Case 4:20-cv-01478 Document 1 Filed on 04/24/20 in TXSD Page 1 of 23
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
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`
`
`
`Civil Action No. 4:20-cv-01478
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`COMPLAINT AND JURY
`DEMAND
`
`FROSCH HOLDCO, INC. d/b/a
`FROSCH; FROSCH INTERNATIONAL
`TRAVEL, LLC d/b/a FROSCH TRAVEL;
`and FT TRAVEL, INC.,
`
` Plaintiffs,
`
` v.
`
`THE TRAVELERS INDEMNITY
`COMPANY and THE CHARTER OAK
`FIRE INSURANCE COMPANY,
`
` Defendants.
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`
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`
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`
`
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`
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`PLAINTIFFS’ ORIGINAL COMPLAINT
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`INTRODUCTION
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`I.
`
`1.
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`Plaintiffs, Frosch Holdco, Inc. d/b/a Frosch; Frosch International Travel, LLC d/b/a
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`Frosch Travel; and FT Travel, Inc. (“Frosch”), files this complaint against Defendants, The
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`Travelers Indemnity Company (“Travelers”) and The Charter Oak Fire Insurance Company
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`(“Charter Oak”), for their denial of benefits for the business interruption sustained by Frosch as a
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`result of quarantine, shelter-in-place, and stay-home orders issued in the United States and around
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`the world. Frosch is a travel agency that provides services internationally. As these orders are
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`entered, both personal and business travel are necessarily suspended. According to Oxford
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`Economics, travel industry losses will reach $355 billion in the United States alone. Frosch has
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`already suffered losses of approximately $40 million, and that number is rapidly increasing.
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`Despite the extensive interruption of Frosch’s business, Defendants summarily denied its claim
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`______________________________________________________________________________
`PLAINTIFFS’ ORIGINAL COMPLAINT
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`which quarantine, shelter-in-place, and stay-home orders were still in effect in the United States
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`and around the world.
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`II.
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`PARTIES
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`2.
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`Plaintiff Frosch Holdco, Inc. is a corporation organized under the laws of Texas
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`with its principal place of business at One Greenway Plaza, #800, Houston, Texas 77046.
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`3.
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`Plaintiff Frosch International Travel, LLC is a limited liability company organized
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`under the laws of Texas with its principal place of business at One Greenway Plaza, #800, Houston,
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`Texas 77046.
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`4.
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`Plaintiff FT Travel, LLC is a limited liability company organized under the laws of
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`Texas with its principal place of business at One Greenway Plaza, #800, Houston, Texas 77046.
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`5.
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`Defendant The Travelers Indemnity Company is a corporation organized under the
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`laws of Connecticut, with its principal place of business at One Tower Square, Hartford,
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`Connecticut 06183. Citation may be served through its registered agent for service of process at
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`Corporation Service Company d/b/a CSC-Lawyers Incorporating Service Company, 211 East 7th
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`Street, Suite 620, Austin, Texas 78701-3218, Travis County, Texas.
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`6.
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`Defendant The Charter Oak Fire Insurance Company is a company organized under
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`the laws of Connecticut, with its principal place of business at One Tower Square, Hartford,
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`Connecticut 06183. Citation may be served through its registered agent for service of process at
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`Corporation Service Company d/b/a CSC-Lawyers Incorporating Service Company, 211 East 7th
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`Street, Suite 620, Austin, Texas 78701-3218, Travis County, Texas.
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`7.
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`At all times herein, Defendants acted by and through their duly authorized agents
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`and servants, each acting within the course and scope of his or her employment.
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`
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`______________________________________________________________________________
`PLAINTIFFS’ ORIGINAL COMPLAINT
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`III.
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`JURISDICTION AND VENUE
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`8.
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`Venue is proper in the Southern District of Texas pursuant 28 U.S.C.A. § 1391
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`because the insured business that is the subject of the action is situated in the Southern District of
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`Texas.
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`9.
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`This Court has jurisdiction pursuant to 28 U.S.C. § 1332(a) because the amount in
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`controversy is greater than $75,000 and plaintiffs and defendants are citizens of different states.
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`10.
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`This Court has specific jurisdiction over Defendants as their activities were directed
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`toward Texas and injuries complained of resulted from their activities in Texas. Defendants have
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`a substantial connection with Texas and the requisite minimum contacts with Texas necessary to
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`constitutionally permit the Court to exercise jurisdiction.
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`IV.
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`FACTUAL ALLEGATIONS
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`
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`A. Frosch Obtains Insurance Coverage for Its Business from Defendants.
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`11.
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`Frosch is a travel agency headquartered in Houston, Texas that provides travel
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`services throughout the United States and internationally. Frosch has offices in more than 40
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`locations worldwide and specializes in business travel, entertainment travel, vacations and cruises,
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`energy travel, group travel, conference and event travel, rewards and incentives, private client
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`services, and student travel.
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`12.
