TP Racing LLLP v. Am. Home Assur. Co.

TP Racing LLLP v. Am. Home Assur. Co.

Opinion

ORDER

The Court now considers Defendant American Home Assurance Company ("American Home")'s 12(B)(6) Motion to Dismiss ("Motion"). (Doc. 23, ("Mot.").)

I. BACKGROUND

This is a COVID-19-related insurance dispute. Plaintiff TP Racing, LLLP ("TP Racing") alleges that its financial losses in the wake of the COVID-19 pandemic are covered by its property insurance policy ("the Policy") through American Home. (Doc. 20, First Am. Compl., ("Am. Compl.") ¶ 135.) TP Racing now seeks reimbursement for its loss of business [*2]  income and extra expenses caused by the COVID-19 pandemic. (Id. ¶ 128-60.) American Home denies the existence of coverage in this situation, arguing that TP Racing's losses are excluded from the Policy in both the plain language of the Policy and the explicit virus exclusion in the Policy. (Mot. at 2.)

TP Racing is a company that organizes and profits from horse racing in Arizona. (Am. Compl. ¶¶ 1-3.) Specifically, TP Racing operates a thoroughbred race track in Phoenix called Turf Paradise, as well as 55 off track betting facilities ("OTBs") across the state. (Id. ¶¶ 1-2.) The OTBs operate in bars and restaurants that are otherwise unaffiliated with TP Racing. (Id. ¶ 2.) The Turf Paradise grounds include a multi-floor racetrack that is home to a grandstand with capacity for 2,500 people. (Id. ¶ 6.) TP Racing had operated the racetrack without interruption since 1956. (Id. ¶ 3.)

Prior to fall 2019, TP Racing purchased an insurance policy from American Home effective between October 1, 2019 and October 1, 2020, which includes part of the period during which Turf Paradise's businesses were compromised by the COVID-19 pandemic and resulting closures. (Id. ¶ 14.) The insurance policy included [*3]  coverage for both Turf Paradise and the OTBs. (Id. ¶ 21.) Specifically, the policy provided:

We will pay the actual business income loss sustained by you due to the necessary partial or total interruption of your business operations, services or production during the period of indemnity as a result of direct physical loss or damage to: (1) covered property by a covered cause of loss or (2) property of the type insured under this Policy by a covered cause of loss which directly affects your use of the covered property, provided that you are a lessee or occupant of the premises where the direct physical loss or damage occurred.

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