COVID-19 coverage roundup: Zurich American sent back to state court; Wiesenthal Center suit tossed

A healthcare worker fills a syringe with a dose of Bharat Biotech's COVID-19 vaccine called COVAXIN, during the coronavirus disease (COVID-19) vaccination campaign at All India Institute of Medical Sciences (AIIMS) hospital in New Delhi, India, January 16, 2021. REUTERS/Adnan Abidi

October 19, 2021 - An Indiana federal judge has sent a COVID-19 coverage suit against Zurich American Insurance Co. back to state court, saying there was no complete diversity between the parties at the time the insurer removed the suit to federal court.

Steinway Musical Instruments Inc. and its subsidiary Conn-Selmer Inc. sued Zurich earlier this year, and Zurich removed the case to the U.S. District Court for the Northern District of Indiana. Zurich argued that U.S. District Judge Damon R. Leichty should dismiss New York-based Steinway from the case, which would leave complete diversity between New York-based Zurich and Indiana-based Conn-Selmer.

But Judge Leichty said Zurich needed to show complete diversity at the time it removed the suit and that it failed to do so.

"This wasn't merely an attempt by Zurich to put the cart before the horse, but to forget the put the wheels on the cart altogether," he said, sending the case back to the Elkhart Superior Commercial Court.

A holding company for several insurers, including Sentinel Insurance Co. Ltd., has won dismissal of COVID-19 coverage claims against it by a South Carolina catering company.

The holding company, defendant Hartford Financial Services Group Inc., is not a party to the insurance contract that plaintiff Fancy That Bistro & Catering LLC alleges was breached, U.S. District Judge Bruce H. Hendricks of the District of South Carolina said.

Further, the judge said, the court lacks general or specific personal jurisdiction over Hartford.

A California federal judge has dismissed a countersuit by the Simon Wiesenthal Center for coverage of its COVID-19 losses, saying the global human rights organization failed to show its premises suffered any direct physical loss.

Earlier this year, Federal Insurance Co. sued the center, seeking a declaration that no coverage was owed. The center responded with a declaratory judgment counterclaim. U.S. District Judge Otis D. Wright of the Central District of California granted Federal's motion to toss the counterclaim and ordered the center to show cause why he should not enter judgment in the insurer's favor on its suit.

Federal judges in Arizona, California, Illinois, New Mexico and Pennsylvania have dismissed five other suits by businesses seeking COVID-19 coverage, including an eye surgery center, a dental practice, an event exhibit designer, restaurants and a limousine company.

The American College of Chest Physicians is suing its insurer, Certain Underwriters at Lloyd's London, in Illinois state court for coverage losses associated with cancellation of its CHEST 2020 event due to coronavirus restrictions.

Mancari's Chrysler Jeep Inc. has filed a proposed class-action suit in the U.S. District Court for the Northern District of Illinois against Falls Lake National Insurance Co., alleging the insurer owes coverage for COVID-19-related losses.

State Farm Fire and Casualty Co. owes coverage for coronavirus losses, a Pittsburgh-area chiropractic clinic says in a proposed class action filed in the U.S. District Court for the Western District of Pennsylvania.

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