Preview
1 Vanessa O. Wells, SBN 121279
Christopher J. Cox, SBN 151650
2 Victoria C. Brown, SBN 117217
HOGAN LOVELLS US LLP ELECTRONICALLY
3 4085 Campbell Ave., Suite 100
Menlo Park, CA 94025
F I L E D
Superior Court of California,
4 Tel: (650) 463-4000 County of San Francisco
Fax: (650) 463-4199 07/22/2020
5 vanessa.wells@hoganlovells.com Clerk of the Court
chris.cox@hoganlovells.com BY: JUDITH NUNEZ
Deputy Clerk
6 victoria.brown@hoganlovells.com
7 Attorneys for Defendants Farmers Group, Inc.
and Truck Insurance Exchange
8
9 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 COUNTY OF SAN FRANCISCO
11 Atelier 1 2 3 Restaurant LLC, a California Case No. CGC-20-584762
limited liability company, dba Atelier Crenn,
12 313 Fillmore CDG LLC, a California limited EXHIBIT A TO NOTICE OF SUBMISSION
liability company, dba Bar Crenn, 609 OF PETITION FOR COORDINATION
13 Hayes CDG LLC, a California limited
liability company, dba Petit Crenn, Assigned Judge: Hon Garrett L. Wong
14
Plaintiffs,
15
v.
16
FARMERS GROUP INC., a California
17 Corporation, TRUCK INSURANCE
EXCHANGE, a California Corporation, Does
18 1 through 10, inclusive,
19 Defendants.
20
21
22
23
24
25
26
27
28
H OGAN L OVEL LS US
LLP
ATTO RNEY S AT LAW EXHIBIT A TO NOTICE OF SUBMISSION OF PETITION FOR COORDINATION
EXHIBIT A
1 Vanessa O. Wells, SBN 121279
Christopher J. Cox, SBN 151650
2 Victoria C. Brown, SBN 117217
HOGAN LOVELLS US LLP
3 4085 Campbell Ave., Suite1 00
Menlo Park, CA 94025
4 Tel: (650) 463-4000
Fax: (650) 463-4199
5 vanessa.wells@hoganlovells.com
chris.cox@hoganlovells.com
6 victoria.brown@hoganlovells.com
7 Michael M. Maddigan, SBN 163450
Vassi Iliadis, SBN 296382
8 HOGAN LOVELLS US LLP
1999 Avenue of the Stars, Suite 1400
9 Los Angeles, California 90067
Tel: (310) 785-4600
10 Fax: (310) 785-4601
michael.maddigan@hoganlovells.com
11 vassi.iliadis@hoganlovells.com
12
Attorneys for the Farmers Defendants
13
14 CHAIRPERSON OF THE JUDICIAL COUNCIL
15 OF THE STATE OF CALIFORNIA
16 SCRATCH RESTAURANTS, INC., dba Los Angeles Superior Court
Phillip Douglas LLC and Scratch Bar Case No. 20STCP01233
17 Assigned to the Hon. Ruth A. Kwan
and Kitchen and Sushi Bar Los Angeles
18 and Sushi Bar Montecito, a limited PETITION FOR COORDINATION FOR
liability company, PRETRIAL PURPOSES AND
19 APPLICATION FOR STAY ORDER
Plaintiff,
20 [Memorandum of Points and Authorities and
v. Declaration of Michael M. Maddigan
21 submitted concurrently herewith]
22 FARMERS GROUP, INC., a corporation; Included Actions:
TRUCK INSURANCE EXCHANGE, a
23 corporation; and; DOES 1 to 25, inclusive, San Francisco Superior Court
Case No. CGC-20-583996
24 Assigned to the Hon. Garrett L. Wong
Defendants.
25 San Francisco Superior Court
Case No. CGC-20-584269
26 Assigned to the Hon. Garrett L. Wong
27 Los Angeles Superior Court
Case No. 20PSCV00325
28
PETITION FOR COORDINATION
1 Assigned to the Hon. Peter A. Hernandez
2 Los Angeles Superior Court
Case No. 20STCV19129
3 Assigned to the Hon. William Claster
4 Contra Costa Superior Court
Case No. CIVMSC20-00901
5 Assigned to the Hon. Jill Fannin
6 Los Angeles Superior Court
Case No. 20STCV20188
7 Assigned to the Hon. Amy D. Hogue
8 Orange County Superior Court
Case No. 30-2020-01140970-CU-IC-CXC
9 Assigned to the Hon. William D. Claster
10 Lake County Superior Court
Case No. CV-420743
11 [Not Yet Assigned]
12 Stanislaus Superior Court
Case No. CV-20-2477
13 Assigned to the Hon. John D. Freeland
14 Los Angeles Superior Court
Case No. 20STCV22451
15 [Not Yet Assigned]
16 San Francisco Superior Court
Case No. CGC-20-584762
17 Assigned to the Hon. Garrett L. Wong
18 Riverside County Superior Court
Case No. RIC2002673
19 [Not Yet Assigned]
20
21
22
23
24
25
26
27
28
PETITION FOR COORDINATION
1 TO THE CHAIRPERSON OF THE JUDICIAL COUNCIL:
2 Pursuant to California Code of Civil Procedure §§ 404, et seq., defendants Truck
3 Insurance Exchange, Farmers Group, Inc., Truck Underwriters Association, Farmers
4 Insurance Exchange, Fire Insurance Exchange, and Mid-Century Insurance Company
5 (hereinafter “Farmers Defendants”) hereby submit this Petition to the Chair of the Judicial
6 Council for assignment of a judge to determine whether coordination of the following
7 “complex” actions is appropriate for pretrial purposes (collectively, the “Included
8 Actions”):
9
Outerlands, Inc. v. Truck Insurance Exchange, No. CGC-20-583996 (San
10
Francisco Super. Ct., filed March 30, 2020);
11
Scratch Restaurants LLC dba Phillip Douglas LLC, et al. v. Farmers Group Inc., et
12 al., No. 20STCP01233 (Los Angeles Super. Ct., filed April 1, 2020);
13
New Restaurant Group LP, et al. v. Farmers Group, Inc., et al. , No. CGC-20-
14 584269 (San Francisco Super. Ct., filed April 30, 2020);
15
Boca J.P. Inc. v. Farmers Group Inc., No. 20PSCV00325 (Los Angeles Super. Ct.,
16 filed May 15, 2020);
17
Odessa Investment Corp. dba The Great Frame Up # 672 v. Farmers Group, Inc.,
18 et al., No. 20STCV20188 (Los Angeles Super. Ct., filed May 26, 2020);
19 Bulk, LLC v. Truck Insurance Exchange, et al., No. 20STCV19129 (Los Angeles
Super. Ct., filed May 18, 2020);
20
Uncle Sharkii, LLC v. Farmers Insurance Exchange, No. CIVMSC20-00901
21 (Contra Costa Super. Ct., filed May 22, 2020);
22 Saddleback Medical Management, Inc. v. Mid-Century Insurance Company, et al.,
23 No. 30-2020-01140970-CU-IC-CXC (Orange County Super. Ct., filed May 26,
2020);
24
Jani Investments, LLC v. Truck Insurance Exchange, No. CV-420743 (Lake Cty.
