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Mealey's Catastrophic Loss

November 11, 2020
Judge Dismisses Insurer’s Counterclaims Against Insured In Tornado Coverage Dispute

NEW YORK — A federal judge in New York on Nov. 10 granted a manufacturer insured’s motion to dismiss its commercial property and business interruption insurer’s declaratory relief and equitable estoppel counterclaims in a coverage dispute over the insured’s alleged $60 million to $100 million loss caused by tornado damage to its glass manufacturing facility, rejecting the insurer’s argument that it is entitled to equitable relief because it justifiably relied on the broker’s representations when it issued the policy (Pilkington North America, Inc. v. Mitsui Sumitomo Insurance Company of America, et al., No. 18-8152, S. D. N.Y., 2020 U.S. Dist. LEXIS 210333).
November 11, 2020
Federal Judge: Barbershop Has Alleged ‘Plausible Claim’ In Coronavirus Coverage Suit

AUSTIN, Texas — A federal judge in Texas on Nov. 4 granted in part and denied in part an insurer’s motion to dismiss a barbershop insured’s novel coronavirus coverage suit and separately denied the insurer’s motion to dismiss the nationwide class action claims, finding that the insured has alleged a plausible claim for relief and that no issue as to standing exists (Independence Barbershop, LLC v. Twin City Fire Insurance Company, No. 20-00555, W.D. Texas).
November 11, 2020
Federal Judge Dismisses California Hotel Owners’ Coronavirus Coverage Suit

LOS ANGELES — A federal judge in California on Oct. 27 granted insurers’ motion to dismiss their hotel owner insureds’ lawsuit seeking business income and civil authority coverage for their losses caused by the novel coronavirus and subsequent governmental closure orders, noting that amendment of the complaint would be futile (West Coast Hotel Management, LLC, et al. v. Berkshire Hathaway Guard Insurance Companies, et al., No. 20-05663, C.D. Calif., 2020 U.S. Dist. LEXIS 201161).
November 10, 2020
Judge Remands Coronavirus Coverage Suit To Texas Court On Magistrate’s Recommendation

SAN ANTONIO — A federal judge in Texas on Nov. 9 granted a dental office insured’s motion to remand its novel coronavirus coverage lawsuit to Texas court after accepting a magistrate’s finding that the insured properly stated a claim against one of the defendants for her conduct as an individual insurance adjuster (Louis G. Orsatti, DDS, P.C v. Allstate Insurance Company, et al., No. 20-00840, W.D. Texas).
November 10, 2020
Threat Of Contamination From Coronavirus Does Not Constitute Physical Loss

SAN FRANCISCO — A California federal judge on Nov. 9 dismissed an insured business’s suit seeking coverage for business losses caused by the COVID-19 pandemic because the insured failed to prove that the imminent threat of contamination by the novel coronavirus qualifies as a covered physical loss under its policy (Water Sports Kauai Inc. v. Fireman’s Fund Insurance Co., No. 20-3750, N.D. Calif., 2020 U.S. Dist. LEXIS 209547).
November 10, 2020
Federal Judge Rules For Insurer In Family Restaurant’s Coronavirus Coverage Suit

HATTIESBURG, Miss. — A federal judge in Mississippi on Nov. 4 granted an “all-risk” insurer’s motion to dismiss an insured’s breach of contract and declaratory relief lawsuit seeking coverage for its business losses, extra expenses and other expenses arising from the close of its family style restaurant as a result of the governmental orders and the novel coronavirus pandemic, rejecting the insured’s argument that “‘loss of property’ reasonably includes loss of usability” (Real Hospitality, LLC v. Travelers Casualty Insurance Company Of America, No. 20-00087, S.D. Miss., 2020 U.S. Dist. LEXIS 208599).
November 09, 2020
Judge Dismisses Insureds’ Coronavirus Coverage Suit, Finds Amendment Would Be Futile

CAMDEN, N.J. — A New Jersey judge on Nov. 5 granted a businessowners insurer’s motion to dismiss without prejudice bakery insureds’ breach of contract lawsuit arising from a suspension of business operations caused by governmental orders in response to the novel coronavirus, finding that amending the complaint will not change the conclusion that the insureds’ “claims based upon actions taken to slow or stop the spread of the coronavirus fall within the virus or bacteria exclusion” (Mac Property Group LLC, et al. v. Selective Fire and Casualty Insurance Company, et al., No. L-2629-20, N.J. Super., Camden Co., Law Div.).
November 09, 2020
COMMENTARY: Can Businesses ‘Waive’ Goodbye To COVID 19 Liability? Basic Principles Of Third Party Liability Waivers And CGL Insurance Protections

By Gabrielle Sigel, Jan A. Larson, Sara M. Stappert and Anna W. Margasinska
November 06, 2020
Virus Exclusion Bars Coverage For COVID-19 Business Losses, Judge Says

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).
November 06, 2020
Insurer Challenges ‘Unconditional Nature’ Of Order Awarding Attorney Fees

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.).
November 06, 2020
Panel Affirms Order Compelling Appraisal Of Hurricane Irma Loss, Certifies Conflict

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).
November 05, 2020
Insurer’s Coronavirus Suit Is ‘Classic Example’ Of Proper Abstention, Judge Says

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.).
November 05, 2020
No Coverage For Business Losses Sustained By COVID-19 Shutdown Orders, Judge Says

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).
November 05, 2020
11th Circuit Partly Reverses, Remands Coverage Dispute Over Hurricane Irma Damage

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).
November 03, 2020
Florida Panel Reverses Summary Judgment Ruling For Insurer In Irma Dispute

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).
November 02, 2020
Retailer Appeals Dismissal Of Coronavirus Coverage Suit To 9th Circuit

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.).
November 02, 2020
N.C. Judge: Restaurants Incurred ‘Direct Physical Loss’ From Coronavirus Shutdowns

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.).
November 02, 2020
Cal Alumnus Dismisses Suit Arising From Canceled Cruise Due To Coronavirus

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.).
November 02, 2020
Federal Judge Dismisses Counterclaims Against Insurer In Coronavirus Coverage Suit

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).
November 02, 2020
Issues Of Fact Exist On Cause Of Interior Water Damage, Judge Determines

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).