The art gallery asks for the 9th circ. To relaunch the antivirus coverage offer
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Law360 (May 27, 2021, 8:24 p.m. EDT) – Art gallery owner asks Ninth Circuit to relaunch its pandemic loss coverage offer, claiming virus provision in its policy with Sentinel Insurance unit Co., Hartford, gives it the right to cover losses resulting from government restrictions.
Billing his appeal lawsuit as one of the first in which an insured purchased virus coverage, Kevin Barry Fine Arts Associates said on Wednesday that a California federal court erred in not properly considering the multiple meanings of the virus. physical loss. He argued that direct physical losses can occur when properties such as its three galleries can no longer be used for their intended purposes – in this case, due to the pandemic.
In a separate file, Kevin Barry also asked the court to consider whether the direct physical loss includes loss of access to the California Supreme Court.
“If Sentinel wanted to limit coverage to ‘total and complete’ or ‘unrecoverable’ physical loss, or physical damage that ‘permanently altered the condition of the property’, it could have done so,” said the owner of the gallery on 102 pages. in short.
Alexander J. Berline, lawyer for Kevin Barry and partner at Hanson Bridgett LLP, told Law360 that the gallery owner is seeking a ruling claiming the coronavirus causes covered physical loss. He said the gallery owner and other businesses had taken out insurance specifically to cover loss of use of the property. Accusing Hartford of playing games, he said the insurer could have issued a more focused policy, rather than one he called broad and ambiguous.
“If their intention was to never, ever cover viruses and global pandemics, then put an exclusion in the policy that says global pandemics are not covered. How difficult is that?”
He described the endorsement of the virus in his policy as a feature of Sentinel coverage, distinguishing the insurer from others. In his Wednesday brief, Kevin Barry said Sentinel’s characterization of the approval as a virus exclusion was misleading.
While some exclusionary terms were included in the policy, it also expressly provided coverage for bacterial and viral losses, the gallery owner said.
Berline added: “If a virus can never cause physical loss or damage, that’s what the [California district] the court found, so what does this endorsement do? “
Sentinel’s attorney did not immediately respond to requests for comment.
According to court documents, there is a separate policy limit of $ 50,000 under the virus endorsement for each of Kevin Barry’s insured properties.
“We are not trying to bankrupt the insurance industry. We are just asking them to pay what they have promised to pay,” Berline said. “If we win our case – $ 150,000. It won’t bankrupt Hartford. And even if this ruling is applied to thousands and tens of thousands of their customers in California, it still won’t go bankrupt.”
Kevin Barry has been forced to close three galleries in San Francisco, Los Angeles and Las Vegas due to state and local orders, he said in a complaint filed last July. The galleries display a range of contemporary works, from traditional paintings to sculpture, photography and digital art, according to Kevin Barry’s website.
In January, the California federal court declined to consider whether the gallery owner qualifies for coverage under the virus endorsement, as he said he had not shown direct physical loss for the galleries. Kevin Barry could not have plausibly alleged damage to their galleries, even if they could have shown the presence of the coronavirus, wrote U.S. Justice of the Peace Sallie Kim in her ruling.
“KBFA is not alleging that it lost access to the properties, but simply that it was not allowed to operate its business outside the properties,” Justice Kim added, saying the direct physical loss did not include the temporary loss resulting from the stay at home. orders.
Kevin Barry on Wednesday asked the Ninth Circuit to let the California Supreme Court decide whether the language of direct physical loss in a policy can include loss of use of a property. Citing differences of opinion on the issue nationally and in California courts, the gallery owner admitted his case hinged on the answer.
Addressing this issue could also affect hundreds or thousands of Californians who, like KBFA, were purchasing business interruption insurance policies and looking to rebuild themselves after more than a year of shelter orders on place caused by the coronavirus pandemic, “said the gallery owner. in the additional deposit.
Sedan said the galleries had asked the California Supreme Court to address the issue in part for the sake of efficiency, saying it would sow discord for the Ninth Circuit to render a decision on the matter, which will not be overturned by the court. supreme state.
Kevin Barry’s lawsuit is one of several unsuccessful policyholders brought in district court. More than 80% of those cases have been definitively dismissed, according to data compiled by the Carey Law School at the University of Pennsylvania. Only a small minority of policies cover communicable diseases, according to the data.
Kevin Barry is represented by Alexander J. Berline, Josephine Mason Petrick and Sean G. Herman of Hanson Bridgett LLP.
Sentinel is represented by Laurie Edelstein and Anthony J. Anscombe of Steptoe & Johnson LLP, Jonathan M. Freiman, Tadhg Dooley, David R. Roth and Shai Silverman of Wiggin and Dana LLP.
The case is Kevin Barry Fine Art Associates v. Sentinel Insurance Company, file number 21-15240, before the United States Court of Appeals for the Ninth Circuit.
– Edited by Haylee Pearl.
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