throbber
FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`COURT
`SUPREME
`OF NEW YORK
`STATE
`
`COUNTY
`
`OF ONONDAGA
`
`6593 WEIGHLOCK
`DRIVE
`COMPANY,
`
`DRIVE,
`LLC,
`
`LLC and
`
`6580 WEIGHLOCK
`
`Plaintiffs,
`
`-against-
`
`SUMMONS
`
`Index
`
`No.
`
`SPRINGHILL
`MARRIOTT
`AMERICAN
`
`SMC CORPORATION,
`INTERNATIONAL,
`INSURANCE
`
`INC.,
`COMPANY,
`Defendants.
`
`FAIRFIELD
`and ZURICH
`
`FMC,
`
`LLC,
`
`Plaintiff
`
`designates
`
`Onondaga
`
`County
`
`as the place
`
`of
`
`trial.
`
`The
`
`basis
`
`of
`
`the
`
`venue
`
`is the place
`
`of
`
`the
`
`occurrence.
`
`YOU ARE HEREBY
`your
`if
`the
`complaint
`answer,
`or,
`Plaintiffs
`within
`20
`Attorney
`after
`30 days
`within
`service
`the
`of New York);
`State
`and
`in case
`the relief
`demanded
`in the complaint.
`
`SUMMONED
`is not
`served
`after
`the
`days
`is complete
`of
`your
`
`the
`
`complaint
`
`to answer
`with
`this
`summons,
`of
`this
`service
`summons,
`if
`this
`summons
`is not
`to appear
`failure
`or answer,
`
`to serve
`in this
`of
`a copy
`and
`action
`on the
`of appearance,
`to serve
`a notice
`the
`of
`service
`(or
`exclusive
`of
`day
`to you within
`delivered
`the
`be taken
`by default
`for
`will
`
`personally
`judgment
`
`Dated:
`
`August
`
`Syracuse,
`
`4, 2020
`New York
`
`Martin
`
`Kelsey
`LYNN
`Attorneys
`750 M&T
`Syracuse,
`Telephone:
`Email:
`
`101 South
`
`Salina
`
`Street
`
`A.
`.
`Lynn,
`W. Shannon,
`Esq.
`LAW FIRM LLP
`for Plaintiff
`Bank
`NY
`
`Building,
`13202
`474-1267
`(315)
`mlynn@lynnlaw.com
`kshannon
`lynnlaw.com
`
`Defendants'
`
`Address:
`
`Springhill
`Fairfield
`Marriott
`Zurich
`
`SMC Corporation,
`10400
`FMC,
`LLC,
`International,
`American
`
`Inc.,
`Insurance
`
`Fernwood
`
`10400
`Fernwood
`Road,
`10400
`Fernwood
`1299
`
`Company
`
`Bethesda,
`Maryland
`
`Road,
`Bethesda,
`Road,
`Bethesda,
`Zurich
`Way,
`Schaumburg,
`
`Maryland
`20817
`Maryland
`
`20817
`
`20817
`60196
`
`IL
`
`1 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`SUPREME
`STATE
`
`COURT
`OF NEW YORK
`
`COUNTY
`
`OF ONONDAGA
`
`6593 WEIGHLOCK
`DRIVE
`COMPANY,
`
`DRIVE,
`LLC,
`
`LLC and
`
`6580 WEIGHLOCK
`
`Plaintiffs,
`
`VERIFIED
`
`COMPLAINT
`
`-against-
`
`Index
`
`No.
`
`SPRINGHILL
`MARRIOTT
`AMERICAN
`
`SMC CORPORATION,
`INTERNATIONAL,
`INSURANCE
`
`INC.,
`COMPANY,
`Defendants.
`
`FAIRFIELD
`and ZURICH
`
`FMC,
`
`LLC,
`
`Plaintiffs,
`
`6539 Weighlock
`
`Drive,
`
`LLC and
`
`6580 Weighlock
`
`Drive
`
`Company,
`
`LLC
`
`("Plaintiffs"),
`
`by
`
`and
`
`through
`
`their
`
`attorneys,
`
`the
`
`Lynn
`
`Law Firm
`
`LLP,
`
`complaining
`
`of
`
`the
`
`defendants,
`
`Springhill
`
`SMC Corporation
`
`("Springhill"),
`
`Fairfield
`
`FMC,
`
`LLC ("Fairfield"),
`
`Marriott
`
`International,
`
`Inc.
`
`("Marriott
`
`International"
`
`and,
`
`collectively
`
`with
`
`Springhill
`
`and Fairfield,
`
`the
`
`"Marriott
`
`Defendants"),
`
`and Zurich
`
`American
`
`Insurance
`
`("Zurich"
`
`and,
`
`together
`
`with
`
`defendants,
`
`d
`
`collectively
`
`"Defendants")
`
`alleges
`
`and
`
`respectfully
`
`shows
`
`to the Court
`
`as follows:
`
`Company
`
`remaining
`
`INTRODUCTION
`
`1.
`
`The
`
`plaintiffs
`
`own
`
`and
`
`operate
`
`two Marriott-flagged
`
`hotels
`
`in Syracuse's
`
`Carrier
`
`Circle
`
`area.
`
`The
`
`plaintiffs
`
`contract
`
`with
`
`two Marriott
`
`entities
`
`(the
`
`Springhill
`
`and Fairfield
`
`defendants)
`
`to
`
`manage
`
`those
`
`businesses.
`
`spreading
`
`2.
`
`3.
`
`Beginning
`
`in approximately
`
`January
`
`2020,
`
`SARS-CoV2,
`
`the
`
`"novel
`
`coronavirus",
`
`began
`
`in New York
`
`State.
`
`As
`
`all
`
`are now aware,
`
`this
`
`virus
`
`spreads
`
`through
`
`droplets
`
`and
`
`aerosols
`
`and
`
`can,
`
`according
`
`to scientists,
`
`live
`
`on surfaces
`
`for
`
`up to several
`
`days.
`
`2 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`4.
`
`As
`
`the
`
`virus
`
`reached
`
`Onondaga
`
`County,
`
`the State
`
`and County
`
`implemented
`
`dramatic
`
`and
`
`unprecedented
`
`closure
`
`orders,
`
`bringing
`
`economic
`
`activity
`
`to nearly
`
`a complete
`
`halt.
`
`5.
`
`As
`
`the
`
`virus
`
`has
`
`continued
`
`to spread
`
`through
`
`the
`
`area
`
`(and,
`
`indeed,
`
`through
`
`the world),
`
`plaintiffs
`
`have
`
`lost millions
`
`of dollars.
`
`6.
`
`The
`
`plaintiffs
`
`had
`
`business
`
`income
`
`coverage,
`
`and
`
`several
`
`other
`
`coverages,
`
`that were
`
`through
`
`their
`
`intended
`
`to and marketed
`
`as insurance
`
`for
`
`exactly
`
`these
`
`types
`
`of events:
`
`when,
`
`no fault
`
`of
`
`own,
`
`a foreign
`
`substance
`
`caused
`
`damage
`
`that
`
`threatened
`
`the
`
`entire
`
`economic
`
`foundation
`
`of
`
`their
`
`businesses.
`
`7.