25 Super. Ct., filed May 26, 2020);
26 American Traders, Inc. dba Ramada Inn Modesto v. Mid-Century Insurance
27 Company, et al., No. CV-20-2477 (Stanislaus Super. Ct., filed June 4, 2020);
28 West Covina Restaurant Group, Inc., et al. v. Farmers Insurance Exchange, No.
H OGAN L OVEL LS US
LLP
ATTO RNEY S AT LAW -1-
PETITION FOR COORDINATION
20STCV22451 (Los Angeles Super. Ct., filed June 9, 2020);
1
Atelier 1 2 3 Restaurant LLC, dba Atelier Crenn, et al. v. Farmers Group, Inc., et
2 al., Case No. CGC-20-584762 (S.F. Super. Ct., filed June 15, 2020); and
3
Chunying Investments Inc., dba Dragon House v. Farmers Group, Inc., et al. Case
4 No. RIC2002673 (Riverside Super Ct., filed July 17, 2020) (the “Chunying
Investments Action”).
5
6 This Petition is made on behalf of all of the above-referenced Farmers Defendants
7 directly to the Chairperson of the Judicial Council pursuant to Section 404. See Cal. Civ.
8 Proc., § 404 (“[A] petition for coordination may be submitted to the Chairperson of the
9 Judicial Council, . . . by all of the parties plaintiff or defendant in any such action.”) No
10 other defendants are named in the Included Actions.
11 As described in the supporting Memorandum of Points and Authorities, the
12 Farmers Defendants make this Petition on the grounds that coordinating the Included
13 Actions before one judge for pretrial purposes will promote the ends of justice as required
14 by Code of Civil Procedure §§ 404 and 404.1. The Included Actions, all of which are
15 “complex” and arise out of COVID-19-related coverage claims submitted to the Farmers
16 Defendants, raise the same or overlapping theories and assert many of the same causes of
17 action under California law. Therefore, common questions of law are significant.
18 Coordination of the Included Actions in one proceeding also will advance the convenience
19 of parties, witnesses, and counsel, and will promote the efficient utilization of judicial
20 facilities and avoid multiple hearings on similar motions in different courts. Further, the
21 relative development and nascent procedural postures of the Included Actions support
22 coordination.
23 The Farmers Defendants request that any hearing on this Petition and the
24 coordinated proceedings in the Included Actions be assigned to the Complex Civil
25 Litigation Division of the Superior Court for the County of Los Angeles. See Cal. Civ.
Proc., § 404.3; CRC 3.540. And given the efficiencies sought by coordination, the
26
Farmers Defendants respectfully request that the matters be stayed pending a decision on
27
this Petition.
28
-2-
PETITION FOR COORDINATION
1 As required under Rule 3.521(a)(2) of the California Rules of Court, the full title of
2 each action, the names of all parties, and the names and addresses of counsel are set forth
3 in the Declaration of Michael M. Maddigan (“Maddigan Declaration”), filed concurrently
4 herewith.
5 In anticipation of filing this Petition, counsel for the Farmers Defendants attempted
6 to meet and confer with counsel for Plaintiffs in each of the Included Actions regarding
7 coordination of all Actions. See Maddigan Decl., ¶ 18; Declaration of Christopher J. Cox
8 (“Cox Decl.”), ¶ 3. Plaintiffs in 11 of the 13 Included Actions have agreed to
9 coordination, and counsel for the Farmers Defendants has not yet received a response
10 from counsel in two Actions as of the date of this Petition. Maddigan Decl., ¶ 18. Most
11 Plaintiffs agree that Los Angeles County is an appropriate court for these purposes.
12 Maddigan Decl., ¶ 18; Cox Decl., ¶ 3.
13
14 Dated: July 20, 2020 Respectfully submitted,
15 HOGAN LOVELLS US LLP
16
By:
17 Michael M. Maddigan, SBN 163450
18 Vassi Iliadis, SBN 296382
1999 Avenue of the Stars, STE 1400
19 Los Angeles, CA 90067
michael.maddigan@hoganlovells.com
20 vassi.iliadis@hoganlovells.com
21 Vanessa O. Wells, SBN 121279
Christopher J. Cox, SBN 151650
22 Victoria C. Brown, SBN 117217
HOGAN LOVELLS US LLP
23 4085 Campbell Ave., Suite1 00
24 Menlo Park, CA 94025
Tel: (650) 463-4000
25 Fax: (650) 463-4199
vanessa.wells@hoganlovells.com
26 chris.cox@hoganlovells.com
victoria.brown@hoganlovells.com
27 Attorneys for Farmers Defendants
28
-3-
PETITION FOR COORDINATION
1 Vanessa O. Wells, SBN 121279
Christopher J. Cox, SBN 151650
2 Victoria C. Brown, SBN 117217
HOGAN LOVELLS US LLP
3 4085 Campbell Ave., Suite1 00
Menlo Park, CA 94025
4 Tel: (650) 463-4000
Fax: (650) 463-4199
5 vanessa.wells@hoganlovells.com
chris.cox@hoganlovells.com
6 victoria.brown@hoganlovells.com
7
Michael M. Maddigan, SBN 163450
8 Vassi Iliadis, SBN 296382
HOGAN LOVELLS US LLP
9 1999 Avenue of the Stars, Suite 1400
Los Angeles, California 90067
10 Tel: (310) 785-4600
Fax: (310) 785-4601
11 michael.maddigan@hoganlovells.com
vassi.iliadis@hoganlovells.com
12
Attorneys for the Farmers Defendants
13
CHAIRPERSON OF THE JUDICIAL COUNCIL
14
OF THE STATE OF CALIFORNIA
15
SCRATCH RESTAURANTS, INC., dba Los Angeles Superior Court
16 Phillip Douglas LLC and Scratch Bar Case No. 20STCP01233
and Kitchen and Sushi Bar Los Angeles Assigned to the Hon. Ruth A. Kwan
17
and Sushi Bar Montecito, a limited MEMORANDUM OF POINTS AND
18 liability company, AUTHORITIES IN SUPPORT OF
PETITION FOR COORDINATION AND
19 Plaintiff, APPLICATION FOR STAY ORDER
20 v. Included Actions:
21 San Francisco Superior Court
FARMERS GROUP, INC., a corporation; Case No. CGC-20-583996
22 TRUCK INSURANCE EXCHANGE, a Assigned to the Hon. Garrett L. Wong
corporation; and; DOES 1 to 25, inclusive,
23 San Francisco Superior Court
Defendants. Case No. CGC-20-584269
24 Assigned to the Hon. Garrett L. Wong
25 Los Angeles Superior Court
Case No. 20PSCV00325
26 Assigned to the Hon. Peter A. Hernandez
27 Los Angeles Superior Court
Case No. 20STCV19129
28 Assigned to the Hon. William Claster
H OGAN L OVEL LS US
LLP
ATTO RNEY S AT LAW
MEMORANDUM OF POINTS AND AUTHORITIES
1
Contra Costa Superior Court
2 Case No. CIVMSC20-00901
Assigned to the Hon. Jill Fannin
3
Los Angeles Superior Court
4 Case No. 20STCV20188
Assigned to the Hon. Amy D. Hogue
5
Orange County Superior Court
6 Case No. 30-2020-01140970-CU-IC-CXC
Assigned to the Hon. William D. Claster
7
Lake County Superior Court
8 Case No. CV-420743
[Not Yet Assigned]
9
Stanislaus Superior Court
10 Case No. CV-20-2477
Assigned to the Hon. John D. Freeland
11
Los Angeles Superior Court
12 Case No. 20STCV22451
[Not Yet Assigned]
13
San Francisco Superior Court
14 Case No. CGC-20-584762
Assigned to the Hon. Garrett L. Wong
15
Riverside County Superior Court
16 Case No. RIC2002673
[Not Yet Assigned]
17
18
19
20
21
22
23
24
25
26
27
28
H OGAN L OVEL LS US
LLP
ATTO RNEY S AT LAW
MEMORANDUM OF POINTS AND AUTHORITIES
1 TABLE OF CONTENTS
2 Page
3 I. INTRODUCTION ..................................................................................................... 1
4 II. STATEMENT OF FACTS AND PROCEDURAL BACKGROUND ..................... 3
5
A. Nature of the Actions ......................................................................................3
6
B. Procedural Status of the Included Actions ......................................................7
