throbber
FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
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`INDEX NO. 713819/2020
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`RECEIVED NYSCEF: 08/24/2020
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF QUEENS
`---------------------------------------------------------------------X
`21 GROUP INC., and 42-50 21st REALTY, LLC,
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`Plaintiffs,
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`Index No.
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`VERIFIED COMPLAINT
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`-against-
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`UNITED NATIONAL INSURANCE COMPANY,
`and GLOBAL INDEMNITY GROUP, INC.,
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`Defendants.
`---------------------------------------------------------------------X
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`The Plaintiff, by its attorneys of record, Sacco & Fillas, LLP, as and for its Verified
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`Complaint against the Defendant, respectfully alleges, upon information and belief, as follows:
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`I.
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`PARTIES AND JURISDICTION
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`1.
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`That, at all times hereinafter mentioned, the Plaintiff 21 Group Inc., Dba Show
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`Palace (“Show Palace”) is located at 200 East 135 St Unit #D-1032, NY 10451.
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`2.
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`That, at all times hereinafter mentioned, the Plaintiff 42-50 21st Realty LLC is
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`located at 42-50 21st St, Long Island City, NY 11101.
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`3.
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`That, at all times hereinafter mentioned, the Defendant United National Insurance
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`Company, (“UNIC”) is located at Three Bala Plaza East, Ste., 300, Bala Cynwyd, Pennsylvania,
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`19004.
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`4.
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`That, at all times hereinafter mentioned, the Defendant, Global Indemnity Group,
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`Inc., (“GIGI”) is located at 20 Highland Ave #A, Metuchen, New Jersey 08840.
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`5.
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`Upon information and belief, Defendant United National Insurance Company, the
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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
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`INDEX NO. 713819/2020
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`RECEIVED NYSCEF: 08/24/2020
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`Policy issuer, is a subsidiary of Global Indemnity Group, Inc.
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`6.
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`Jurisdiction exists in the Supreme Court, County of QUEENS because QUEENS
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`County is the county in which the subject premises of this action is located.
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`7.
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`The basis of venue is CPLR § 503(c): Venue Based on Corporation. Plaintiff is a
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`domestic corporation authorized to transact business in the state and as such is deemed a resident
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`of the county in which its principal office is located, that being QUEENS County.
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`II.
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`NATURE OF THE ACTION
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`8.
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`Plaintiff owns and operates Show Palace, a Nightclub establishment and
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`restaurant. Show Palace is now threatened by COVID-19 (a.k.a. the “coronavirus” or “SARS-
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`CoV-2”).
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`9.
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`To protect its business in the event that they suddenly had to suspend operations
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`for reasons outside of its control, or in order to prevent further property damage, Plaintiff
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`purchased insurance coverage from UNIC, including special property coverage, as set forth in
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`UNIC’ Business Income (and Extra Expense) Coverage Form (“Business Income (And Extra
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`Expense) Coverage Form”).
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`10.
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`UNIC’s Business Income (And Extra Expense) Coverage Form provides
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`“Business Income” coverage, which promises to pay for loss due to the necessary suspension of
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`operations following physical loss or damage to property.
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`11.
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`UNIC’s Business Income (And Extra Expense) Coverage Form also provides
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`“Civil Authority” coverage, which promises to pay for loss caused by the action of a civil
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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
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`INDEX NO. 713819/2020
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`RECEIVED NYSCEF: 08/24/2020
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`authority that prohibits access to the insured premises.
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`12.
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`UNIC’s Business Income (And Extra Expense) Coverage Form also provides
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`“Extra Expense” coverage, which promises to pay the expense incurred to minimize the
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`suspension of business and to continue operations.
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`13.
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`UNIC’s Business Income (And Extra Expense) Coverage Form, under a section
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`entitled “Duties in the Event of Loss” mandates that the insured “must see that the following are
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`done in the event of loss”. . . [t]ake all reasonable steps to protect the Covered Property from
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`further damage and keep a record of your expenses necessary to protect the Covered Property,
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`for consideration in the settlement of the claim.”
