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Law360 (March 17, 2021, 6:19 PM EDT) -- The owner of an Illinois Quality Inn & Suites urged the Seventh Circuit on Tuesday to revive its proposed class action alleging Aspen Specialty Insurance Co. is responsible for its pandemic-related losses.
Bradley Hotel Corp. asked the appeals court to take another look at its insurance policy, saying in its opening brief that its inability to use the hotel's restaurant and convention center were clearly covered losses under Aspen's all-risk policy.
The government shutdown orders caused a "direct physical loss of or damage to" the hotel's property, triggering coverage, Bradley Hotel said.
"There is no better evidence that Bradley Hotel's interpretation of the policy is reasonable than the hundreds of lawsuits arising from policies with identical or similar language and the disparate decisions from other federal and state courts across the country interpreting that language," the hotel owner said.
Bradley Hotel filed its proposed class action in the Northern District of Illinois, alleging Aspen wrongfully denied coverage for its losses as a result of government orders in response to the spreading coronavirus pandemic.
But U.S. District Judge Charles P. Kocoras dismissed the case in December, finding no harm could actually be shown at the hotel's property. The government orders rendering Bradley Hotel unable to use the restaurant and banquet hall at the property weren't enough to trigger coverage under Aspen's policy, Judge Kocoras said. The hotel owner appealed.
In Tuesday's brief, Bradley Hotel argued Aspen should cover its business interruption losses because there was a "direct physical loss of or damage to" its property. The government orders "dispossessed" the hotel of using the restaurant and the convention center for their intended purposes, the owner said.
A year into the COVID-19 pandemic, litigation between policyholders and insurers has reached appellate courts. Of note, 19 Minor League Baseball teams and their insurers are asking the Ninth Circuit to decide if a virus exclusion bars coverage. That court is also hearing an appeal by a dental appliance manufacturer, which says microscopic substances like the coronavirus can cause damage to property.
A National Restaurant Association affiliate is supporting a Florida restaurant owner's efforts to have the Eleventh Circuit revive the restaurant's proposed class action seeking coverage of losses related to COVID-19.
Mario M. Iveljic of Mag Mile Law LLC, counsel for Bradley Hotel, told Law360 on Wednesday his client is hopeful the claims will be revived on appeal.
"We believe our client is entitled to coverage under the policy language," Iveljic said.
Representatives for Aspen declined to comment.
Bradley Hotel is represented by Mario M. Iveljic and Steven Mikuzis of Mag Mile Law LLC and Robert R. Duncan and James H. Podolny of Duncan Law Group LLC.
Aspen is represented by Mark B. Blocker, Yvette Ostolaza, Yolanda C. Garcia and Mitchell Alleluia-Feinberg of Sidley Austin LLP.
The case is Bradley Hotel Corp. v. Aspen Specialty Insurance Co., case number 21-1173, in the U.S. Court of Appeals for the Seventh Circuit.
--Additional reporting by Daphne Zhang. Editing by Marygrace Murphy.
For a reprint of this article, please contact reprints@law360.com.
