New CA Insurance Case

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Insurance

The COVID-19 pandemic has led to the filing of many coverage actions by businesses against their commercial property carriers. We're now starting to see published cases from California Courts of Appeal regarding coverage. Last month, the Second District Court of Appeal addressed whether the plaintiffs had adequately alleged potential coverage for business losses due to COVID-19. As you'll see in the summary, plaintiffs were creative making in their allegations. A video discussing the case is above and my summary of the case is below.

New Insurance Decision  

Marina Pacific Hotel and Suites, LLC v. Fireman's Fund Ins. Co. (2022) _ Cal.App.5th _ , 2022 WL 2711886: The Court of Appeal reversed the trial court's order sustaining defendant's demurrer, without leave to amend, to plaintiffs' complaint alleging causes of action for breach of contract, tortious breach of contract, elder abuse and unfair competition based upon defendant's denial of coverage and refusal to pay (or to advance) commercial property insurance policy benefits for losses claimed by the insureds as a result of the COVID pandemic. Plaintiffs alleged the COVID-19 virus was present on, and had physically transformed, portions of the insured properties—"direct physical loss or damage" within the meaning of defendant's first party commercial property insurance policy. The trial court sustained the demurrer concluding that the COVID-19 virus could not cause direct physical loss or damage to property for purposes of insurance coverage. The trial court also found there was a virus exclusion in the policy. The Court of Appeal disagreed, concluding that by alleging that COVID-19 not only lives on surfaces but also bonds to surfaces through physicochemical reactions involving cells and surface proteins, which transformed the physical condition of the property and forced plaintiffs to close their business on the property, plaintiffs adequately alleged direct physical loss or damage caused by the COVID-19 virus and a cause of action for breach of contract. (C.A. 2nd, July 13, 2022.)

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California Case Summaries Annual™: Published early every January, with short, organized summaries of every new civil case published the year before, with the official case citations.  

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Mediation, Arbitration and Referee Services

I help attorneys and their clients as a mediator, arbitrator and referee at ADR Services, Inc., handling cases in the areas of business, employment, insurance bad faith, insurance coverage, legal malpractice, medical malpractice, personal injury, real property and wrongful death. I conduct Zoom hearings throughout California and also in-person services. When you need an experienced, effective neutral who knows CA law, to schedule a matter please contact my case manager at ADR services, Haward Cho, [email protected], (213) 683-1600.  
 

Stay safe and healthy.

Best regards,
Monty A. McIntyre, Esq.
California Case Summaries™
Mediator, Arbitrator & Referee
Lawyer Master Mentoring™
CA Civil Trial Attorney Since 1980
ABOTA Member Since 1995
Past President San Diego County Bar Assn., SD ABOTA Chapter
Phone: (619) 990-4312.
Email: [email protected]