NEW ORLEANS — Despite finding that an orthopedic firm failed to establish the necessary “direct physical loss” to overcome a virus exclusion in its insurance policy, a Louisiana federal judge on Jan. 25 denied without prejudice the insurer’s motion to dismiss the plaintiff’s complaint for bad faith and declaratory relief over the denial of its business interruption claim related to COVID-19 shutdown orders, giving the plaintiff leave to amend its complaint to address its deficiencies.
SAN FRANCISCO — A panel of the Ninth Circuit U.S. Court of Appeals on Jan. 19 unanimously denied a petition for rehearing and a petition for rehearing en banc filed by small businesses that own and operate Minor League Baseball (MiLB) teams and let stand a prior ruling that dismissed the businesses’ breach of contract and declaratory judgment coronavirus coverage lawsuit brought against insurers.
The journalists and staff of Mealey’s Litigation Reports are saddened by the passing of co-founder Michael P. Mealey. He was a respected member of the newsletter community, being named publisher of the year by the National Newsletter Association and president of the National Newsletter Association. Mike and Judy Mealey started Mealey Publications Inc. in 1984. As president, Mike grew the Mealey’s Litigation Report portfolio, introduced email news bulletins and electronic CD formats and launched a continuing legal education conference business. Mealey’s was sold to LexisNexis in 2000. We hope to carry on his journalistic curiosity and integrity in the titles we continue to publish today under his name.
RICHMOND, Va. — A group of Anytime Fitness franchise owners appealing from a Virginia federal district court’s dismissal of their first amended class action complaint seeking coverage for the negative impact on their business caused by government shutdown orders issued in response to the coronavirus pandemic told the Fourth Circuit U.S. Court of Appeals in their Jan. 10 opening brief that the district court misinterpreted both the provisions of the insurance policy and the applicable law.
LAKE CHARLES, La. — A Louisiana federal judge on Jan. 20 granted partial summary judgment in a breach of insurance contract and bad faith case against a property insurer, foreclosing the insurer’s claim that the sale of the property raised a question of insurable interest.
GREENSBORO, N.C. — A North Carolina federal judge on Jan. 13 dismissed an insured restaurant owner’s complaint seeking additional coverage for water damages and business interruption losses after determining that a breach of contract claim is barred by the applicable three-year statute of limitations and that the claim for violation of North Carolina’s Unfair and Deceptive Trade Practices Act (UDTPA) cannot proceed because the insured failed to show that the insurer’s conduct constituted bad faith.
WEST PALM BEACH, Fla. — The majority of the Fourth District Florida Court of Appeal on Jan. 5 reversed a trial court’s ruling in favor of an insurer on a bad faith claim after determining that questions of fact exist regarding whether or not the insurer acted in bad faith in handling the insureds’ hurricane damage claim.
WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 18 denied a petition for writ of certiorari filed by the owner and manager of a residential development who sought the high court’s review of a ruling compelling arbitration of an insurance coverage dispute against English underwriters for $5.66 million in hurricane damage, which they said contradicted a Washington statute that bars mandatory arbitration clauses in insurance contracts.
ALEXANDRIA, Va. — No coverage is owed to insureds for business interruption losses sustained as a result of the COVID-19 virus because the virus does not qualify as a pollution condition under the premises pollution liability policy, a Virginia federal found Jan. 5 in granting the insurer’s motion for summary judgment.
BALTIMORE — A Maryland federal judge was unconvinced that a damage expert retained by a company suing its insurer for breach of contract had relied on unreliable methodology and incomplete information when determining the financial impact of a roof leak and on Jan. 11 denied an insurer’s motion to exclude.
LOS ANGELES — A California federal judge on Jan. 11 granted State Farm General Insurance Co.’s motion for a new trial on an insurance bad faith claim only, finding the jury made a mistake in determining that the insurer breached the implied covenant of good faith and fair dealing in its handling of actress Shannen Doherty’s Woolsey Fire claim and the “grossly excessive” $3 million emotional distress damages award “shocks the conscience.”
ATLANTA — The 11th Circuit U.S. Court of Appeals on Jan. 11 affirmed a lower federal court’s summary judgment ruling in favor of a commercial general liability insurer in an insured’s breach of contract lawsuit seeking the replacement costs for two of its buildings damaged by a hurricane, finding that the insurer had no obligation to pay the replacement cost value of the buildings because the insured made no repairs.
WEST PALM BEACH, Fla. — A majority of a Florida appeals court on Jan. 5 affirmed a lower court’s summary judgment ruling in favor of an insurer in an assignee’s breach of contract lawsuit seeking post-loss insurance benefits arising from Hurricane Irma damage, rejecting the assignee's argument that the lower court erred in granting the insurer's motion for final summary judgment based on its presuit payment to the insured and the assignee.
RICHMOND, Va. —The Fourth Circuit U.S. Court of Appeals on Jan. 6 affirmed a lower federal court’s finding that an insurance policy’s $50,000 flood sublimit applies to an insured’s claim for damage to two of its buildings following rainfall that created a flash flood in Maryland, finding that the “anti-concurrent causation” clause made all of the insured’s damage subject to the policy's flood sublimit.
NEW ORLEANS — No coverage is owed to insured restaurant owners for business losses incurred as a result of the governmental shutdown orders issued in the wake of the COVID-19 pandemic because the restaurants did not sustain a direct physical loss to their properties, a Louisiana federal judge said Dec. 20 in dismissing the lawsuit seeking coverage and penalties for the insurers’ alleged bad faith denial of their coverage claim.
By Scott M. Seaman and Sarah Anderson
INDIANAPOLIS — An Indiana appeals panel on Jan. 4 said that while it sympathizes with the plight of small businesses and not-for-profits during the coronavirus pandemic, the plain language of a commercial property insurance policy issued to the state’s largest professional nonprofit theater fails to support coverage for its claim for loss of use of its facilities during the pandemic.
NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Jan. 5 affirmed a lower federal court’s ruling in favor of a commercial property insurer in a barbecue restaurant insured’s lawsuit seeking business interruption coverage for its alleged losses arising from the coronavirus pandemic, finding that the suspension of the insured’s dine-in services during the pandemic is not a direct physical loss of or damage to its property to trigger coverage.
JACKSON, Miss. — A Mississippi appeals panel on Jan. 4 affirmed a lower court’s summary judgment ruling in favor of a bank and insurers in a lawsuit seeking coverage for windstorm damage, finding that the defendants were not liable because the plaintiff was not a third-party beneficiary to the force-placed insurance policy.
NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Jan. 4 affirmed a lower federal court’s dismissal of a misrepresentation lawsuit brought against an insurer under Louisiana Revised Statute Section 22:1973(B)(1), finding that the lower court did not err in finding that the claims were not timely filed within the one-year prescriptive period.