7
III. ANALYSIS ............................................................................................................... 7
8
A. The Included Actions Are Complex................................................................7
9
B. These Actions Meet And Exceed The Requirements For
10 Coordination ..................................................................................................10
11 C. If Coordination Is Granted, The Actions Should Be Coordinated
In Los Angeles County. .................................................................................13
12
IV. THESE ACTIONS SHOULD BE STAYED PENDING A RULING
13 ON THIS PETITION. ............................................................................................. 14
14 V. PLAINTIFFS’ POSITION ...................................................................................... 15
15 VI. CONCLUSION ....................................................................................................... 15
16
17
18
19
20
21
22
23
24
25
26
27
28
H OGAN L OVEL LS
US LLP -i-
ATTO RNEY S AT LAW
MEMORANDUM OF POINTS AND AUTHORITIES
1 TABLE OF AUTHORITIES
2 Page(s)
3
Cases
4
Citicorp N. Am., Inc. v. Super. Ct.,
5 213 Cal. App. 3d 563 (1989) ........................................................................................ 10
6 Ford Motor Warranty Cases,
7 11 Cal. App. 5th 626, 643 (2017), reh’g denied (May 25, 2017) ................................. 12
8 McGhan Med. Corp. v. Super. Ct.,
11 Cal. App. 4th 804 (1992) ................................................................................... 11, 12
9
Thayer v. Wells Fargo Bank,
10 92 Cal. App. 4th 819 (2001) ........................................................................................... 8
11
Statutes
12
Cal. Civ. Proc. Code § 404.1 .......................................................................................... 7, 10
13
Cal. Civ. Proc. Code § 404.2 .............................................................................................. 11
14
15 Cal. Civ. Proc. Code § 404.5 .............................................................................................. 14
16 Rules
17 California Rules of Court Rule 3.400 ............................................................................... 7, 8
18 California Rules of Court Rule 3.515(f) ............................................................................. 14
19 California Rules of Court Rule 3.521(a) ............................................................................ 12
20
21
22
23
24
25
26
27
28
H OGAN L OVEL LS US -ii-
LLP
ATTO RNEY S AT LAW MEMORANDUM OF POINTS AND AUTHORITIES
1 I. INTRODUCTION
2 Defendants Truck Insurance Exchange, Farmers Group, Inc., Truck Underwriters
3 Association, Farmers Insurance Exchange, Fire Insurance Exchange, and Mid-Century
4 Insurance Company (hereinafter “Farmers Defendants”) seek coordination of the
5 following related actions which are currently pending in superior courts throughout
6 California, including Los Angeles, Orange, San Francisco, Contra Costa, Lake, Stanislaus,
7 and Riverside Counties (the “Included Actions”):
8 Outerlands, Inc. v. Truck Insurance Exchange, No. CGC-20-583996 (San
Francisco Super. Ct., filed March 30, 2020) (the “Outerlands Action”);
9
10 Scratch Restaurants LLC dba Phillip Douglas LLC, et al. v. Farmers Group Inc., et
al., No. 20STCP01233 (Los Angeles Super. Ct., filed April 1, 2020) (the “Scratch
11 Restaurants Action”);
12
New Restaurant Group LP, et al. v. Farmers Group, Inc., et al., No. CGC-20-
13 584269 (San Francisco Super. Ct., filed April 30, 2020) (the “New Restaurant
14 Action”);
15 Boca J.P. Inc. v. Farmers Group Inc., No. 20PSCV00325 (Los Angeles Super. Ct.,
filed May 15, 2020) (the “Boca J.P. Action”);
16
17 Odessa Investment Corp. dba The Great Frame Up # 672 v. Farmers Group, Inc.,
et al., No. 20STCV20188 (Los Angeles Super. Ct., filed May 26, 2020) (the
18 “Odessa Investment Action”);
19
Bulk, LLC v. Truck Insurance Exchange, et al., No. 20STCV19129 (Los Angeles
20 Super. Ct., filed May 18, 2020) (the “Bulk Action”);
21 Uncle Sharkii, LLC v. Farmers Insurance Exchange, No. CIVMSC20-00901
(Contra Costa Super. Ct., filed May 22, 2020) (the “Uncle Sharkii Action”);
22
Saddleback Medical Management, Inc. v. Mid-Century Insurance Company, et al.,
23 No. 30-2020-01140970-CU-IC-CXC (Orange County Super. Ct., filed May 26,
2020) (the “Saddleback Medical Management Action”);
24
25 Jani Investments, LLC v. Truck Insurance Exchange, No. CV-420743 (Lake Cty.
Super. Ct., filed May 26, 2020) (the “Jani Investments Action”);
26
American Traders, Inc. dba Ramada Inn Modesto v. Mid-Century Insurance
27 Company, et al., No. CV-20-2477 (Stanislaus Super. Ct., filed June 4, 2020) (the
28 “American Traders Action”);
H OGAN L OVEL LS US
LLP -1-
ATTO RNEY S AT LAW
MEMORANDUM OF POINTS AND AUTHORITIES
1 West Covina Restaurant Group, Inc., et al. v. Farmers Insurance Exchange, No.
20STCV22451 (Los Angeles Super. Ct., filed June 9, 2020) (the “West Covina
2 Restaurant Group Action”);
3 Atelier 1 2 3 Restaurant LLC, dba Atelier Crenn, et al. v. Farmers Group, Inc., et
al., Case No. CGC-20-584762 (S.F. Super. Ct., filed June 15, 2020) (the “Crenn
4 Action”); and
5 Chunying Investments Inc., dba Dragon House v. Farmers Group, Inc., et al. Case
No. RIC2002673 (Riverside Super Ct., filed July 17, 2020) (the “Chunying
6 Investments Action”).
7 The 13 Included Actions are class action and individual lawsuits filed by local
8 restaurants, bars, hotels, retail stores, and other businesses against one or more of the
9 Farmers Defendants in the wake of the COVID-19 pandemic. Each of these lawsuits
10 alleges that the Farmers Defendants improperly denied insureds’ claims for business
11 income losses and extra expenses allegedly suffered as a result the COVID-19 pandemic,
12 purportedly due to COVID-19 related orders and mandates issued by the State of
13 California and local authorities.
14 The Included Actions—which are “complex”1—raise the same or overlapping legal
15 theories and assert many of the same causes of action under California law. All arise out
16 of COVID-19-related coverage claims submitted to the Farmers Defendants. All require
17 interpretation under California law of the same key terms from the same policy form.
18 Procedurally, these Actions are in their infancy. They were filed only recently and some
19 have not yet been served.
20 The interests of the Court, witnesses, and parties weigh heavily against separately
21 litigating the Included Actions one-by-one, given the duplication of efforts and costs that
22 would be required. Indeed, coordinated treatment of the Included Actions not only would
23 promote the fair and efficient use of the Court’s and parties’ resources, but also is
24 essential to avoid the risk of conflicting or duplicative rulings on issues critical to all of
25 the Actions. The Farmers Defendants further request that the Included Actions be stayed
26 pending the resolution of this Petition.