`
`The
`
`plaintiffs
`
`submitted
`
`claims
`
`to their
`
`insurer,
`
`defendant
`
`Zurich,
`
`for
`
`the
`
`losses
`
`as
`
`covered
`
`under
`
`their
`
`policy.
`
`Zurich
`
`denied
`
`those
`
`claims
`
`without
`
`even
`
`a cursory
`
`investigation.
`
`8.
`
`The Marriott
`
`to acquire
`
`insurance
`
`that
`
`Defendants,
`
`who
`
`were
`
`contractually
`
`obligated
`
`would
`
`protect
`
`plaintiffs
`
`in these
`
`circumstances,
`
`have
`
`likewise
`
`denied
`
`all
`
`responsibility.
`
`9.
`
`Plaintiffs
`
`strive
`
`merely
`
`to stay
`
`afloat,
`
`the
`
`companies
`
`that
`
`plaintiffs
`
`have
`
`relied
`
`on - and
`
`paid
`
`handsomely
`
`-
`
`to protect
`
`them have
`
`been
`
`nowhere
`
`to be found.
`
`Plaintiffs
`
`contracted
`
`with
`
`international
`
`and
`
`sophisticated
`
`companies
`
`to protect
`
`them from
`
`risk. When
`
`that
`
`loss
`
`occurred,
`
`despite
`
`their
`
`contractual
`
`Zurich
`
`and
`
`now insist
`
`own.
`
`obligations,
`
`the Marriott
`
`Defendants
`
`plaintiffs
`
`are on their
`
`PARTIES
`
`10.
`
`At
`
`all
`
`relevant
`
`times
`
`herein,
`
`plaintiff
`
`6593 Weighlock
`
`Drive,
`
`LLC ("6593
`
`Weighlock")
`
`is
`
`a domestic
`
`limited
`
`liability
`
`company
`
`with
`
`a principal
`
`place
`
`of business
`
`in Syracuse,
`
`New York.
`
`11.
`
`At
`
`all
`
`relevant
`
`times
`
`herein,
`
`6593 Weighlock
`
`owns
`
`and
`
`operates
`
`a hotel
`
`known
`
`as the
`
`Fairfield
`
`Inn & Suites
`
`by Marriott
`
`Carrier
`
`Circle,
`
`located
`
`at 6593 Weighlock
`
`Drive,
`
`East
`
`Syracuse,
`
`NY
`
`13057.
`
`2
`
`3 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`12.
`
`In addition
`
`to guestrooms,
`
`The
`
`Fairfield
`
`Inn & Suites
`
`by Marriott
`
`Carrier
`
`Circle
`
`offers
`
`important
`
`amenities:
`
`a fitness
`
`center,
`
`indoor
`
`pool,
`
`conference
`
`center,
`
`and
`
`breakfast
`
`buffet.
`
`13.
`
`At
`
`all
`
`relevant
`
`times
`
`herein,
`
`plaintiff
`
`6580 Weighlock
`
`Drive
`
`Company,
`
`LLC
`
`("6580
`
`Weighlock")
`
`is a domestic
`
`limited
`
`liability
`
`company
`
`with
`
`a principal
`
`place
`
`of business
`
`in Syracuse,
`
`New
`
`York.
`
`14.
`
`At
`
`all
`
`relevant
`
`times
`
`herein,
`
`6580 Weighlock
`
`owns
`
`and
`
`operates
`
`a hotel
`
`known
`
`as the
`
`SpringHill
`
`Suites
`
`by Marriott
`
`Carrier
`
`Circle,
`
`located
`
`at 6580 Weighlock
`
`Drive,
`
`East
`
`Syracuse,
`
`NY
`
`13057.
`
`°
`
`15.
`
`The
`
`SpringHill
`
`Suites
`
`by Marriott
`
`Carrier
`
`Circle
`
`is an all-suite
`
`hotel
`
`that
`
`offers
`
`important
`
`amenities:
`
`a fitness
`
`center,
`
`indoor
`
`pool,
`
`conference
`
`center,
`
`and
`
`breakfast
`
`buffet.
`
`a
`
`o
`
`Z
`
`16.
`
`Upon
`
`information
`
`and
`
`belief,
`
`Fairfield
`
`FMC,
`
`LLC
`
`is a Delaware
`
`corporation
`
`with
`
`principal
`
`place
`
`of business
`
`in Bethesda,
`
`Maryland,
`
`and
`
`a mailing
`
`address
`
`of
`
`10400
`
`Fernwood
`
`Road,
`
`Bethesda,
`
`Maryland
`
`20817.
`
`17.
`
`Upon
`
`information
`
`and
`
`belief,
`
`Springhill
`
`SMC Corporation
`
`a Delaware
`
`corporation
`
`with
`
`a
`
`prmcipal
`
`place
`
`of business
`
`in Bethesda,
`
`Maryland,
`
`and
`
`a mailing
`
`address
`
`of
`
`10400
`
`Fernwood
`
`Road,
`
`Bethesda,
`
`Maryland
`
`20817.
`
`18.
`
`Upon
`
`information
`
`and
`
`belief
`
`Zurich
`
`American
`
`Insurance
`
`Company
`
`is a New York
`
`corporation
`
`with
`
`a principal
`
`place
`
`of business
`
`in Schaumburg,
`
`Illinois,
`
`and
`
`a mailing
`
`address
`
`of
`
`1299
`
`Zurich
`
`Way,
`
`Schaumburg,
`
`IL
`
`60196.
`
`19.
`
`Upon
`
`information
`
`and
`
`belief,
`
`Zurich
`
`American
`
`Insurance
`
`Company
`
`is authorized
`
`to sell
`
`insurance
`
`in the State
`
`of New York.
`
`3
`
`4 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`20.
`
`Upon
`
`information
`
`and
`
`belief,
`
`Marriott
`
`International,
`
`Inc.
`
`is a Delaware
`
`corporation
`
`with
`
`a
`
`principal
`
`place
`
`of business
`
`in Bethesda,
`
`Maryland,
`
`and
`
`a mailing
`
`address
`
`of
`
`10400
`
`Fernwood
`
`Road,
`
`Bethesda,
`
`Maryland
`
`20817.
`
`21.
`
`Upon
`
`information
`
`and
`
`belief,
`
`the Marriott
`
`Defendants
`
`(i.e.,
`
`Springhill,
`
`Fairfield,
`
`and
`
`Marriott
`
`International)
`
`are part
`
`of
`
`the
`
`global
`
`Marriott
`
`compañy.
`
`Upon
`
`information
`
`and
`
`belief,
`
`the
`
`Marriott
`
`companies
`
`are the
`
`largest
`
`hotel
`
`business
`
`in the world.
`
`THE GOVERNMENTAL
`
`ORDERS
`
`22.
`
`On March
`
`7, 2020,
`
`New York
`
`Governor
`
`Andrew
`
`Cuomo
`
`issued
`
`Executive
`
`Order
`
`202
`
`declaring
`
`a public
`
`emergency
`
`in New York
`
`State.
`
`23.
`
`On March
`
`20,
`
`2020,
`
`Governor
`
`Cuomo
`
`issued
`
`Executive
`
`Order
`
`202.8.
`
`Pursuant
`
`to
`
`Order
`
`non-essential
`
`ordered
`
`closed
`
`effective
`
`March
`
`2020
`
`at 8
`
`Executive
`
`202.8,
`
`all
`
`businesses
`
`were
`
`22,
`
`p.m.
