6/3/20 – In-N-Out sues its business interruption insurance provider.
Restaurant Business magazine reports that the burger chain has sued Zurich American Insurance Company for breach of contract in denying its claim. In-N-Out Burger added its substantial voice to the chorus of restaurant owners who say insurance companies are improperly denying their business interruption insurance claims.
The Irvine, Calif.-based burger chain last week sued its insurance company, Zurich American Insurance Co., for breach of contract after the insurer officially denied its business interruption insurance claim.
In its complaint, filed in a federal court in California, In-N-Out says it has an “all-risk” coverage plan with Zurich that covers common risks such as fire but also “novel risks that may arise which were not previously considered by the company, Zurich or by the public-at-large.”
The complaint says the policy “contains no exclusion for viruses or infectious diseases.”
In-N-Out has a policy with Zurich with a $250 million limit, and in its complaint says that it notified Zurich of its coronavirus loss in April. The burger chain said the insurer’s investigation was “limited to a short email containing a handful of questions regarding COVID-19 diagnoses and the amount of loss.”
Within a week, a senior Zurich employee told In-N-Out that he believed the insurer would not cover the loss, according to the complaint, which also quotes Zurich CFO George Quinn noting in May that 99% of its plans do not cover virus outbreaks.
Zurich officially denied its claim on Friday. In-N-Out filed its lawsuit that same day.
6/1/20 – Class Action Filed Against Farmers Insurance Over Same-Day Business Interruption Claim Denial.
Market Insider reports that a retailer sued Farmers Insurance in Los Angeles Superior Court for denying a business interruption claim on the very same day the claim was made.
The Great Frame Up is a national chain of framing stores with 100 locations throughout the United States. A franchisee of the Great Frame Up located in in Northridge, California brought a class action lawsuit against Farmers Insurance after its business interruption claim was denied over the phone the very same day the claim was made.
The class action alleges Farmers Insurance is employing a strategy to summarily deny any claim for loss of business income made by small business in the hopes that they will not pursue litigation. The suit alleges Farmers employed the same tactic after the 1994 Northridge earthquake.
6/1/20 – Legal Roundup: McDonald’s Lack of PPE Lands Them in Court, FedEx Agrees to Settle EEOC Suit and More.
Risk & Insurance magazine reports that a group of five McDonald’s workers and four of their family members in Chicago have sued the fast-food giant. They claim employees weren’t given enough personal protective equipment or training to do their jobs safely as the restaurant stayed open during the COVID-19 pandemic.
CNBC reports: “The plaintiffs allege that McDonald’s is not giving workers enough masks, gloves and hand sanitizer to protect themselves from the virus. Employees at one location received masks and gloves only after striking, but they were given just one mask, which has to be worn each shift, according to the lawsuit.”
McDonald’s responded, saying “that personal protective equipment is in ‘ample supply’ for all restaurants, and more than 130 million masks have been distributed to employees,” according to CNBC. The suit was only recently filed and the plaintiffs are seeking class action status.
6/1/20 – NY County Judge Orders Remote Depositions to Proceed.
On May 28, 2020, in the matter of Johnson, et al. v. Time Warner Cable Company New York City, LLC, Supreme Court of the State of New York, County of New York, Index #155531/2017, Judge Robert Kalish Ordered that depositions proceed remotely signaling a likely preference for Courts to have parties proceed with depositions and discovery remotely despite the fact that remote discovery is unconventional.
Judge Kalish held that “to delay discovery until a vaccine is available or the pandemic has otherwise abated would be unacceptable. It goes without saying that business as usual is no longer the normal. The legal profession and its clients are currently coming to grips with the “new normal” brought about by the COVID-19 pandemic. Among other things, this “new normal” means that it is no longer safe and practical for depositions to be taken in person, as was the default during the “old normal.” Moreover, it remains uncertain how soon the “old normal” will return— if it ever does.”
5/29/20 – Tokio Marine unit seeks dismissal of COVID-19 suit.