27
28 1
See Part III, A., below.
H OGAN L OVEL LS
US LLP
ATTO RNEY S AT LAW
-2-
MEMORANDUM OF POINTS AND AUTHORITIES
1 In anticipation of filing this Petition, counsel for the Farmers Defendants attempted
2 to meet and confer with counsel for Plaintiffs in each of the Included Actions regarding
3 coordination. See Declaration of Michael M. Maddigan (“Maddigan Decl.”), ¶ 18; see
4 also Declaration of Christopher J. Cox (“Cox Decl.”), ¶ 3. As described below, Plaintiffs
5 in 11 of the 13 Included Actions have agreed to coordination. Id. Counsel for the
6 Farmers Defendants has not yet received a response from counsel in two Actions as of the
7 date of this Petition. Maddigan Decl., ¶ 18.
8 II. STATEMENT OF FACTS AND PROCEDURAL BACKGROUND
9 A. Nature of the Actions
10 The insurer Farmers Defendants2 issued business owners’ policies to Plaintiffs,
11 each of which contained certain identical provisions under which Plaintiffs claim
12 coverage. The first, frequently referred to as “business interruption” coverage, provides:
13 We will pay for the actual loss of Business Income you sustain due to the
necessary suspension of your “operations” during the “period of
14 restoration.” The suspension must be caused by direct physical loss of or
damage to property at the described premises. The loss or damage must be
15 caused by or result from a Covered Cause of Loss.
16 See Maddigan Decl., ¶ 5, Ex. B(1), ¶ A.5.f.(1).3
17 The second, known as “Civil Authority” coverage, provides:
18 We will pay for the actual loss of Business Income you sustain and
necessary Extra Expense caused by action of civil authority that prohibits
19 access to the described premises due to direct physical loss of or damage to
property, other than at the described premises, caused by or resulting from
20 any Covered Cause of Loss.
21 See id., ¶ A.5.i.
22 As described in more detail below, all of the complaints proceed according to a
23 theory that the COVID-19 pandemic – decoupled from the SARS-CoV-2 virus defining
24 the pandemic4 – through the instrumentality of various state and local COVID-19 related
25
2
26 Farmers Group, Inc. is not an insurer. It is the “attorney in fact” for Farmers, Truck, and
Fire Insurance Exchanges. Insurance exchanges are membership organizations peculiar to
27 the
3
insurance industry. See Cal. Ins. Code Div. 1 Part 2 Chapter 3.
“Covered Cause of Loss” is defined as “Risks of Direct Physical Loss . . . .” Maddigan
28 Decl.
4
¶ 5, Ex. B(1) ¶ A.3.
The reason many Plaintiffs attempt to disassociate the pandemic from the virus is that
H OGAN L OVEL LS
US LLP
ATTO RNEY S AT LAW
-3-
MEMORANDUM OF POINTS AND AUTHORITIES
1 Stay-At-Home orders (or perhaps regardless of those orders), caused Plaintiffs to lose the
2 use of their business premises as a result of which they lost business income. Plaintiffs all
3 contend that the Business Interruption and Civil Authority provisions provide coverage
4 under this theory.
5 Although the Included Actions involve different businesses, some different Stay-
6 At-Home orders, and individualized alleged facts, they share the same core questions
7 under California law: the proper interpretation of the policy form at issue and the viability
8 of central, common legal theories. See Maddigan Decl., ¶ 4, Exs. A-M (attaching
9 Complaints of each Included Action).
10 Specifically, the Actions allege that the Farmers Defendants provided commercial
11 property coverage to each insured and improperly denied their claims for Business
12 Interruption coverage (or for Business Income losses and Extra Expenses) and/or Civil
13 Authority coverage for losses purportedly suffered as a result of the Stay-At-Home orders
14 from the State of California and/or local authorities that (i) directed the public to cancel
15 non-essential gatherings and to stay at home or “shelter-in-place,” and (ii) required
16 closure or curtailment of non-essential businesses. Id. Ex. A (Outerlands Am. Compl.,
17 ¶¶ 14-33); Ex. B (Scratch Restaurants Compl., ¶¶ 36-38); Ex. C (New Restaurant Compl.,
18 ¶¶ 90-97); Ex. D (Boca J.P. Compl., ¶¶ 23-24); Ex. E (Bulk Compl., ¶¶ 66-72), Ex. F
19 (Uncle Sharkii Compl., ¶¶ 6, 31); Ex. G (Odessa Investment Compl., ¶¶ 2, 7, 56); Ex. H
20 (Saddleback Medical Management Compl., ¶¶ 60-66); Ex. I (Jani Investments Compl.,
21 ¶¶ 30-33); Ex. J (American Traders Compl., ¶¶ 64-65); Ex. K (West Covina Restaurant
22 Group Compl., ¶¶ 31, 36-39); Ex. L (Crenn Compl., ¶¶ 52-59, 68-71, 93-96); Ex. M
23 (Chunying Investments Compl., ¶¶ 20-23).
24 The Included Actions also assert common legal theories. Relying on the Business
25 Income, Extra Expense, and/or Civil Authority provisions in their policies, Plaintiffs
26 assert that the Stay-At-Home orders caused “direct physical loss of or damage to the
27
28 the policy form includes an “EXCLUSION OF LOSS DUE TO VIRUS OR
BACTERIA.” See id. Endorsement 6316 (emphasis added).
H OGAN L OVEL LS
US LLP
ATTO RNEY S AT LAW
-4-
MEMORANDUM OF POINTS AND AUTHORITIES
1 property” because Plaintiffs were unable to use their properties when following orders.
2 Id. Ex. A (Outerlands Am. Compl., ¶ 53 ); Ex. B (Scratch Restaurants Compl., ¶¶ 42-
3 44); Ex. C (New Restaurant Compl., ¶¶ 126-127); Ex. D (Boca J.P. Compl., ¶¶ 29-30);
4 Ex. E (Bulk Compl. ¶¶ 95-105), Ex. F (Uncle Sharkii Compl., ¶¶ 55-58); Ex. G (Odessa
5 Investment Compl., ¶¶ 48-51); Ex. H (Saddleback Medical Management Compl., ¶ 39);
6 Ex. I (Jani Investments Compl., ¶ 55); Ex. J (American Traders Compl., ¶ 71). The
7 Included Actions further allege that none of the exclusions in their policies apply. See,
8 e.g., Maddigan Decl., ¶ 4, Ex. A (Outerlands Am. Compl., ¶ 53 ); Ex. C (New Restaurant
9 Compl., ¶¶ 75-86 ); Ex. E (Bulk Compl. ¶¶ 106-113 ); Ex. F (Uncle Sharkii Compl., ¶¶ 59,
10 66); Ex. G (Odessa Investment Compl., ¶ 52); Ex. H (Saddleback Medical Management
