United States District Court for the Northern District of Illinois — Case 1:20-cv-05965, Document 25
Summary
Plaintiffs' Responses and Objections to Defendant's Local Rule 56.1 Statement of Undisputed Material Facts, Document #25 filed 10/19/20 in In Re: Society Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, MDL No. 2964, Master Docket No. 20 C 5965, before Judge Edmond E. Chang in the Northern District of Illinois. It relates to Case No. 1:20-cv-03959 and responds to Defendant Society Insurance's numbered facts, including the CDC cleaning guidance and Governor Pritzker's March 16, 2020 Executive Order 2020-07 on restaurants and bars. Most responses say Undisputed, with objections that certain facts are not material to the insurance coverage question. It is dated October 19, 2020 and signed by counsel including Joshua Karsh.
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“United States District Court for the Northern District of Illinois — Case 1:20-cv-05965, Document 25.”
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Case: 1:20-cv-05965 Document #: 25 Filed: 10/19/20 Page 1 of 15 PageID #:711
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
IN RE: SOCIETY INSURANCE ) MDL No. 2964
COMPANY COVID‐19 BUSINESS )
INTERRUPTION PROTECTION ) Master Docket No. 20 C 5965
INSURANCE LITIGATION )
) Judge Edmond E. Chang
This Document Relates to Case )
No. 1:20‐cv‐ 03959 ) Magistrate Judge Jeffrey I. Cummings
PLAINTIFFS’ RESPONSES AND OBJECTIONS TO DEFENDANT’S
LOCAL RULE 56.1 STATEMENT OF UNDISPUTED MATERIAL FACTS
Plaintiffs submit the follow responses and objections to Defendant Society
Insurances Local Rule 56.1 Statement of Undisputed Material Facts.
Response to Description Of The Parties
Undisputed.
Response to Jurisdiction and Venue
Undisputed.
Response to Undisputed Material Facts
CDC Guidance Regarding COVID‐19
1. Attached as Exhibit 1 is a copy of the CDC’s Guidance for Cleaning and
Disinfecting Public Spaces, Workplaces, Businesses, Schools, and Homes, (“the CDC
Guidance”), available at https://www.cdc.gov/coronavirus/2019‐ncov/community/
clean‐disinfect/index.html (last visited August 25, 2020).
RESPONSE: Undisputed. However, Plaintiffs object to Exhibit 1 because it is not
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material. Issued on April 28, 2020, it provides dated guidance and less specific guidance
as regards Plaintiffs’ operations than the FDA’s Best Practices for Retail Food Stores,
Restaurants, and Food Pick‐Up/Delivery Services, to which Exhibit 1 links, and which is
available at https://www.fda.gov/food/food‐safety‐during‐emergencies/best‐practices‐
retail‐food‐stores‐restaurants‐and‐food‐pick‐updelivery‐services‐during‐covid‐19.
Governor Pritzker’s Social Distancing Orders
2. On March 16, 2020, Illinois Governor issued Executive Order 2020‐07 (“the
March 16 Order.)” A copy the March 16 Executive Order is attached as Exhibit 2.
RESPONSE: Undisputed.
3. The March 16 Order states that “COVID‐19 is a novel and severe acute
respiratory illness that can spread among people through respiratory transmission.”
(Ex. 2 at 1.)
RESPONSE: Undisputed.
4. The March 16 Order further states that “social distancing, which consists of
maintain [sic] at least a six‐foot distance between people, is the paramount strategy for
minimizing the spread of COVID‐19.” It goes on to say, “[T]he number of suspected
COVID‐19 cases in Illinois is increasing exponentially . . . indicating that drastic social
distancing measures are needed.” (Id. at 1‐2.)
RESPONSE: Undisputed.
5. The March 16 Order provides that, beginning March 16, 2020 at 9 p.m.,
restaurant and bars “must suspend service for and may not permit on‐premises
consumption. Such businesses are permitted and encouraged to serve food and
beverages so that they may be consumed off‐premises, as currently permitted by law,
through means such as in‐house delivery, third‐party delivery, drive‐through, and
curbside pick‐up. In addition, customers may enter the premises to purchase food or
beverages for carry out.” (Id.)
