A state court in Los Angeles on Thursday refused to grant an Allianz SE unit’s motion for summary judgment in a Covid-19-related business interruption case that was sent back to a lower court following a pro-policyholder state appeals court ruling.
In July, in a rare policyholder victory, the California Court of Appeal in Los Angeles reversed a lower court and reinstated the lawsuit filed by a Los Angeles hotel and restaurant, Marina Pacific Hotel and Suites LLC, saying it was premature to reject the dispute, according to the judgment in Marina Pacific Hotel and Sites LLC et al. v. Fireman’s Fund Insurance Co .
Plaintiffs in the case, who own Hotel Erwin and Larry̵7;s, an adjacent restaurant in the Los Angeles neighborhood of Venice, sued Allianz SE unit Fireman’s Fund in July 2020 under their commercial property insurance policy, which provided $22 million in outage coverage. .
The ruling issued Thursday by another Superior Court judge in Santa Monica cites the appeals court ruling and says: “Defendant fails to plead plaintiff’s allegations that it suffered ‘direct physical loss or damage’ due to covid under Business Income, Business Access and Civil Authority coverage.”
It said the insurer “presents no evidence or argument disputing the plaintiff’s claim that the covid virus is an external force causing physical change or alteration on Hotel Erwin’s property”, and “fails to deny the plaintiff’s claim that the surface of the Hotel Erwin was exposed to covid and the virus was on them.”
“At best, Defendant’s evidence suggests that there may have been additional, contributing factors to Plaintiff’s suspension and reduction beyond the physical loss or injury caused by the virus,” the order states.
In December, the court issued a motion to compel Fireman’s Fund chairman and CEO William Scaldaferri to participate in a deposition, which took place on January 10.
Attorneys in the case did not respond to requests for comment.