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Insurers continue to prevail in the vast majority of lawsuits that seek business-interruption coverage for income lost during COVID-19 shutdowns, but a small minority of state court judges are taking a contrary view.

On Monday, Cook County Circuit Court Judge Raymond W. Mitchell denied a motion by Continental Casualty Co. that asked him to reconsider his decision in August not to dismiss a lawsuit filed against the insurer by JDS Construction Group and 9 Dekalb Fee Owner against Continental Casualty Co. Lawyers for Continental cited numerous decisions by courts in Illinois and New York that found SARS-CoV-2 does not cause a direct physical loss of or damage to property.

“Judges are not sheep, and I do not decide a case by counting noses,” Mitchell wrote in his order denying the motion. “Further, the ‘herd’ can be wrong.”

JDS and 9 Dekalb alleged that virus particles were physically present on their properties, both on surfaces and in the air. Mitchell said in his order that virus contamination physically changes a property, which constitutes physical loss and damage.

Mitchell acknowledged that many courts have reached a contrary conclusions, but he said that Continental’s argument was an appeal to “‘herding behavior’—a process by which group-think replaces individual decision making.”

The Cohen Ziffer Frenchman & McKenna law firm represented the plaintiffs.

“We are thrilled with Judge Mitchell’s well-reasoned order affirming his denial of Continental’s motion to dismiss and are appreciative that the court disregarded the carrier’s bid for herd dismissal based on differently plead cases lacking precedential value and/or resolving—at the pleadings stage—disputed facts about an evolving and novel coronavirus,” attorney Robin Cohen said in a statement.

Judges in Stark County, Ohio and Hennepin County, Minnesota also issued decisions this month that sided with policyholders pursuing COVID-19 business-interruption claims. However, out of 22 court decisions issued in October, those rulings were the only ones that did not grant insurer motions to dismiss, according to a COVID-19 litigation tracker maintained by the University of Pennsylvania law school.

In the Ohio case, McKinley Development Leasing Co. sought coverage from Westfield Insurance Co. for rental income lost because of government orders that forced tenants of 12 commercial properties in North Canton to temporarily shut down. Judge Frank G. Forchione denied Westfield’s motion to dismiss the lawsuit in February and granted a partial summary judgment in favor of McKinley on Oct. 14.

Forchione said in his order that a microorganism exclusion in the policy did not clearly exclude loss of property caused by a government closure. The ruling says that the policy issued by Westfield was ambiguous because it did not define “direct physical loss or damage,” so he was required to find in favor of the policyholder.

“While some jurists may think it is easier not to take a stand in situations like this where the law is still developing, our Stark County Court is willing to put in the time and the effort, and has the intellectual curiosity and fortitude, to make substantive rulings,” attorney Lee Plakas, with Plakas and Mannos law firm in Canton, stated in a press release.

In Minnesota, Hennepin County District Court Judge Kristen A. Siegesmind on Oct. 7 denied a motion by Zurich American Insurance Co. to dismiss a lawsuit seeking coverage for COVID-19 closures filed by Life Time Inc., which owns a chain of fitness centers. The company has purchased a builder’s risk policy from Zurich that covered 19 fitness centers that were under construction in various locations around the country.

Siegesmind cited Minnesota appellate court decisions that found coverage was owed for a building that became contaminated with asbestos, grain that could not be sold because it has been exposed to an unapproved pesticide and dried egg powder that had been damaged by smoke.

“These three cases are instructive in the present situation because none of them require structural damage to property,” Siegesmind said in her order. “All of them found coverage when there had been contamination that resulted in a loss of function or value.”

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