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`14.
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`Unlike many policies that provide Business Income (also referred to as “business
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`interruption”) coverage, UNIC’s Business Income (And Extra Expense) Coverage Form does not
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`include, and is not subject to, any exclusion for losses caused by viruses or communicable
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`diseases.
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`15.
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`Plaintiff Show Palace was forced to suspend or reduce business due to COVID-19
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`and the resultant orders issued by civil authorities in New York mandating the suspension of
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`business for on-site services, as well as in order to take necessary steps to prevent further damage
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`and minimize the suspension of business and continue operations.
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`16.
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`Upon information and belief, UNIC has denied Plaintiff’s claim submitted
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`pursuant to its policy, and refused to pay its insured under its Business Income, Civil Authority,
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`Extra Expense, and Sue and Labor coverages for losses suffered due to COVID-19, any
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`executive orders by civil authorities that have required the necessary suspension of business, and
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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
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`INDEX NO. 713819/2020
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`RECEIVED NYSCEF: 08/24/2020
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`any efforts to prevent further property damage or to minimize the suspension of business and
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`continue operations.
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`III. FACTUAL BACKGROUND
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`A. The Business Income (And Extra Expense) Coverage Form
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`17.
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`In return for the payment of a premium, UNIC issued Policy No. MP1229654 to
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`Show Palace, for a policy period of February 15, 2020 to February 15, 2021. Policy No.
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`MP1229654 is attached hereto as Exhibit A. Show Palace has performed all of its obligations
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`under Policy No. MP1229654, including the payment of premiums.
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`18.
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`In context to the insurance industry in the majority of the world, property
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`insurance is sold on a specific peril basis. Such policies cover a risk of loss if that risk of loss is
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`specifically listed (e.g., hurricane, earthquake, H1N1, etc.). Most property policies sold in the
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`United States, however, including those sold by UNIC insurance, are all-risk property damage
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`policies. These types of policies cover all risks of loss except for risks that are expressly and
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`specifically excluded. Under the heading “Covered Causes of Loss,” UNIC agreed to pay for
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`direct physical loss “unless the loss is excluded or limited” in the policies.
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`19.
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`Losses due to COVID-19 are a Covered Cause of Loss under the UNIC’ policies
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`with the Business Income (And Extra Expense) Coverage Form.
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`20.
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`In the Business Income (And Extra Expense) Coverage Form, UNIC agreed to
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`pay for its insured’s actual loss of Business Income sustained due to the necessary suspension of
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`its operations during the “period of restoration” caused by direct physical loss or damage. A
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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
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`INDEX NO. 713819/2020
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`RECEIVED NYSCEF: 08/24/2020
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`“slowdown or cessation” of business activities at the Covered Property is a “suspension” under
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`the policy, for which UNIC agreed to pay for loss of Business Income during the “period of
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`restoration” that begins 72 hours after the time of direct physical loss or damage.
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`21.
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`“Business Income” means net income (or loss) before tax that Plaintiff would
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`have earned and continuing normal operating expenses incurred, including payroll.
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`22.
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`The presence of virus or disease can constitute physical damage to property, as
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`the insurance industry has recognized since at least 2006. When preparing so-called “virus”
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`exclusions to be placed in some policies, but not others, the insurance industry drafting arm, ISO,
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`circulated a statement to state insurance regulators that included the following:
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`Disease-causing agents may render a product impure (change its quality or substance), or
`enable the spread of disease by their presence on interior building surfaces or the surfaces
`of personal property. When disease-causing viral or bacterial contamination occurs,
`potential claims involve the cost of replacement of property (for example, the milk), cost
`of decontamination (for example, interior building surfaces), and business interruption
`(time element) losses. Although building and personal property could arguably become
`contaminated (often temporarily) by such viruses and bacteria, the nature of the property
`itself would have a bearing on whether there is actual property damage. An allegation of
`property damage may be a point of disagreement in a particular case.
`In the Business Income (And Extra Expense) Coverage Form, UNIC also agreed
`23.
