The franchisee of 100 Outback Steakhouse restaurants isn’t covered by Affiliated FM Insurance Co. for its pandemic-related losses, a California federal judge said, finding that neither the presence of the coronavirus nor government shutdown orders caused any loss or damage to the restaurants.
Law360 (March 22, 2021, 3:19 PM EDT) — The franchisee of 100 Outback Steakhouse restaurants isn’t covered by Affiliated FM Insurance Co. for its pandemic-related losses, a California federal judge said, finding that neither the presence of the coronavirus nor government shutdown orders caused any loss or damage to the restaurants.
In Friday’s order, U.S. Magistrate Judge Thomas S. Hixson found coverage wasn’t triggered for Out West Restaurant Group, which operates Outback locations in California, Arizona, Colorado, Nevada and New Mexico. The Outback owner didn’t show a “direct physical loss of or damage to” its locations, he said.
“The overwhelming majority of courts have concluded that neither COVID-19 nor the governmental orders associated with it cause or constitute property loss or damage for purposes of insurance coverage,” Judge Hixson said, granting judgment on the pleadings to Affiliated FM.
The presence of COVID-19 doesn’t cause a change to the Outback owner’s properties, he said.
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DeVries also said the court ignored more than 45 other judges across the country who have found the “loss or damage” provision potentially covers the presence of COVID-19 as well the government orders. “Out West will challenge these and other issues on appeal,” DeVries said.
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The restaurant management company, which cited 100 positive COVID-19 cases with its employees, alleged the virus was present on the surfaces and in the air at its restaurant locations. After a positive case is known, Out West said it then spent costs on deep cleaning and sanitation measures to fix the issue.
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[url] https://www.law360.com/foodbeverage/articles/1366992/outback-steakhouse-owner-loses-pandemic-coverage-suit[/url]