`
`All
`
`non-essential
`
`businesses
`
`were
`
`required
`
`to reduce
`
`their
`
`in-person
`
`workforces
`
`by
`
`100
`
`percent.
`
`24.
`
`These
`
`closures
`
`were
`
`extended
`
`successive
`
`Executive
`
`Orders
`
`by
`
`202.10,
`
`202.11,
`
`202.13,
`
`and
`
`202.18.
`
`These
`
`State-wide
`
`orders
`
`required
`
`the
`
`closure
`
`of all
`
`nonessential
`
`businesses
`
`through
`
`at
`
`least
`
`May
`
`15, 2020.
`
`z
`
`.J
`
`25.
`
`Beginning
`
`on May
`
`15, 2020,
`
`the State
`
`started
`
`to permit
`
`certain
`
`other
`
`industries
`
`to open
`
`on
`
`a region-by-region
`
`and
`
`industry-by-industry
`
`basis.
`
`This
`
`was
`
`first
`
`instituted
`
`through
`
`Executive
`
`Order
`
`202.31.
`
`mandatory
`
`orders.
`
`26.
`
`Parts
`
`of
`
`the
`
`state,
`
`including
`
`the most
`
`populous
`
`regions,
`
`continued
`
`to be subject
`
`to
`
`closures
`
`of all nonessential
`
`businesses
`
`under
`
`Executive
`
`Order
`
`202.31
`
`and
`
`later
`
`implementing
`
`4
`
`5 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`27.
`
`Other
`
`Executive
`
`Orders,
`
`including
`
`Order
`
`202.16,
`
`imposed
`
`requirements
`
`on even
`
`essential
`
`businesses
`
`in New York
`
`State,
`
`including
`
`that
`
`all
`
`employees
`
`wear
`
`face-coverings
`
`and
`
`that
`
`the businesses
`
`provide,
`
`at
`
`their
`
`expense,
`
`face-covering
`
`for
`
`employees.
`
`28.
`
`Local
`
`municipalities,
`
`including
`
`Onondaga
`
`County,
`
`were
`
`implementing
`
`additional
`
`restrictions
`
`during
`
`this
`
`period.
`
`On March
`
`Onondaga
`
`Executive
`
`J. Ryan McMahon
`
`declared
`
`a State
`
`of
`
`29.
`
`14, 2020,
`
`County
`
`Emergency.
`
`He
`
`immediately
`
`ordered
`
`all
`
`schools
`
`to close
`
`on March
`
`20,
`
`2020
`
`and
`
`cancelled
`
`all
`
`extracurricular
`
`activities.
`
`30.
`
`This
`
`State
`
`of Emergency
`
`was
`
`subsequently
`
`extended
`
`on April
`
`13, 2020, May
`
`13, 2020,
`
`June
`
`12, 2020,
`
`and
`
`July
`
`12, 2020.
`
`A State
`
`of Emergency
`
`is currently
`
`in place
`
`through
`
`August
`
`11, 2020,
`
`and may
`
`be further
`
`extended.
`
`31.
`
`On March
`
`2020,
`
`Executive
`
`McMahon
`
`ordered
`
`all non-essential
`
`gatherings
`
`of
`
`27,
`
`County
`
`any
`
`size
`
`for
`
`any
`
`reason
`
`to be cancelled
`
`or postponed.
`
`32.
`
`At
`
`least
`
`42
`
`states
`
`and
`
`countless
`
`local
`
`governments
`
`issued
`
`substantially
`
`similar
`
`directives.
`
`These
`
`orders
`
`were
`
`intended
`
`to mitigate
`
`and
`
`slow
`
`the
`
`spread
`
`and
`
`impact
`
`of
`
`coronavirus.
`
`33.
`
`the
`
`While
`
`hotels
`
`were
`
`declared
`
`essential
`
`and
`
`permitted
`
`to remain
`
`open
`
`throughout
`
`this
`
`were
`
`alter
`
`their
`
`customer
`
`period,
`
`plaintiffs
`
`forced
`
`to considerably
`
`businesses.
`
`Important
`
`amenities,
`
`including
`
`the
`
`pools
`
`and
`
`fitness
`
`centers,
`
`were
`
`required
`
`to close.
`
`34.
`
`Moreover,
`
`the
`
`travel
`
`that
`
`sustains
`
`the
`
`hotels
`
`was
`
`effectively
`
`barred:
`
`business
`
`travel
`
`became
`
`for most
`
`illegal
`
`and
`
`the
`
`events
`
`that
`
`brought
`
`many
`
`visitors
`
`to the
`
`hotels
`
`were
`
`cancelled
`
`because
`
`of
`
`the
`
`virus
`
`and
`
`government
`
`edict.
`
`5
`
`6 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`CORONAVIRUS
`
`IN ONONDAGA
`
`COUNTY
`
`35.
`
`The
`
`first
`
`confirmed
`
`case
`
`of
`
`coronavirus
`
`in New York
`
`State was
`
`identified
`
`on March
`
`11,
`
`36.
`
`The
`
`first
`
`confirmed
`
`case
`
`of
`
`coronavirus
`
`in Onondaga
`
`County
`
`was
`
`identified
`
`on March
`
`16,
`
`2020.1
`
`2020.2
`
`37.
`
`Only
`
`a week
`
`later,
`
`the County
`
`confirmed
`
`the
`
`first
`
`death
`
`resulting
`
`from
`
`COVID-19,
`
`the
`
`disease
`
`resulting
`
`from
`
`the
`
`coronavirus.3
`
`(While
`
`sometimes
`
`conflated,
`
`the
`
`"novel
`
`coronavirus"
`
`or SARS-
`
`CoV2,
`
`and
`
`"COVID-19"
`
`refer
`
`to different
`
`things.
`
`The
`
`coronavirus
`
`is the
`
`virus,
`
`COVID-19
`
`is the
`
`disease
`
`caused
`
`by
`
`the
`
`virus.
`
`Plaintiffs'
`
`claims
`
`are based
`
`on the presence
`
`of
`
`the
`
`coronavirus,
`
`not
`
`its
`
`sequalae,
`
`COVID-19).
`
`date
`
`38.
`
`The
`
`first
`
`confirmed
`
`COVID-19
`
`death
`
`in Onondaga
`
`County
`
`coincided
`
`with
`
`the
`
`first
`
`on which
`
`nonessential
`
`businesses
`
`in the State
`
`were
`
`closed.
`
`39.
`
`As
`
`of
`
`July
`
`20,
`
`2020,
`
`Onondaga
`
`County
`
`alone
`
`has
`
`seen
`
`at
`
`least
`
`3,169
`
`confirmed
`
`cases
`
`of
`
`coronavirus
`
`and
`
`192
`
`deaths.4
`
`40.
`
`In addition
`
`to the
`
`government-mandated
`
`closures,
`
`many
`
`events
`
`were
`
`cancelled.
`
`For
`
`example,
`
`Syracuse
`
`University
`
`announced
`
`on March
`
`23,
`
`2020
`
`that
`
`the
`
`school
`
`would
`
`not
`
`host
`
`in-
`
`any
`
`person
`
`graduations
`
`in the
`
`spring
`
`of 2020.5
`
`PLAINTIFFS'
`
`AGREEMENTS
`
`WITH
`
`THE MARRIOTT
`
`DEFENDANTS
`
`41.
