Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Connecticut newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (June 16, 2021, 7:15 PM EDT ) A Connecticut state judge freed an insurance unit of The Hartford from having to cover shoe designer Marc Fisher Footwear's pandemic losses, saying the policyholder failed to show its shoe products were physically harmed.
Judge Barbara N. Bellis granted summary judgment Tuesday to Hartford Fire Insurance Co., saying Marc Fisher could not demonstrate its financial losses are covered under a business insurance policy and a marine insurance policy it held with the carrier.
Marc Fisher has argued that its loss was caused by government closure orders instead of the coronavirus and said the virus exclusion thus does not apply. But the judge disagreed, saying the exclusion clearly said the insurer will not pay for any loss caused by any virus, and there is no doubt that the shoemaker's injury resulted from the coronavirus.
Hartford sued Marc Fisher last year seeking a declaration that the shoemaker's alleged losses are not covered under the policies. The shoe business then brought counterclaims of breach of contract and good faith and unfair trade practices claims.
According to the suit, the shoemaker said that government closures have tanked its plans to ship and sell its spring footwear lines through major retailers and have left it unable to pay $107 million due to third-party factories for past and in-progress shoe orders. Marc Fisher has said that its warehouses were overflowing with about $120 million worth of unsellable off-season shoes.
Marc Fisher, which was founded in 2005 and has operations in 12 states, designs and sells a variety of men's, women's and children's shoes, including its namesake Marc Fisher branded shoes and licensed Guess, Tommy Hilfiger and Calvin Klein footwear, among others.
The shoemaker has maintained that the policy only excludes virus-related losses when they are not caused by a special event such as air travel. Marc Fisher said the coronavirus was introduced to the United States by people traveling from China and Europe, so the virus exclusion's aircraft exception should be triggered.
But Judge Bellis sided with Hartford on Tuesday by saying Marc Fisher failed to show how the virus was transmitted by aircraft instead of person-to-person by coughing and breathing. The judge said Marc Fisher's reading of the exception is "unrealistically broad."
Judge Bellis also rebuffed the shoemaker's contention that Hartford had deleted the virus exclusion and replaced it with a fungus exclusion that does not bar coverage. The judge said the policy specifically restricted the exclusion change to New York and it "would make no sense" if the change wiped off the virus exclusion from the entire policy.
Additionally, the judge said, the shoemaker's marine policy only insures direct physical loss or damage but Marc Fisher could not show its goods incurred tangible change. None of its shoe products were infected with the virus, she added.
Counsel for the parties could not be immediately reached for comment.
Marc Fisher is represented by Joshua Adam Siegal and Jerold Oshinsky of Kasowitz Benson Torres LLP
The carrier is represented by Sarah Gordon, Johanna Dennehy and James Rocap of Steptoe & Johnson LLP.
The case is Hartford Fire Insurance Co. v. Moda LLC et al, case number 20-6056095, in the Waterbury County Superior Court of Connecticut.
--Editing by Gemma Horowitz.
For a reprint of this article, please contact reprints@law360.com.
