Policyholders can finally begin to gain some certainty about where they stand legally with respect to COVID-19 related business interruption cases with the Ohio Supreme Court accepting such a case and a federal appeals board holding oral arguments on another.  The insurer in both cases was The Cincinnati Insurance Co.
On Wednesday – over the policyholder's objections – the Ohio Supreme Court, with three different judges, agreed to consider Neuro-Communication Services Inc etc. v Cincinnati Insurance Co .; Cincinnati Casualty Co .; and The Cincinnati Indemnity Co.
In the second case, the Eighth American Circuit Court of Appeals in St. Louis oral argument Wednesday Oral Surgeons P.C. v. Cincinnati Insurance Co. where the U.S. District Court in Des Moines, Iowa, ruled against the policyholder.
In the case of Neuro-Communications, Boardman, an Ohio-based audiology firm that had purchased an all-risk policy from Cincinnati, filed a business interruption in March 2020 that the insurer denied on the grounds that it did not involve a direct physical loss to the property.
Judge Benita Y. Pearson of the Youngstown U.S. District Court said in her motion that she requested the Supreme Court of Ohio to handle the case that its decision "will provide consistency in the application of state law to these policies." [1
The policyholder had requested that the Supreme Court not handle the case. . In its application arguing against acceptance, Neuro-Communications stated that the issues are "not purely legal issues and should not be decided in an actual vacuum.
" Especially given the importance of all judgments that the court would make for the certified issue, the more appropriate the way would be to settle such issues only after the discovery has been made. "
In the argument, the court would accept the case," the insurer said, "The certified issue here should be accepted so that the court can address the legal meaning of the insurance language involved here and solve the problem for all Ohioans. "
Lawyers did not respond to requests for comment.
Policyholder Attorney K. James Sullivan, a partner with Calfee, Halter & Griswold LLP in Cleveland, who is not involved in the case, said he believes three judges voted against handling the case because of the policyholder
Mr. Sullivan said he believes this is the first Supreme Court to agree to try a COVID-19 policyholder / insurer.
He said that the Supreme Court of Ohio has at various times notified both policyholders and insurers, and therefore he does not know how the court is likely to rule.
"I suspect we may end up in a divided court, but I think just as much" that whatever judgment the court issues will be "essential," Sullivan said. "Other courts will certainly take that into account," he said.
In the case Oral Surgeons the U.S. District Court in Des Moines ruled in a two-sided decision in September against policyholders, arguing that the term "loss" is defined by the policy as "unintentional physical loss or unintentional physical loss. damage ", which is not alleged.
Lawyers did not respond to request for comment.
Observers have said that some degree of certainty about where policyholders stand on COVID-19-related business outages would remain elusive until state supreme courts and federal Appellate courts have ruled in this matter, and so far most of the decisions of the lower court have been in favor of insurers.