In an 11-page order, Chief U.S. District Judge Nancy Rosenstengel dismissed Erik Taube's suit against Hartford since the corporation was not responsible for Taube's insurance policy, but said Taube could explore a theory that Hartford is the "alter ego" of Twin City Fire Insurance Co., whose name is on the policy.
"After reviewing the allegations in the complaint, the insurance policy, and the other judicially noticeable materials, the court finds HFSG is not a party to the policy," the order said.
Judge Rosenstengel's decision is the latest in the breach of contract suit Taube launched against Hartford and Twin City in mid-June.
According to Taube's suit, prior to the pandemic, he purchased a commercial insurance policy from Hartford that purportedly extends coverage for loss of business income.
Similar to many other businesses that had to close their doors as COVID-19 spread, Taube shut down a majority of his practice and suffered a financial hit in doing so, according to the order.
To help mitigate the financial blow, his suit says, Taube submitted a claim to Hartford under the belief that the policy covers losses from the coronavirus.
But Hartford allegedly denied the claim because the insurance policy does not cover such losses.
Taube then filed his proposed class action, which aims to represent other operating dental practices in Illinois that are "similarly situated."
Hartford moved to dismiss the suit, arguing Taube lacks standing to sue Hartford because he does not have a contractual relationship with the company, since the policy is with Twin City.
But Taube argues Hartford is a party to the 225-page policy given that it refers to "The Hartford" more than 100 times, the order said.
The dentist also implored the judge to allow discovery to explore an alter ego theory, pointing out that some individuals who signed the insurance policy have LinkedIn pages reflecting that they are employed at Hartford.
On Thursday, Judge Rosenstengel granted Hartford's motion to dismiss and took note of the language in Taube's policy. Specifically, the judge underlined that the policy "was issued by The Hartford writing company identified on [the] policy," which named Twin City as the insurer.
However, the judge did not buy Hartford's argument that Taube lacked standing, given that the dentist is still a party to the contract and is raising breach of contract claims himself.
The judge added that she was willing to entertain Taube's theory to see if The Hartford is the "alter ego of the other defendants."
"But simply because it may be difficult for Taube to pierce the corporate veil — does not prohibit Taube from amending his complaint, and conducting discovery into this alter ego theory," the order said.
Taube faces a March 11 deadline to file an amended complaint.
Taube's suit is not the first dental suit Hartford has faced over COVID-19 related losses.
Last November, the insurer was let out of a similar suit from four dental practices over COVID-19 business losses after a judge found Hartford bears no legal liability since it did not issue the policies.
Representatives for the parties did not immediately respond to Law360's requests for comment Friday.
Taube is represented by Kevin P. Green of Goldenberg Heller & Antognoli PC.
Hartford is represented by Patrick J. Kenny of Armstrong Teasdale LLP.
The case is Erik Taube et al. v. Hartford Financial Services Group Inc. et al., case number 20-cv-00565, in the U.S. District Court for the Southern District of Illinois.
--Editing by Marygrace Murphy.
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