`
`The
`
`plaintiffs
`
`are owners
`
`and
`
`operators
`
`of
`
`two Marriott-flagged
`
`hotels.
`
`1 https://www.syracuse.com/news/2020/03/new-york-state-confirms-first-case-of-coronavirus.html
`2 https://cortlandstandard.net/2020/03/16/first-coronavirus-case-in-onondaqa-county/
`3 https://www.syracuse.com/coronavirus/2020/03/onondaqa-county-confirms-first-coronavirus-death.html.
`4 https://www.syracuse.com/coronavirus-ny/
`5 https://www.syracuse.com/coronavirus/2020/03/syracuse-university-coronavirus-update-no-in-person-
`graduation-prorated-room-and-board.html
`
`6
`
`7 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`42.
`
`Each
`
`plaintiff
`
`has
`
`a management
`
`agreement
`
`with
`
`a Marriott
`
`entity
`
`under
`
`which
`
`the
`
`Marriott
`
`entity
`
`agrees
`
`to manage
`
`the
`
`property
`
`and
`
`perform
`
`certain
`
`services.
`
`43.
`
`Among
`
`other
`
`things,
`
`these
`
`agreements
`
`obligate
`
`the Marriott
`
`Defendants
`
`to procure
`
`insurance
`
`for
`
`the
`
`property.
`
`44.
`
`6580 Weighlock
`
`and Springhill
`
`SMC Corporation
`
`executed
`
`a Management
`
`Agreement
`
`dated
`
`January
`
`30,
`
`2004
`
`(the
`
`"Springhill
`
`Agreement").
`
`45.
`
`46.
`
`The
`
`Springhill
`
`Agreement
`
`has
`
`an initial
`
`term of 25 years
`
`and
`
`remains
`
`in force.
`
`The
`
`Springhill
`
`Agreement
`
`contains
`
`a confidentiality
`
`provision
`
`prohibiting
`
`the
`
`public
`
`disclosure
`
`of
`
`the
`
`terms
`
`of
`
`the Springhill
`
`Agreement
`
`except
`
`in narrow
`
`circumstances.
`
`Accordingly,
`
`in an
`
`abundance
`
`of caution,
`
`plaintiff
`
`does
`
`not
`
`quote
`
`the
`
`applicable
`
`terms
`
`here.
`
`47.
`
`Section
`
`6.01
`
`of
`
`the Springhill
`
`Agreement
`
`provides,
`
`among
`
`other
`
`things,
`
`that
`
`Springhill
`
`shall
`
`procure
`
`and maintain
`
`"all-risk"
`
`property
`
`and
`
`casualty
`
`insurance.
`
`48.
`
`Section
`
`6.03
`
`of
`
`the Springhill
`
`Agreement
`
`permits
`
`Springhill
`
`to fulfil
`
`its
`
`insurance
`
`obligations
`
`by
`
`obtaining
`
`"blanket"
`
`insurance
`
`programs,
`
`but
`
`requires
`
`that
`
`any
`
`such
`
`programs
`
`satisfy
`
`Springhill's
`
`obligations.
`
`49.
`
`Section
`
`11.04
`
`of
`
`the Springhill
`
`Agreement
`
`provides
`
`that
`
`the Springhill
`
`Agreement
`
`shall
`
`be construed
`
`under
`
`and
`
`shall
`
`be governed
`
`by
`
`the
`
`laws
`
`of
`
`the State where
`
`the
`
`hotel
`
`is located,
`
`i.e.,
`
`the
`
`r
`
`Z
`
`State
`
`of New York.
`
`50.
`
`6593 Weighlock
`
`and
`
`Fairfield
`
`FMC,
`
`LLC executed
`
`a Management
`
`Agreement
`
`dated
`
`January
`
`25,
`
`2013
`
`(the
`
`"Fairfield
`
`Agreement").
`
`51.
`
`The
`
`Fairfield
`
`Agreement
`
`has
`
`an initial
`
`term of 25 years
`
`and
`
`remains
`
`in force.
`
`7
`
`8 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`52.
`
`Section
`
`6.01A
`
`of
`
`the Fairfield
`
`Agreement
`
`provides,
`
`among
`
`other
`
`things,
`
`that
`
`Fairfield
`
`shall
`
`procure
`
`and maintain
`
`"broad
`
`form"
`
`property
`
`and
`
`casualty
`
`insurance.
`
`53.
`
`Section
`
`6.01.B.2
`
`of
`
`the Fairfield
`
`Agreement
`
`further
`
`governs
`
`Fairfield's
`
`obligations
`
`to
`
`procure
`
`insurance
`
`under
`
`the Fairfield
`
`Agreement.
`
`54.
`
`Section
`
`6.03
`
`of
`
`the Fairfield
`
`Agreement
`
`allows
`
`Fairfield
`
`to fulfil
`
`its
`
`insurance
`
`obligations
`
`"blanket"
`
`by
`
`obtaining
`
`obligations.
`
`insurance
`
`programs,
`
`but
`
`requires
`
`that
`
`any
`
`such
`
`programs
`
`satisfy
`
`Springhill's
`
`55.
`
`Pursuant
`
`to the
`
`terms
`
`of
`
`the Fairñeld
`
`Agreement,
`
`6593 Weighlock
`
`elected,
`
`and Fairfield
`
`FMC agreed,
`
`that
`
`the Manager
`
`(that
`
`is, Fairfield
`
`FMC)
`
`would
`
`procure
`
`insurance
`
`as provided
`
`therein.
`
`Section
`
`11.04
`
`Agreement
`
`shall
`
`56.
`
`of
`
`the Springhill
`
`Agreement
`
`provides
`
`that
`
`the Springhill
`
`be construed
`
`under
`
`and
`
`shall
`
`be governed
`
`by
`
`the
`
`laws
`
`of
`
`the State where
`
`the
`
`hotel
`
`is located,
`
`i.e.,
`
`the
`
`State
`
`of New York.
`
`PLAINTIFFS'
`
`INSURANCE
`
`57.
`
`As
`
`required
`
`by
`
`the Springhill
`
`and Fairfield
`
`Agreements,
`
`the Springhill
`
`and Fairñeld
`
`Defendants
`
`undertook
`
`to procure
`
`insurance
`
`for
`
`the
`
`plaintiffs'
`
`hotels.
`
`58.
`
`59.
`
`Plaintiffs
`
`relied
`
`on Springhill
`
`and Fairfield
`
`to do so.
`
`Because
`
`Springhill
`
`and Fairfield
`
`were
`
`contractually
`
`obligated
`
`to procure
`
`insurance
`
`that
`
`met
`
`the
`
`terms
`
`of
`
`the Fairfield
`
`and Springhill
`
`Agreements,
`
`plaintiffs
`
`did
`
`not
`
`undertake
`
`to procure
`
`their
`
`own
`
`insurance.
`
`60.
`
`The
`
`Springhill
`
`and Fairfield
`
`Defendants
`
`insured
`
`the
`
`properties
`
`under
`
`a blanket
`
`policy
`
`with
`
`Defendant
`
`Zurich.