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`to pay necessary Extra Expense that its insureds incur during the “period of restoration” that the
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`insureds would not have incurred if there had been no direct physical loss or damage to the
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`Covered Property.
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`24.
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`“Extra Expense” includes expenses to avoid or minimize the suspension of
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`business, continue operations, and to repair or replace property.
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`25.
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`UNIC also agreed to “pay for the actual loss of Business Income” that Plaintiff
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`sustains “and any Extra Expense caused by action of civil authority that prohibits access to” the
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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
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`INDEX NO. 713819/2020
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`RECEIVED NYSCEF: 08/24/2020
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`Covered Property when a Covered Cause of Loss causes damage to property near the Covered
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`Property, the civil authority prohibits access to property immediately surrounding the damaged
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`property, the Covered Property is within the prohibited area, and the civil authority action is
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`taken “in response to dangerous physical conditions.”
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`26.
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`UNIC’s Business Income (And Extra Expense) Coverage Form, under a section
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`entitled “Duties in the Event of Loss” mandates that UNIC’s insured “must see that the following
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`are done in the event of loss. . . [t]ake all reasonable steps to protect the Covered Property from
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`further damage and keep a record of your expenses necessary to protect the Covered Property,
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`for consideration in the settlement of the claim.” This is commonly referred to as “Sue and
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`Labor” coverage.
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`27.
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`Losses caused by COVID-19 and the related orders issued by local, state, and
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`federal authorities triggered the Business Income, Extra Expense, Civil Authority, and Sue and
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`Labor provisions of the UNIC policy.
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`B. The Covered Cause of Loss
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`28.
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`In December 2019, a novel (new) coronavirus known as SARS-CoV-2 was first
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`detected in Wuhan, Hubei Province, China, and which caused an outbreak of a disease now
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`known as COVID-19.
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`29.
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`The coronavirus causing COVID-19 is thought to spread mainly from person to
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`person, primarily through respiratory droplets produced when an infected person coughs or
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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
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`INDEX NO. 713819/2020
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`RECEIVED NYSCEF: 08/24/2020
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`sneezes.1
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`30.
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`The coronavirus spread globally, and on January 30, 2020, the World Health
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`Organization designated the COVID-19 outbreak as a Public Health Emergency of International
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`Concern. 2
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`31. On January 31, 2020, United States Health and Human Services Secretary Alex
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`M. Azar II declared a public health emergency for the entire United States to aid the nation’s
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`healthcare community in responding to COVID-19.3
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`32.
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` To date, there have been more than 1 million confirmed cases of COVID-19 in
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`the United States, including more than 295,000 in New York State and more than 160,000 in
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`New York City. As a result of COVID-19, there have been more than 57,000 deaths in the
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`United States, including more than 22,000 in New York State and more than 17,000 in New
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`York City.4
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`33.
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` In New York, on March 7, 2020, Governor Andrew Cuomo declared a state
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`disaster emergency for the entire state in effect until September 7, 2020.5
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`34.
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`On March 12, 2020, Governor Cuomo signed Executive Order 202.1, which,
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`1 See generally CDC Coronavirus Disease 2019 (COVID-19), https://www.cdc.gov/coronavirus/2019-ncov/faq.html
`(last visited June 1, 2020).
`2 https://www.who.int/news-room/detail/30-01-2020-statement-on-the-second-meeting-of-the- international-health-
`regulations-(2005)-emergency-committee-regarding-the-outbreak-of-novel- coronavirus-(2019-ncov)
`3 Press Release, Secretary Azar Declares Public Health Emergency for United States for 2019 Novel Coronavirus
`(Jan. 31, 2020), available at https://www.hhs.gov/about/news/2020/01/31/secretary-azar-declares-public-health-
`emergency- us-2019-novel-coronavirus.html.
