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Law360 (February 26, 2021, 4:05 PM EST) -- A California federal judge freed a Chubb Ltd. insurance unit from having to cover a San Francisco concert operating company's COVID-19-related losses, saying he couldn't imagine how the policyholder could get coverage when it was not able to show any property damage.
U.S. District Judge Vince Girdhari Chhabria said Thursday that Another Planet Entertainment is not entitled to coverage from Vigilant Insurance Co. under the property provision of its entertainment insurance program, granting the carrier's dismissal motion.
"It is difficult to understand how Another Planet can allege with a straight face that the virus was actually present on its facilities' surfaces at the time of the shutdowns," the judge said. "That seems unknowable. There was nothing specific about Another Planet's properties that caused them to shut down."
The entertainment company only assumed that the coronavirus must be on the surface of its properties and their surroundings, but "as Another Planet's counsel conceded at the hearing, its facilities would have remained shut regardless of whether the virus was present in its facilities," the judge added.
Another Planet operates concerts and events at the Greek Theatre at UC Berkeley, the Bill Graham Civic Auditorium in San Francisco, the Fox Theater in Oakland and the Lake Tahoe Outdoor Arena at Harveys. The company sued Vigilant last October, alleging that the insurer breached the insurance contract in denying coverage.
On Thursday, Judge Chhabria said the government closure orders were issued specifically to curb the virus' spread in the community, but not because of the potential presence of the virus near Another Plant's properties.
It could be a different story if the business had to shut down because its employees working on the facilities tested positive for COVID-19, requiring the properties to be sanitized, and the insured could potentially argue that the virus created physical loss or damage as some chemical contaminant might have, the judge noted.
However, "it is exceedingly difficult to imagine that Another Planet will be able to state a claim for coverage under this policy," the judge said, but he allowed the concert operator to amend its complaint within 14 days.
Counsel for the parties could not be immediately reached for comment on Friday.
Another Planet is represented by Kirk Alan Pasich and Anamay Melmed Carmel of Pasich LLP.
Vigilant is represented by Susan Rebecca Koehler Sullivan, Brett Charles Safford and Gretchen Sigridur Carner of Clyde & Co. LLP.
The case is Another Planet Entertainment LLC v. Vigilant Insurance Company, case number 3:20-cv-07476, in the U.S. District Court for the Northern District of California.
--Editing by Ellen Johnson.
For a reprint of this article, please contact reprints@law360.com.