11 Compl., ¶¶ 38-39 ); Ex. J (American Traders Compl., ¶¶ 105-112); Ex. K (West Covina
12 Restaurant Group Compl., ¶ 53); Ex. L (Crenn Compl., ¶¶ 75-76).
13 Five of the Included Actions, Bulk, Uncle Sharkii, Odessa Investment, Saddleback
14 Medical Management, and American Traders, are class actions that purport to assert
15 claims on behalf of overlapping putative classes consisting of California policyholders
16 insured under a policy issued by one or more of the Farmers Defendants whose covered
17 premises were the subject of a Stay-At-Home order and who filed a claim under their
Preview
1 Vanessa O. Wells, SBN 121279 Christopher J. Cox, SBN 151650 2 Victoria C. Brown, SBN 117217 HOGAN LOVELLS US LLP ELECTRONICALLY 3 4085 Campbell Ave., Suite 100 Menlo Park, CA 94025 F I L E D Superior Court of California, 4 Tel: (650) 463-4000 County of San Francisco Fax: (650) 463-4199 07/22/2020 5 vanessa.wells@hoganlovells.com Clerk of the Court chris.cox@hoganlovells.com BY: JUDITH NUNEZ Deputy Clerk 6 victoria.brown@hoganlovells.com 7 Attorneys for Defendants Farmers Group, Inc. and Truck Insurance Exchange 8 9 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 COUNTY OF SAN FRANCISCO 11 Atelier 1 2 3 Restaurant LLC, a California Case No. CGC-20-584762 limited liability company, dba Atelier Crenn, 12 313 Fillmore CDG LLC, a California limited EXHIBIT A TO NOTICE OF SUBMISSION liability company, dba Bar Crenn, 609 OF PETITION FOR COORDINATION 13 Hayes CDG LLC, a California limited liability company, dba Petit Crenn, Assigned Judge: Hon Garrett L. Wong 14 Plaintiffs, 15 v. 16 FARMERS GROUP INC., a California 17 Corporation, TRUCK INSURANCE EXCHANGE, a California Corporation, Does 18 1 through 10, inclusive, 19 Defendants. 20 21 22 23 24 25 26 27 28 H OGAN L OVEL LS US LLP ATTO RNEY S AT LAW EXHIBIT A TO NOTICE OF SUBMISSION OF PETITION FOR COORDINATION EXHIBIT A 1 Vanessa O. Wells, SBN 121279 Christopher J. Cox, SBN 151650 2 Victoria C. Brown, SBN 117217 HOGAN LOVELLS US LLP 3 4085 Campbell Ave., Suite1 00 Menlo Park, CA 94025 4 Tel: (650) 463-4000 Fax: (650) 463-4199 5 vanessa.wells@hoganlovells.com chris.cox@hoganlovells.com 6 victoria.brown@hoganlovells.com 7 Michael M. Maddigan, SBN 163450 Vassi Iliadis, SBN 296382 8 HOGAN LOVELLS US LLP 1999 Avenue of the Stars, Suite 1400 9 Los Angeles, California 90067 Tel: (310) 785-4600 10 Fax: (310) 785-4601 michael.maddigan@hoganlovells.com 11 vassi.iliadis@hoganlovells.com 12 Attorneys for the Farmers Defendants 13 14 CHAIRPERSON OF THE JUDICIAL COUNCIL 15 OF THE STATE OF CALIFORNIA 16 SCRATCH RESTAURANTS, INC., dba Los Angeles Superior Court Phillip Douglas LLC and Scratch Bar Case No. 20STCP01233 17 Assigned to the Hon. Ruth A. Kwan and Kitchen and Sushi Bar Los Angeles 18 and Sushi Bar Montecito, a limited PETITION FOR COORDINATION FOR liability company, PRETRIAL PURPOSES AND 19 APPLICATION FOR STAY ORDER Plaintiff, 20 [Memorandum of Points and Authorities and v. Declaration of Michael M. Maddigan 21 submitted concurrently herewith] 22 FARMERS GROUP, INC., a corporation; Included Actions: TRUCK INSURANCE EXCHANGE, a 23 corporation; and; DOES 1 to 25, inclusive, San Francisco Superior Court Case No. CGC-20-583996 24 Assigned to the Hon. Garrett L. Wong Defendants. 25 San Francisco Superior Court Case No. CGC-20-584269 26 Assigned to the Hon. Garrett L. Wong 27 Los Angeles Superior Court Case No. 20PSCV00325 28 PETITION FOR COORDINATION 1 Assigned to the Hon. Peter A. Hernandez 2 Los Angeles Superior Court Case No. 20STCV19129 3 Assigned to the Hon. William Claster 4 Contra Costa Superior Court Case No. CIVMSC20-00901 5 Assigned to the Hon. Jill Fannin 6 Los Angeles Superior Court Case No. 20STCV20188 7 Assigned to the Hon. Amy D. Hogue 8 Orange County Superior Court Case No. 30-2020-01140970-CU-IC-CXC 9 Assigned to the Hon. William D. Claster 10 Lake County Superior Court Case No. CV-420743 11 [Not Yet Assigned] 12 Stanislaus Superior Court Case No. CV-20-2477 13 Assigned to the Hon. John D. Freeland 14 Los Angeles Superior Court Case No. 20STCV22451 15 [Not Yet Assigned] 16 San Francisco Superior Court Case No. CGC-20-584762 17 Assigned to the Hon. Garrett L. Wong 18 Riverside County Superior Court Case No. RIC2002673 19 [Not Yet Assigned] 20 21 22 23 24 25 26 27 28 PETITION FOR COORDINATION 1 TO THE CHAIRPERSON OF THE JUDICIAL COUNCIL: 2 Pursuant to California Code of Civil Procedure §§ 404, et seq., defendants Truck 3 Insurance Exchange, Farmers Group, Inc., Truck Underwriters Association, Farmers 4 Insurance Exchange, Fire Insurance Exchange, and Mid-Century Insurance Company 5 (hereinafter “Farmers Defendants”) hereby submit this Petition to the Chair of the Judicial 6 Council for assignment of a judge to determine whether coordination of the following 7 “complex” actions is appropriate for pretrial purposes (collectively, the “Included 8 Actions”): 9 Outerlands, Inc. v. Truck Insurance Exchange, No. CGC-20-583996 (San 10 Francisco Super. Ct., filed March 30, 2020); 11 Scratch Restaurants LLC dba Phillip Douglas LLC, et al. v. Farmers Group Inc., et 12 al., No. 20STCP01233 (Los Angeles Super. Ct., filed April 1, 2020); 13 New Restaurant Group LP, et al. v. Farmers Group, Inc., et al. , No. CGC-20- 14 584269 (San Francisco Super. Ct., filed April 30, 2020); 15 Boca J.P. Inc. v. Farmers Group Inc., No. 20PSCV00325 (Los Angeles Super. Ct., 16 filed May 15, 2020); 17 Odessa Investment Corp. dba The Great Frame Up # 672 v. Farmers Group, Inc., 18 et al., No. 20STCV20188 (Los Angeles Super. Ct., filed May 26, 2020); 19 Bulk, LLC v. Truck Insurance Exchange, et al., No. 20STCV19129 (Los Angeles Super. Ct., filed May 18, 2020); 20 Uncle Sharkii, LLC v. Farmers Insurance Exchange, No. CIVMSC20-00901 21 (Contra Costa Super. Ct., filed May 22, 2020); 22 Saddleback Medical Management, Inc. v. Mid-Century Insurance Company, et al., 23 No. 30-2020-01140970-CU-IC-CXC (Orange County Super. Ct., filed May 26, 2020); 24 Jani Investments, LLC v. Truck Insurance Exchange, No. CV-420743 (Lake Cty. 25 Super. Ct., filed May 26, 2020); 26 American Traders, Inc. dba Ramada Inn Modesto v. Mid-Century Insurance 27 Company, et al., No. CV-20-2477 (Stanislaus Super. Ct., filed June 4, 2020); 28 West Covina Restaurant Group, Inc., et al. v. Farmers Insurance Exchange, No. H OGAN L OVEL LS US LLP ATTO RNEY S AT LAW -1- PETITION FOR COORDINATION 20STCV22451 (Los Angeles Super. Ct., filed June 9, 2020); 1 Atelier 1 2 3 Restaurant LLC, dba Atelier Crenn, et al. v. Farmers Group, Inc., et 2 al., Case No. CGC-20-584762 (S.F. Super. Ct., filed June 15, 2020); and 3 Chunying Investments Inc., dba Dragon House v. Farmers Group, Inc., et al. Case 4 No. RIC2002673 (Riverside Super Ct., filed July 17, 2020) (the “Chunying Investments Action”). 