EAST ST. LOUIS, Ill. — A federal judge in Illinois on May 10 held that, for now, a hair salon insured has plausibly stated a cause of action that it is entitled to “Communicable Disease Business Income and Extra Expense Coverage” for its losses arising from the governmental shutdown of its business in response to the coronavirus pandemic, denying the insurer’s motion to dismiss the insured’s declaratory judgment lawsuit in its entirety.
PHILADELPHIA — Denying an insurer’s motion to dismiss a retail furniture insured’s lawsuit seeking coverage for its losses stemming from the forced closure of its business in response to the coronavirus pandemic, a Pennsylvania federal judge on May 7 said the more-than-100-page policy requires “the insured to fall down a rabbit hole and wander through a vast thicket of verbiage that would leave even the most careful reader mystified by the mazes of pages to be pieced together and deciphered in order to determine if there is coverage on the other side.”
CHICAGO — Amici curiae in support of an insurer on May 5 asked the Seventh Circuit U.S. Court of Appeals to affirm a lower federal court’s dismissal of a restaurant insured’s breach of contract lawsuit seeking coverage for its alleged $977,891 in lost business income arising from its government-ordered shutdown in response to the coronavirus pandemic, arguing that “[i]mposing a new and retroactive extra-contractual risk on insurers would threaten insurer solvency and harm Illinois’ insurance marketplace."
SAN FRANCISCO — The owner of two Los Angeles restaurants recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s dismissal of its lawsuit seeking coverage for its business income loss caused by the governmental shutdown orders in response to the coronavirus pandemic, contending that the lower court dismissed its complaint “based on a range of hypothetical policy consequences” that render its interpretation of the policy “unreasonable — even if conceivable.”
NEW YORK — A Manhattan-based art gallery tells the Second Circuit U.S. Court of Appeals in an April 2 brief that a lower federal court committed reversible error in its interpretation of an all-risk business owners insurance policy because it permitted the insurer to escape liability even though a reasonable interpretation of the policy requires the insurer to provide coverage for its losses arising from the forced cessation of its operations in response to the coronavirus pandemic.
ATLANTA — The 11th Circuit U.S. Court of Appeals on May 6 held that “there is no entrenched maritime rule governing captain or crew warranties” and, therefore, Florida law applies to determine the effect of an insured’s alleged breaches in a Hurricane Irma coverage dispute, noting that maybe “this case will prove tempting enough for the Supreme Court to wade in.”
FORT MYERS, Fla. — A federal judge in Florida in April 27 denied an insurer’s motion to dismiss an insured’s bad faith lawsuit seeking coverage for Hurricane Irma damage, finding that the allegations and attached exhibits give enough facts to assert a plausible bad faith claim.
MIAMI — A Florida appeals panel on May 5 reversed and remanded a lower court’s judgment against an insurer in an insured’s breach of contract lawsuit arising from Hurricane Irma property damage, finding that the lower court failed to recognize that the insured breached his homeowners insurance policy by failing to pay the deductible, suing the insurer before fulfilling his post-loss obligations and circumventing the explicit policy terms by hiring his own contractor to conduct the appraised repairs.
ATLANTA — The 11th Circuit U.S. Court of Appeals on April 27 granted an insured’s motion to consolidate for oral argument its appeal of a lower court’s dismissal of its lawsuit seeking coverage for its business losses arising from the coronavirus pandemic with two related appeals, noting that the three cases will be consolidated for merits disposition after briefing has been completed separately in each appeal.
PHILADELPHIA — The owner and operator of the Philadelphia Eagles football organization on April 30 moved for the U.S. District Court for the Eastern District of Pennsylvania to remand its lawsuit seeking a declaration as to coverage for its alleged losses arising from the coronavirus pandemic eight days after its property insurer moved to dismiss the lawsuit, arguing that remand is warranted so the federal court “can avoid interference in the delicate state regulatory issues involved and give appropriate respect to the important state interests implicated by this action."
SAN FRANCISCO — A California appeals panel held on April 27 that there is a triable issue of material fact regarding a homeowners insurer’s intent when it reinstated an insurance policy after the insureds paid the past due premium, partly reversing a lower court’s ruling in a breach of contract and bad faith lawsuit arising from the insurer’s denial of a claim arising from the 2017 Tubbs wildfire.
CHICAGO — Calling it a “quizzical situation,” a federal judge in Illinois on April 26 refused to remand a coronavirus coverage lawsuit brought by the owner and operator of a network of nearly 80 restaurants throughout the country and exercised his discretion to transfer the lawsuit to the U.S. District Court for the Middle District of Florida where the insurer has a nearly identical declaratory judgment lawsuit pending.
MIAMI — A Florida federal judge on April 23 denied a motion to dismiss filed by an insurer and reinsurers after determining that the insureds adequately stated claims for breach of contract and tortious interference of contract arising out of a coverage dispute for property damage caused by Hurricane Dorian in the Bahamas.
KANSAS CITY, Mo. — An insurer breached the terms of a property insurance policy and acted in bad faith by failing to properly investigate and pay damages under the policy to a church that sustained damage to its roof in a hail and windstorm, the church alleges in a April 27 complaint filed in Missouri federal court.
LOS ANGELES — A California federal judge on April 26 denied a motion to remand filed by insureds alleging claims for breach of contract and bad faith arising out of a coverage claim for wildfire damages after determining that the property insurer timely filed its notice of removal within 30 days of learning that the insureds were seeking more than $75,000 in damages.
GULFPORT, Miss. — State Farm Fire and Casualty Co. on April 13 moved to compel arbitration of claims under the False Claims Act (FCA) and stay all proceedings in relators’ 15-year-old qui tam suit accusing the insurer of filing false flood insurance claims after Hurricane Katrina.
FORT MYERS, Fla. — A federal judge in Florida on April 26 denied an insurer’s motion to dismiss an insured’s claim seeking specific performance of the insurance policy in the form of compelling appraisal in a Hurricane Irma coverage dispute but dismissed without prejudice a breach of contract for failure to conduct appraisal claim, noting that the insured must allege general damages from the breach on repleading.
NEW ORLEANS — A federal judge in Louisiana on April 23 granted a businesowners insurer’s motion for judgment on the pleadings in insureds’ lawsuit seeking coverage for their alleged losses prompted by the coronavirus pandemic, finding that the policy’s time element clause does not permit independent coverage for the insureds’ losses that are otherwise barred by the virus exclusion.
JOPLIN, Mo. — A Missouri federal judge on April 22 denied a homeowners insurer’s motion for summary judgment in a water damage dispute after determining that a genuine issue of material fact exists as to whether the water damage was caused by a sudden and accidental loss, a coverage cause of loss under the policy or by wear and tear or mold, excluded causes of loss under the policy.
CHICAGO — A dental provider insured on April 6 asked the Seventh Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that it failed to allege a “direct physical loss” to trigger coverage for its financial losses as a result of the novel coronavirus closure orders, arguing that, in response to the SARS virus, “the greater insurance industry has admitted, over a decade ago, that nearly identical policies did cover viruses.”