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CNA Underwriter Secures Significant Appellate Victory in COVID-19 Business Interruption Insurance Lawsuit
- Client News
- July 3, 2024
Paul, Weiss won a significant appellate victory in a business interruption insurance coverage dispute on behalf of CNA Financial Corporation when the Texas Court of Appeals for the Fifth District (Dallas) affirmed the trial court’s entry of summary judgment for CNA underwriter Continental Casualty Company. The plaintiffs in Julio & Sons Co. v. Continental Casualty Company, which operate 41 fast-casual Mexican restaurants around the country under the brand names Uncle Julio’s and bartaco, sought substantial damages related to their lost business income during the COVID-19 pandemic, as well as statutory damages.
In their suit filed in February 2021 in Dallas County, Texas, the plaintiffs sought insurance coverage for financial losses at their restaurants during the pandemic under their commercial property insurance policy with Continental Casualty Company. They claimed that COVID-19 caused direct physical loss of or damage to their restaurant property, triggering coverage under the policy, and also claimed that Continental had denied their insurance claim in bad faith.
In December 2022, the trial court entered summary judgment for Continental and dismissed the case with prejudice. The plaintiffs appealed, and the Texas Court of Appeals affirmed the trial court’s entry of summary judgment. In so doing, the court relied on the factual record developed during discovery to conclude that the plaintiffs had failed to present “more than a scintilla of evidence to create a genuine issue of material fact regarding whether COVID-19 caused direct physical loss of or damage to property.” As such, the plaintiffs could not establish entitlement to coverage under their insurance policy.
Since 2020, Paul, Weiss has secured victories in over 80 trial-level dispositive motions and in more than 20 federal and state appeals for CNA in business interruption cases resulting from the COVID-19 pandemic.
The Paul, Weiss team in Julio & Sons included litigation partners Christopher Boehning, Yahonnes Cleary, who argued the summary judgment motion and the appeal, and David Friedman and counsel Daniel Levi.