Scott Mollen

Contracts—Anticipatory Breach of Contract—Commercial Property Insurance Policy—Parties Cross-Moved for Partial Judgment on the Pleadings, Seeking a Ruling as to Whether Two Policy Exclusions Bar Coverage of Tenant's Pandemic Related Losses—Motions Were Denied

A plaintiff commercial landlord leases properties to hundreds of office, retail, and restaurant tenants. The plaintiff purchased from the defendant insurance company, an insurance policy that provides up to $750 million in coverage "for property damage and business interruption losses…. (policy)"

Coverage began on March 15, 2020. "Days later, state governments across the country adopted stay-at-home orders in response to the COVID-19 pandemic." Many of the plaintiff's tenants had to "close shop and, unable to generate revenue, have requested abatements or other accommodations." The plaintiff allegedly suffered "significant business interruption as a result of the pandemic." The plaintiff alleged that "confirmed cases of COVID-19 … have required it to take action to secure and preserve those locations." The plaintiff alleged that it had already lost "more than $20 million in rental income alone."

The policy provides for a "maximum per-occurrence limit of liability of $750 million, with various sublimits and time limits." The policy defined an occurrence as "the sum total of all loss or damage of the type insured, including any insured (time element) loss, arising out of or caused by one discreet event of physical loss or damage." The policy included business interruption coverage.