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Law360 (June 22, 2021, 3:18 PM EDT) -- A Missouri federal judge has thrown away a St. Louis law firm's COVID-19 business coverage interruption suit, freeing a Hartford unit from having to pay for Hais Hais and Goldberger PC's pandemic-related losses.
U.S. District Judge David D. Noce granted Sentinel Insurance Co.'s dismissal motion on Monday, saying a virus exclusion unambiguously bars coverage to the law firm's alleged losses from the COVID-19 outbreak and government shutdown orders.
The law firm first sued Sentinel in Missouri state court after the insurer refused to cover Hais' insurance claim in April 2020. Sentinel later moved the case to federal court. Hais held an all commercial property policy and has claimed COVID-19 and government orders caused physical damage and loss to its property and interrupted its business operation.
Sentinel has argued the policy's virus exclusion unambiguously precludes all losses related to COVID-19, while the firm has maintained that the exclusion attached to the policy's "special property coverage form" only applies to computers and media-related properties.
Hais has contended it specifically "prepared for events such as the outbreak of COVID-19 by purchasing property insurance" and when it bought the policy its "reasonable expectation" did not include that the virus exclusion applies to other coverage sections apart from the computer and media matters.
The policy language is also ambiguous regarding where and how the virus exclusion will be triggered and the exclusion is not specific enough compared with other property policies Sentinel cited in its dismissal motion, the firm has said.
However, Judge Noce was not convinced on Monday.
"The complaint does not allege plaintiff purchased the policy to protect it specifically from the effects of a virus," he said. "Nothing in the plaintiff's complaint indicates that the policy was specifically negotiated regarding any virus coverage."
The firm only alleged its all-risk policy should cover all perils unless specifically excluded, the judge said. The virus exclusion unambiguously states that it applies to all coverage areas, including the special property coverage form and computer and media properties, Judge Noce pointed out.
"The plain language of this text establishes that it is not limited to 'computer and media coverage,' as plaintiff argues," he added.
Representatives for the parties could not be immediately reached for comment on Tuesday.
The law firm is represented by Alan S. Mandel of Mandel & Mandel LLP.
Sentinel is represented by Sarah Gordon, Khristoph Becker and James L Brochin of Steptoe & Johnson LLP and Patrick J. Kenny of Armstrong Teasdale LLP.
The case is Hais Hais and Goldberger PC v. Sentinel Insurance Company LTD, case number 4:20-cv-00919, in the U.S. District Court for the Eastern District of Missouri.
--Editing by Janice Carter Brown.
For a reprint of this article, please contact reprints@law360.com.
