By Jeannie O'Sullivan

Law360 (March 12, 2021, 6:39 PM EST) -- Federal Insurance Co. blasted a minor league baseball team's claim that it was "statistically certain" that COVID-19 was present in its ballpark as the virus canceled its season last year, arguing the team hasn't shown the physical property loss or damage necessary to trigger business interruption coverage.

In a Thursday brief seeking to toss the remaining claim in the West Michigan Whitecaps' suit over coverage denial, the insurer said that the "purely economic losses" prompted by the pandemic don't show the team's property was physically damaged under New Jersey law.

Federal Insurance is fighting the contention by team operator Whitecaps Professional Baseball Corp., or WPBC, that Gov. Phil Murphy's shutdown of nonessential business operations in March 2020 amid the public health crisis effectively rendered its ballpark unusable for its intended purpose, satisfying the property loss or damage requirement in its policy.

However, "WPBC cannot be permitted to circumvent the requirement to sufficiently plead some type of physical alteration to its property by relying on unsupported, conclusory allegations," the insurer said in a response brief supporting its motion for judgment on the pleadings.

The insurer reminded the court that it previously dismissed Arch Insurance from the suit after finding that its insureds, the Everett AquaSox and the Asheville Tourists, hadn't alleged the required "direct physical loss or damage" to property to trigger coverage.

"WPBC has failed to provide any reason why this court should not grant Federal's motion for judgment on the pleadings for substantially the same reasons that this court granted Arch's motion to dismiss," the brief stated.

The teams' July lawsuit asserted claims of breach of contract against Federal Insurance and anticipatory breach of contract against Arch Insurance and sought a declaration against each insurer that coverage was triggered by the pandemic.

The teams alleged that the pandemic, which prompted government-mandated business limitations starting around March 2020, caused the first-ever shutdown of a minor league baseball season.

The Federal Insurance policy at issue provided coverage to WPBC from March 1, 2020, to March 1, 2021, and required WPBC to "demonstrate that its losses constitute, were caused by, or resulted from 'direct physical loss or damage' to property," court records show.

Federal Insurance denied the team's coverage claim in May on the grounds that there was no evidence of the direct physical loss or damage to property that was required to trigger coverage.

In November, U.S. District Judge Susan D. Wigenton trimmed from the suit claims by Everett AquaSox owners 7th Inning Stretch LLC and Asheville Tourists owners DeWine Seeds Silver Dollars Baseball against Arch Insurance Co.

Citing the court's dismissal of Arch from the lawsuit, Federal Insurance filed a motion for judgment on the pleadings on Feb. 26. In opposition, WPBC insisted that it meets the property loss or damage requirement, arguing in a brief earlier this month the allegations pass muster under Michigan and New Jersey law and that courts across the country have been denying insurers' motions to dismiss similar claims.

Counsel for the parties didn't immediately respond to requests for comment.

WPBC is represented by Andrew L. Sandler, Stephen M. LeBlanc and Rebecca Guiterman of Mitchell Sandler LLC and Robin L. Cohen and Orrie Levy of Cohen Ziffer Frenchman & McKenna LLP.

Federal Insurance Co. is represented by Daren S. McNally, Barbara M. Almeida, Meghan C. Goodwin and Nicholas S. Pradaxay of Clyde & Co. LLP.

The case is 7th Inning Stretch LLC dba Everett AquaSox et al. v. Arch Insurance Co. et al., case number 2:20-cv-08161, in the U.S. District Court for the District of New Jersey.

--Additional reporting by Mike Curley. Editing by Daniel King.

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