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RESPONSE: Undisputed. However, Plaintiffs object to the second sentence of
paragraph 5 because the portion of the March 16 order permitting restaurants and bars
were permitted to provide in‐house delivery, third‐party delivery, drive‐through, and
curbside pickup is immaterial to the insurance coverage question in this case. Under
Society’s policies, coverage does not turn on whether the Governor closed only on‐
premises food and beverages service or all food and beverage service.
6. The reason for the prohibition of on‐premises consumption of food at
restaurants, as set forth in the March 16 Order, is because such public dining “usually
involves prolonged close social contact contrary to recommended practice for social
distancing.” (Id. at 1.)
RESPONSE: Disputed. Defendant has selectively quoted a portion of the March
16 order and ascribed a misleadingly narrow purpose to it (“the reason for the
prohibition … is because”), which is inconsistent with other portions of the March 16
order, including, for example, the very next sentence of the order, which provides an
additional reason for the prohibition on in‐premises food and beverage service, stating
that, “frequently used surfaces in public settings, including bars and restaurants, if not
cleaned and disinfected frequently and properly, also pose a risk of exposure ….” The
March 16 order does not support the statement in paragraph 6 that “the reason” for the
prohibition of on‐premises service or consumption was the danger of “social contact.”
Likewise, paragraph 6 also does not support Defendant’s statements in its brief that the
Governor’s orders were “social distancing” orders, that their “purpose” was to enforce
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social distancing, or that “the reason for prohibition of on‐premises consumption of
food” was to enforce social distancing. The March 6 Order explicitly references surface
transmission of the virus, including at bars and restaurants, as a further concern.
7. On March 20, 2020 Governor Pritzker issued executive order 2020‐10 (“March
20 Order.”) A copy of the March 20 Order is attached as Exhibit 3.
RESPONSE: Undisputed.
8. The March 20 Order required on‐premises business operations in the state to
cease, with the exception of “Essential Businesses” and “Minimum Basic Operations,”
and it prohibited gatherings of more than ten people. (Ex. 3, at 2, ¶¶ 2‐3.)
RESPONSE: Disputed, to the extent that the March 20 order refers to gatherings
of more than ten people that are “exempted by this Executive Order.”
9. The March 20 Order states that it was entered into “for the preservation of
public health and safety throughout the entire State of Illinois and to ensure that our
healthcare delivery system is capable of serving those who are sick . . . [and] to slow
and stop the spread of COVID‐ 19.” (Ex. 3 at 1.)
RESPONSE: Undisputed.
10. Essential Businesses under the March 20 Order include “[r]estaurants and
other facilities that prepare and serve food, but only for consumption off‐premises,
through such means as in‐house delivery, third‐party delivery, drive through, curbside
pick‐up, and carry‐out.” (Id. at 6‐7, ¶12(l).)
RESPONSE: Undisputed. However, Plaintiffs object to the second sentence of
paragraph 10 because the portion of the March 20 order permitting restaurants and bars
were permitted to provide in‐house delivery, third‐party delivery, drive‐through, and
curbside pickup is immaterial to the insurance coverage question in this case. Under
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Society’s policies, coverage does not turn on whether the Governor closed only on‐
premises food and beverages service or all food and beverage service.
11. Essential Businesses were encouraged to remain open. (Id. at 2, ¶ 2.)
RESPONSE: Disputed. Paragraph 11 is both misleading and immaterial.
Plaintiffs were prohibited from opening their premises to customers for on‐site
consumption of food and beverages. And it is immaterial to the question of coverage
under Society’s policies that Plaintiffs were permitted to prepare and serve food for
consumption off premises.
12. The March 20 Order requires Essential Businesses that remain open, to the
greatest extent feasible, to “comply with Social Distancing Requirements as defined in
this Executive Order, including by maintaining six‐foot social distancing for both
employees and members of the public at all times.” (Id. at p. 2, ¶ 2.)
RESPONSE: Undisputed. However, Plaintiffs object to paragraph 12 because it is
immaterial to the insurance coverage question in this case. Under Society’s policies,
coverage does not turn on whether the Governor closed only on‐premises food and
beverages service or all food and beverage service.
13. Individuals were allowed to leave their homes for “Essential Activities” and
obtaining and delivering food are “Essential Activities” under the March 20 Order. (Id.
at 3, ¶ 5(b).)
