A state court in Ohio has refused to dismiss COVID-19 related disputes filed against an insurance company by a leasing company that has lost rental income, stating that the insurer's policy language is ambiguous.
McKinley Development Leasing in North Canton, Ohio. Co. Ltd., a real estate development and leasing company that owns several commercial properties in North Canton, filed a lawsuit against Westfield Center, Ohio-based Westfield Insurance Co. for breach of contract and bad faith in May, according to Tuesday's decision by Stark County Court in Canton, Ohio under McKinley Development Leasing co. Ltd., et al v. Westfield Insurance Co.
McKinley accused the insurer of breach of contract and bad faith after refusing to compensate it for the business income that arose when the governor ordered companies to restrict their business activity or were completely shut down due to COVID-1
Westfield's policy prescribes loss of business revenue caused by "direct physical loss of property damage on the premises", they said. 19659002] “The conclusion is simply this. Both sides gave reasonable interpretations of the policy language. Westfield argues that the physical loss means that some form of tangible, physical damage must alter the integrity of the structure.
"McKinley reckons that it has relied on sufficient facts to justify recovery and that the conditions laid down by Westfield in their policy are ambiguous. and susceptible to more than one interpretation.
"There is no doubt that the court has been bombarded with cases that fall on both sides at once. However, Westfield has the advantage of writing policy with the ability to consider consequences in this ever-changing world.
"They had an obligation to use terminology that can be easily understood by lay people … That is not the case here. The Court can only assume that with these different views, the policy is ambiguous.
The Court held that the exclusion of viruses was not applicable. "In the eyes of the court, it appears that Westfield is looking at both the virus and the pandemic at the same time, while McKinley argues that their losses are the result of the pandemic being different from those caused by the virus itself," the decision said.  "It is obvious to the court that a virus is not the same as a pandemic. The insurer, which is the language of choice in the contract, must be specific in its use; an exemption from liability must be clear and precise in order to take effect, "it said.
" More importantly, this court questions whether Westfield intended to exclude a "pandemic" from coverage, why did it not explicitly exclude it? After all, Westfield was in control and wrote the policy.
"At this early stage, McKinley's argument is more convincing because the language is reasonably receptive to more than one interpretation," the court said, refusing to dismiss the case.
McKinley's General Counsel Thomas Winkhart said in a statement that the company "has been committed to doing this area for decades. It is crucial for McKinley that its insurance agreement with Westfield is respected, so that McKinley can continue to support this region and the many small businesses that are its tenants.
The insurer did not respond to a request for comment.
19659002] Last month, another Ohio court judge refused to dismiss a COVID-19-related business interruption lawsuit filed by a North Canton restaurant against its insurer, citing the restaurant's civil authority coverage and food aid policy support. [19659002 More insurance and risk management news about the coronavirus crisis here .