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Law360 (May 25, 2021, 8:08 PM EDT ) Markel Insurance Co. asked a Virginia federal court to throw out a suit from a group of Anytime Fitness gym owners seeking coverage for pandemic losses, saying a virus exclusion in their policies precludes any coverage.
None of the gym owners showed in their proposed class action that their properties were physically damaged by the coronavirus, Markel said Monday, a precondition for coverage under their commercial insurance policies that would have already been barred by an exclusion for viruses. In asking to toss the suit, Markel joins a wave of insurers across the country hoping to shrug off pandemic claims sent their direction.
The insurer pointed to other exclusions in the policy that preclude coverage for decisions of government bodies that result in loss, as well as ordinances or laws that cause loss by regulating the use of a policyholder's property.
In their January complaint, the gym owners cited government-ordered restrictions in response to the pandemic as key reasons for their losses. Markel, in its bid to dismiss their suit, said that because the gym owners "unquestionably" alleged losses stemming from the virus, the virus exclusion in their policy barred coverage.
"Whether [the gym owners'] losses are alleged to flow from the virus itself or virus-precipitated civil-authority orders, the losses plainly result from the coronavirus and are barred by the virus exclusion's plain language," Markel said.
The gym owners brought their suit on behalf of a proposed class of 4,500 Anytime Fitness franchises across the United States, according to their complaint. They described their policy with Markel as one issued for health clubs.
They face an uphill battle. Federal courts have dismissed upwards of 80% of coronavirus coverage cases, according to judicial data from the University of Pennsylvania Carey Law School. Most of the disputed policies have contained some form of communicable disease or virus exclusion, their data shows.
Gyms and recreation centers have been among the businesses hardest hit by the pandemic. The owner of L.A. Fitness brought its insurers to Washington state court in April, in a case that has since been consolidated and is seeking $950 million in coverage.
In March, a New Jersey federal court declined to hold a Nationwide Insurance unit responsible for a Haddonfield gym's pandemic losses. In that case, as in the Anytime Fitness case, the gym's policy contained an exclusion for losses stemming from viruses.
Counsel for Anytime Fitness and counsel for Markel didn't immediately respond to requests for comment.
The gym owners are represented by William H. Monroe Jr., Marc C. Greco, Kip A. Harbison and Michael A. Glasser of Glasser & Glasser PLC, Diandra S. Debrosse Zimmermann, Elizabeth Graham and Adam J. Gomez of Grant & Eisenhofer PA, L.N. Chandler Rogers of Rogers Law Group PA and by Winston B. Collier of The Collier Firm PA.
Markel is represented by Henrik Jonathan Redway, Nicole M. Meyer and Timothy M. Strong of Dickinson Wright PLLC.
The case is Fountain Enterprises LLC et al. v. Markel Insurance Co., case number 2:21-cv-00027, in the U.S. District Court for the Eastern District of Virginia.
--Additional reporting by Daphne Zhang and Lauren Berg. Editing by Haylee Pearl.
For a reprint of this article, please contact reprints@law360.com.