RESPONSE: Undisputed. However, Plaintiffs object to paragraph 13 because it is
immaterial to the insurance coverage question in this case. Under Society’s policies,
coverage does not turn on whether the Governor closed only on‐premises food and
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beverages service or all food and beverage service.
14. Under the March 20 Order, Non‐Essential Businesses are allowed to perform
Minimum Basic Operations on their premises, which include “[t]he minimum necessary
activities to maintain the value of the business’s inventory, preserve the condition of the
business’s physical plant and equipment, ensure security, process payroll and employee
benefits, or for related functions.” (Id. at p. 2, ¶ 2, p. 8, ¶ 13.)
RESPONSE: Undisputed. However, Plaintiffs object to paragraph 14 because it is
immaterial to the insurance coverage question in this case. Under Society’s policies,
coverage does not turn on whether the Governor closed only on‐premises food and
beverages service at Plaintiffs’ premises or access to their premises.
15. Under the March 20 Order, “Outdoor Activity,” including running, walking,
hiking, or biking is an Essential Activity, as is shopping for “necessary supplies and
services,” including household consumer products. (Id. at 3, ¶ 5(b‐c).)
RESPONSE: Undisputed. However, Plaintiffs object to paragraph 15 because it is
immaterial to the insurance coverage question in this case.
16. On April 1, Governor Pritzker executed Executive Order 2020‐18, a copy of
which is attached as Exhibit 4.
RESPONSE: Undisputed.
17. Attached as Exhibit 5 is a copy of Executive Order 2020‐33, which was
issued by Governor Pritzker on April 30, 2020.
RESPONSE: Undisputed.
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18. Attached as Exhibit 6 is a copy of Executive Order 2020‐32, which was issued by
Governor Pritzker on April 30, 2020.
RESPONSE: Undisputed.
19. Executive Orders 2020‐18 and 2020‐33 extended the requirements of the March 16,
2020 order that pertained to restaurants and bars through May 29, 2020.
RESPONSE: Undisputed.
20. Executive Order 2020‐32 renewed the requirements of the March 20 Order
including the classification of restaurants and establishments engaged in the retail sale of
alcohol as Essential Businesses.
RESPONSE: Undisputed.
21. Attached as Exhibit 7 is a copy of a document entitled Illinois Liquor Control
Commission March 31 COVID‐19: Compliance Directive.
RESPONSE: Undisputed.
22. The Illinois Liquor Control Commission interpreted Governor Pritzker’s orders as
allowing bars and taverns to receive the delivery of beer, wine, and liquor from wholesalers,
and, if allowed by local ordinance, to sell and deliver alcohol for off‐premises consumption
as long as they follow the appropriate social‐distancing guidelines. (Ex. 7)
RESPONSE: Disputed: the cited document (Exhibit 7) does not, without more,
establish how the Liquor Control Commission “interpreted” the Governor’s orders.
Plaintiffs also object that paragraph 27 is not material to any issue in this case.
23. Attached as Exhibit 8 is a document issued by the Chicago Department of
Business Affairs and Consumer Protection (“BACP”).
RESPONSE: Undisputed.
24. The BACP guidance provided that holders of a license for consumption on
premises‐incidental activity as well as holders of a tavern liquor license can sell and deliver
incidental packaged goods liquor. (Ex. 8)
RESPONSE: Undisputed. However, Plaintiffs object to paragraph 24 because it is
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immaterial to the insurance coverage question in this case. Under Society’s policies, coverage
does not turn on whether Plaintiffs were allowed to sell and deliver incidental packaged
goods liquor.
25. Attached as Exhibit 9 is a copy of the document “Restore Illinois: A Public
Health Approach to Safely Reopen Our State,” issued by the Office of Governor JB Pritzker
on May 5, 2020.
RESPONSE: Undisputed.
26. The State of Illinois’s timetable for fully reopening businesses is tied to the
percentage of positive COVID‐19 cases, the rate of hospital admissions for COVID‐19 like
illnesses, and the available capacity of ICU beds and ventilators. (Ex. 9.)
RESPONSE: Disputed Exhibit 9 does not support the statement in paragraph 26
insofar as the Exhibit characterizes itself not as a “timetable” but, rather, as “an initial
framework that will likely be updated as research and science develop.” In addition,
Plaintiffs object that paragraph 26 is immaterial to the insurance coverage question in this
case.
