KESSLER TOPAZ MELTZER & CHECK, LLP IS LITIGATING A CLASS ACTION LAWSUIT AGAINST STATE FARM FOR DENYING BUSINESS INTERRUPTION CLAIMS
Kessler Topaz Meltzer & Check, LLP (“Kessler Topaz”) is currently litigating a class action lawsuit against State Farm Fire and Casualty Company and State Farm Mutual Automobile Insurance Company (the “State Farm Defendants”) concerning the denial of loss of business income claims (business interruption) stemming from the COVID-19 pandemic. The case was filed on May 27, 2020 in the United States District Court for the Eastern District of Virginia (Norfolk Division) and is captioned Elegant Massage, LLC d/b/a Light Stream Spa v. State Farm Mutual Automobile Insurance Company, et al., Case No. 2:20-cv-00265 (the “Action”).
Any persons or entities who purchased insurance coverage from State Farm and were denied business interruption or business disruption claims, are encouraged to fill out our online form or contact James Maro at (484) 270-1453 or Adrienne Bell at (484) 270-1435 or toll free at (888) 299-7706; or info@ktmc.com.
Alleged Wrongdoing in the Action
The Action alleges that in March 2020, and continuing to the present, many individuals and businesses suffered and continue to suffer financial hardship. In the midst of the COVID-19 global pandemic, states and localities across the nation issued orders that limited human interaction and required residents to stay at home. Such orders have prevented businesses from being able to operate and generate revenue. To protect against any unexpected interruption to their businesses, many persons or entities purchased commercial property insurance policies that guaranteed policyholders the reimbursement of lost income and other expenses in the event that their businesses were suspended. Given the complete disruption of their businesses as a direct result of these social distancing and/or stay-at-home orders, policyholders submitted claims to the State Farm Defendants seeking reimbursement for their lost income and other expenses under their policy’s applicable provisions.
The Action alleges that the State Farm Defendants violated their obligations pursuant to these commercial property insurance policies by arbitrarily and without justification refusing to reimburse policyholders for loss of business income and other expenses incurred as a result of social distancing and/or stay-at-home orders in connection with the COVID-19 global pandemic.
The Court Denies the State Farm Defendants’ Motion to Dismiss
The Honorable Raymond A. Jackson denied, in large part, the State Farm Defendants’ motion to dismiss the Action and held that the plaintiff pled sufficient facts to state a claim for breach of contract and for breach of covenant of good faith and fair dealing. Thus, the Action is currently proceeding to discovery, and a trial has been scheduled for September 2021.