5 6 This Petition is made on behalf of all of the above-referenced Farmers Defendants 7 directly to the Chairperson of the Judicial Council pursuant to Section 404. See Cal. Civ. 8 Proc., § 404 (“[A] petition for coordination may be submitted to the Chairperson of the 9 Judicial Council, . . . by all of the parties plaintiff or defendant in any such action.”) No 10 other defendants are named in the Included Actions. 11 As described in the supporting Memorandum of Points and Authorities, the 12 Farmers Defendants make this Petition on the grounds that coordinating the Included 13 Actions before one judge for pretrial purposes will promote the ends of justice as required 14 by Code of Civil Procedure §§ 404 and 404.1. The Included Actions, all of which are 15 “complex” and arise out of COVID-19-related coverage claims submitted to the Farmers 16 Defendants, raise the same or overlapping theories and assert many of the same causes of 17 action under California law. Therefore, common questions of law are significant. 18 Coordination of the Included Actions in one proceeding also will advance the convenience 19 of parties, witnesses, and counsel, and will promote the efficient utilization of judicial 20 facilities and avoid multiple hearings on similar motions in different courts. Further, the 21 relative development and nascent procedural postures of the Included Actions support 22 coordination. 23 The Farmers Defendants request that any hearing on this Petition and the 24 coordinated proceedings in the Included Actions be assigned to the Complex Civil 25 Litigation Division of the Superior Court for the County of Los Angeles. See Cal. Civ. Proc., § 404.3; CRC 3.540. And given the efficiencies sought by coordination, the 26 Farmers Defendants respectfully request that the matters be stayed pending a decision on 27 this Petition. 28 -2- PETITION FOR COORDINATION 1 As required under Rule 3.521(a)(2) of the California Rules of Court, the full title of 2 each action, the names of all parties, and the names and addresses of counsel are set forth 3 in the Declaration of Michael M. Maddigan (“Maddigan Declaration”), filed concurrently 4 herewith. 5 In anticipation of filing this Petition, counsel for the Farmers Defendants attempted 6 to meet and confer with counsel for Plaintiffs in each of the Included Actions regarding 7 coordination of all Actions. See Maddigan Decl., ¶ 18; Declaration of Christopher J. Cox 8 (“Cox Decl.”), ¶ 3. Plaintiffs in 11 of the 13 Included Actions have agreed to 9 coordination, and counsel for the Farmers Defendants has not yet received a response 10 from counsel in two Actions as of the date of this Petition. Maddigan Decl., ¶ 18. Most 11 Plaintiffs agree that Los Angeles County is an appropriate court for these purposes. 12 Maddigan Decl., ¶ 18; Cox Decl., ¶ 3. 13 14 Dated: July 20, 2020 Respectfully submitted, 15 HOGAN LOVELLS US LLP 16 By: 17 Michael M. Maddigan, SBN 163450 18 Vassi Iliadis, SBN 296382 1999 Avenue of the Stars, STE 1400 19 Los Angeles, CA 90067 michael.maddigan@hoganlovells.com 20 vassi.iliadis@hoganlovells.com 21 Vanessa O. Wells, SBN 121279 Christopher J. Cox, SBN 151650 22 Victoria C. Brown, SBN 117217 HOGAN LOVELLS US LLP 23 4085 Campbell Ave., Suite1 00 24 Menlo Park, CA 94025 Tel: (650) 463-4000 25 Fax: (650) 463-4199 vanessa.wells@hoganlovells.com 26 chris.cox@hoganlovells.com victoria.brown@hoganlovells.com 27 Attorneys for Farmers Defendants 28 -3- PETITION FOR COORDINATION 1 Vanessa O. Wells, SBN 121279 Christopher J. Cox, SBN 151650 2 Victoria C. Brown, SBN 117217 HOGAN LOVELLS US LLP 3 4085 Campbell Ave., Suite1 00 Menlo Park, CA 94025 4 Tel: (650) 463-4000 Fax: (650) 463-4199 5 vanessa.wells@hoganlovells.com chris.cox@hoganlovells.com 6 victoria.brown@hoganlovells.com 7 Michael M. Maddigan, SBN 163450 8 Vassi Iliadis, SBN 296382 HOGAN LOVELLS US LLP 9 1999 Avenue of the Stars, Suite 1400 Los Angeles, California 90067 10 Tel: (310) 785-4600 Fax: (310) 785-4601 11 michael.maddigan@hoganlovells.com vassi.iliadis@hoganlovells.com 12 Attorneys for the Farmers Defendants 13 CHAIRPERSON OF THE JUDICIAL COUNCIL 14 OF THE STATE OF CALIFORNIA 15 SCRATCH RESTAURANTS, INC., dba Los Angeles Superior Court 16 Phillip Douglas LLC and Scratch Bar Case No. 20STCP01233 and Kitchen and Sushi Bar Los Angeles Assigned to the Hon. Ruth A. Kwan 17 and Sushi Bar Montecito, a limited MEMORANDUM OF POINTS AND 18 liability company, AUTHORITIES IN SUPPORT OF PETITION FOR COORDINATION AND 19 Plaintiff, APPLICATION FOR STAY ORDER 20 v. Included Actions: 21 San Francisco Superior Court FARMERS GROUP, INC., a corporation; Case No. CGC-20-583996 22 TRUCK INSURANCE EXCHANGE, a Assigned to the Hon. Garrett L. Wong corporation; and; DOES 1 to 25, inclusive, 23 San Francisco Superior Court Defendants. Case No. CGC-20-584269 24 Assigned to the Hon. Garrett L. Wong 25 Los Angeles Superior Court Case No. 20PSCV00325 26 Assigned to the Hon. Peter A. Hernandez 27 Los Angeles Superior Court Case No. 20STCV19129 28 Assigned to the Hon. William Claster H OGAN L OVEL LS US LLP ATTO RNEY S AT LAW MEMORANDUM OF POINTS AND AUTHORITIES 1 Contra Costa Superior Court 2 Case No. CIVMSC20-00901 Assigned to the Hon. Jill Fannin 3 Los Angeles Superior Court 4 Case No. 20STCV20188 Assigned to the Hon. Amy D. Hogue 5 Orange County Superior Court 6 Case No. 30-2020-01140970-CU-IC-CXC Assigned to the Hon. William D. Claster 7 Lake County Superior Court 8 Case No. CV-420743 [Not Yet Assigned] 9 Stanislaus Superior Court 10 Case No. CV-20-2477 Assigned to the Hon. John D. Freeland 11 Los Angeles Superior Court 12 Case No. 20STCV22451 [Not Yet Assigned] 13 San Francisco Superior Court 14 Case No. CGC-20-584762 Assigned to the Hon. Garrett L. Wong 15 Riverside County Superior Court 16 Case No. RIC2002673 [Not Yet Assigned] 17 18 19 20 21 22 23 24 25 26 27 28 H OGAN L OVEL LS US LLP ATTO RNEY S AT LAW MEMORANDUM OF POINTS AND AUTHORITIES 1 TABLE OF CONTENTS 2 Page 3 I. INTRODUCTION ..................................................................................................... 1 4 II. STATEMENT OF FACTS AND PROCEDURAL BACKGROUND ..................... 3 5 A. Nature of the Actions ......................................................................................3 6 B. Procedural Status of the Included Actions ......................................................7 7 III. ANALYSIS ............................................................................................................... 