Business Insurance magazine reports that a U.S. unit of Tokio Marine Group of Cos. filed a motion to dismiss a Las Vegas restaurant chain’s coronavirus-related business interruption suit on Tuesday.
In the case Egg and I LLC et al v. U.S. Specialty Insurance Co. et al, which was filed in federal court in Las Vegas on April 24, the insurer argues that it would only cover lost income if it is a result of an insured event, as defined by the policy.
The restaurant chain, which has seven locations in the Las Vegas area, had argued in the proposed class action that the Restaurant Recovery policy it bought from Houston-based U.S. Specialty covers business income it lost due to government-ordered restrictions on nonessential businesses to limit the spread of the coronavirus.
The policy covers “accidental contamination” of an “insured product” and insured products include retail restaurant offerings at any of the policyholder’s locations, the suit said.
In its motion to dismiss filed Tuesday, U.S. Specialty said courts have previously held that contamination only occurs if a product comes into contact with a contaminant.
5/29/20 – Nearly 300 federal suits stem from pandemic; 101 ‘business interruption’ cases filed; what’s next?
The ABA Journal reports that Nearly 300 federal lawsuits filed in the months of March and April stem from the COVID-19 pandemic, a number that is likely to continue to expand. Lex Machina found 395 new lawsuits using COVID-19 related terms over the two-month period. Among those suits, 287 stemmed from the COVID-19 crisis, the company reported. Contracts, insurance and employment were the practice areas with the largest number of cases stemming from the pandemic. The results were based on a keyword search for the terms “covid” or “coronavirus” or “pandemic” in the litigation areas monitored by Lex Machina.
Despite the growing number of COVID-19 mentions, the number of federal case filings is slightly down in April 2020, compared to the previous year, according to new Lex Machina data cited by Law360. The data excludes two massive product liability multidistrict litigation matters.
A different tracker of federal and state cases found that, as of May 28, more than 2,300 cases had been filed over the novel coronavirus. The numbers were compiled by Hunton Andrews Kurth. Despite the decline in cases noted by Lex Machina, some practice areas increased in April, including employment and insurance law. Both are likely to become COVID-19 battlegrounds in the months ahead.
Already, the U.S. Judicial Panel on Multidistrict Litigation has received notice of 101 federal lawsuits seeking insurance coverage for “business interruption” losses caused by the virus, the Claims Journal reported in a May 21 story. Restaurants are among the plaintiffs. The multidistrict panel received notice because of a petition filed by plaintiffs in Philadelphia and Chicago seeking one judge to preside in all federal business interruption suits.
Plaintiffs lawyers expect that thousands of suits will eventually be filed seeking business interruption coverage, according to the Claims Journal.
5/29/20 – Removal Ruling Raises Questions about Where COVID-19-Related Business Interruption Claims Should be Heard.
The National Law Review published an article discussing where Covid-19 related cases should be heard. In a case that had been removed from the Allegheny County Court of Common Pleas to the District Court for the Western District of Pennsylvania, District Judge Nora Barry Fischer remanded a business interruption coverage lawsuit to state court sua sponte, finding that these cases of first impression involve state law claims that should be decided by state courts.
Though Judge Barry Fischer noted infirmities in the Petition to Remove required the case to be remanded, she expressly held that she would decline to exercise jurisdiction under the Declaratory Judgment Act even if the court had diversity jurisdiction over the matter.
“[Business interruption claims] raise novel insurance coverage issues under Pennsylvania law which are best reserved for the state court to resolve in the first instance,” Judge Barry Fischer held. The court reasoned that a ruling in federal court would not resolve the uncertainty of the COVID-19 business interruption coverage issue and it was inappropriate for the court to decide “this matter of great public concern, with little persuasive authority from state courts on these issues.”
While the court’s holding addressed the propriety of exercising its discretionary jurisdiction under the Declaratory Judgment Act, it is possible other federal courts will consider the reasoning expressed by Judge Barry Fischer when assessing breach of contract or broker negligence cases raised related to COVID-19 insurance claims.
