Sacramento Downtown Arena LLC v. Factory Mut. Ins. Co.

Sacramento Downtown Arena LLC v. Factory Mut. Ins. Co.

Opinion

ORDER

In this insurance coverage dispute, Factory Mutual Insurance Company moves to dismiss its insureds' claims that it wrongly denied coverage of losses related to the COVID-19 pandemic. The motion is denied. As explained in this order, one reasonable interpretation of the policy's scope and exclusions encompasses the plaintiffs' insurance claims.

I. BACKGROUND

The plaintiffs operate and manage the Golden 1 Center, which is the home of the Sacramento Kings, as well as a nearby hotel and outdoor shopping center. See Compl. ¶¶ 15-18, 24-27. In early 2020, the rapid spread of SARS-CoV-2 and COVID-19 developed into a global pandemic. See id. ¶¶ 40-48. [*2]  California and Sacramento County urged people to stay home, and every event at the Golden 1 Center was cancelled for the next year: basketball games, a Bon Jovi concert, a talk by the former First Lady of the United States, and a graduation ceremony for Sacramento State University, among many others. See id. ¶ 59. The basketball team and arena lost a year's revenue. See id. ¶ 7. Occupancy at the hotel dropped to almost zero before it closed completely for ten weeks, and after reopening, occupancy was half of what it once was. See id. ¶ 8. Retailers' and restaurants' revenues plummeted as foot traffic disappeared. See id. ¶ 9. The plaintiffs also spent money cleaning, replacing air filtration systems, remodeling, and taking other precautions. See id. ¶ 77.

Before the pandemic, one of the plaintiffs had purchased an insurance policy from Factory Mutual Insurance Company. See id. ¶ 28; Policy, Compl. Ex. A, ECF No. 1-1. The Golden 1 Center, the hotel, and the shopping center are insured locations under this policy. See Compl. ¶ 30; Policy App'x A (Schedule of Locations). The policy is an "all risks" policy, as explained in the preamble on the first page of its declarations:

This Policy [*3]  covers property, as described in this Policy, against ALL RISKS OF PHYSICAL LOSS OR DAMAGE, except as hereinafter excluded, while located as described in this Policy.

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