`4 See Johns Hopkins Coronavirus Resource Center, available at https://coronavirus.jhu.edu/map.html (last visited
`June 1, 2020); N.Y. Dep’t of Health COVID- 19 Tracker, available at
`https://covid19tracker.health.ny.gov/views/NYS-COVID19- Tracker/NYSDOHCOVID-19Tracker-
`Map?%3Aembed=yes&%3Atoolbar=no&%3Atabs=n (last checked April 28, 2020); New York City Dep’t of Health
`COVID-19: Data, available at https://www1.nyc.gov/site/doh/covid/covid-19-data.page (last visited June 1, 2020).
`5 https://www.governor.ny.gov/news/no-202-declaring-disaster-emergency-state-new-york.
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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
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`INDEX NO. 713819/2020
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`RECEIVED NYSCEF: 08/24/2020
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`among other things, ordered that any large gathering or event for which attendance is anticipated
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`to be in excess of five hundred people be cancelled or postponed for a minimum of thirty days.
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`Executive Order 202.1 also required that any place of business or public accommodation, and
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`any gathering or event for which attendance is anticipated to be fewer than five hundred people,
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`operate at no greater than 50% occupancy, and no greater than 50% of seating capacity, for thirty
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`days effective on Friday, March 13, 2020.6
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`35.
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`On March 16, 2020, Governor Cuomo signed Executive Order 202.3, which
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`amended Executive Order 202.1 to require that, until further notice, any large gathering or event
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`at any location in New York State be cancelled or postponed if more than fifty persons are
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`expected in attendance. Executive Order 202.3 also ordered that any restaurant or bar in the state
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`Executive Order No. 202, 202.1-48: Continuing Temporary Suspension and Modification of
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`Laws Relating to the Disaster Emergency, March 12, 2020. of New York cease serving patrons
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`food or beverage on-premises effective at 8 p.m. on March 16, 2020 until further notice.7
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`36.
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`On March 18, 2020, Governor Cuomo signed Executive Order 202.6, which
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`required, among other things, that any non-essential business reduce its in-person workforce at
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`any work locations by 50% no later than March 20, 2020 at 8 p.m.8
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`37.
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`On March 19, 2020, Governor Cuomo signed Executive Order 202.7, which,
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`among other things, amended Executive Order 202.6 to require that any non-essential business
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`6 https://www.governor.ny.gov/news/no-2021-continuing-temporary-suspension-and- modification-laws-relating-
`disaster-emergency
`7 https://www.governor.ny.gov/news/no-2023-continuing-temporary-suspension-and- modification-laws-relating-
`disaster-emergency
`8 https://www.governor.ny.gov/news/no-2026-continuing-temporary-suspension-and- modification-laws-relating-
`disaster-emergency
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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
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`INDEX NO. 713819/2020
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`RECEIVED NYSCEF: 08/24/2020
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`reduce its in-person workforce at any work locations by 75% no later than March 21, 2020 at 8
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`p.m.9
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`38.
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`On March 20, 2020, Governor Cuomo signed Executive Order No. 202.8, which
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`ordered, among other things, that effective at 8 p.m. on Sunday, March 22, 2020, all non-
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`essential businesses statewide would be closed.10
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`39.
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`For the purposes of the Executive Orders 202.6 and subsequent orders, non-
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`essential businesses include, among other things, “Any large gathering or event venues,
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`including but not limited to establishments that host concerts, conferences, or other in-person
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`performances or presentations in front of an in-person audience” and “Any dine-in or on-premise
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`restaurant or bar service, excluding take-out or delivery for off-premise consumption.”11
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`40.
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`On March 23, 2020, Governor Cuomo signed Executive Order No. 202.10, which
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`ordered that “Non-essential gatherings of individuals of any size for any reason (e.g. parties,
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`celebrations or other social events) are canceled or postponed at this time.”12
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`C. The Impact of COVID-19 and the Closure Orders
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`41.