5/29/20 – Carnival, pharmaceutical firm face virus-related suits.
Business Insurance magazine reports that Pandemic-related putative securities class-action lawsuits were filed this week by shareholders against Carnival Corp. and a biopharmaceutical company that allegedly falsely promised a vaccine. Miami-based cruise ship operator Carnival Corp. and company officials are accused of making false and misleading statements and concealing material information concerning passengers on two of its cruise ships who became infected with COVID-19, according to the lawsuit filed Wednesday in U.S. District Court in Miami in Service Lamp Corp. Profit Sharing Plan v. Carnival Corp., Arnold W. Donald and David Bernstein.
San Diego-based Sorrento Therapeutics Inc. and its officials are accused of making misleading comments about a COVID-19 vaccine, according to the lawsuit filed Tuesday in U.S. District Court in San Diego in WASA Medical Holdings v. Sorrento Therapeutics Inc., Henry Ji and Mark R. Brunswick.
5/27/20 – Law firm sues for income lost due to court closure.
Business Insurance magazine reports that a Georgia bankruptcy law firm sued its insurer last week seeking business interruption coverage for income it allegedly lost after courtrooms in the state were closed due to the COVID-19 pandemic.
In the proposed class-action suit, Karmel Davis and Associates Attorneys-at-Law LLC v. The Hartford Financial Services Group Inc., which was filed on Thursday, the Douglasville, Georgia-based law firm argues that the coronavirus caused direct physical loss to its own office, triggering business interruption coverage under its policy.
In addition, the policy covers losses that result from damage to a “dependent property,” which for Karmel Davis includes bankruptcy courts that have closed or reduced services since government-ordered lockdowns began in March, the suit states.
“Plaintiff suffered an actual loss of Business Income due to direct physical loss or physical damage to the Bankruptcy Court (a Dependent Property),” the suit states.
In a statement, Hartford said: “Unfortunately, viruses are generally outside the scope of business interruption coverage due to the absence of any physical damage. These policies do not cover this exposure and, accordingly, premiums were never collected for it.”
5/27/20 – Animal products firm faces COVID-related shareholder suit.
Business Insurance magazine reports that a shareholder has filed a putative class-action lawsuit against an animal products manufacturer and its directors and officers, charging them with issuing false and misleading information after it revised its earnings projections based on the COVID-19 pandemic.
Shareholder Sandra Hunter said in a lawsuit filed in U.S. District Court in Indianapolis on May 20 that Greenfield, Indiana-based Elanco Animal Health Inc.’s share price dropped 13% after the company said on March 24 it was withdrawing its previously announced 2020 revenue and earnings per share guidance “as the situation around the COVID-19 pandemic is rapidly evolving,” according to the lawsuit, Sandra Hunter v. Elanco Animal Health Inc., Jeffrey N. Simmons and Todd S. Young.
5/26/20 – COVID-19 lawsuit takes on McDonald’s like it was a rowdy bar.
Business Insurance magazine reports that as U.S. businesses reopen, worried workers and their advocates are borrowing a legal strategy commonly used to shut down rowdy topless bars to try and force employers to strengthen protection against further spread of the coronavirus.
Workers and their families at McDonald’s Corp.’s Chicago restaurants have filed a class-action lawsuit against the fast-food chain that does not seek money for sick staff, but compliance with health guidance such as providing clean face masks.
5/20/20 – Family of meat cutter who died of COVID sues Tyson.
Business Insurance magazine reports that the family of a Tyson Foods Inc. worker who died from COVID-19 has filed a wrongful death suit against the company.
The husband and four children of Pwar Gay, who worked as a meat cutter at Tyson’s Amarillo, Texas plant and died from the virus May 8, charged the Springdale, Arkansas-based firm with “grossly negligent conduct,” according to the lawsuit filed in U.S. District Court in Amarillo on May 15 in Ka La Ya Lay et al. v. Tyson Foods Inc.