7 8 A. The Included Actions Are Complex................................................................7 9 B. These Actions Meet And Exceed The Requirements For 10 Coordination ..................................................................................................10 11 C. If Coordination Is Granted, The Actions Should Be Coordinated In Los Angeles County. .................................................................................13 12 IV. THESE ACTIONS SHOULD BE STAYED PENDING A RULING 13 ON THIS PETITION. ............................................................................................. 14 14 V. PLAINTIFFS’ POSITION ...................................................................................... 15 15 VI. CONCLUSION ....................................................................................................... 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H OGAN L OVEL LS US LLP -i- ATTO RNEY S AT LAW MEMORANDUM OF POINTS AND AUTHORITIES 1 TABLE OF AUTHORITIES 2 Page(s) 3 Cases 4 Citicorp N. Am., Inc. v. Super. Ct., 5 213 Cal. App. 3d 563 (1989) ........................................................................................ 10 6 Ford Motor Warranty Cases, 7 11 Cal. App. 5th 626, 643 (2017), reh’g denied (May 25, 2017) ................................. 12 8 McGhan Med. Corp. v. Super. Ct., 11 Cal. App. 4th 804 (1992) ................................................................................... 11, 12 9 Thayer v. Wells Fargo Bank, 10 92 Cal. App. 4th 819 (2001) ........................................................................................... 8 11 Statutes 12 Cal. Civ. Proc. Code § 404.1 .......................................................................................... 7, 10 13 Cal. Civ. Proc. Code § 404.2 .............................................................................................. 11 14 15 Cal. Civ. Proc. Code § 404.5 .............................................................................................. 14 16 Rules 17 California Rules of Court Rule 3.400 ............................................................................... 7, 8 18 California Rules of Court Rule 3.515(f) ............................................................................. 14 19 California Rules of Court Rule 3.521(a) ............................................................................ 12 20 21 22 23 24 25 26 27 28 H OGAN L OVEL LS US -ii- LLP ATTO RNEY S AT LAW MEMORANDUM OF POINTS AND AUTHORITIES 1 I. INTRODUCTION 2 Defendants Truck Insurance Exchange, Farmers Group, Inc., Truck Underwriters 3 Association, Farmers Insurance Exchange, Fire Insurance Exchange, and Mid-Century 4 Insurance Company (hereinafter “Farmers Defendants”) seek coordination of the 5 following related actions which are currently pending in superior courts throughout 6 California, including Los Angeles, Orange, San Francisco, Contra Costa, Lake, Stanislaus, 7 and Riverside Counties (the “Included Actions”): 8 Outerlands, Inc. v. Truck Insurance Exchange, No. CGC-20-583996 (San Francisco Super. Ct., filed March 30, 2020) (the “Outerlands Action”); 9 10 Scratch Restaurants LLC dba Phillip Douglas LLC, et al. v. Farmers Group Inc., et al., No. 20STCP01233 (Los Angeles Super. Ct., filed April 1, 2020) (the “Scratch 11 Restaurants Action”); 12 New Restaurant Group LP, et al. v. Farmers Group, Inc., et al., No. CGC-20- 13 584269 (San Francisco Super. Ct., filed April 30, 2020) (the “New Restaurant 14 Action”); 15 Boca J.P. Inc. v. Farmers Group Inc., No. 20PSCV00325 (Los Angeles Super. Ct., filed May 15, 2020) (the “Boca J.P. Action”); 16 17 Odessa Investment Corp. dba The Great Frame Up # 672 v. Farmers Group, Inc., et al., No. 20STCV20188 (Los Angeles Super. Ct., filed May 26, 2020) (the 18 “Odessa Investment Action”); 19 Bulk, LLC v. Truck Insurance Exchange, et al., No. 20STCV19129 (Los Angeles 20 Super. Ct., filed May 18, 2020) (the “Bulk Action”); 21 Uncle Sharkii, LLC v. Farmers Insurance Exchange, No. CIVMSC20-00901 (Contra Costa Super. Ct., filed May 22, 2020) (the “Uncle Sharkii Action”); 22 Saddleback Medical Management, Inc. v. Mid-Century Insurance Company, et al., 23 No. 30-2020-01140970-CU-IC-CXC (Orange County Super. Ct., filed May 26, 2020) (the “Saddleback Medical Management Action”); 24 25 Jani Investments, LLC v. Truck Insurance Exchange, No. CV-420743 (Lake Cty. Super. Ct., filed May 26, 2020) (the “Jani Investments Action”); 26 American Traders, Inc. dba Ramada Inn Modesto v. Mid-Century Insurance 27 Company, et al., No. CV-20-2477 (Stanislaus Super. Ct., filed June 4, 2020) (the 28 “American Traders Action”); H OGAN L OVEL LS US LLP -1- ATTO RNEY S AT LAW MEMORANDUM OF POINTS AND AUTHORITIES 1 West Covina Restaurant Group, Inc., et al. v. Farmers Insurance Exchange, No. 20STCV22451 (Los Angeles Super. Ct., filed June 9, 2020) (the “West Covina 2 Restaurant Group Action”); 3 Atelier 1 2 3 Restaurant LLC, dba Atelier Crenn, et al. v. Farmers Group, Inc., et al., Case No. CGC-20-584762 (S.F. Super. Ct., filed June 15, 2020) (the “Crenn 4 Action”); and 5 Chunying Investments Inc., dba Dragon House v. Farmers Group, Inc., et al. Case No. RIC2002673 (Riverside Super Ct., filed July 17, 2020) (the “Chunying 6 Investments Action”). 7 The 13 Included Actions are class action and individual lawsuits filed by local 8 restaurants, bars, hotels, retail stores, and other businesses against one or more of the 9 Farmers Defendants in the wake of the COVID-19 pandemic. Each of these lawsuits 10 alleges that the Farmers Defendants improperly denied insureds’ claims for business 11 income losses and extra expenses allegedly suffered as a result the COVID-19 pandemic, 12 purportedly due to COVID-19 related orders and mandates issued by the State of 13 California and local authorities. 14 The Included Actions—which are “complex”1—raise the same or overlapping legal 15 theories and assert many of the same causes of action under California law. All arise out 16 of COVID-19-related coverage claims submitted to the Farmers Defendants. All require 17 interpretation under California law of the same key terms from the same policy form. 18 Procedurally, these Actions are in their infancy. They were filed only recently and some 19 have not yet been served. 20 The interests of the Court, witnesses, and parties weigh heavily against separately 21 litigating the Included Actions one-by-one, given the duplication of efforts and costs that 22 would be required. Indeed, coordinated treatment of the Included Actions not only would 23 promote the fair and efficient use of the Court’s and parties’ resources, but also is 24 essential to avoid the risk of conflicting or duplicative rulings on issues critical to all of 25 the Actions. The Farmers Defendants further request that the Included Actions be stayed 26 pending the resolution of this Petition. 