By Daphne Zhang

Law360 (April 1, 2021, 3:57 PM EDT) -- An Illinois federal judge tossed a proposed class action from a Chicago train station's food court vendor seeking pandemic loss coverage from a unit of The Hartford, finding the policy's virus exclusion does not apply to state closure orders.

U.S. District Judge Gary Feinerman on Wednesday freed Twin City Fire Insurance Co. from having to pay for Firenze Italian Street Food's revenue loss during the pandemic, saying the vendor failed to allege either COVID-19 or government orders caused it any property damage. However, he gave the vendor a last chance to amend its complaint.

"Firenze does not allege that the COVID-19 virus was physically present at its deli, the only premises identified in the policy's declarations," the judge said.

Firenze operated a deli inside Chicago's Ogilvie Transportation Center. The vendor has said that it was forced to suspend business due to state closure orders in March 2020 and had its only business activity coming from making sandwiches for hospitals. When it reopened last April, it was only allowed to offer takeout and delivery, the deli owner said.

After Firenze made an insurance claim for business loss, Twin City refused to provide benefits, stating that the policy's virus exclusion bars coverage. Firenze has argued that its losses are covered by the policy's "limited coverage provision," which acted as an exception to the virus exclusion.

According to the suit, the provision applies when a virus-related loss is caused by fire, aircraft or vehicles, or windstorm, among others. The deli owner has maintained that its losses were caused by aircraft or vehicles because the "COVID-19 virus was introduced and spread to the Chicago area by aircraft passengers from China" and infected Chicago's train station, where its business is based.

On Wednesday, Judge Feinerman said Firenze's reading of the provision is "unrealistically broad."

"Firenze went so far as to suggest that viral contamination will virtually always be the result of 'aircraft or vehicles' for purposes of the Limited Coverage provision, excepting the hypothetical case of a Patient Zero who introduces the virus to the site of contamination by walking there," the judge said.

The deli owner failed to show it experienced any direct physical loss or damage to its property or a causal relationship between an alleged cause of loss to any physical condition it allegedly suffered, Judge Feinerman said.

"If a person catches a cold in New York one night, flies to Chicago the next morning, takes an Uber downtown to her hotel, and then sneezes on her bellhop in the elevator, no speaker of ordinary English would say that the bellhop's ensuing cold was 'the result of' the aircraft or the Uber," he added.

Additionally, the policy's civil authority coverage is not triggered as Firenze couldn't demonstrate government closure orders "specifically prohibited" access to its insured premises, the judge said. The government order was issued due to the widespread virus outbreak in Chicago, rather than any particular physical damage or loss on or near its property, Judge Feinerman said.

Insurers have fielded hundreds of suits stemming from the pandemic. Hartford in particular has battled more than 225 coverage cases, according to a database maintained by the University of Pennsylvania's Carey Law School.

Two weeks ago, a New York magistrate judge said a Hartford unit shouldn't have to cover a New York dental office's more than $150,000 in business interruption losses caused by the coronavirus pandemic and government shutdown orders.

Also in March, a Kentucky federal judge tossed a sportswear store's lawsuit seeking coverage for pandemic-related losses from Twin City, saying the policy's virus exclusion clearly states the insurer won't pay for any losses or damages caused by a virus.

In February, an Illinois federal judge dismissed a dentist's proposed class action seeking business interruption coverage from Hartford Financial Services Group amid the coronavirus pandemic but gave the dentist the chance to amend his complaint.

Representatives for the parties could not be immediately reached for comment.

The food vendor is represented by Daniel A. Edelman of Edelman Combs Latturner & Goodwin LLC.

The insurer is represented by Anthony J. Anscombe of Steptoe & Johnson LLP.

The case is Firenze Ventures LLC v. Twin City Fire Insurance Co., case number 1:20-cv-04226, in the U.S. District Court for the Northern District of Illinois. 

--Additional reporting by Shawn Rice, Lauren Berg and Melissa Angell. Editing by Orlando Lorenzo.

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