`
`8
`
`9 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`61.
`
`The Marriott
`
`Defendants
`
`did
`
`not
`
`disclose
`
`the
`
`scope
`
`of
`
`coverages
`
`prior
`
`to the
`
`losses
`
`complained
`
`of herein
`
`and
`
`at no time
`
`did
`
`they
`
`notify
`
`plaintiff
`
`of any
`
`endorsements
`
`to the
`
`policies.
`
`62.
`
`For
`
`the
`
`period
`
`from
`
`April
`
`1, 2019
`
`at 12:01
`
`a.m.
`
`through
`
`April
`
`1, 2021,
`
`the
`
`plaintiffs
`
`(as
`
`well
`
`as many
`
`others)
`
`were
`
`insured
`
`under
`
`Policy
`
`No. PPR 3700638-17
`
`(the
`
`"First
`
`Policy").
`
`63.
`
`Despite
`
`requests
`
`to the Marriott
`
`Defendants,
`
`plaintiffs
`
`have
`
`been
`
`provided
`
`only
`
`a heavily
`
`redacted
`
`of
`
`policy.
`
`here
`
`as Exhibit
`
`A.
`
`W
`
`Ol---
`
`Z
`>-
`
`version
`
`this
`
`A copy
`
`of
`
`the
`
`redacted
`
`policy
`
`is attached
`
`64.
`
`Upon
`
`information
`
`and
`
`belief,
`
`for
`
`the
`
`period
`
`from
`
`April
`
`1, 2020
`
`at 12:01
`
`a.m.
`
`through
`
`April
`
`1, 2020,
`
`the
`
`plaintiffs
`
`(as well
`
`as many
`
`others)
`
`were
`
`insured
`
`under
`
`Policy
`
`No. PPR 3700638-17
`
`(the
`
`"Second
`
`Policy").
`
`65.
`
`The
`
`First
`
`Policy
`
`is 79 pages
`
`including
`
`appendices,
`
`as shown
`
`in the Table
`
`of Contents:
`
`TABLEOFCONTENTS
`(OrderinWhichTheyAppeai)
`
`.
`
`.
`
`.
`
`.
`
`....
`
`.....
`
`.
`
`PARTICIPATIONPAGE
`DECLARATIONS-SECTIONA
`1 NAMEDINSURED
`2 MAILINGADDRESS
`3 POLICYDATES
`4 TERRITORY.
`5 INSUREDLOCATION
`6. CURRENCY........ ....... ...
`..
`7 PARTICIPATION
`..
`8 PROGRAMUMITSOFLIABILITY
`9 PREMJUM
`10 PREMIUMPAYABLE
`.
`1I ADJUSTMENTOFPREMiUM
`12 VALUEREPORTlNGPROVISIONS
`13 WALTlNGPERIOD
`14 DEDUCTIBLES
`15 EXCESSCLAUSEAPPLICABLETOEXCESSoOUCIES
`PROPERTYDAMAGE-SECTIONB
`1 PROPERTYINSURED
`13
`14
`2 PROPERTYEXCLUDED
`3 PERILSIMSUREDACalNST
`10
`4 ADDITIONALCOVERAGES
`16
`A ACCOUNTSRECEIVABLE
`15
`It
`B AUTOMATICCOVERAGE
`17
`C BRANDSANDLABELS
`D CGINSURANCEDEFICIENCYANDCURRENCYDEVALUATION
`17
`E CONSEOVENTIALREDUCTIONINVALVE.
`.
`F CONTROLOFDAi.IAGEDVROPEERTY
`19
`G DEBRISREMOVAL
`9
`H DECONTAMINATIONCOSTS
`19
`I
`19
`DEFERREDPAYMENTS
`.' DEMOLITIONANDIlwCREASECCOSTOFCONSTRUCTION
`20
`K DIFFERENCEINCONDITIONS
`N
`21
`L EARTHMOVEl.IENT..
`. ..
`M ERROR$ANDOMIS5IONS
`22
`N EXPEDITINGCOSTS
`22
`NEARTS
`2
`O LANDANDWATERCONTAMINANTORNLLUTANTCI.EANUPREMOVAL
`R
`U.IPROÉMENTS ..
`
`I
`
`2
`2
`2
`5
`5
`5
`6
`G
`1I
`
`.
`
`.
`
`.
`
`.N
`24
`25
`24
`2T
`2T
`25
`its
`Ji
`31
`
`St
`39
`do
`
`S NEiHBCJRSRECOURSEANDTElkANTSLtABri*TV
`PGALMITTEDINCREASEDTAXL'AS'LITY
`u ¾fEWM FEM. . .
`v DROTECTONANDPRESERVATCN0FPR-‡#ERTY
`w 3ggyggsgi:ggqnpTEPROPERTYDALEGE
`X TAXTREATI.tENTOFPRWITS
`Y TEl#GRE.RYRElXNALAFPRODERTY
`Z TRAN5ff
`AA VALUAELEPADERMANDREchRDS
`TYDAP .
`BB MWZOND R
`' EXCUJS.<‰
`TIMEELEMENT-SECTIONC
`E
`A BUSNEWNTERRUC
`E EXTRAEXPENSE
`C LEASEMOLO:NTEREAT
`O RENTAL(NSURANCE
`E COUl-tiSSlfiN5.r'ROFITSMIDR6YAA.TIES
`
`F DEBTRESTRWTURING
`3 "'t.IEELEMENTCV-ERAGEEXTENGtCNS .
`A BUSINESS6NTERRUFT•0NGAp½WWéR&FEES
`P WhTesGErtiTPEELE).1ENT
`43
`C EXTENDE0PERIODOFLIAE•ILITV
`45
`La INGRESMGRES
`JJ
`.
`44
`E (AWELLATIONOFBOOKIriGS
`46
`F % DREU15ESSER'ACES
`G PMECTWhNMERVATicNW SR(.WERTY- TIMEELELtE'ff4t
`la RELATEDREPORTEDVALtiES
`48.
`T
`EP I tE LErfENT
`N edTERR•JPTIONBycMt.ANDMillTARYAJTNAfTY
`49
`L WA EDC+UESTS. .
`
`JS
`M GUEATREBATES
`49
`.
`N COMJZONINGTI'EELE'.IENT
`13
`') DELAY:NCOMPLETOs
`49
`-1. PERMJ-# LIAB1ITV...................... ...... ... .............. ... .. ... .
`5 T;uEELEl.ENTEXCLUSIONS........... ...... ... .... ..........
`
`.. .. ... . 5I
`LOSSADJUSTMENTANDSETTLEMENT-SECTIOND
`. SP.
`AYABLE.... ......................................
`
`....
`
`9
`
`10 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`.
`
`..
`
`..
`..
`
`.
`
`56
`56
`57
`58
`58
`58
`59
`59
`60
`60
`60
`60
`
`..
`
`..
`..
`
`5 LOS8CONDITIONS
`
`A REQUIREMENTSINCASEOFLOSS
`B COMPANYOPTION
`C ABANDONMENT
`D SUBROGATlON
`E APPRAISAL
`F SU:TAGAINSTTHECOMPANY
`.
