A California state court refused to dismiss COVID-19 business interruption litigation filed by Goodwill Industries' point of sale against a Tokyo Marine Holdings Inc. entity, stating that the insurer's policy language was ambiguous.
Judge Peter Wilson of the California Superior Court in Santa Ana said there was a question of whether there was a "direct physical loss" according to Goodwill Industries in Orange County business revenue and additional expenses and policies for civilian authorities, according to Thursday's ruling in Goodwill Industries in Orange County, California v Philadelphia Indemnity Insurance Co.
Philadelphia Indemnity had requested a court ruling that Goodwill's complaint in Santa Ana was not legally sufficient to uphold a complaint. [1
Goodwill, which operates 24 local shops and selected donation sites, had claimed according to its website that a "direct physical loss" does not require a concrete change of property and that allegations of loss of use are sufficient. It said that if physical concrete change was required, it would also have met this requirement.
The complainant said that the virus was present in the droplets of the repository, called aerosols, which remain on surfaces and in the air for up to a month, and that they physically alter the air and the surfaces to which they attach, making them "unsafe, deadly and dangerous. ", according to court documents.
The complaint stated that when Goodwill opened its properties, its employees were tested positive and that they had to carry out further cleaning and decontamination to remove the virus from the physical surfaces of its premises in accordance with public health measures, according to the decision.
In refusing to dismiss the case in its preliminary ruling, the court cited a September 8. decision of the U.S. District Court in Kansas City, Missouri, in Studio 417 Inc. v. Cincinnati Insurance Co., where the court ruled that the plaintiffs had "sufficiently stated a claim of direct physical loss", based on the alleged causal link between the virus and their alleged losses.
The Court in the Goodwill case said that although it recognized California's federal COVID-19 related decisions in favor of insurers, decisions "are not binding on the court and were decided by a different standard. "
The Court stated that it" is not convinced that there is sufficiently complete information "at this point in the disputes" to make the decision in law that coronavirus and COVID-19 have not in any way caused physical harm to property. A state conference on the matter was set for April 2.
Lawyers in the case did not respond to a request for comment.
More insurance and risk management news about the coronavirus crisis here . Catalog