The lawsuit said Ms. Gay slipped and fell and injured her knees in April while on the job. Tyson sent her to the company clinic, where she received first aid treatment and was sent back to work.
The complaint said although Ms. Gay was suffering from pain and swelling, she was not allowed to go home and rest or seek medical attention because of Tyson’s staff shortage.
The lawsuit said after working on her injured leg, Ms. Gay, who was not provided any personal protective equipment by the company, fell ill and was rushed to the hospital after she started having difficulty breathing. She was in the hospital for several weeks before her death.
Ms. Gay’s injuries and death “were proximately caused by the negligence, both of commission and omission, of Tyson. Tyson’s negligence caused Ms. Gay’s knee injuries, and also caused Ms. Gay to contract COVID-19 and die,” says the lawsuit.
5/20/20 – McDonald’s hit with two class-action suits over COVID-19 worker safety.
The NY Post reports that five McDonald’s workers in Chicago filed a class-action lawsuit against the chain accusing it of failing to adopt government safety guidance on COVID-19 and endangering employees and their families.
McDonald’s failed to provide adequate hand sanitizer, gloves and masks and has not notified its staff when an employee has become infected with the new coronavirus, according to a copy of the lawsuit provided by a spokesman for the workers.
McDonald’s said in a statement that the allegations were inaccurate and that safety, including wellness checks and protective gear, was a top priority.
The workers requested the Illinois state court issue an injunction, which would make McDonald’s stop requiring workers to reuse masks, mandate face coverings for customers and require the company to inform employees if a coworker becomes infected.
Separately, McDonald’s workers at three California locations on Tuesday filed administrative actions over allegedly unsafe conditions with the California Division of Occupational Safety and Health.
Employees at restaurants, warehouses and other essential businesses that remained open during the COVID-19 outbreak have protested and walked off the job over fears of getting sick.
Trade groups have warned of a wave of litigation over the pandemic, but few cases have been filed.
5/18/20 – Texas tries a pandemic first: a jury trial by Zoom.
Reuters reports that with jury trials on hold throughout the United States because of the coronavirus pandemic, court officials in Texas are trying something new: let jurors hear a case through Zoom. Lawyers in an insurance dispute in Collin County District Court on Monday picked a jury to hear the case by videoconference, in what officials believe is the first virtual jury trial to be held nationally amid the COVID-19 crisis.
More than two dozen potential jurors logged in by smartphone, laptop and tablet for jury selection, which was streamed live on YouTube here, with a judge occasionally providing tech advice on how to best use their devices.
The one-day trial is a so-called summary jury trial, in which jurors hear a condensed version of a case and deliver a non-binding verdict. The parties, having seen how their case could fare before a jury in a full-blown trial, will sit down for mediation and try to negotiate a settlement on Tuesday. Officials say the abbreviated format and non-binding verdict make it ideal to test the viability of holding jury trials remotely, as they grapple with the more daunting challenge of how to conduct them safely in person during the pandemic.
5/18/20 – COVID-19 suit alleges negligence by broker.
Business Insurance magazine reports that a legal services firm sued its broker in addition to its insurer last week in a claims dispute over coronavirus-related losses.
The suit filed by Magna Legal Services in state court in Philadelphia on Thursday says the firm engaged Nottingham Agency Inc. in Hamilton, New Jersey, to secure “all appropriate insurance coverage” for its business, including coverage against losses related to viruses and pandemics.
“But for the negligence and misrepresentations” of the broker, Magna Legal Services would have bought business income and contingent business income protection that was “as broad as possible,” court papers say.
5/18/20 – Lloyd’s Expects US$4.3B in COVID-19 Claims – On Par with Costs of 9/11 Terror Attacks.
The Insurance Journal reports that Lloyd’s of London revealed it will pay claims in the range of $3 billion to $4.3 billion as a result of the COVID-19 pandemic.
