The operators of two high-end Napa Valley restaurants, The French Laundry and Bouchon Bistro, have decided to drop their lawsuit seeking pandemic-related loss recovery from Hartford Fire Insurance Co. This move comes after the California Supreme Court ruled in a related case that a virus exclusion in insurance policies did not render limited virus coverage illusory.
California Eateries COVID Coverage : Voluntary Dismissal
On Wednesday, the restaurants filed a motion with the Ninth Circuit to voluntarily dismiss their appeal against Hartford. Both parties agreed to bear their own costs and fees. The decision follows a September order from the California Supreme Court, which declined to address a key question certified by the Ninth Circuit regarding the enforceability of virus exclusions in insurance policies.
Impact of the John’s Grill Ruling
The dismissal is largely influenced by the California Supreme Court’s ruling in John’s Grill Inc. et al. v. The Hartford Financial Services Group Inc. et al. In that case, the court ruled that a virus endorsement in a similar Hartford policy was unambiguous. The endorsement allowed for limited virus-related coverage, but only if the virus led to specified causes of loss, such as physical damage. The ruling reversed an earlier decision that had found the endorsement created illusory coverage.