`6 SETTLEMENTOFCLAIMS
`7 COLLECTIONFROMOTHERS
`8 PART1ALPAYMENTOFLOSSSETTLEMENT
`9 Ji-IRISOICTION
`10 ASSIGNMENTOFPOLICY
`GENERALPROVISIONS•SECTIONE
`
`I ADDITIONALINSURABLEINTERESTSeCERTIFICATESOFINSURANCE 61
`Gl
`2 CANCELLATION/NON-RENEWAL
`61
`3 INSPECTIONS
`4 VACANCY
`62
`5 PROVISIONSAPPLICABLETOSPECIFICJURISD!CTIONS.
`62
`.
`
`64
`.
`6 MISREPRESENTATIONANDFRAUD
`7 LENDERSLOSSPAYEEANDMORTGAGEEINTERESTSANDOBLIGATIONS65
`8 OTHERINSURANCE
`67
`9 GROUNDLESSORINTERESTS
`10 REUCTIONBYLOSS
`67
`.
`11 SUSPENSION
`67
`67
`12 TITLES
`67
`13 OCCURRENCE
`APPENDXA
`68
`APPENDIXB
`70
`APPEND1XC ..
`74
`APPENDIXD
`76
`7/
`APPENDIXE
`APPENDIXF
`78
`
`.
`
`.
`
`.
`
`.
`
`.
`
`.
`
`Z
`
`66.
`
`67.
`
`The
`
`First
`
`Policy
`
`is also modified
`
`by
`
`18 Endorsements.
`
`The
`
`First
`
`Policy
`
`identifies
`
`the Named
`
`Insured
`
`as Marriott
`
`International,
`
`Inc.
`
`It
`
`then
`
`provides
`
`that
`
`other
`
`entities
`
`which
`
`operate
`
`Marriott
`
`hotels
`
`and
`
`are so identified
`
`by Marriott
`
`International
`
`will
`
`also
`
`be insureds
`
`under
`
`the First
`
`Policy.
`
`68.
`
`69.
`
`Accordingly,
`
`plaintiffs
`
`are
`
`insureds
`
`under
`
`the First
`
`Policy.
`
`The
`
`First
`
`Policy
`
`is an all-risk
`
`policy
`
`that
`
`"covers
`
`property,
`
`as described
`
`in this Policy,
`
`against
`
`all
`
`risks
`
`of direct
`
`physical
`
`loss
`
`or damage,
`
`except
`
`as hereinafter
`
`excluded,
`
`while
`
`located
`
`as
`
`described
`
`in this
`
`Policy
`
`occurring
`
`during
`
`the policy
`
`period."
`
`70.
`
`The
`
`First
`
`Policy
`
`(exclusive
`
`of endorsements)
`
`contains
`
`no exclusions
`
`that would
`
`even
`
`arguably
`
`apply
`
`to the
`
`coronavirus.
`
`10
`
`11 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`71.
`
`The
`
`First
`
`Policy
`
`further
`
`provides
`
`for
`
`business
`
`interruption
`
`coverage
`
`of
`
`the
`
`actual
`
`loss
`
`sustained.
`
`72.
`
`The
`
`First
`
`Policy
`
`further
`
`provides
`
`for
`
`rental
`
`insurance
`
`covering
`
`the
`
`actual
`
`loss
`
`sustained
`
`in
`
`loss
`
`of
`
`rents.
`
`73.
`
`The
`
`First
`
`Policy
`
`further
`
`provides
`
`for
`
`Ingress/Egress
`
`Coverage
`
`for
`
`damages
`
`resulting
`
`to
`
`interruption
`
`of business
`
`due
`
`to impairment
`
`of
`
`ingress
`
`to or egress
`
`from
`
`an Insured
`
`whether
`
`the
`
`Location,
`
`or not
`
`the
`
`premises
`
`or property
`
`of
`
`the
`
`Insured
`
`is damaged,
`
`provided
`
`that
`
`such
`
`impairment
`
`is a direct
`
`result
`
`of direct
`
`physical
`
`damage
`
`of
`
`the type
`
`insured
`
`by
`
`this
`
`Policy,
`
`to the
`
`kind
`
`of property
`
`not
`
`excluded
`
`by
`
`this Policy.
`
`74.
`
`The
`
`First
`
`Policy
`
`further
`
`provides
`
`for
`
`"Cancellation
`
`of
`
`Bookings"
`
`coverage,
`
`providing
`
`for
`
`the
`
`of
`
`the
`
`actual
`
`loss
`
`sustained
`
`resulting
`
`from
`
`the
`
`cancellation
`
`of,
`
`or
`
`to accept,
`
`recovery
`
`inability
`
`bookings
`
`or
`
`reservations
`
`resulting
`
`from,
`
`among
`
`other
`
`things,
`
`the
`
`"outbreak
`
`of
`
`contagious
`
`and/or
`
`infectious
`
`disease
`
`as well
`
`as restrictive
`
`guidance
`
`or
`
`travel
`
`advisories
`
`placed
`
`on a region
`
`or area
`
`by
`
`the
`
`Centers
`
`for Disease
`
`Control,
`
`World
`
`Health
`
`Organization,
`
`or comparable
`
`authority
`
`."
`
`.
`
`. .
`
`75.
`
`The
`
`First
`
`Policy
`
`further
`
`provides
`
`for
`
`coverage
`
`for
`
`Interruption
`
`by Civil
`
`and Military
`
`which
`
`sustained
`
`the
`
`period
`
`of
`
`time
`
`as
`
`Authority,
`
`provides
`
`for
`
`coverage
`
`for
`
`the
`
`actual
`
`loss
`
`"during
`
`when,
`
`a result
`
`of physical
`
`loss
`
`or damage
`
`not
`
`otherwise
`
`excluded
`
`herein,
`
`to the
`
`kind
`
`of property
`
`not
`
`otherwise
`
`excluded
`
`herein
`
`and
`
`access
`
`to the
`
`property
`
`of
`
`the
`
`insured
`
`is impaired
`
`by
`
`order
`
`or action
`
`of
`
`civil
`
`or
`
`authority."
`
`military
`
`76.
`
`The Civil
`
`and Military
`
`authority
`
`coverage
`
`does
`
`not
`
`require
`
`that
`
`access
`
`be prohibited,
`
`only
`
`that
`
`it be
`
`"impaired."
`
`11
`
`12 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`77.
`
`Zurich
`
`America
`
`contends
`
`that
`
`a single
`
`endorsement
`
`to the First
`
`Policy
`
`applies
`
`to exclude
`
`plaintiffs'
`
`claims,
`
`Endorsement
`
`#4.
`
`78.
`
`Endorsement
`
`#4 is titled
`
`"Mold,
`
`Mildew
`
`and
`
`Fungus
`
`Clause
`
`and Microorganism
`
`Exclusion."
`
`It provides
`
`for
`
`an exclusion
`
`for
`
`damage
`
`resulting
`
`from
`
`"mold,
`
`mildew,
`
`fungus,
`
`spores
`
`or
`
`other microorganisms
`
`of any
`
`type,
`
`nature,
`
`or description,
`
`including
`
`but
`
`not
`
`limited
`
`to any
`
`substance
`
`whose
`
`presence
`
`poses
`
`an actual
`
`or potential
`
`threat
`
`to human
`
`health."
`
`79.
