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Florida Covid Business Interruption Case Survives Dismissal

Gynecologist’s Insurance Suit Survives

A federal judge in Florida last week denied an insurer’s bid to dismiss a lawsuit by a gynecologist’s office which alleged an insurance company wrongfully denied coverage of losses caused by the Covid-19 shutdown. The decision represented the fourth federal court case to move past the dismissal stage.

U.S. District Judge Anne C. Conway told Sentinel Insurance Co. Ltd. that the virus exclusion it cited in its motion to dismiss the suit is not unambiguous enough to bar coverage which Urogynecology Specialist of Florida LLC alleges the insurer owes.

Judge Conway ruled that the grouping of the virus exclusion with other pollutants “does not logically align” with losses stemming from Covid-19 in a way which the policy anticipated and intended to deny coverage for those losses.

Further, Judge Conway wrote that the virus exclusion does not exist as an independent document. Instead, she ruled that the exclusion modifies certain forms in the policy that were not provided in the policy itself or to the court.

She noted that because the court had no access to those forms, it could not make a decision based on the merits of the plain language of the policy to determine whether Urogynecology Specialist’s losses are covered.

Related: Frequently Asked Questions for Covid-19 Insurance Claims

Along with several other specialist facilities and other businesses in the last several months, Urogynecology Specialist sued its insurer in state court in June 2020. The suit alleged that the insurer wrongly denied coverage of business losses stemming from government orders shutting down nonessential businesses to stem the spread of Covid-19. Against the plaintiff’s wishes, Sentinel successfully removed the suit to federal court in July 2020.

Last week’s decision marks the fourth Covid-19 business interruption suit to make it past the dismissal stage in federal court. Last month, three Missouri federal court cases were denied dismissal.

In August 2020, a group of hair salons and restaurants led by Studio 417 Inc. pushed their case against The Cincinnati Insurance Copast dismissal. as did a similar suit against the same insurer. In addition last month, a restaurant chain — K.C. Hopps Ltd. — also successfully moved a suit past dismissal. Then on Sept. 21, four dentist’s offices, led by Blue Springs Dental Care LLC, got the go ahead to continue a suit against Owners Insurance Co.

Another Plaintiff’s Court Victory
A New Jersey Superior Court case — Optical Services USA/JCI v. Franklin Mutual Insurance Co. – also moved forward last month, after a judge rejected the insurer’s argument that Covid-19 did not trigger coverage for physical loss.

In the latest Florida ruling, Judge Conway also rejected Sentinel’s argument that other cases had upheld similar virus exclusions. She said those cases involved things such as a sexually transmitted virus, pollution exclusions, and sewer backups, which, she ruled, are situations distinct from Covid-19.

Judge Conway wrote: “Importantly, none of the cases dealt with the unique circumstances of the effect Covid-19 has had on our society, a distinction this court considers significant.”

An attorney for the gynecologist’s office told Law360 that the plaintiff was happy to “have passed this hurdle” and could now “get to the merits of the real issue, which is that this claim should have been covered under the terms and conditions of the policy.”

Law 360 said Sentinel representatives could not immediately be reached for comment.

Florida Covid Business Interruption Case Survives Dismissal

The case is Urogynecology Specialist of Florida LLC v. Sentinel Insurance Co. Ltd., case number 6:20-cv-01174, in the U.S. District Court for the Middle District of Florida.

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