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`The presence of COVID-19 caused direct physical loss of or damage to the
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`covered property under the Plaintiffs’ policies, and the policies of the other Class members, by
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`denying use of and damaging the covered property, and by causing a necessary suspension of
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`9 https://www.governor.ny.gov/news/no-2027-continuing-temporary-suspension-and- modification-laws-relating-
`disaster-emergency
`10 https://www.governor.ny.gov/news/no-2028-continuing-temporary-suspension-and- modification-laws-relating-
`disaster-emergency
`11 See Empire State Development, Guidance for Whether a Business Enterprise Is Subject to a Workforce Reduction
`Under Recent Executive Orders (last updated April 24, 2020), available at https://esd.ny.gov/guidance-executive-
`order-2026
`12 https://www.governor.ny.gov/news/no-20210-continuing-temporary-suspension-and- modification-laws-
`relating-disaster-emergency
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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
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`INDEX NO. 713819/2020
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`RECEIVED NYSCEF: 08/24/2020
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`operations during a period of restoration.
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`42.
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`The Closure Orders prohibited access to Plaintiff’s Covered Property, and the area
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`immediately surrounding Covered Property, in response to dangerous physical conditions
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`resulting from a Covered Cause of Loss.
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`43.
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`As a result of the presence of COVID-19 and the Closure Orders, Plaintiff lost
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`Business Income and incurred Extra Expense.
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`D. Covered Losses Under the Policy
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`44.
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`Defendants issued Plaintiff’s Business Owners Policy No. MP1229654 for the
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`policy period between February 15, 2020 to February 15, 2021 (the “Policy”).
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`45.
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`Parts of the Policy are standardized forms that are used by UNIC for all insureds
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`having applicable coverage.
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`46.
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`The Policy is an all-risk policy, insofar as it provides that covered causes of loss
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`under the policy means direct physical loss or direct physical damage unless the loss is
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`specifically excluded or limited in the Policy.
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`47.
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`Among the coverages provided by the Policy, which is currently in full effect, is
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`business interruption insurance, which, generally, would indemnify Plaintiff for lost income and
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`profits in the event that its business was shut down.
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`48.
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`Specifically, Plaintiff’s Business Income (And Extra Expense) Coverage Form,
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`Form SS 00 30 06 95, under the Section “Additional Coverages,” provides coverage for loss of
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`Business Income as follows:
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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
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`INDEX NO. 713819/2020
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`RECEIVED NYSCEF: 08/24/2020
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`We will pay for the actual loss of Business Income you sustain due
`to the necessary suspension of your “operations” during the “period
`of restoration”. The suspension must be caused by direct physical
`loss of or physical damage to property in the open (or in a vehicle)
`within 100 feet, at premises which are described in the Declarations
`and for which a Business Income Limit of Insurance is shown in
`Declarations. The loss or damage must be caused by or result from a
`Covered Cause of Loss.
`UNIC Policy, Business Income (And Extra Expense) Coverage Form § A.
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`49.
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`Under this coverage in the Policy, “Business Income” is defined as:
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`(a) Net Income (Net Profit or Loss before income taxes) that would have been earned or
`incurred; and
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`(b) Continuing normal operating expenses incurred, including payroll.
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`UNIC Policy, Business Income (And Extra Expense) Coverage Form § A.5.
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`
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`50. The Policy also provides Extra Expense coverage as follows:
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`Extra Expense means necessary expenses you incur during the “period of restoration”
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`that you would not have incurred if there had been no direct physical loss or damage to
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`property caused by or resulting from a Covered Cause of Loss.
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`(1) We will pay any Extra Expense to avoid or minimize the suspension of business and
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`to continue “operations”:
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`a. At the described premises; or
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`b. At replacement premises or at temporary locations, including:
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`i. Relocation expenses; and
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`ii. Costs to equip and operate the replacement or temporary locations.
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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
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`(2) We will pay any Extra Expense to minimize the suspension of business if you cannot
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`continue “operations.”
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`(3) We will pay any Extra Expense to:
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`a. Repair or replace any property; or
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`b. Research, replace or restore the lost information on damaged valuable papers
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`and records;
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`To the extent it reduces the amount of loss that otherwise would have been
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`payable under this Coverage Form.
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`UNIC Policy, Business Income (And Extra Expense) Coverage Form § A.3.a.
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`51.
