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Third Court of Appeal rules against policyholders in case COVID-19



Policyholders again lost in Friday's third federal appeals court decision on the issue of insurance providing coverage for COVID-19 related business interruptions, just as they did in the two previous federal appeals boards in the matter.

The latest case, a suspected class action lawsuit, was filed by a children's store in San Francisco, Mudpie Inc., against a Travelers Cos. Inc. unit, according to the judgment of the 9th U.S. Circuit Court of Appeals in San Francisco Mudpie Inc. v. Travelers Casualty Insurance Co. of America .

The panel of three judges unanimously confirmed a decision of the United States District Court in Oakland, California.

Mudpie filed the disputes after the travelers refused to provide coverage under its extensive commercial liability and the property insurance policy's corporate income and fees for additional costs, according to the judgment.

"Mudpie claims that under California law, direct loss or damage to property does not require actual damage to the property, but only requires that the property is no longer suitable for its intended purpose," the judgment said.

But, it states, unlike the cases Mudpie invokes, its complaint "does not identify a" clearly demonstrable, physical change of property ", the judgment states, citing a previous opinion," and it does not claim that Mudpie has permanently removed his

"Instead," the judgment said, "Mudpie claims that Stay at Home Order temporarily prevented Mudpie from operating its stores as intended, and urges us to interpret" direct physical loss of or damage "to be synonymous with "loss of use."
"We cannot approve of Mudpie's interpretation because California courts have carefully distinguished 'intangible,' 'corporeal,' and 'economic' losses from 'physical,'" it said.

The judgment referred the decision of the Eighth U.S. District Court in the United States. Appeal in July Oral Surgeons, PC v. Cincinnati Insurance Co. who issued a similar judgment.

The Sixth U.S. District Court of Cincinnati also ruled against a restaurant in question last month in Santo & # 39 ;s Italian Café LLC v. Acuity Insurance Co

The 9th District Panel ruled that the exclusion of the policy of viruses also impedes coverage. "Mudpie's complaint does not allege a weakened causal chain between the virus and Mudpie's losses," the lower court's statement said.

Lawyers in the case did not respond to a request for comment.

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