This payout is on a par with the Sept. 11 terrorist attacks, which cost the Lloyd’s market $4.7 billion, and the combined impact of hurricanes Harvey, Irma and Maria in 2017, which had price tag for Lloyd’s of $4.8 billion.
5/18/20 – Few COVID-19 Liability Lawsuits Filed So Far.
Daily Newsflash reports that businesses are urging U.S. lawmakers to shield companies from what they fear could be a flood of lawsuits by workers and consumers blaming employers for exposing them to the new coronavirus.
But so far, court records show few such cases have been filed and some legal experts say the threat of liability is exaggerated because of the difficulty of proving where someone was infected. As of Wednesday, only 45 of 1,018 coronavirus-related lawsuits were personal injury or medical malpractice cases against a business, the areas of most concern for trade groups. Of the 45 cases, 28 were against Princess Cruise Lines. The rest were against three other cruise lines, two meat processing companies, Walmart Inc., a senior living facility operator, two care centers, a hospital and a doctor’s group.
The U.S. Chamber of Commerce and retail and leisure trade groups told Congress that the novel coronavirus and the patchwork of evolving health guidance from state and local authorities created legal uncertainty for companies. A liability shield would give businesses the confidence to reopen without the looming threat of lawsuits by customers or employees who get COVID-19, the disease caused by the coronavirus. Protections would not be available for companies guilty of gross negligence, recklessness or willful misconduct.
Consumer groups have argued that current law provides adequate protection for businesses that act in good faith. Removing the threat of liability would discourage Americans from returning to work, dining out and resuming other activities, the consumer groups said.
About a third of the cases filed have been brought by prisoners seeking release from a coronavirus-hit facility. Hundreds more have been brought by businesses, mostly over insurance coverage or contracts. There are 197 class actions, largely brought by consumers, stemming from disputes over insurance, lending, tuition and ticket refunds.
5/18/20 – Louisiana lawmakers scrap business interruption bill.
Business Insurance magazine reports that LA lawmakers have scrapped a bill that would have forced insurers to cover retroactive business interruption claims due to COVID-19. However, state senators agreed to rewrite and amend Senate Bill 477 to allow a proposal requiring insurers to clarify exclusions on business interruption policies to move ahead.
5/18/20 – San Diego barber: Insurance denied claims for business interruption coverage.
ABC’s Channel 10 News, reports that a San Diego barbershop owner filed a lawsuit against his insurance company for denial of a COVID-19 claim. According to the lawsuit filed by Pappy’s Barber Shop, “Farmers and other insurers are now categorically refusing to pay these legitimate claims for business interruption coverage claims.” According to the lawsuit, “Despite the provision of business interruption coverage in these policies, Farmers is denying its obligation to pay for business income losses and other covered expenses incurred by policyholders for the physical loss and damage to the insureds’ property arising from the COVID-19 Civil Authority Orders.”
The lawsuit claims, “Farmers’ categorical treatment, failure to investigate in good faith, and denial of Plaintiffs’ and the Class members’ claims appears to be part of a broader strategy being employed by the insurance industry generally, to broadly deny claims for business interruption coverage related to the Coronavirus pandemic, as has been widely reported by the media and resulted in numerous lawsuits brought by businesses against property insurance companies throughout the country.”
5/13/20 – Preparing for the Wave of BI Claims in the Wake of COVID-19.
US Claims Solutions issued an article discussing a need to begin preparing for an anticipated “wave of Business Interruption claims like we’ve never seen before.” The American Property Casualty Insurance Association (APCIA) estimates that there could be as many as 30 million claims from small businesses that suffered a COVID related loss. That’s 10 times the amount of claims that have ever been handled in a year.
5/13/20 – Companies brace for legal battles over unsafe travel for workers.
Advisen Europe Front Page News reports Fearful workers could unleash a barrage of legal claims against their employers as the economy reopens – potentially putting Britain’s recovery at risk.
