RADNOR, Pa., March 5, 2021 /PRNewswire/ -- A federal judge recently permitted a class action lawsuit to proceed 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 is pending 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").
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 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.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). For more information about Kessler Topaz Meltzer & Check, LLP, please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP James Maro, Esq. Adrienne Bell, Esq. 280 King of Prussia Road Radnor, PA 19087 (888) 299-7706 (toll free) [email protected]