6 Insurers Hit With Class Suits Over COVID-19 Coverage

By Mike Curley
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Law360 (April 17, 2020, 7:52 PM EDT) -- A group of attorneys from DiCello Levitt Gutzler LLC, the Lanier Law Firm PC, Burns Bowen Bair LLP and Daniels & Tredennick launched class action suits against six insurance companies in federal courts on Friday over their denials of coverage for businesses shut down because of the COVID-19 outbreak.

The complaints target Certain Underwriters at Lloyd's, London in New York, Society Insurance in Wisconsin, Auto-Owners Insurance Co. in Ohio, Topa Insurance Co. in California, Oregon Mutual Insurance Co. in Oregon, and Aspen American Insurance Co. in Texas, the attorneys announced in a press release Friday.

In each case, the businesses, which include bakeries, taverns, restaurants, nightclubs and bridal retailers, allege they paid premiums to the insurance companies for business interruption insurance for situations in which they could be forced to close through no fault of their own, but their claims have been denied.

"Businesses buy these policies and pay high premiums for these policies, for specifically this precise situation," Adam Levitt of DiCello Levitt Gutzler LLC told Law360 on Friday. "It is unfortunate that after these policyholders have held up their end of their bargain with their insurers, that their insurers are unwilling to do the same."

He added that the firms have been speaking to hundreds, if not thousands, of businesses that have been denied coverage, and Friday's complaints are the first of what will become a series of actions to be filed in the coming weeks.

"We are looking into the claims of businesses of all sizes, each of which has had the uniform experience of getting their claims wrongfully rejected by their respective insurance companies," Levitt said.

He added that he believes the courts will be able to certify the classes, because the companies experienced "uniform" courses of conduct by the insurance companies, under what he called "materially uniform" provisions in their policies.

While the complaints filed Friday are not the first class actions against insurers during the COVID-19 pandemic, Levitt said these cases are the "state of the art" claims in this issue.

In the complaints, the companies say their policies are "all risk" — policies that entitle them to coverage unless the policies specifically exclude the situation. They also cite "civil authority" clauses that provide coverage when their properties are made inaccessible because of orders from the government.

"Insurers will deny almost every claim — even the most legitimate ones — because that's just how they operate," Mark Lanier of the Lanier Law Firm said in a press release Friday. "But at the end of the day, this really is a straightforward issue about honoring their agreements. As our nation emerges from this horrific pandemic, businesses of all sizes will be critical to restarting the economy. In playing their usual claim-denial games, these insurers are threatening the welfare of not only small-business owners and their families but the entire U.S. economy."

A spokesperson for Auto-Owners said they will address each claim and appropriately respond to the parties involved.

Spokespersons for Society Insurance and Aspen American declined to comment.

Representatives for the other insurance companies could not immediately be reached for comment Friday.

The class action complaints follow a slew of individual complaints against insurance companies, including Society and Lloyd's, alleging businesses were wrongfully denied coverage of business interruptions because of government-mandated shutdowns during the pandemic.

The other suits include claims by a Chicago restaurant, a group of Chicago movie theater and restaurant owners, a D.C. restaurant, an Illinois dental clinic, a nonprofit professional theater in Indiana, a Florida sports bar, a scuba shop in the Florida Keys and a group of Texas movie theaters.

In addition, some states have introduced legislation to make the business interruption policies retroactively cover the COVID-19 outbreak, though attorneys representing insurers have told Law360 that such measures may be unconstitutional in restricting their freedom to contract.

The plaintiffs are represented by Adam Levitt, Mark DiCello and Ken Abbarno of DiCello Levitt Gutzler LLC, Mark Lanier and Alex Brown of the Lanier Law Firm PC, Timothy Burns, Jeff Bowen, Freya Bowen and Jesse Bair of Burns Bowen Bair LLP and Douglas Daniels of Daniels & Tredennick, as well as local counsel.

The cases are Gio Pizzeria & Bar Hospitality LLC et al. v. Certain Underwriters at Lloyd's, London, case number 1:20-cv-03107, in the U.S. District Court for the Southern District of New York; Rising Dough Inc. et al. v. Society Insurance, case number 2:20-cv-00623, in the U.S. District Court for the Eastern District of Wisconsin; Bridal Expressions LLC v. Owners Insurance Co., case number 1:20-cv-00833, in the U.S. District Court for the Northern District of Ohio; Caribe Restaurant & Nightclub Inc. v. Topa Insurance Company, case number 2:20-cv-03570, in the U.S. District Court for the Central District of California; Dakota Ventures LLC v. Oregon Mutual Insurance Co., case number 3:20-cv-00630, in the U.S. District Court for the District of Oregon; and Christie Jo Berkseth-Rojas DDS v. Aspen American Insurance Co., case number 3:20-cv-00948, in the U.S. District Court for the Northern District of Texas.

--Additional reporting by Jeff Sistrunk. Editing by Janice Carter Brown.

Update: This story has been updated with case information for the Dakota Ventures complaint, and the responses from Society Insurance, Aspen American and Auto-Owners to a request for comment.

For a reprint of this article, please contact reprints@law360.com.

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Case Information

Case Title

Rising Dough Inc et al vs Society Insurance


Case Number

2:20-cv-00623

Court

Wisconsin Eastern

Nature of Suit

Insurance

Judge

J P Stadtmueller

Date Filed

April 17, 2020


Case Title

Bridal Expressions LLC v. Owners Insurance Company


Case Number

1:20-cv-00833

Court

Ohio Northern

Nature of Suit

Insurance

Judge

Solomon Oliver, Jr

Date Filed

April 17, 2020


Case Title

Berkseth-Rojas DDS v. Aspen American Insurance Company


Case Number

3:20-cv-00948

Court

Texas Northern

Nature of Suit

Contract: Insurance

Judge

Sidney A Fitzwater

Date Filed

April 17, 2020


Case Title

Gio Pizzeria & Bar Hospitality, LLC et al v. Certain Underwriters at Lloyd's, London Subscribing to Policy Numbers ARP-74910-20 and ARP-75209-20


Case Number

1:20-cv-03107

Court

New York Southern

Nature of Suit

Insurance

Judge

Ronnie Abrams

Date Filed

April 17, 2020


Case Title

Caribe Restaurant and Nightclub, Inc. v. Topa Insurance Company


Case Number

2:20-cv-03570

Court

California Central

Nature of Suit

Insurance

Judge

Otis D. Wright, II

Date Filed

April 17, 2020


Case Title

Dakota Ventures, LLC et al v. Oregon Mutual Insurance Co.


Case Number

3:20-cv-00630

Court

Oregon

Nature of Suit

Insurance

Judge

Marco A. Hernandez

Date Filed

April 17, 2020

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