Mealey's Catastrophic Loss
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May 12, 2021
Judge: How Can Insurer Be ‘So Certain’ That COVID-19 Was Not On Salon’s Premises?
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.
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May 12, 2021
Policy Requires Insured To ‘Fall Down A Rabbit Hole,’ Judge Says In COVID-19 Suit
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.”
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May 11, 2021
Amici: Policies Never Intended To Cover Economic Losses Untethered To Physical Damage
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."
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May 11, 2021
Los Angeles Restaurant Owner Seeks Reversal Of No Coverage Ruling In COVID-19 Suit
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.”
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May 11, 2021
Gallery: Court Erred In Accepting Insurer’s ‘Self- Serving’ Policy Interpretation
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.
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May 07, 2021
Florida, Not Maritime, Law Governs Hurricane Irma Coverage Suit, Panel Says, Reverses
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.”
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May 06, 2021
Judge Refuses To Dismiss Bad Faith Claim In Hurricane Irma Coverage Dispute
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.
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May 06, 2021
Florida Panel Reverses Ruling Against Insurer In Hurricane Irma Coverage Suit
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.
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May 04, 2021
Panel Grants Insured’s Motion To Consolidate Appeals In COVID-19 Coverage Suits
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.
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May 03, 2021
Philadelphia Eagles Move To Remand COVID-19 Coverage Suit Against Insurer
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."
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April 30, 2021
California Panel Partly Reverses Ruling In Coverage Suit Prompted By Tubbs Wildfire
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.
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April 30, 2021
Judge Transfers COVID-19 Coverage Suit Brought By Owner Of Close To 80 Restaurants
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.
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April 30, 2021
Claims Against Insurer, Reinsurer To Proceed, Federal Judge Determines
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.
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April 29, 2021
Church Sues Insurer Over Bad Faith Refusal To Pay Roof Damages Claim
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.
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April 29, 2021
Breach Of Contract, Bad Faith Suit Arising Out Of Wildfire Damage Was Timely Removed
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.
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April 29, 2021
State Farm Moves To Compel Arbitration, Stay Relators’ False Claims Act Suit
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.
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April 27, 2021
Judge: Insurer’s Appraisal Argument In Irma Suit ‘Defies Legions Of Florida Cases’
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.
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April 26, 2021
Judge: Time Element Clause Does Not Allow Independent Coverage For COVID-19 Losses
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.
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April 26, 2021
Issue Of Fact Exists On Cause Of Homeowner’s Water Damage, Federal Judge Says
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.
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April 26, 2021
Dentist: Insurance Industry Admitted Nearly Identical Policies Covered Viruses
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.”