Hartford Fire Ins. Co. v. Moda

Hartford Fire Ins. Co. v. Moda

Opinion

MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT #142 FACTS

In this matter, the plaintiff, Hartford Fire Insurance Company, has brought suit seeking a declaratory judgment that it has no legal obligation to provide insurance coverage for certain COVID-19 related losses allegedly suffered by the various defendants.¹ Broadly speaking, the plaintiffs one-count complaint alleges that following the onset of the COVID-19 pandemic, on April 2, 2020, Moda, LLC and its affiliates (collectively, the defendants), sent the plaintiff a letter indicating that it had suffered covered losses under the insurance policies between the parties. The plaintiff alleges that the defendants' claimed losses either do not fall within the ambit of the subject policies' coverage obligations or are specifically barred by exclusions found within the policies. Accordingly, the plaintiff seeks a judicial declaration that there is no coverage under its insurance policies for the defendants' claimed business losses.

In response to the plaintiff's complaint, on June 25, 2020, the defendants filed their answer, special defenses² and counterclaim. The defendants' counterclaim alleges the following relevant [*2]  facts. Prior to the commencement of the COVID-19 pandemic, the defendants were a financially successful business that employed approximately 200 people nationwide selling footwear to department stores and retail establishments across the United States. Specifically, the defendants allege that they are "principally engaged in the wholesale business of designing, developing, sourcing, marketing and selling women's, men's and children's footwear under their owned or licensed brand names . . . ." During the period between October 15, 2019 and October 15, 2020, the plaintiff issued the defendants two different insurance policies. The first is special multi-flex business insurance policy number UUN AB7878 (the package policy) and the second is ocean marine business insurance policy number 31 CTP AN9840 (the marine policy). As alleged in the plaintiff's complaint, there are four covered premises identified in the policies: (1) the defendants' office/headquarters in Greenwich; (2) a condominium also located in Greenwich; (3) a showroom on 5th Avenue in New York City and (4) a warehouse situated in Cranbury, New Jersey.³

According to the defendants, beginning in February, 2020, they started experiencing [*3]  losses covered under the subject insurance policies when state and local governments issued orders temporarily closing all non-essential businesses. As alleged by the defendants, "[i]n direct response to these orders of civil authority . . . the [defendants'] major retail customers not only shuttered their storefronts, but also cancelled their retail orders, placed months prior, from the [defendants'] spring lines. As a result, [the defendants'] warehouses are now overflowing with spring inventory, which due to the seasonal nature of the retail business, is effectively unsellable." The defendants contend they have suffered immense financial injuries resulting from these COVID-19 related business losses and "will have no choice but to liquidate" without the proceeds provided by their insurance policies with the plaintiff According to the defendants, the plaintiffs refusal to provide insurance coverage is wrongful and in contravention of the policies. Therefore, the defendants allege the following counterclaims against the plaintiff: (1) count one: breach of contract; (2) count two: breach of the implied covenant of good faith and fair dealing and (3) count three: a claim arising under [*4]  the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. (CUTPA) based on alleged violations of the Connecticut Unfair Insurance Practices Act, General Statutes § 38a-815 et seq. (CUIPA). On September 25, 2020, the plaintiff filed its amended reply to the defendants' special defenses along with its amended answer to the defendants' counterclaim. In this pleading, the plaintiff also asserted seventeen special defenses to the defendants' counterclaims. These special defenses mostly recite various contractual exclusions and limitations within the insurance policies at issue that the plaintiff claims prevents it from providing coverage for the defendants' purported financial losses.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.