CNA Underwriter Wins Dismissal of Significant COVID-19 Business Interruption Insurance Lawsuit

Paul, Weiss won the dismissal of a significant business interruption insurance coverage dispute on behalf of commercial insurer CNA Financial Corporation and its underwriter Continental Casualty Company, when a state court judge in Denver disposed of the case on a motion for judgment on the pleadings. The plaintiffs, a national operator of senior living communities and its individual communities known as Spectrum Retirement Communities, had sought more than $500 million in alleged lost income and statutory damages.

In its suit filed in February 2021 in Denver County, Colorado, Spectrum sought coverage for financial losses at 43 communities during the COVID-19 pandemic under its commercial property insurance policy with Continental Casualty Company. Spectrum claimed that COVID-19 caused direct physical loss of or damage to property at the communities, triggering coverage under the policy, and that Continental had denied its insurance claim in bad faith. 

In his order granting Continental’s motion for judgment on the pleadings, Second Judicial District Court Judge Martin Egelhoff agreed with Continental’s arguments that Spectrum could not establish coverage under the “unambiguous, plain and ordinary terms” of its insurance policy. Judge Egelhoff also held that Spectrum’s statutory and common law bad faith claims should be dismissed. 

The Paul, Weiss team included litigation partners Christopher Boehning and Yahonnes Cleary, and counsel Daniel Levi.