. People's Trust Insurance Company, No. 3D19-646, Fla. App., 3rd Dist.).
LAKELAND, Fla. — Noting that Florida appeals courts have not reached a consensus as to the order in which a trial court should resolve appraisal and coverage issues, the Second District Florida Court of Appeal on Nov. 4 adopted the dual-track approach in finding that a lower court acted within its discretion in granting an insured’s motion to compel appraisal of its Hurricane Irma damage. The panel also certified conflict with three of its sister courts’ rulings “to the extent that they hold the trial court must always resolve coverage disputes prior to compelling an appraisal” (American Capital Assurance Corporation v. Leeward Bay at Tarpon Bay Condominium Association, Inc., No. 2D20-165, Fla. App., 2nd Dist., 2020 Fla. App. LEXIS 15723).
CHICAGO — A federal judge in Illinois on Nov. 3 dismissed a commercial property insurer’s lawsuit seeking a declaration that it has no duty to provide business interruption coverage for 31 restaurant insureds’ alleged losses arising from public health orders that restricted public gatherings in an effort to slow the spread of the novel coronavirus, noting that allowing the insurer’s case to proceed “would ‘be indulging in gratuitous interference’” with the insureds’ competing Ohio state lawsuit (State Auto Property and Casualty Insurance Co. v. Classic Dining Group LLC, et al., No. 20-04434, N.D. Ill.).
CHARLESTON, W.Va. — A West Virginia federal judge on Nov. 2 dismissed an insured’s suit seeking coverage for business income and business interruption losses caused by governmental shutdown orders in the wake of the novel coronavirus pandemic because the virus did not cause any physical damage or physical loss to the insured’s property (Uncork and Create LLC v. The Cincinnati Insurance Co., et al., No. 20-401, S.D. W.Va., 2020 U.S. Dist. LEXIS 204152).
ATLANTA — The 11th Circuit U.S. Court of Appeals on Nov. 2 reversed a lower federal court’s ruling that two insureds lacked standing to sue their insurer for Hurricane Irma property damage and remanded to determine whether the insureds’ material breach of their policy’s proof-of-loss requirement prejudiced the insurer (New South Communications, Inc. v. Houston Casualty Company, No. 19-12276, 11th Cir., 2020 U.S. App. LEXIS 34509).
MIAMI — A Florida appeals panel on Oct. 21 reversed a lower court’s grant of summary judgment in favor of a homeowners insurer, finding that whether the insureds substantially complied with their post-loss obligations under the policy after the insurer acknowledged coverage for their Hurricane Irma loss or completely failed to comply is a disputed issue of fact (Walter Gonzalez, et al. v. People's Trust Insurance Company, No. 3D19-646, Fla. App., 3rd Dist., 2020 Fla. App. LEXIS 14860).
SAN FRANCISCO — A retailer insured on Sept. 23 filed a notice indicating that it is appealing to the Ninth Circuit U.S. Court of Appeals a federal judge’s dismissal of its class complaint seeking coverage under a comprehensive business insurance policy for its claimed losses following the state’s “Stay at Home” order in response to the novel coronavirus pandemic (Mudpie, Inc. v. Travelers Casualty Insurance Company of America, No. 20-03213, N.D. Calif.).
DURHAM, N.C. —A North Carolina judge on Oct. 7 granted restaurant insureds’ motion for partial summary judgment in finding as a matter of law that their “all-risk” insurance policies provide business income and extra expenses coverage for their loss of use and access to insured property mandated by the government response to the novel coronavirus pandemic (North State Deli, LLC, et al. v. The Cincinnati Insurance Company, et al., No. 20-02569, N.C. Super., Durham Co.).
SAN FRANCISCO — A University of California alumnus on Sept. 30 filed a notice to voluntarily dismiss without prejudice his breach of contract and bad faith class complaint arising from a deluxe travel company’s failure to provide a refund for a cruise canceled because of the novel coronavirus pandemic (Guy Saperstein v. Thomas P. Gohagan & Company, No. 20-03143, N.D. Calif.).