27 28 1 See Part III, A., below. H OGAN L OVEL LS US LLP ATTO RNEY S AT LAW -2- MEMORANDUM OF POINTS AND AUTHORITIES 1 In anticipation of filing this Petition, counsel for the Farmers Defendants attempted 2 to meet and confer with counsel for Plaintiffs in each of the Included Actions regarding 3 coordination. See Declaration of Michael M. Maddigan (“Maddigan Decl.”), ¶ 18; see 4 also Declaration of Christopher J. Cox (“Cox Decl.”), ¶ 3. As described below, Plaintiffs 5 in 11 of the 13 Included Actions have agreed to coordination. Id. Counsel for the 6 Farmers Defendants has not yet received a response from counsel in two Actions as of the 7 date of this Petition. Maddigan Decl., ¶ 18. 8 II. STATEMENT OF FACTS AND PROCEDURAL BACKGROUND 9 A. Nature of the Actions 10 The insurer Farmers Defendants2 issued business owners’ policies to Plaintiffs, 11 each of which contained certain identical provisions under which Plaintiffs claim 12 coverage. The first, frequently referred to as “business interruption” coverage, provides: 13 We will pay for the actual loss of Business Income you sustain due to the necessary suspension of your “operations” during the “period of 14 restoration.” The suspension must be caused by direct physical loss of or damage to property at the described premises. The loss or damage must be 15 caused by or result from a Covered Cause of Loss. 16 See Maddigan Decl., ¶ 5, Ex. B(1), ¶ A.5.f.(1).3 17 The second, known as “Civil Authority” coverage, provides: 18 We will pay for the actual loss of Business Income you sustain and necessary Extra Expense caused by action of civil authority that prohibits 19 access to the described premises due to direct physical loss of or damage to property, other than at the described premises, caused by or resulting from 20 any Covered Cause of Loss. 21 See id., ¶ A.5.i. 22 As described in more detail below, all of the complaints proceed according to a 23 theory that the COVID-19 pandemic – decoupled from the SARS-CoV-2 virus defining 24 the pandemic4 – through the instrumentality of various state and local COVID-19 related 25 2 26 Farmers Group, Inc. is not an insurer. It is the “attorney in fact” for Farmers, Truck, and Fire Insurance Exchanges. Insurance exchanges are membership organizations peculiar to 27 the 3 insurance industry. See Cal. Ins. Code Div. 1 Part 2 Chapter 3. “Covered Cause of Loss” is defined as “Risks of Direct Physical Loss . . . .” Maddigan 28 Decl. 4 ¶ 5, Ex. B(1) ¶ A.3. The reason many Plaintiffs attempt to disassociate the pandemic from the virus is that H OGAN L OVEL LS US LLP ATTO RNEY S AT LAW -3- MEMORANDUM OF POINTS AND AUTHORITIES 1 Stay-At-Home orders (or perhaps regardless of those orders), caused Plaintiffs to lose the 2 use of their business premises as a result of which they lost business income. Plaintiffs all 3 contend that the Business Interruption and Civil Authority provisions provide coverage 4 under this theory. 5 Although the Included Actions involve different businesses, some different Stay- 6 At-Home orders, and individualized alleged facts, they share the same core questions 7 under California law: the proper interpretation of the policy form at issue and the viability 8 of central, common legal theories. See Maddigan Decl., ¶ 4, Exs. A-M (attaching 9 Complaints of each Included Action). 10 Specifically, the Actions allege that the Farmers Defendants provided commercial 11 property coverage to each insured and improperly denied their claims for Business 12 Interruption coverage (or for Business Income losses and Extra Expenses) and/or Civil 13 Authority coverage for losses purportedly suffered as a result of the Stay-At-Home orders 14 from the State of California and/or local authorities that (i) directed the public to cancel 15 non-essential gatherings and to stay at home or “shelter-in-place,” and (ii) required 16 closure or curtailment of non-essential businesses. Id. Ex. A (Outerlands Am. Compl., 17 ¶¶ 14-33); Ex. B (Scratch Restaurants Compl., ¶¶ 36-38); Ex. C (New Restaurant Compl., 18 ¶¶ 90-97); Ex. D (Boca J.P. Compl., ¶¶ 23-24); Ex. E (Bulk Compl., ¶¶ 66-72), Ex. F 19 (Uncle Sharkii Compl., ¶¶ 6, 31); Ex. G (Odessa Investment Compl., ¶¶ 2, 7, 56); Ex. H 20 (Saddleback Medical Management Compl., ¶¶ 60-66); Ex. I (Jani Investments Compl., 21 ¶¶ 30-33); Ex. J (American Traders Compl., ¶¶ 64-65); Ex. K (West Covina Restaurant 22 Group Compl., ¶¶ 31, 36-39); Ex. L (Crenn Compl., ¶¶ 52-59, 68-71, 93-96); Ex. M 23 (Chunying Investments Compl., ¶¶ 20-23). 24 The Included Actions also assert common legal theories. Relying on the Business 25 Income, Extra Expense, and/or Civil Authority provisions in their policies, Plaintiffs 26 assert that the Stay-At-Home orders caused “direct physical loss of or damage to the 27 28 the policy form includes an “EXCLUSION OF LOSS DUE TO VIRUS OR BACTERIA.” See id. Endorsement 6316 (emphasis added). H OGAN L OVEL LS US LLP ATTO RNEY S AT LAW -4- MEMORANDUM OF POINTS AND AUTHORITIES 1 property” because Plaintiffs were unable to use their properties when following orders. 2 Id. Ex. A (Outerlands Am. Compl., ¶ 53 ); Ex. B (Scratch Restaurants Compl., ¶¶ 42- 3 44); Ex. C (New Restaurant Compl., ¶¶ 126-127); Ex. D (Boca J.P. Compl., ¶¶ 29-30); 4 Ex. E (Bulk Compl. ¶¶ 95-105), Ex. F (Uncle Sharkii Compl., ¶¶ 55-58); Ex. G (Odessa 5 Investment Compl., ¶¶ 48-51); Ex. H (Saddleback Medical Management Compl., ¶ 39); 6 Ex. I (Jani Investments Compl., ¶ 55); Ex. J (American Traders Compl., ¶ 71). The 7 Included Actions further allege that none of the exclusions in their policies apply. See, 8 e.g., Maddigan Decl., ¶ 4, Ex. A (Outerlands Am. Compl., ¶ 53 ); Ex. C (New Restaurant 9 Compl., ¶¶ 75-86 ); Ex. E (Bulk Compl. ¶¶ 106-113 ); Ex. F (Uncle Sharkii Compl., ¶¶ 59, 10 66); Ex. G (Odessa Investment Compl., ¶ 52); Ex. H (Saddleback Medical Management 11 Compl., ¶¶ 38-39 ); Ex. J (American Traders Compl., ¶¶ 105-112); Ex. K (West Covina 12 Restaurant Group Compl., ¶ 53); Ex. L (Crenn Compl., ¶¶ 75-76). 13 Five of the Included Actions, Bulk, Uncle Sharkii, Odessa Investment, Saddleback 14 Medical Management, and American Traders, are class actions that purport to assert 15 claims on behalf of overlapping putative classes consisting of California policyholders 16 insured under a policy issued by one or more of the Farmers Defendants whose covered 17 premises were the subject of a Stay-At-Home order and who filed a claim under their