`
`Notably,
`
`Endorsement
`
`#4 makes
`
`no mention
`
`of viruses
`
`(although
`
`the First
`
`Policy
`
`itself
`
`elsewhere
`
`uses
`
`the
`
`term).
`
`80.
`
`Upon
`
`information
`
`and
`
`belief,
`
`the Second
`
`Policy
`
`is substantively
`
`identical
`
`to the First
`
`Policy
`
`with
`
`two
`
`exceptions.
`
`not
`
`contain
`
`coverage
`
`for
`
`"Cancellation
`
`Bookings."
`
`of
`
`First,
`
`the Second
`
`Policy
`
`does
`
`any
`
`Second,
`
`the Second
`
`Policy
`
`contains
`
`an Endorsement
`
`11 that
`
`is not
`
`present
`
`in the First
`
`81.
`
`82.
`
`Policy.
`
`83.
`
`It has
`
`been
`
`represented
`
`to plaintiffs
`
`that Endorsement
`
`11 of
`
`the Second
`
`Policy
`
`reads:
`
`1. This
`
`policy,
`
`subject
`
`to all
`
`applicable
`
`terms,
`
`conditions
`
`and
`
`exclusions,
`
`covers
`
`losses
`
`attributable
`
`to direct
`
`physical
`
`loss
`
`or physical
`
`damage
`
`occurring
`
`during
`
`the
`
`period
`
`of
`
`insurance.
`
`Consequently,
`
`and
`
`notwithstanding
`
`any
`
`other
`
`provision
`
`of
`
`this
`
`policy
`
`to the
`
`contrary,
`
`this
`
`policy
`
`does
`
`not
`
`insure
`
`any
`
`loss,
`
`damage,
`
`claim,
`
`cost
`
`expense
`
`or other
`
`sum,
`
`directly
`
`or
`
`indirectly
`
`arising
`
`out
`
`of,
`
`attributable
`
`to,
`
`or occurring
`
`concurrently
`
`or
`
`in any
`
`sequence
`
`with
`
`a Communicable
`
`Disease
`
`or
`
`the
`
`12
`
`13 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`fear
`
`or
`
`threat
`
`(whether
`
`actual
`
`or perceived)
`
`of a Communicable
`
`Disease.
`
`2. For
`
`the
`
`purposes
`
`of
`
`this
`
`endorsement,
`
`loss,
`
`damage,
`
`claim
`
`cost,
`
`expense
`
`or other
`
`sum,
`
`includes,
`
`but
`
`is not
`
`limited
`
`to,
`
`any
`
`cost
`
`to clean-
`
`up,
`
`detoxify,
`
`remove,
`
`monitor
`
`or
`
`test:
`
`1)for
`
`a Communicable
`
`Disease,
`
`or
`
`2)any
`
`property
`
`insured
`
`hereunder
`
`that
`
`is affected
`
`such
`
`by
`
`Communicable
`
`Disease.
`
`3. As
`
`used
`
`herein,
`
`a Communicable
`
`Disease
`
`means
`
`any
`
`disease
`
`which
`
`can
`
`be transmitted
`
`by means
`
`of any
`
`substance
`
`or agent
`
`from
`
`any
`
`organism
`
`to another
`
`organism
`
`where:
`
`1)the
`
`substance
`
`or agent
`
`but
`
`is not
`
`limited
`
`a virus,
`
`includes,
`
`to,
`
`bacterium,
`
`parasite
`
`or other
`
`organism
`
`or any
`
`variation
`
`thereof,
`
`whether
`
`deemed
`
`living
`
`or not,
`
`and
`
`2)the
`
`method
`
`of
`
`transmission,
`
`whether
`
`direct
`
`or
`
`indirect,
`
`includes
`
`but
`
`is
`
`not
`
`limited
`
`to,
`
`airborne
`
`transmission,
`
`bodily
`
`fluid
`
`transmission,
`
`transmission
`
`from
`
`or
`
`to any
`
`surface
`
`or object,
`
`solid,
`
`liquid
`
`or gas
`
`or
`
`between
`
`organisms,
`
`and
`
`3)the
`
`disease,
`
`substance
`
`or agent
`
`can
`
`cause
`
`or
`
`threaten
`
`damage
`
`to
`
`human
`
`health
`
`or human
`
`welfare
`
`or can
`
`cause
`
`or
`
`threaten
`
`damage
`
`to,
`
`deterioration
`
`of,
`
`loss
`
`of value
`
`of, marketability
`
`of or
`
`loss
`
`of use
`
`of
`
`property
`
`insured
`
`hereunder.
`
`13
`
`14 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`84.
`
`Plaintiffs
`
`were
`
`never
`
`notified
`
`of
`
`these
`
`changes
`
`in coverage
`
`before
`
`receiving
`
`a reservation
`
`of
`
`rights
`
`letter
`
`from
`
`Zurich
`
`for
`
`the
`
`subject
`
`claims.
`
`PLAINTIFFS
`
`SUFFERED
`
`AN IMMENSE
`BUSINESS
`CORONAVIRUS
`
`LOSS
`
`AS A RESULT
`
`OF THE
`
`85.
`
`Plaintiffs'
`
`hotels
`
`have
`
`historically
`
`been
`
`successful
`
`and
`
`profitable.
`
`Located
`
`in the Carrier
`
`Circle
`
`area
`
`of Syracuse,
`
`they
`
`are
`
`an attractive
`
`option
`
`for
`
`business
`
`travelers,
`
`Syracuse
`
`University
`
`students
`
`and
`
`other
`
`to Central
`
`New York.
`
`and
`
`families,
`
`visitors
`
`86.
`
`Historically,
`
`the
`
`first
`
`quarter
`
`of each
`
`year,
`
`coming
`
`as it does
`
`during
`
`the
`
`long
`
`Syracuse
`
`is the
`
`slowest
`
`and
`
`plaintiffs
`
`make
`
`most
`
`of
`
`their
`
`revenue
`
`and
`
`income
`
`during
`
`the
`
`spring,
`
`summer,
`
`winter,
`
`and
`
`fall.
`
`87.
`
`Prior
`
`to the
`
`spread
`
`of
`
`the
`
`coronavirus,
`
`this
`
`same
`
`pattern
`
`was
`
`in place
`
`for
`
`2020,
`
`with
`
`the
`
`hotels
`
`poised
`
`for
`
`another
`
`year
`
`once
`
`the
`
`began.
`
`strong
`
`spring
`
`88.
`
`With
`
`the
`
`appearance
`
`of
`
`the
`
`coronavirus
`
`in New York
`
`State
`
`and
`
`then,
`
`soon
`
`thereafter,
`
`Onondaga
`
`County,
`
`the
`
`business
`
`immediately
`
`began
`
`to suffer.
`
`89.
`
`The
`
`governmental
`
`closures,
`
`particularly
`
`the mandatory
`
`closure
`
`of all nonessential
`
`business
`
`and
`
`the
`
`effective
`
`prohibition
`
`on nonessential
`
`travel,
`
`decimated
`
`the
`
`plaintiffs'
`
`business.
`
`90.
`
`Throughout
`
`March
`
`2020,
`
`the
`
`plaintiffs,
`
`together
`
`with
`
`Marriott,
`
`created
`
`successively
`
`more
`
`projections
`
`for
`
`immediate
`
`immense
`
`of
`
`dire
`
`upcoming
`
`months,
`
`reflecting
`
`the
`
`and
`
`impact
`
`the
`
`coronavirus
`
`and
`
`the
`
`governmental
`
`closures.