LOS ANGELES — A federal judge in California on Oct. 19 granted an insurer’s motion to dismiss declaratory relief, breach of contract, bad faith and California unfair competition law (UCL) counterclaims brought by its insured, finding that the policy’s virus exclusion explicitly precludes civil authority coverage and the business income and extra expenses coverage does not apply because there was no physical damage to the insured’s property (Travelers Casualty Insurance Company of America v. Geragos & Geragos, Nos. 20-3619, C.D. Calif., 2020 U.S. Dist. LEXIS 196932).
TULSA, Okla. — Claims for breach of contract and bad faith alleged against a commercial property insurer can proceed because questions of fact exist on the cause of interior water damages to an insured church, an Oklahoma federal judge said Oct. 30 in partially denying the insurer’s motion for summary judgment (Garnett Road Baptist Church v. GuideOne Mutual Insurance Co., No. 19-286, N.D. Okla., 2020 U.S. Dist. LEXIS 202724).
FORT MYERS, Fla. — A federal judge in Florida on Oct. 26 denied an insurer’s motion to dismiss a condominium association insured’s claim for declaratory relief in a Hurricane Irma coverage dispute, finding that the insured brings an actual controversy that survives the insurer’s motion to dismiss (500 LA Peninsula Condominium Association v. Landmark American Insurance Company, No. 20-67, M.D. Fla., 2020 U.S. Dist. LEXIS 198034).
WEST PALM BEACH, Fla. — A Florida appeals panel on Oct. 21 held that a lower court erred in failing to find that a homeowners insurer waived its argument that an insured failed to strictly comply with Florida Statutes Section 624.155 by misidentifying it in a civil remedy notice, reversing and remanding the lower court’s order dismissing the insured's bad faith complaint with prejudice (Carla Bay v. United Services Automobile Association, No. 4D19-3332, Fla. App., 4th Dist., 2020 Fla. App. LEXIS 14946).
SANTA ANA, Calif. — Dismissal of an insured business’s breach of contract and bad faith lawsuit against its business interruption insurers for failure to pay lost income benefits stemming from government closures due to the novel coronavirus pandemic is warranted because the plain language of the policy precludes coverage under its virus exclusion, one of the insurers argues in an Oct. 8 motion to dismiss filed in California federal court (Long Affair Carpet and Rug Inc. v. Liberty Mutual Insurance Co., et al., No. 20-1713, C.D. Calif.).
NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Oct. 16 vacated a federal court’s federal preemption ruling as to an insurance broker and agent’s alleged “failure to maintain and procure sufficient excess flood insurance to provide $20 million of coverage” in a Hurricane Harvey coverage dispute and remanded for further proceedings (Younas Chaudhary, et al. v. Arthur J. Gallagher & Company, et al., No. 19-20039, 5th Cir., 2020 U.S. App. LEXIS 32678).
MIAMI — A Florida appeals panel on Oct. 7 found that an insurer’s “right to appraisal was not only preserved but preferred,” reversing and remanding with instructions for the lower court to grant the insurer’s motion to compel appraisal of its insured’s claimed Hurricane Irma damages (People's Trust Insurance Company v. Farua Portuondo, No. 3D20-266, Fla. App., 3rd Dist., 2020 Fla. App. LEXIS 14084
ROCHESTER —A New York appeals court held Oct. 9 that an insurance policy unambiguously precludes coverage for an insured’s actual loss of business income and the insurer is not estopped from denying coverage, reversing the lower court’s denial of the insurer’s motion for partial summary judgment (Downstairs Cabaret, Inc. v Wesco Insurance Company, No. 607 CA 19-02071, N.Y. Sup., App. Div., 4th Dept., 2020 N.Y. App. Div. LEXIS 5843).
HOUSTON — A Texas appeals panel on Oct. 20 conditionally granted a homeowners insurer’s petition for writ of mandamus and directed a lower court to vacate its ruling denying the insurer’s motion to compel appraisal in a Hurricane Harvey coverage dispute (In Re QBE Specialty Insurance Company, No. 01-19-00164, Texas App., 1st Dist., 2020 Tex. App. LEXIS 8275).