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The Federal Court of Appeal dismisses the covid case of the child care center



A federal appeals court on Tuesday upheld the dismissal of covid-19 business interruption litigation filed by child care centers in Illinois and Michigan, citing decisions of other courts.

Waterford, Michigan-based Paradigm Care & Enrichment Center LLC, which operates child care centers in Waterford and Canton, Michigan, and the Creative Paths Learning Center and Creative Paths Infant Center in Skokie, Illinois, sued West Bend, Wisconsin-based West Bend Mutual Insurance Co. seeks coverage under its all-risk commercial real estate insurance policies, according to the judgment of the 7th U.S. Circuit Court of Appeals in Chicago in Paradigm Care Enrichment Center, LLC et al., V. West Bend Mutual Insurance Co.

A three-judge panel of judges upheld the decision of the U.S. District Court in Milwaukee and dismissed the case.

The 7th district panel quoted the appellate court̵

7;s previous decision in Sandy Point DentalPC v. Cincinnati Insurance Co.which it said was based on Illinois law.

It stated that although Michigan’s Supreme Court has not yet ruled on the matter, an appellate court in Michigan had ruled against the policyholder in Gavrilides Management v. Michigan Insurance Co.

If one interprets the common meaning of the phrase according to the laws of different states, the circles have all come to the same general conclusion as the sixth circle when applying laws from Michigan: An insurance policy that limits coverage to “direct physical loss” requires either “destruction or alteration”. of the property, or withdrawals from the property, ‘”it said.

“The centers point out that there is no authority to suggest that the Supreme Court of Michigan would reject this consensus,” the panel said, adding that it agrees with the district court that the complaint “does not allege direct physical loss or damage.”

The lawyers in the case had no comments or did not respond to a request for comment.

On Monday, the Ninth U.S. District Court in San Francisco ruled in favor of a unit of American International Group Inc. and upheld a lower court ruling that an event and venue management company is not entitled to cover covid19-related business interruptions, citing the plaintiff’s virus exclusion.


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