The Society Policies
27. Society and Counter‐Defendants entered into the following Businessowners
insurance contracts:
a. The Whistler, LLC: Policy Number TRM 587236, policy period November 15,
2019 to November 15, 2020 (Compl. at ¶ 12, Ex. 2.)
b. Sleeping Village Inc.: Policy Number BP 17026033, policy period January 2, 2020
to January 2, 2021 (Compl. at ¶ 13, Ex. 3.)
RESPONSE: Undisputed.
28. The insurance contracts entered into between Society and Plaintiffs contain the
Businessowners Special Property Coverage Form TBP2 (05‐15) (“the Special Property
Coverage Form”). (Id. at ¶ 23, Exs.2, 3.)
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RESPONSE: Undisputed.
29. A copy of the Special Property Coverage Form is attached hereto as Exhibit 10.
RESPONSE: Undisputed.
30. Plaintiffs claim they are entitled to coverage under the Business Income, Civil
Authority and Contamination, additional coverage parts in the Special Property Coverage
Form of the Society Policy. (Compl. at ¶¶ 29‐41.)
RESPONSE: Undisputed
31. Part A of the Special Property Coverage Form is the section that provides and
defines the coverage available.
Part A provides, in part:
A. Coverage
We will pay for direct physical loss of or damage to Covered Property at the
premises described in the Declarations caused by or resulting from any
Covered Cause of Loss.
1. Covered Property
Covered Property includes Buildings as described under Paragraph a.
below, Business Personal Property as described under Paragraph b.
below, or both, depending on whether a Limit of Insurance is shown in
the Declarations for that type of property. . . .
a. Buildings, meaning the buildings and structures at the premises described in
the Declarations . . .
b. Business Personal Property located in or on the buildings at the described
premises or in the open (or in a vehicle) within 100 feet of described premises,
including….
(Ex. 12 at p.1, ¶ A.1)
RESPONSE: Undisputed
32. The term Covered Cause of Loss is defined in Section 3 of Part A and states:
3. Covered Causes Of Loss
Direct Physical Loss unless the loss is excluded or limited under this
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coverage form.
(Id. at p.2, ¶ A.3.)
RESPONSE: Undisputed.
33. The Business Income additional coverage of the Special Property Coverage Form
provides, in part:
5. Additional Coverages
f. Business Income
(1) Business Income
(a) We will pay for the actual loss of Business Income you sustain due to
the necessary suspension of your “operations” during the “period of
restoration.” The suspension must be caused by a direct physical loss
of or damage to covered property at the described premises. The loss
or damage must be caused by or result from a Covered Cause of Loss.
...
(b) We will only pay for loss of Business Income that you sustain during
the “period of restoration” and that occurs within 12 consecutive
months after the date of direct physical loss or damage.
(c) * * * *
(Id. at p. 5, ¶ A.5.g.)
RESPONSE: Undisputed
34. “Period of Restoration” refers to the period of time that:
a. Begins immediately after the time of direct physical loss or damage for
Business Income or Extra Expense coverage caused by or resulting
from any covered Cause of Loss at the described premises; and
b. Ends on the earlier of:
(1) The date when the property at the described premises should
be repaired, rebuilt or replaced with reasonable speed and
similar quality; or
(2) The date when business is resumed at a new permanent
location.
(Id. at p. 31, ¶ H.12.)
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RESPONSE: Undisputed.
35. The Civil Authority additional coverage provides, in part:
k. Civil Authority
When a Covered Cause of Loss causes damage to property other
than property at the described premises, we will pay for the actual
loss of Business Income you sustain and necessary Extra Expense
caused by action of civil authority that prohibits access to the
described premises, provided that both of the following apply:
(1) Access to the area immediately surrounding the damaged
property is prohibited by civil authority as a result of the
damage, and the described premises are within the area; and
(2) The action of civil authority is taken in response to dangerous
physical conditions resulting from the damage or continuation
of the Covered Cause of Loss that caused the damage, or the
action is taken to enable a civil authority to have unimpeded
access to the damaged property.
(Id. at p. 7, ¶ A.5.k.)
RESPONSE: Undisputed.