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`The Policy also provides Civil Authority coverage as follows:
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`We will pay for the actual loss of Business Income you sustain and necessary Extra
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`Expense caused by action of civil authority that prohibits access to the described
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`premises due to direct physical loss of or damage to property, other than at the described
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`premises, caused by or resulting from any Covered Cause of Loss. The coverage for
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`Business Income will begin 72 hours after the time of that action and will apply for a
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`period of up to three consecutive weeks after coverage begins.
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`The coverage for Extra Expense will begin immediately after the time of that action and
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`will end:
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`(1) 3 consecutive weeks after the time of that action; or
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`(2) When your Business Income coverage ends;
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`Whichever is later.
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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
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`INDEX NO. 713819/2020
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`RECEIVED NYSCEF: 08/24/2020
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`UNIC Policy, Business Income (And Extra Expense) Coverage Form § B.1.
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`52.
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`Plaintiff has suffered a direct physical loss of and damage to their property as a
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`result of COVID-19 and the orders of civil authorities because, among other things, they have
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`been unable to use their property for its intended purpose, and they have been denied access to
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`their property, causing a suspension of business operations on the premises and the function of
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`their property to be nearly eliminated or destroyed.
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`53.
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`The interruption of Plaintiff’s business was not caused by any of the exclusions
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`set forth in the applicable Policy.
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`54. Upon information and belief, Plaintiff’s Policy does not include any exclusion for
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`losses caused by the viruses,
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`55. Beginning in March 2020, Plaintiff was forced to suspend business operations as
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`a result of COVID-19 and the related actions of civil authorities. This suspension,
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`which is ongoing, has caused Plaintiff to suffer significant losses and incur significant
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`expenses.
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`56.
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`Plaintiff provided notice of its losses to Defendants consistent with the terms and
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`procedures of the Policy.
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`57. Notwithstanding the foregoing, by way of letter dated August 5, 2020, UNIC
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`denied Plaintiff’s claim for business interruption losses under the Policy.
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`
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`14
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`13 of 21
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`

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`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
`
`INDEX NO. 713819/2020
`
`RECEIVED NYSCEF: 08/24/2020
`
`IV. CLAIMS FOR RELIEF
`
`FIRST CAUSE OF ACTION
`BREACH OF CONTRACT – BUSINESS INCOME COVERAGE
`Plaintiff repeats and realleges Paragraphs 1-50 as if fully set forth herein.
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`Plaintiff’s UNIC policy, is a contract under which UNIC were paid premiums in
`
`58.
`
`59.
`
`exchange for their promise to pay Plaintiff’s losses for claims covered by the policy.
`
`60.
`
`In the Business Income (And Extra Expense) Coverage Form, UNIC agreed to
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`pay for its insured’s actual loss of Business Income sustained due to the necessary suspension of
`
`its operations during the “period of restoration.”
`
`61.
`
`A “slowdown or cessation” of business activities at the Covered Property is a
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`“suspension” under the policy, for which UNIC agreed to pay for loss of Business Income during
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`the “period of restoration” that begins within 72 hours after the time of direct physical loss or
`
`damage.
`
`62.
`
`“Business Income” means net income (or loss) before tax that Plaintiff would
`
`have earned “if no physical loss or damage had occurred” and continuing normal operating
`
`expenses incurred. COVID-19 caused direct physical loss and damage to Plaintiff’s Covered
`
`Properties, requiring suspension of operations at the Covered Properties. Losses caused by
`
`COVID-19 thus triggered the Business Income provision of Plaintiff’s policy.
`
`63.
`
`Plaintiff has complied with all applicable provisions of its policy and/or those
`
`provisions have been waived by UNIC, or UNIC is estopped from asserting them, and yet UNIC
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`has abrogated its insurance coverage obligations pursuant to the policy’s clear and unambiguous
`
`terms.
`
`
`
`
`
`
`
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`15
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`14 of 21
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`

`

`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
`
`INDEX NO. 713819/2020
`
`RECEIVED NYSCEF: 08/24/2020
`
`64.