Staff and unions are expected to fight back against demands to start commuting again due to fears it could endanger workers. A string of lawsuits could hamper firms’ efforts to restart operations and return to profitability.
The Government published long-awaited guidance on Monday outlining the steps companies must take to make workplaces safe for returning staff, but unions warned that travelling to work will still be unsafe for workers using public transport.
The guidance also explicitly warns employers they must respect the needs of different workers and that they will be breaking the law by discriminating on the basis of age, sex or disability.
Decisions around selection of staff to come back to the workplace could breach equality laws.
5/12/20 – COVID-19’s Shadow Spreads Across Federal Court Filings.
Law 360 reports that Federal courts are seeing an explosion of complaints referencing the COVID-19 pandemic, and the surge is spreading to a host of practice areas, according to recently released Lex Machina data.
Looking at U.S. federal district court complaints filed between March 1 and May 2 that referenced keyword terms tied to the coronavirus pandemic, Lex Machina found there was a 110% spike around mid-April, according to a report released on Monday.
The pandemic has also been referenced in filings that touch on 14 of the 16 practice areas that Lex Machina tracks, and most filings cite the coronavirus pandemic as a major factor behind the filing as opposed to just mentioning the current state of affairs, according to the data.
5/12/20 – Missouri Sues China Over Coronavirus Pandemic.
The Insurance Journal reports that the state of Missouri filed a lawsuit on April 21 against the Chinese government over the coronavirus, alleging that nation’s officials are to blame for the global pandemic.
The lawsuit, filed in federal court by the state’s top lawyer, alleges Chinese officials are “responsible for the enormous death, suffering, and economic losses they inflicted on the world, including Missourians.”
It’s unclear whether the lawsuit will have much, if any, impact. U.S. law generally prohibits lawsuits against other countries with few exceptions, said Chimene Keitner, an international law professor at University of California, Hastings College of the Law.
“The legal problem is, it’s just not possible,” said Keitner, who recently wrote a blog titled “Don’t Bother Suing China for Coronavirus.”
Foreign ministry spokesman Geng Shuang said the legal action has “no factual and legal basis at all” and repeated China’s defense of its response to the outbreak, which has largely subsided in the country where it was first detected.
5/11/20 – U.S. Businesses, Patients Sue China Seeking Damages From Coronavirus Outbreak.
The Insurance Journal reports that dozens of American virus patients and some U.S. businesses are taking a new legal step: They are attempting to sue China over the spread of the virus, which has killed at least 75,000 people in the United States. At least nine lawsuits have been filed in the U.S. against China claiming authorities there did not do enough to corral the virus initially, tried to hide what was happening in the outbreak center of Wuhan and sought to conceal their actions and what they knew.
5/7/20 – Philly meat worker’s family sues over COVID-19 death.
The Philadelphia Inquirer reports that lawyers for a veteran meat-packing worker who died of COVID-19 last month have sued his former employer, the meat giant JBS, accusing it of wrongful death and negligence over the Haitian immigrant’s fatal encounter with the coronavirus.
The suit, filed Thursday in Philadelphia Common Pleas Court, says that JBS failed to protect workers with masks and other safety measures at the 1,400-employee meat-processing complex, and instead tacked onto the production schedule a “Saturday kill” program in March to satisfy demand in the “public panic purchases of ground meat.”
“By choosing profits over safety, JBS demonstrated a reckless disregard to the rights and safety of others,” the suit claims.
5/6/20 – Business Interruption Litigation Rolls in Amid COVID-19 Pandemic.
Risk & Insurance magazine reports that on April 17, six class actions suits were filed on the same day against insurers Aspen American Insurance, Auto-Owners Insurance, Lloyd’s of London, Society Insurance, Oregon Mutual Insurance and Topa Insurance Company. The plaintiffs run the gamut, from restaurateurs and bridal retailers to dental practices and pizzerias. Among them are thousands of small businesses across the U.S. seeking business interruption reimbursement.
