Rainbow U.S. Inc. v. Zurich Am. Ins. Co.

2022 NY Slip Op 31270(U)

RAINBOW USA INC., AIJJ ENTERPRISES INC., ET AL, Plaintiffs, v. ZURICH AMERICAN INSURANCE CQMPANY, Defendant,

Index No. 513649/20

Supreme Court, Kings County

April 18, 2022

Unpublished Opinion

DECISION AND ORDER

HON LEON RUGHELSMAN, JUDGE

The plaintiff moves pursuant to CPLR §2221 seeking to reargue a decision and order dated January 27, 2022 which dismissed the lawsuit. The defendant opposes this motion. Papers were submitted by the parties and after reviewing the arguments this court now makes the following determination As recorded in the prior decision, the plaintiff, a New York corporation with a principal place of business in Brooklyn commenced this action seeking business interruption insurance resulting from the government imposed shutdowns due to the COVID-19 pandemic. The court dismissed the lawsuit finding essentially, that the plaintiff failed to demonstrate it suffered any direct physical loss^ as a result of the shut-down orders and thus could hot recover under the terms of the policy. The court noted that this was the overwhelming consensus of other cases that have considered the issue and the plain language of the insurance policy itself compelled this conclusion. Within the decision the court noted that "the Verified Complaint in this case merely recites, in conclusory fashion, that damage from COVID-19 "both existed oh surfaces found within the insureds and surrounding premises as well .as in the breathable air circulating Within the insureds and surrounding premises" (see. Complaint, ¶101)" (see. Rainbow USA Inc., v. Zurich American Insurance Company, 74 Misc.3d 653, _N.Y.S.3d [Supreme Court Kings County 2022]. The plaintiff now argues the court overlooked expert affidavits submitted which supplemented the verified complaint and raise non-conclusory assertions the presence of COVID-19 physically damaged the goods demanding a reinstatement of the complaint. As noted, the defendant has opposed the motion.

Conclusions of Law

A motion to reargue must; be based upon the fact the court overlooked or misapprehended fact or law or for some other reason mistakenly arrived at in its earlier decision (Deutsche Bank National Trust Co.. v Russo, 170 A.D.3d 952, 96 N.Y.S.2d 617 [2d Dept., 2019]).

The plaintiff submitted a report by Dr. Aleksandr Alesandr Aravkin dated November 4, 2021. That report does not state that COVID-19 existed in any of plaintiff's stores at all. Rather, the report is a lengthy statistical analysis of the prevalence of COVID-19 virtually every where, based upon data where the virus was found to exist in March 2020 at the time of the governmental shut-down orders and in all likelihood existed in plaintiff's locations as well. More importantly, the report does not state that the presence of COVID-19, if it even was present at any of plaintiff's stores, constituted a physical loss of any goods. Therefore, that report cannot support any contention the court overlooked any evidence in reaching its conclusion the verified complaint was conclusory.

Even assuming that COVID-19 actually existed in the plaintiff's locations, the plaintiff also submitted a report by Dr. Michael Sulzinsky dated November 4, 2021, On page 3 of that; report Dr. Sulzinsky concludes that “during March 2020, the presence of virus SARS-COV-2 and the communicable disease COVID-19 caused physical loss or damage to clothing stores, department stores, retail and outlet shops. home improvement stores, toy stores, supermarkets, and indeed, all retail and wholesale outlets ranging in size from "big box" type stores, to small "mom: and pop" stores" and that COVID-19's "physical presence materially changed and damaged the property, rendering it dangerous and unusable" (id).

However all eases that have addressed this issue have concluded that the existence of the virus upon any materials did not physically damage the item. For example, in Sandy Point Dental P.C. v. Cincinnati Insurance Company, 20 F4th. 327 [7th Cir. 2021] the court noted that "even if the virus was present and physically attached itself to Sandy Point's premises, Sandy Point does not allege that the virus altered the physical structures to which it attached, and there is no reason to think that it could...