By Scott M. Seaman and Judith A. Selby
From a Florida restaurant owner’s appeal to the 11th Circuit U.S. Court of Appeals to a class action lawsuit asserting that GEICO “scored a windfall” while many have suffered financially, Mealey Publications takes a look at the latest pleadings relating to insurance coverage for COVID-19.
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on March 29 held that a federal court properly considered underlying putative class claims to determine whether insurers’ duties to defend exists, further affirming the lower court’s ruling that the allegation that the Forty Niners football team’s design and construction of their stadium did not comply with federal disability access design standards was not an “occurrence” to trigger policy coverage.
GULFPORT, Miss. — A federal judge in Mississippi on March 26 denied in part State Farm Fire and Casualty Co.’s motion to dismiss certain claims in relators’ second amended complaint in their 15-year-old qui tam suit accusing the insurer of filing false flood insurance claims after Hurricane Katrina, finding that the relators have plausibly and sufficiently asserted express and implied false certification claims.
CONCORD, N.H. — A majority of the New Hampshire Supreme Court on March 19 affirmed a jury verdict that determined that an insurance agent was negligent for failing to advise a hotel owner that it lacked sufficient law and ordinance coverage to pay for reconstruction of its hotel in compliance with the current building code.
SAN JOSE, Calif. — An insured filed a class action lawsuit in a federal court in California on March 25 for breach of contract, unjust enrichment, frustration of purpose and violations of California’s false advertising and unfair competition laws, alleging that although “many companies, industries, and individuals have suffered financially as a result of the COVID-19 pandemic, auto insurers like GEICO have scored a windfall.”
WASHINGTON, D.C. — The U.S. Supreme Court on March 29 denied a Florida insured’s petition for a writ of certiorari seeking review of whether construction dust and debris constitutes “direct physical loss” to its restaurant to trigger coverage under an “all-risk” insurance policy and whether a court erred in excluding three of its causation experts under Daubert v. Merrell Dow Pharmaceuticals Inc. and its progeny.
TULSA, Okla. — A federal judge in Oklahoma on March 23 held that a real estate agent’s negligence and vicarious liability lawsuit did not trigger coverage under an insurance policy’s employment practices liability endorsement but that the policy’s professional services exclusion does not bar coverage, granting in part and denying an insurer’s motion for summary judgment.
ATLANTA — The owner of a Florida restaurant on March 25 filed a notice of appeal in the 11th Circuit U.S. Court of Appeals seeking review of a Florida federal court’s dismissal of its breach of contract and declaratory judgment lawsuit against its insurer arising from the coronavirus pandemic.
CHICAGO — An insured on March 23 sued two of its insurers for breach of contract in a federal court in Illinois, seeking event cancellation coverage for its alleged several million dollars in losses arising out of its “necessary and unavoidable cancellation” of the May 2020 National Restaurant Association Show in Chicago due to circumstances that were created by the coronavirus pandemic.
WEST PALM BEACH, Fla. — A Florida appeals panel on March 24 reversed a lower court’s finding that an insurance policy provided $2 million in coverage for a mid-air collision between two airplanes that killed four people, finding that the policy’s unambiguous language provides only $1 million in coverage to compensate the victims’ estates.
SAN FRANCISCO — A federal magistrate judge in California on March 19 granted an insurer’s motion for judgment on the pleadings in a coronavirus coverage dispute, finding that a franchisee of Outback Steakhouse restaurants in Arizona, Colorado, Nevada, New Mexico and California and its parent and affiliated companies have failed to plausibly allege “direct physical loss of or damage to” their property to trigger coverage under the policy.
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 22 vacated a lower federal court’s sua sponte order remanding the Academy of Country Music’s breach of contract and bad faith lawsuit against its insurer to state court, directing the lower court to recall the remand and notify the state court that it is resuming jurisdiction over the coverage dispute.
PASADENA, Calif. — An insured in a Feb. 25 brief asks the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s dismissal of its putative class action seeking coverage for class members’ “substantial financial losses” resulting from the coronavirus and the subsequent civil authority orders, arguing that pursuant to California’s rules of policy interpretation, the lower court had a duty to adopt the insured’s reasonable interpretation of the phrase “direct physical loss of or damage to property."
FRANKFORT, Ky.—Ruling on a matter of first impression, a Kentucky appeals panel on March 19 held that a lower court erred in finding that Kentucky State University (KSU) is entitled to professional liability insurance coverage for underlying wrongful discharge and intentional infliction of emotional distress claims brought by former employees because the insured provided notice of the claim three days late and the notice-prejudice rule does not apply.
PHILADELPHIA — The Third Circuit U.S. Court of Appeals on March 18 affirmed a lower court’s summary judgment ruling in favor of a commercial general liability insurer, rejecting a Philadelphia building owner insured’s argument that an underlying abuse-of-process claim alleges facts that constitute a malicious prosecution claim that triggers coverage under the policy.
JOHNSTOWN, Pa. — A federal judge in Pennsylvania on March 18 granted an insurer’s motion for judgment on the pleadings in a hospital insured’s class action lawsuit seeking declaratory and injunctive relief as to coverage for its losses caused by the coronavirus and the subsequent governmental orders, finding that the insured failed to establish an initial right to coverage and the policy’s virus exclusion further bars recovery.
ATLANTA — An insurer on March 17 filed a reply urging the 11th Circuit U.S. Court of Appeals to dismiss as moot an appeal brought by a quadriplegic woman and her husband challenging a trial court’s denial of their motion to intervene in a lawsuit in which the operators of a tourist attraction where she was injured sought to halt arbitration, writing that because a Hong Kong tribunal recently found that the woman’s injury is not covered under the policy, the 11th Circuit can no longer provide any relief.
INDIANAPOLIS — The Indiana Supreme Court on March 18 held that although an insured’s losses from a ransomware attack resulted directly from the use of a computer, neither the insured nor its insurer is entitled to summary judgment, reversing the lower court’s grant of summary judgment in favor of the insurer, affirming the lower court’s denial of the insured’s motion for summary judgment and remanding for further proceedings.
NEWARK, N.J. — A federal judge in New Jersey on March 17 granted an insurer’s motion to dismiss a breach of contract lawsuit brought by the owners of more than 120 franchise locations under the brands Wendy's, T.G.I. Friday's, Marriott and Hilton, finding that the insureds’ “general statements that the COVID-19 virus was on surfaces and in the air at their properties is insufficient to show property loss or damage.”