The plaintiffs allege that they purchased property insurance coverage to protect against business interruptions, including ones spurred by the COVID-19 pandemic. The lawfirms representing the plaintiffs add that business income coverage is, in fact, included in their policies. However, the carriers have denied coverage.
5/5/20 – Legal Sea Foods Is Suing Its Insurer for Denying Its Coronavirus Claim.
Eater magazine reports that Boston-based seafood restaurant chain Legal Sea Foods is suing its insurer, Strathmore Insurance Co., for rejecting a claim it filed for damages resulting from the COVID-19 pandemic. The seafood chain claims that its “all risks” policy should cover losses incurred by dine-in shutdowns in Massachusetts and the other states in which it operates. The lawsuit was filed in federal court in Boston on May 4.
According to reporting from The Boston Globe, the lawsuit states that Legal Sea Foods’ insurance policy doesn’t contain a pandemic exclusion. Pandemic exclusions became de rigueur for most major insurance companies in the wake of the SARS epidemic of 2003.
4/30/20 – Two Texas based businesses file bad faith lawsuits against Travelers.
Insurance Business Magazine reports that two Texas based businesses have filed bad faith actions against Travelers accusing the P&C insurer of rejecting their damages and business interruption claims without investigating.
In the first lawsuit, Travelers defended its denial for the restaurant’s claim by stating the policy specifically excluded losses caused by “bacteria and viruses.” However, the “Deluxe Coverage” policy contains no such language, it states. The lawsuit also said that Travelers claimed that the restaurant has not suffered because restaurants are allowed to sell food to-go, even though the restaurant has never offered takeout service.
In the second lawsuit, the company cited that its policy would “pay for [T]he actual loss of business income … sustain[ed] due to the necessary ‘suspension’ of your ‘operations.’” The policy also allegedly promised to pay for additional coverages, such as damages that occur when a business is closed by civil authorities – such as the mandatory closure ordered across the US in the wake of the pandemic. But Travelers claimed that the restaurant had not suffered a “cessation of business” because it was still open and had not sustained property damage, the lawsuit said.
4/22/20 – Litigation over business interruption insurance heats up.
Insurance Business magazine issued an article detailing how litigation is beginning to take shape for business interruption coverage. In a recent development, two motions were filed on April 20 with the Judicial Panel on Multidistrict Litigation (JPML) that asked the panel to consolidate federal suits accusing insurers of dodging claims by businesses that were shut down by government orders, according to Reuters.
The first of these motions involves Levin Sedran & Berman and Golomb & Honik, and argues that the question of whether business interruption insurance policies will cover losses incurred by these businesses can’t be answered in piecemeal by different courts around the US because of its significant national importance. The second bid, which was filed by DiCello Levitt Gutzler, the Lanier Law Firm, Burns Bowen Bair and Daniels & Tredennick, underscored the efficiency of centralized expert epidemiology discovery and legal analysis.
The key issues across the complaints filed against insurers so far are whether COVID-19 causes physical damage or property loss, and whether insurance coverage is triggered when the virus is present on or near a policyholder’s property, as argued in the brief.
4/21/20 – NJ Eatery Sues Chubb Over Virus Coverage Amid MDL Push.
Law 360 issued an article detailing how a New Jersey restaurant filed an action against Chubb with a proposed class action over denying coverage for losses stemming from government-ordered business closures amid the COVID-19 pandemic. This suit was filed while Pennsylvania eateries pursue similar suits against their insurers and seek a new federal multidistrict litigation program to consolidate such cases. The restaurant located in Summit, NJ is seeking to represent a nationwide class of entities that entered into standard all-risk commercial property insurance policies with Chubb that cover business income losses and “do not exclude coverage for pandemics, and who have suffered losses due to measures put in place by civil authorities to stop the spread of COVID-19.” The restaurant also proposed a sub-class of such entities that insured property in New Jersey.
4/21/20 – How Courts May Handle Real Estate Force Majeure Suits.