36. The Contamination additional coverage provides, in part:
If your “operations” are suspended due to “contamination”:
***
(2) We will also pay for the actual loss of Business Income and Extra
Expense you sustain caused by:
(a) “Contamination” that results in an action by a public health or
other governmental authority that prohibits access to the described
premises or production of your product.
(b) “Contamination threat”
(c) “Publicity” resulting from the discovery or suspicion of
contamination.
***
(4) Additional Definitions:
(a) “Contamination” means a defect, deficiency, inadequacy or
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dangerous conditions in your products, merchandise, or premises.
(b) “Contamination threat” means a threat made by a third party
against you to commit a “malicious contamination” unless the
third party’s demand for money or other consideration is met.
(c) “Malicious contamination” means an intentional, malicious and
illegal altercation or adulteration of your products
(d) “Publicity” means a publication or broadcast by the media, of the
discovery or suspicion of “contamination” at a described premise.
(Id. at p. 8, ¶ A.5.m.)
RESPONSE: Undisputed.
Plaintiffs’ Businesses
37. Attached as Exhibit 11 is a true and accurate image a of post made by the
Facebook account for The Whistler on March 25, 2020.
RESPONSE: Undisputed. However, Plaintiffs object that Exhibit 11 is not material
to the insurance coverage question in this case.
38. The Whistler fulfilled orders for curbside pickup during the period in which
Governor Pritzker’s Executive Orders, attached hereto as Exhibits 2‐6, were in effect. (Ex.
11.)
RESPONSE: Undisputed. However, Plaintiffs object that the facts in paragraph 38
are not material to the insurance coverage question in this case.
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39. Attached as Exhibit 12 is a true and accurate image of a post made by the
Facebook account for The Sleeping Village on March 24, 2020. (Ex. 12.)
RESPONSE: Undisputed. However, Plaintiffs object that Exhibit 11 is not material
to the insurance coverage question in this case
40. The Sleeping Village fulfilled orders for curbside pickup during the period in
which Governor Pritzker’s Executive Orders, attached hereto as Exhibits 2‐6, were in effect.
(Ex. 12.)
RESPONSE: Undisputed. However, Plaintiffs object that the facts in paragraph 40
are not material to the insurance coverage question in this case.
Date: October 19, 2020
Respectfully submitted,
/s/ Joshua Karsh
Gary M. Klinger Jay Angoff
gklinger@masonllp.com jangoff@findjustice.com
MASON LIETZ & KLINGER LLP Cyrus Mehri
227 West Monroe St., Ste. 2100 cmehri@findjustice.com
Chicago, IL 60606 Joshua Karsh
Tel.: 312‐283‐3814 jkarsh@findjustice.com
Ezra Bronstein
Gary E. Mason ebronstein@findjustice.com
gmason@masonllp.com MEHRI & SKALET, LLC
Danielle L. Perry 1250 Connecticut Ave NW, Suite 300
dperry@masonllp.com Washington, DC 20036
MASON LIETZ & KLINGER LLP Tel.: (202) 822‐5100
5101 Wisconsin Ave., NW Ste. 305 Fax: (202) 822‐4997
Washington, DC 20016
Tel.: 202‐429‐2290
Fax.: 202‐429‐2294
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Jonathan Shub Joel R. Rhine
jshub@shublawyers.com jrr@rhinelawfirm.com
Kevin Laukaitis, Esq. Martin A. Ramey
Klaukaitis@shublawyers.com mjr@rhinelawfirm.com
SHUB LAW FIRM LLC Rhine Law Firm, P.C.
134 Kings Hwy. E. 1612 Military Cutoff Road, Suite 300
2nd Floor Wilmington, North Carolina 28403
Haddonfield, New Jersey 08033 Tel: (910) 772‐9960
Tel.: 856‐772‐7200 Fax: (910) 772‐9062
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CERTIFICATE OF SERVICE
I certify that, on October 19, 2020, I filed and caused to be served on all counsel of
record the foregoing PLAINTIFFS’ RESPONSES AND OBJECTIONS TO DEFENDANT’S
LOCAL RULE 56.1 STATEMENT OF UNDISPUTED MATERIAL through the Northern
District of Illinois’ CM/ECF system.
By: /s/ Joshua Karsh
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