Class action lawsuit filed over insurer's denial of claim for trip insurance on ground that trip cancellation due to coronavirus does not come within definition of quarantined

A class action lawsuit against a travel insurance company was filed yesterday in the United States District Court for the District of Massachusetts, seeking reimbursement for money paid for a school trip canceled due to the coronavirus pandemic.

In Corrigan v. EF Education Tours, Inc., et al, Amy Corrigan alleges that in October 2019 she enrolled her daughter, an 8th grader, in a school trip to Spain that was scheduled for April 2020.  She paid in full over $4,000 for the trip, which was coordinated by EF Education Tours and related organizations.

In November 2019, Corrigan purchased travel insurance marketed by EF and apparently written by United States Fire Insurance Company (USFIC).  The coverage  included reimbursement of trip costs if the student was prevented from traveling because she was "quarantined."  According to the complaint "quarantined" was not defined by the policy.

On March 12, 2020, EF announced that it was postponing all tours scheduled for April because of the coronavirus pandemic.  As we know, later that month the Massachusetts governor issued an executive order restricting public movement of non-essential personnel and banning gatherings of ten or more people.  He subsequently closed all public schools through the end of the school year. On March 31, 2020, the United States Department of State advised US citizens to avoid all international travel due to the pandemic.

Corrigan sought reimbursement from USFIC for the funds she had paid for the trip.  USFIC denied the claim, stating that trip cancellation due to the state quarantine and the threat of COVID-19 did not come within the coverages of the policy.

Corrigan's class action complaint alleges breach of contract, breach of the duty of good faith and fair dealing, unjust enrichment, and conversion.

This lawsuit is at the very beginning stages.  I expect to see many similar suits filed against trip insurers, summer camp insurers, and the like.  But I do note that if Corrigan's allegations are correct, her policy differs from others that I have seen that do in fact provide a definition of "quarantined."  In insurance coverage disputes, it is (almost always) the terms of the specific policy that will control the outcome.

First Circuit holds that church group splintering off from church is not covered by church's directors and officers coverage

The definition of the word chutzpah is when a man kills both his parents and then begs for the court's mercy because he is an orphan.

Typically I would not apply a Yiddish word to a church dispute.  And yet . . .

In January, 2017, members of the Newton Presbyterian Church (NPC) voted to withdraw from the national Presbyterian organization.  The withdrawing members called themselves the Newton Covenant Church (NCC).  The schism arose because the withdrawing members disagreed with the progressive stance of the national organization with respect to same-sex marriage and the ordination of gay, lesbian, bisexual, and transgender ministers.

NPC and the Boston affiliate of the national organization sued NCC and its officers, alleging that they had unlawfully exerted control over real property and bank accounts owned by NPC, had rejected the church's authority to resolve an ecclesiastical schism, and had conducted a vote not authorized under the constitution of  national organization. They sought in part a declaratory judgment that NPC owned church property at 75 Vernon Street in Newton, Massachusetts.

The Massachusetts Superior Court granted partial summary judgment to NPC.  It also held that NPC is the sole and exclusive owner of the real property and ordered NCC and its members to vacate the premises.  The parties subsequently settled. 

NCC had requested a defense from Great American Insurance Company (GAIC) under a Directors and Officers policy GAIC had issued to NPC. NCC asserted that it  was the same legal entity as NPC. GAIC denied the claim.

In Newton Covenant Church v. Great Am. Ins. Co., 956 F.3d 32 (1st Cir. 2020), the United States Court of Appeals for the First Circuit held that NCC was not covered by the policy.  The policy defined "Insured" as the "Organization" and "Insured Persons."  The policy defined the "Organization" as the entity named in the declarations, which in this case was the NPC.  The policy defined "Insured Persons" as "persons who were, now are, or shall be directors, trustees [or] officers . . . of the Organization."

The court held that there was no coverage even to the extent that NCC claimed that it was a segment of the original NPC, and therefore within the definition of Insured, because the policy contained an exclusion for claims between insureds.  The same exclusion excluded coverage to the extent that NCC claimed that it was the original NPC and had simply undergone a name change.  "Because insureds would be on both sides of the litigation, the exclusion would apply."

View webinar on Insurance Issues for New Personal Injury Attorneys

On May 6, 2020 I moderated a Boston Bar Association panel on Insurance Issues for New Personal Injury Attorneys.  Many thanks to panelists Frank Riccio and Andy Caplan, who did a stellar job.  You can view the webinar here.

Free Boston Bar Association webinar: Insurance Issues for New Personal Injury Attorneys

This Wednesday, May 6, 2020 from 12:30 to 1:30 PM I will be moderating a Boston Bar Association panel discussion webinar with Frank Riccio and Andy Caplan on Insurance Issues for New Personal Injury Attorneys. 

Like all BBA webinars at this time, it is free for both members and non-members.  If you are a member you can sign up here.  If you are not a member, send me an email (my contact information is on the left) and I'll put you in touch with someone at the BBA who will give you a link to log in.