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Mealey's Catastrophic Loss

October 27, 2020
Federal Judge: Insured Brings Actual Controversy In Hurricane Irma Coverage Suit

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).
October 27, 2020
Florida Panel Reverses Dismissal Of Insured’s Bad Faith Suit Over Hurricane Damage

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).
October 23, 2020
Virus Exclusion Bars Business Interruption Claim, Insurer Argues

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.).
October 22, 2020
5th Circuit Partially Vacates, Remands Ruling In Hurricane Harvey Coverage Suit

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).
October 22, 2020
Insurer Did Not Waive Right To Appraisal, Panel Says, Reverses Hurricane Irma Suit

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
October 22, 2020
Policy Unambiguously Bars Coverage For Business Income Loss, Panel Rules In Reversal

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).
October 21, 2020
Panel Directs Court To Vacate Ruling Denying Insurer’s Motion To Compel Appraisal

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).
October 20, 2020
COMMENTARY: Conducting A Civil Jury Trial In COVID-19 Times

By John P. Katerndahl
October 20, 2020
Texas Panel Affirms Ruling In Insurer’s Favor In Hailstorm Coverage Dispute

EASTLAND, Texas — A Texas appeals panel on Oct. 16 affirmed a lower court’s grant of summary judgment in favor of a commercial business insurer in a breach of contract lawsuit arising from hailstorm damage, finding that the insurer's payment of the insured’s roof damage claim does not excuse the insured from segregating covered from noncovered losses (Prime Time Family Entertainment Center, Inc. v. Axis Insurance Company, et al., No. 11-18-00241, Texas App., 11th Dist., 2020 Tex. App. LEXIS 8216).
October 20, 2020
Insured’s Property Damage Suit Must Be Remanded To Oklahoma State Court

TULSA, Okla. — An insured’s suit seeking coverage for storm-related damages and alleging claims for breach of contract and bad faith against two insurers must be remanded to Oklahoma state court because diversity of citizenship does not exist, an Oklahoma federal judge said Oct. 16 (Regent Preparatory School of Oklahoma v. Travelers Property Casualty Company of America, et al., No. 20-0512, N.D. Okla., 2020 U.S. Dist. LEXIS 192073).
October 15, 2020
Restaurant, Hospitality Franchise Owners File $41M Coronavirus Coverage Lawsuit

NEWARK, N.J. — The owners of more than 120 franchise locations under the brands Wendy's, T.G.I. Friday's, Marriott and Hilton on Oct. 12 sued their all-risk commercial business insurer in a federal court in New Jersey for breach of contract and reformation, alleging that physical loss and damage caused by the novel coronavirus “directly led” to their subsequent $40,798,390 in economic damages (Manhattan Partners LLC, et al. v. American Guaranty and Liability Insurance Company, No. 20-cv-14342, D. N.J.).
October 15, 2020
Insured Seeks Coverage For COVID-19 Damages Under Environmental Policy

NEW YORK — An insured real estate development company contends in an Oct. 9 complaint filed in New York federal court that its environmental insurer breached its contract by denying coverage for losses incurred by the COVID-19 pandemic and state shutdown orders because the novel coronavirus, which causes COVID-19, constitutes a pollutant under the policy (JEMB Realty Corp. v. Greenwich Insurance Co., No. 20-8537, S.D.N.Y.).
October 13, 2020
Insureds Failed To Provide Evidence Of Physical Damage To Their Home, Panel Says

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Oct. 9 affirmed a district court’s ruling in favor an insurer in a breach of contract and bad faith suit stemming from a wildfire damage claim after determining that the insureds failed to present a genuine dispute of material fact regarding the alleged physical damage to their home (Jensen Shirley, et al. v. Allstate Insurance Co., No. 19-56066, 9th Cir., 2020 U.S. App. LEXIS 32069).
October 12, 2020
Judge Grants Insurer’s Motion For Protective Order In Hurricane Matthew Dispute

RALEIGH, N.C. — A federal judge in North Carolina on Oct. 8 granted an insurer’s motion for a protective order and denied without prejudice the insured’s motions for partial summary judgment and to compel certain discovery in a coverage dispute over the insured’s tobacco product losses caused by Hurricane Matthew (U.S. Tobacco Cooperative, Inc. v. Certain Underwriters at Lloyd's, No. 19-430, E.D. N.C., 2020 U.S. Dist. LEXIS 186908).
October 09, 2020
Magistrate Recommends Remanding Dental Office’s Coronavirus Coverage Dispute

SAN ANTONIO — A magistrate on Oct. 7 issued a report recommending that a Texas federal court grant a dental office insured’s motion to remand its coronavirus coverage lawsuit to Texas court, finding that the insured has 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, 2020 U.S. Dist. LEXIS 185935).
October 08, 2020
Judge’s ‘Narrow Decision’ Dismisses Restaurant’s Coronavirus Suit With Leave To Amend

DALLAS — A federal judge in Texas on Oct. 7 granted an “all risk” commercial property insurer’s motion to dismiss its restaurant insured’s lawsuit seeking business interruption coverage for its losses arising from the novel coronavirus, allowing the insured to replead (Vandelay Hospitality Group LP v. The Cincinnati Insurance Company, et al., No. 20-01348, N.D. Texas, 2020 U.S. Dist. LEXIS 185581).
October 08, 2020
Theater Dismisses French Reinsurer From Coverage Suit For Pandemic Losses

MIAMI — A theater operator voluntarily dismissed a French reinsurance company on Oct. 5 from its proposed class action in a Florida federal court for pandemic loss more than a month after the reinsurer sought dismissal on the basis that it was not a party to the all-risk insurance policy at issue (Actors Playhouse Productions, Inc. v. SCOR SE, et al., No. 20-22981, S.D. Fla.).
October 07, 2020
Insureds Ask Delaware High Court To Reverse No Coverage Ruling For Rainstorm Damage

WILMINGTON, Del. — Delaware insureds on Sept. 22 asked the state's highest court to reverse a lower court's ruling that granted a homeowners insurer's motion for summary judgment, arguing that coverage exists for a pedestrian bridge and wall that was damaged during a rainstorm (Eric Monzo, et al. v. Nationwide Property & Casualty Insurance Co., No. 199,2020, Del. Sup.).
October 06, 2020
Federal Judge Dismisses Restaurant's Coronavirus Coverage Suit With Prejudice

LOS ANGELES — A federal judge in California on Oct. 2 granted an insurer's motion to dismiss a restaurant's coronavirus coverage lawsuit, finding that the insured failed to plausibly assert that it incurred a "physical loss of or damage to" its restaurant and that the policy's virus exclusion further bars all coverage (Mark's Engine Company No. 28 Restaurant, LLC v. The Travelers Indemnity Company of Connecticut, et al., No. 20-04423, C.D. Calif.).
October 05, 2020
JPMDL Creates Only 1 Insurer-Specific MDL For Coronavirus Coverage Suits

WASHINGTON, D.C. — The U.S. Judicial Panel on Multidistrict Litigation on Oct. 2 created only one insurer-specific multidistrict litigation to centralize lawsuits seeking business interruption coverage for losses arising from governmental closure orders prompted by the coronavirus pandemic and refused to create specific MDLs against four other insurers (In re: Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, No. 2964, JPMDL).