By Daphne Zhang

Law360 (April 22, 2021, 5:08 PM EDT ) Zurich urged a Georgia federal judge Thursday not to give a second thought to his dismissal of an Atlanta restaurant owner's pandemic-related coverage suit, saying the owner cannot use its reconsideration motion as a "backdoor" to certify insurance questions of state law.

Zurich American Insurance Co. said the court should crush its policyholder's bid to certify the coronavirus-related insurance questions to the state high court because the insured did not properly raise its request until in its reconsideration motion after the court had decided to toss the suit.

The carrier said the court has correctly held that Restaurant Group Management, which owns popular Atlanta restaurants including Joe's on Juniper and Hudson Grille, failed to show the virus caused any "direct physical loss of or damage to" its restaurants' properties, a precondition for coverage under the policy.

In March, U.S. District Judge Thomas W. Thrash dismissed the case, saying that the eateries themselves — not a virus — chose to rearrange their tables and seats to stymie virus transmission, so he ruled that the owner did not meet the requirements to get paid by its insurer.

Earlier this month, the restaurant owner asked the federal judge to reconsider his order denying COVID-19 coverage from Zurich, arguing the judge transformed "findings of fact into conclusions of law to kill the case."

The owner also urged the court to certify to the state high court questions including if the virus presence at a restaurant constitutes property damage, and if Zurich's microorganism coverage is triggered for COVID-19 related losses, as well as whether or not the policy's civil authority provision should cover its losses from government closure orders.

On Thursday, Zurich said the court should not grant the restaurant owner's certification bid because the owner never properly requested it. The restaurants "never filed a motion to certify a question. Rather, they use the Motion for Reconsideration as a vehicle to develop in more detail their argument for certification," Zurich maintained.

"The Court cannot reconsider requests to certify which were not presented to it, and the Court should reject Plaintiffs' use of a motion for reconsideration as a backdoor to certify questions of state law. "

Additionally, the insurer said, the restaurant company failed to explain why and how the requested certification questions involve doubt of the state law and need to be decided at the state level.

"Simply put, plaintiffs do not want to be in federal court. That alone is insufficient to certify questions to the Georgia Supreme Court," the insurer said.

According to court records, the Georgia restaurant group was reportedly planning to close Joe's on Juniper and Einstein's, a sister restaurant in Midtown Atlanta, last June when their parent company sold the real estate. The company also runs six locations of a sports bar called Hudson Grille.

On Thursday, Zurich said the group failed to provide new evidence and should not be allowed to present new arguments in its motion for reconsideration. The court correctly held that the restaurant group's properties did not incur any actual physical change during the pandemic, the carrier said.

"Plaintiffs merely repackage and expand the very same arguments that they already presented to the court and which the court specifically rejected," it added.

Counsel could not be immediately reached for comment Thursday. 

The restaurant management company is represented by J. Robert Persons and William Thomas Lacy Jr. of Lindsey & Lacy PC.

Zurich is represented by Anthony Wyatt Morris and Robin Needham Johnson of Akerman LLP.

The case is Restaurant Group Management LLC et al v. Zurich American Insurance Company, case number 1:20-cv-04782, in the U.S. District for the Northern District of Georgia.

--Editing by Gemma Horowitz.

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