Court overturns class certification for restaurant in COVID case

An Illinois appeals court overturned a lower court ruling that granted a restaurant class-action status permitting it to pursue its COVID-19 coverage litigation based on the governor’s executive order that closed on-site eating establishments.

In its decision in Alley 64 Inc. v. Society Insurance, the trial court had agreed with many other comparable cases in holding that the St. Charles, Illinois, bar and grill was not entitled to coverage under its policy with Fond du Lac, Wisconsin-based Society Insurance Co. because the premises wasn’t contaminated under its policy’s terms.

The St. Charles court agreed with the plaintiff, however, that it was entitled to coverage, and class-action certification, under Gov. Jay Pritzker’s executive orders prohibiting on-premises consumption of food and beverages under an “additional coverage” provision in its policy.

It said in its April 2021 ruling that the restaurant was entitled to reimbursement for up to $5,000 of actual costs, and up to three consecutive weeks of lost income.

The state appeals court overturned that decision in last week’s ruling. The additional coverage provision requires that the restaurant’s operations be suspended because of contamination, the decision said.

Alley 64’s “failure to allege the presence of the virus in its products, merchandise or premises defeats its claims for contamination coverage,” it said.

Coverage under additional coverage “requires that the insured’s operations be suspended due to contamination. Alley 64 never alleged that its premises was actually contaminated. Without contamination, there is no contamination coverage under Additional Coverage,” a unanimous three-judge panel said, in holding the restaurant does not have a valid claim for contamination coverage and has therefore not satisfied the statutory prerequisites for class certification.

Attorneys in the case did not respond to requests for comment.