`
`91.
`
`From
`
`March
`
`23 through
`
`the
`
`present,
`
`business
`
`has
`
`been
`
`essentially
`
`at a standstill.
`
`Plaintiffs
`
`have
`
`lost millions
`
`of dollars
`
`and
`
`these
`
`losses
`
`are ongoing.
`
`92.
`
`The
`
`losses
`
`have
`
`been
`
`so severe
`
`that
`
`plaintiffs
`
`have
`
`discussed
`
`with
`
`Marriott
`
`the
`
`possibility
`
`of
`
`closing
`
`the
`
`hotels
`
`for
`
`some
`
`period
`
`of
`
`time.
`
`14
`
`15 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`93.
`
`Plaintiffs
`
`provided
`
`proofs
`
`of
`
`loss
`
`to Zurich
`
`and Marriott
`
`estimating
`
`the
`
`business
`
`income
`
`loss
`
`at $3,970,506
`
`(6593 Weighlock)
`
`and
`
`$2,537,382
`
`(6580 Weighlock).
`
`94.
`
`These
`
`estimates
`
`reflect
`
`an assumption
`
`that
`
`business
`
`in 2020
`
`will
`
`be down
`
`nearly
`
`two-
`
`thirds
`
`from
`
`the
`
`prior
`
`year,
`
`and
`
`given
`
`current
`
`realities
`
`even
`
`these
`
`calculations
`
`may
`
`be overly
`
`optimistic.
`
`PLAINTIFFS'
`
`CLAIMS
`
`ARE REJECTED
`
`95.
`
`On June
`
`15, 2020,
`
`plaintiff
`
`6593 Weighlock
`
`served
`
`a sworn
`
`proof
`
`of
`
`loss
`
`on Zurich
`
`America
`
`that
`
`claimed
`
`a loss
`
`of $3,970,506
`
`less
`
`a $25,000
`
`deductible.
`
`With
`
`the
`
`proof
`
`of
`
`loss,
`
`6593
`
`Weighlock
`
`provided
`
`a detailed
`
`calculation
`
`of
`
`the
`
`basis
`
`for
`
`this
`
`claim.
`
`z
`
`96.
`
`On June
`
`15, 2020,
`
`plaintiff
`
`6580 Weighlock
`
`served
`
`a sworn
`
`proof
`
`of
`
`loss
`
`on Zurich
`
`With
`
`proof
`
`America
`
`that
`
`claimed
`
`a loss
`
`of $2,537,382.
`
`the
`
`of
`
`loss,
`
`6580 Weighlock
`
`provided
`
`a detailed
`
`calculation
`
`of
`
`the
`
`basis
`
`for
`
`this
`
`claim.
`
`97.
`
`As
`
`directed
`
`by Marriott,
`
`plaintiffs
`
`provided
`
`these
`
`proofs
`
`of
`
`loss
`
`directly
`
`to Zurich
`
`America.
`
`98.
`
`99.
`
`Zurich
`
`assigned
`
`claim
`
`numbers
`
`5730067945
`
`and
`
`5630048610
`
`to these
`
`claims.
`
`By
`
`letter
`
`of
`
`July
`
`13, 2020,
`
`Zurich
`
`denied
`
`these
`
`claims
`
`in their
`
`entirety.
`
`z
`
`100.
`
`First,
`
`Zurich
`
`denied
`
`claims
`
`under
`
`the Cancellation
`
`of Bookings
`
`coverage
`
`because,
`
`the
`
`$2.5 million
`
`sublimit
`
`had
`
`been
`
`eroded
`
`claims
`
`by
`
`by
`
`other
`
`Marriott
`
`hotels
`
`in Chile
`
`in
`
`purportedly,
`
`2019."
`
`"late
`
`101.
`
`Second,
`
`Zurich
`
`contended
`
`that
`
`"the
`
`presence
`
`of COVID-19
`
`does
`
`not
`
`constitute
`
`'direct
`
`physical
`
`loss
`
`or
`
`damage.'"
`
`15
`
`16 of 26
`
`

`

`FILED: ONONDAGA COUNTY CLERK 08/04/2020 04:22 PM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 004799/2020
`
`RECEIVED NYSCEF: 08/04/2020
`
`102.
`
`Third,
`
`Zurich
`
`contended
`
`that
`
`even
`
`if
`
`the
`
`presence
`
`of
`
`coronavirus
`
`constituted
`
`direct
`
`physical
`
`loss,
`
`the
`
`claim
`
`would
`
`be excluded
`
`based
`
`on either
`
`a "contamination
`
`exclusion"
`
`in the First
`
`Policy
`
`or by Endorsement
`
`4 (the Mold,
`
`Mildew
`
`and Fungus
`
`Clause
`
`and Microorganism
`
`Exclusion).
`
`103.
`
`Fourth,
`
`Zurich
`
`contended
`
`that
`
`there
`
`was
`
`no
`
`coverage
`
`under
`
`either
`
`the Civil
`
`and Military
`
`Authority
`
`or
`
`Ingress/Egress
`
`Coverages
`
`because
`
`plaintiffs
`
`"have
`
`not
`
`demonstrated
`
`the
`
`prerequesites
`
`to
`
`coverage
`
`under
`
`these
`
`coverages."
`
`104.
`
`Finally,
`
`Zurich
`
`contended
`
`that
`
`coverage
`
`was
`
`excluded
`
`under
`
`the Second
`
`Policy
`
`based
`
`on
`
`the new Endorsement
`
`11, which
`
`excluded
`
`coverage
`
`for
`
`damages
`
`resulting
`
`from
`
`communicable
`
`diseases.
`
`Plaintiff
`
`each
`
`of
`
`these
`
`bases
`
`for
`
`denial
`
`are faulty.
`
`105.
`
`contends
`
`that
`
`106.
`
`As
`
`an initial
`
`matter,
`
`the
`
`loss
`
`commenced
`
`in March
`
`2020.
`
`Accordingly,
`
`the
`
`applicable
`
`policy
`
`is the First
`
`Policy,
`
`which
`
`was
`
`effective
`
`until
`
`April
`
`1, 2020,
`
`not
`
`the Second
`
`Policy.
`
`107.
`
`The
`
`Policies
`
`do not
`
`define
`
`"direct
`
`physical
`
`loss".
`
`108.
`
`The
`
`novel
`
`coronavirus
`
`(as distinct
`
`from
`
`the
`
`disease
`
`it causes,
`
`COVID-19)
`
`is
`
`unquestionably
`
`a tangible
`
`and
`
`physical
`
`thing.
`
`109.
`
`"Physical"
`
`means
`
`"having
`
`material
`
`existence"
`
`or
`
`"of
`
`or
`
`relating
`
`to material
`
`things."
`
`See
`
`Physical,
`
`Merriam-Webster
`
`(2020),
`
`available
`
`at https://www.merriam-webster.com/dictionary/physical
`
`(last
`
`accessed
`
`July
`
`20,
`
`2020).
`
`110.
`
`"Material"
`
`means
`
`"relating
`
`to,
`
`derived
`
`from,
`
`or c

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