`
`By denying coverage for any Business Income losses incurred by Plaintiff in
`
`connection with the COVID-19 pandemic, UNIC has breached its coverage obligations under the
`
`policy.
`
`65.
`
`As a result of UNIC’s breach of the policy, Plaintiff has sustained substantial
`
`damages for which UNIC is liable, in an amount to be established at trial.
`
`
`
`herein.
`
`SECOND CAUSE OF ACTION
`BREACH OF CONTRACT – CIVIL AUTHORITY COVERAGE
`
`66.
`
`Plaintiff Show Palace repeats and realleges Paragraphs 1-50 as if fully set forth
`
`67.
`
`Plaintiff’s UNIC policy is a contract under which UNIC was paid premiums in
`
`exchange for its promise to pay Plaintiff’s losses for claims covered by the policy.
`
`68.
`
`UNIC agreed to “pay for the actual loss of Business Income” that its insured
`
`sustains “and any Extra Expense caused by action of civil authority that prohibits access to” the
`
`Covered Property when a Covered Cause of Loss causes damage to property near the Covered
`
`Property, the civil authority prohibits access to property immediately surrounding the damaged
`
`property, the Covered Property is within the prohibited area, and the civil authority action is
`
`taken “in response to dangerous physical conditions.”
`
`69.
`
`The Closure Orders triggered the Civil Authority provision under Plaintiff’s Civil
`
`Authority’s UNIC insurance policy.
`
`70.
`
`Plaintiff has complied with all applicable provisions of the policy, and/or those
`
`provisions have been waived by UNIC, or is UNIC estopped from asserting them, and yet UNIC
`16
`
`
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`
`
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`15 of 21
`
`

`

`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
`
`INDEX NO. 713819/2020
`
`RECEIVED NYSCEF: 08/24/2020
`
`has abrogated its insurance coverage obligations pursuant to the Policy’s clear and unambiguous
`
`terms.
`
`71.
`
`By denying coverage for any business losses incurred by Plaintiff in connection
`
`with the Closure Orders and the COVID-19 pandemic, UNIC has breached its coverage
`
`obligations under the policy.
`
`72.
`
`As a result of UNIC’s breach, Plaintiff has sustained substantial damages for
`
`which UNIC is liable, in an amount to be established at trial.
`
`THIRD CAUSE OF ACTION
`BREACH OF CONTRACT – EXTRA EXPENSE COVERAGE
`
`73.
`
`Plaintiff Show Palace repeats and realleges Paragraphs 1-50 as if fully set forth
`
`
`
`herein.
`
`74.
`
`Plaintiff’s UNIC insurance policy is a contract under which UNIC was paid
`
`premiums in exchange for its promise to pay Plaintiff’s Extra Expense losses for claims covered
`
`by the policy.
`
`75.
`
`In the Business Income (And Extra Expense) Coverage Form, UNIC also agreed
`
`to pay necessary Extra Expense that Plaintiff incurs during the “period of restoration” that the
`
`insured would not have incurred if there had been no direct physical loss or damage to the
`
`Covered Property.
`
`76.
`
`“Extra Expense” includes expenses to avoid or minimize the suspension of
`
`business, continue operations, and to repair or replace property.
`
`77.
`
`Due to COVID-19 and the Closure Orders Plaintiff incurred Extra Expense at
`
`
`
`
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`
`
`17
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`16 of 21
`
`

`

`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
`
`INDEX NO. 713819/2020
`
`RECEIVED NYSCEF: 08/24/2020
`
`Covered Property
`
`78.
`
`Plaintiff has complied with all applicable provisions of the policy and/or those
`
`provisions have been waived by UNIC, or UNIC is estopped from asserting them, and yet UNIC
`
`has UNIC has abrogated its insurance coverage obligations pursuant to the Policy’s clear and
`
`unambiguous terms.
`
`
`
`79.
`
`By denying coverage for any business losses incurred by Plaintiff in connection
`
`with the Closure Orders and the COVID-19 pandemic, UNIC has breached its coverage
`
`obligations under the policy.
