By Mike Curley

Law360 (September 25, 2020, 4:16 PM EDT ) A Florida federal judge has denied an insurer's bid to toss a suit by a gynecologist's office alleging it wrongfully denied coverage of losses stemming from the COVID-19 shutdown, making it the fourth federal court case to move past the dismissal stage.

In an order filed Thursday, U.S. District Judge Anne C. Conway told Sentinel Insurance Co. Ltd. that the virus exclusion it cited in its motion to dismiss is not unambiguous enough to bar coverage that Urogynecology Specialist of Florida LLC alleges it's owed in the suit.

The judge said the grouping of the virus exclusion with other pollutants "does not logically align" with losses stemming from COVID-19 such that the policy anticipated and intended to deny coverage for those losses.

In addition, Judge Conway wrote that the virus exclusion does not exist as an independent document but instead modifies certain forms in the policy that were not provided in the policy itself, or to the court.

Without access to those forms, the court cannot make a decision on the merits of the plain language of the policy to determine whether Urogynecology Specialist's losses are covered, Judge Conway wrote.

As a number of other specialist facilities and other businesses have done in the last several months, Urogynecology Specialist sued its insurer in June in state court, alleging the insurer wrongly denied coverage of business losses stemming from government orders shutting down nonessential businesses to stem the spread of COVID-19. Sentinel removed the suit to federal court in July.

Thursday's decision marks the fourth COVID-19 business interruption suit to make it past the dismissal stage in federal court, after three Missouri federal court cases were denied dismissal in the last month.

In August, a group of hair salons and restaurants led by Studio 417 Inc. pushed their case against The Cincinnati Insurance Co. past dismissal, as did a similar suit against the same insurer by restaurant chain K.C. Hopps Ltd. And on Sept. 21, four dentist's offices led by Blue Springs Dental Care LLC got the go ahead to continue its suit against Owners Insurance Co.

A New Jersey Superior Court case, Optical Services USA/JCI v. Franklin Mutual Insurance Co., is also moving ahead after the judge last month rejected the insurer's argument that COVID-19 did not trigger coverage for physical loss.

In Thursday's order, Judge Conway also rejected Sentinel's argument that other cases had upheld similar virus exclusions, saying those cases involved things like a sexually transmitted virus, pollution exclusions and sewer backups, situations distinct from COVID-19.

"Importantly, none of the cases dealt with the unique circumstances of the effect COVID-19 has had on our society — a distinction this court considers significant," she wrote.

"I am certainly glad we have passed this hurdle and can get to the merits of the real issue, which is that this claim should have been covered under the terms and conditions of the policy," Imran Malik of Malik Law PA, representing Urogynecology Specialist, told Law360 on Friday. "We look forward to proving this matter in court."

Representatives for Sentinel could not immediately be reached for comment Friday.

Urogynecology Specialist is represented by Imran Malik of Malik Law PA.

Sentinel is represented by Troy J. Seibert of Butler Weihmuller Katz Craig LLP and Sarah D. Gordon, John J. Kavanagh and Caitlin R. Tharp of Steptoe & Johnson LLP.

The case is Urogynecology Specialist of Florida LLC v. Sentinel Insurance Co. Ltd., case number 6:20-cv-01174, in the U.S. District Court for the Middle District of Florida.

--Additional reporting by Jeff Sistrunk. Editing by Janice Carter Brown.

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