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COVID-19 Business Interruption Rulings, Most Favoring Insurers, Moving to Appeals

2021-01-06 06:00:32

According to a database maintained by Garbriel K. Gillett of Jenner & Block in Chicago, so far at least 11 lawsuits have been appealed against court decisions, all but one by policyholders whose claims have been rejected. Gillett is a professional attorney for the Restaurant Law Center, which is advocating on behalf of restaurant owners whose business interruption claims were denied.

On Wednesday, insurers had won 83 of 105 business interruption lawsuits that were decided by dismissal motions or summary proceedings. a process tracker administered by the University of Pennsylvania Carey Law School shows. Companies with policies that had no virus exclusion fared slightly better, with survivors surviving in 12 out of 35 cases.

Only a small fraction of the 1,422 business interruption lawsuits have been resolved, but early rulings reveal the hurdle policyholders must overcome. In many of the cases, the courts ruled that business losses are not covered unless there is tangible physical damage to the property.

A ruling of October 6 by Judge Thomas W. Thrash Jr. of the United States court in a lawsuit brought by the owners of Henry & # 39; s Louisiana Grill in Acworth, Georgia against Allied Insurance Co. The judge said an executive order issued on March 14 by Georgian Governor Brian Kemp declaring a public health emergency had caused no physical damage to the restaurant.

“Every physical element of the dining areas – the floors, the ceilings, the plumbing, the HVAC, the tables, the chairs – was not physically altered as a result of the order,” wrote Thrash. "The only possible change was an increased public and private perception of the existing threat, which cannot be viewed as a physical change that rendered the property unsatisfactory."

Henry & # 39; s appealed the decision to the 11th Circuit Court of Appeals on Nov. 4. The Restaurant Law Group, which represents restaurateurs in partnership with the National Restaurant Association, has one an amicus briefing on December 21.

Chicago attorney Gabriel K. Gillett said in the letter that courts generally do not interpret contract language as "redundant," meaning words with the same meaning. He said that Henry & # 39; s policy includes both & # 39; physical damage & # 39; as & # 39; physical loss & # 39; covers. While the governor's executive order may have caused no harm, it certainly caused physical loss by rendering the restaurant's dining room unusable.

"Black letter contract interpretation requires the terms – separated by the disjunctive" or "- to be given a different meaning," the letter states.

In his appeal, Henry's 11th Circuit asks the 11th Circuit to send a certified question to the Georgia Supreme Court about whether physical damage means the same as physical loss.

Many of the judges who found the plaintiffs in the right pointed out that the policies in question covered both physical damage and loss. Judge Orlando F. Hudson Jr. of the Supreme Court said that Cincinnati Insurance Co. the two terms "merged" when it denied coverage of the business interruption losses suffered by North State Deli and 15 other restaurants in the Raleigh-Durham area.

Cincinnati Insurance appealed the ruling on Nov. 6.

The other appeals are:

  • Gavrilides Management Co. LLC v. Michigan Insurance Co., 354418, of the Michigan Court of Appeals.
  • Rose's 1 LLC v. Erie Insurance Exchange, 2020 CA 002424 B, District of Columbia Court of Appeals.
  • 10th LLC v Travelers Indemnity Co. of Connecticut, 20-56206, at the 9th Circuit Court of Appeals.
  • Plan Check Downtown III LLC v. AmGuard Insurance Col, 20-56020, to the 9th Circuit.
  • Mudpie Inc. Travelers Casualty Insurance Co. of America, 20-16868, to the 9th Circuit.
  • Chattanooga Professional Baseball v National Casualty Co. et al., 20-17422, to the 9th Circuit.
  • Mark's Engine Co. no. 28 Restaurant v. Travelers Indemnity Co. of America, 20-56031, to the 9th Circuit.
  • Oral Surgeons v Cincinnati Insurance Co., 20-3211, to the 8th Circuit.

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