`
`80.
`
`As a result of UNIC’s breach, Plaintiff has sustained substantial damages for
`
`which UNIC is liable, in an amount to be established at trial.
`
`FOURTH CAUSE OF ACTION
`BREACH OF CONTRACT – SUE AND LABOR COVERAGE
`Plaintiff Show Palace repeats and realleges Paragraphs 1-50 as if fully set forth
`
`81.
`
`herein.
`
`82.
`
`Plaintiff’s UNIC policy is a contract under which UNIC was paid premiums in
`
`exchange for its promise to pay Plaintiff’s losses for claims covered by the policy.
`
`83.
`
`In the Business Income (And Extra Expense) Coverage Form, UNIC agreed to
`
`give due consideration in settlement of a claim to expenses incurred in taking all reasonable steps
`
`to protect Covered Property from further damage.
`
`84.
`
`In complying with the Closure Orders and otherwise suspending or limiting
`
`operations, Plaintiff incurred expenses in connection with reasonable steps to protect Covered
`
`Property.
`
`
`
`
`
`
`
`
`18
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`17 of 21
`
`

`

`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
`
`INDEX NO. 713819/2020
`
`RECEIVED NYSCEF: 08/24/2020
`
`85.
`
`Plaintiff has complied with all applicable provisions of the policy and/or those
`
`provisions have been waived by UNIC, or UNIC is estopped from asserting them, and yet UNIC
`
`has abrogated its insurance coverage obligations pursuant to the policy’s clear and unambiguous
`
`terms.
`
`86.
`
`By denying coverage for any Sue and Labor expenses incurred by Plaintiff in
`
`connection with the Closure Orders and the COVID-19 pandemic, UNIC has breached its
`
`coverage obligations under the policy.
`
`87.
`
`As a result of UNIC’s breach of the policy, Plaintiff has sustained substantial
`
`damages for which UNIC is liable, in an amount to be established at trial.
`
`FIFTH CAUSE OF ACTION
`DECLARATORY JUDGMENT – BUSINESS INCOME COVERAGE
`Plaintiff repeats and realleges Paragraphs 1-50 as if fully set forth herein.
`88.
`
`89.
`
`Plaintiff’s UNIC policy is a contract under which UNIC was paid premiums in
`
`exchange for its promise to pay Plaintiff’s losses for claims covered by the policy.
`
`90.
`
`Plaintiff has complied with all applicable provisions of the policies and/or those
`
`provisions have been waived by UNIC, or UNIC is estopped from asserting them, and yet UNIC
`
`has abrogated its insurance coverage obligations pursuant to the policy’s clear and unambiguous
`
`terms and has wrongfully and illegally refused to provide coverage to which Plaintiff is entitled.
`
`91.
`
`Therefore, Plaintiff seeks a declaratory judgment from this Court declaring the
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`following:
`
`
`
`
`
`
`
`
`i. Plaintiff’s Income losses incurred in connection with the Closure Orders and the
`
`necessary interruption of their businesses stemming from the COVID-19 pandemic
`
`19
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`18 of 21
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`

`

`FILED: QUEENS COUNTY CLERK 08/24/2020 02:32 PM
`NYSCEF DOC. NO. 2
`
`INDEX NO. 713819/2020
`
`RECEIVED NYSCEF: 08/24/2020
`
`are insured losses under its policy; and
`
`ii. UNIC is obligated to pay Plaintiff for the full amount of the Business Income
`
`losses incurred and to be incurred in connection with the Closure Orders during the
`
`period of restoration and the necessary interruption of their business stemming from
`
`the COVID-19 pandemic.
`
`SIXTH CAUSE OF ACTION
`DECLARATORY JUDGMENT – CIVIL AUTHORITY COVERAGE
`Plaintiff Show Palace repeats and realleges Paragraphs 1-50 as if fully set forth
`92.
`
`herein.
`
`93.
`
`Plaintiffs bring this Count individually and on behalf of the other members of the
`
`Civil Authority Declarato

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