Law 360 issued an article discussing how the COVID-19 pandemic is expected to usher in a flood of litigation over force majeure clauses in real estate contracts. This will require an examination of the circumstances of each case and the language of the contract/ Per the article, force majeure, common in real estate contracts, excuses parties from certain obligations in the wake of so-called act of God or other uncontrollable events, although the clauses generally don’t include the word pandemic, which opens the door to different interpretations from each State. The article projects potential interpretations in New York, California and Florida.
4/20/20 – A wave of litigation is expected in the coming months over contract disputes.
Fox News reports that lawsuits are beginning to be filed across the country in various industries impacted by Covid-19 related closures. The suits are relying upon a rarely used contractual term, force majeure, to avoid contractual obligations. Typically, a qualifying force majeure event must be unforeseeable and unavoidable and must make it impossible or onerous for a party to fulfill its side of the bargain. The report discusses that even if a contract does not have a force majeure clause it may be unenforceable nonetheless due to impossibility of performance.
4/20/20 – Class action suits filed against 6 insurance carriers for business interruption coverage.
Property Casualty 360 reports that class action suits have been filed against 6 insurance carriers for their denial of claims for business interruption coverage. In six separate lawsuits filed in federal courts across the country, it is alleged the insurers rejected special property coverage insurance claims made by small businesses impacted by mandated closures over COVID-19. The lawsuits allege that the plaintiffs purchased all-risk special property insurance coverage for business interruption losses. The policies, which included losses of “business income,” or due to the actions of a “civil authority,” plus any “extra expense,” either included viruses or illnesses in their coverage, or failed to state exclusions for such damage.
4/13/20 – Florida restaurant files class action seeking virus cover.
Business Insurance issued an article discussing how a Florida based restaurant has sued insurers at Lloyd’s of London in federal court for coronavirus-related business interruption coverage in a suit filed seeking class action status. The suit filed by El Novillo Restaurant, which has branches in Hialeah, Florida, and Miami, is one of more than a dozen suits filed by commercial policyholders over the past month seeking declaratory rulings that their business interruption policies cover government-ordered shutdowns of their operations.
4/7/20 – Multiple Class Action suits filed against China by U.S. Citizens and Businesses.
General Counsel magazine reports that “an initial wave of three class actions stemming from COVID-19 were filed against the Chinese government this past week. Each action claims the Chinese government is liable for injuries and damages in the United States caused by the virus.” Class certification is sought and it may prove difficult to obtain along with proper service on a foreign government.
4/7/20 – Walmart hit with wrongful-death lawsuit by estate of worker who died of coronavirus.
Marketwatch reports that Wal-Mart has been sued in wrongful death suit filed in Cook County, Illinois by the estate of an employee who passed away from the coronavirus. Wal-Mart management didn’t warn the deceased or others “that various individuals were experiencing symptoms at the store and may have been infected by COVID-19 which was present and active within in the store,” the lawsuit said. It is claimed that the death could have been “avoided if [management] was more transparent with teammates and customers.”
4/2/20 – Florida Sports Bar Sues for Business Interruption Coverage.
As reported in Law 360 on April 2, 2020, a sports bar located in Tampa, Florida named Prime Time Sports Bar filed a suit against Lloyd’s of London in federal court after the insurer denied coverage for its state-mandated closure in response to the COVID-19 pandemic. Further, it is reported that according to the complaint, Prime Time holds a policy protecting it from risks to its business that does not exclude government orders to suspend business. Prime Time requested that Lloyd’s pay under its policy and cover it for the loss of business shortly after Gov. DeSantis’ first shutdown order, but the insurer denied coverage stating that the policy only covers work stoppage that results from physical losses and property damage, according to court documents. Prime Time filed suit for a determination as to Lloyd’s obligations under the policy and asked the court to find that the policy does cover the COVID-19 shut down and that Lloyd’s must pay out up to the $200,000 policy limit.