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`Defendants issued commercial policy number P-630-8294B216-COF-19 to Frosch
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`for the policy period of July 1, 2019 to July 1, 2020 (the “Policy”). The Policy, a costume insurance
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`policy prepared for Frosch, One Greenway Plaza #800, Houston TX 77046, is attached hereto as
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`Exhibit A. The Policy identifies 57 locations and buildings covered under the insurance. Exhibit
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`A, IL TO 030496, Pages 1 through 4. The Policy covers named insureds in addition to Frosch
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`______________________________________________________________________________
`PLAINTIFFS’ ORIGINAL COMPLAINT
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`International Travel, Inc. d/b/a Frosch Travel, as identified at Exhibit A, IL T8 00, Pages 1-2. The
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`Policy is an all risk policy that covers all risks unless specifically excluded.
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`13.
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`Frosch has performed all of its obligations under the Policy including faithfully
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`paying policy premiums.
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`B. The Coronavirus 2019 Global Pandemic Causes Damage Around the Globe,
`Including to the Travel Industry and Frosch.
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`14.
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`The Coronavirus disease was first detected toward the end of 2019, emerging in
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`
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`Wuhan, China. The World Health Organization proposed the nomenclature COVID-19, standing
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`for coronavirus disease 2019.1
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`15.
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`On January 30, 2020, the World Health Organization declared the virus a public
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`health emergency of international concern. In February 2020, coronavirus deaths began to be
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`reported outside of China. Throughout February 2020, Coronavirus infections are reported in a
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`growing number of locations around the world, including in the Philippines, Japan, Europe, South
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`Korea, Iran, Latin America, Sub-Saharan Africa, and the United States.
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`16.
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`On March 11, 2020, the World Health Organization characterized the Coronavirus
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`(COVID-19) as a pandemic. On March 13, 2020, a national emergency was declared in the United
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`States of America. On March 15, 2020, the United States Centers for Disease Control and
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`Prevention advised no gatherings of 50 or more people in the United States. The next day, the
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`President advised citizens to avoid groups of more than 10.
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`17. Worldwide, more than 2,665,000 cases of COVID-19 have been confirmed. The
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`Coronavirus has caused more than 186,000 deaths, with the death toll increasing every day, and
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`1 See, generally, https://www.who.int/emergencies/diseases/novel-coronavirus-2019/technical-guidance/naming-the-
`coronavirus-disease-(covid-2019)-and-the-virus-that-causes-it. As used in this Petition, the term “Coronavirus”
`refers to the virus termed as Coronavirus disease 2019 (COVID-19), including without limitation the severe acute
`respiratory syndrome coronavirus 2 (SARS-CoV-2), and the term is used broadly, and references the global
`pandemic associated with the virus first detected in December 2019 in Wuhan, China.
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`the numbers of reported cases growing exponentially. In the United States alone, tens of thousands
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`of people have died and more than 846,000 confirmed cases of COVID-19 have been reported.
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`The economy has been devastated by business interruptions in Harris County, the State of Texas,
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`the United States, and worldwide.
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`18.
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`As coronavirus spread around the world and the death toll rose, countries and
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`regions fell under various levels of quarantine orders. Residents were ordered to stay home and
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`business operations were shuttered.
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`19.
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`Coronavirus cases in Texas spiked in March 2020, Frosch’s home, and a growing
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`number of counties and municipalities issued quarantine directives. The numbers of reported
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`Coronavirus cases have spread throughout Texas Counties, curtailing business, social, and
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`economic activities throughout the State. Correspondingly, the entire nation experienced spikes in
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`infections and deaths, with a growing number of citizens subjected to quarantine orders and
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`business shutdowns.
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`20.
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`The scientific community recognizes the Coronavirus as a cause of real physical
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`loss and damage.
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`21.
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`The Coronavirus is physically impacting public and private property, and physical
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`spaces in communities around the world.
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`22.
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`The global pandemic is exacerbated by the fact that the potentially deadly virus
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`physically infects and stays on the surface of objects or materials for weeks. The duration of the
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`virus’ lethal staying power, and the conditions upon which the virus can continue to propagate and
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`infect people, are known facts under continued scrutiny by the scientific community. The virus
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`can physically infect and stay on surfaces for weeks, up to twenty-eight days under some estimates.
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`Moreover, because of the ongoing Coronavirus pandemic, a significant component of the public
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`health crisis is the risk of continued contamination of the surface of objects and materials which
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`could propagate infections. Therefore, the Coronavirus has caused damage, including damage to
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`property, as a result of the staying power of the virus and the communicability of disease from
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`exposure to the surface of objects and materials.
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`23.
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`For example, China, Italy, France, and Spain have implemented the cleaning and
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`fumigating of public areas prior to allowing them to re-open publicly due to the intrusion of
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`microbials.
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`24.
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`The physical contamination of surfaces with communicable Coronavirus is a well-
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`recognized cause of physical damage and a reason that civil authorities have issued quarantine
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`orders.
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`C. Frosch’s Business was Interrupted by Civil Authority Orders Halting Business
`Activity and Business and Personal Travel.
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`Domestic Operations
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`25.
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`Frosch has domestic locations in Texas (3), New York (1), New Jersey (1),
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`California (13), Arizona (1), Colorado (4), Washington DC (1), Florida (11), Illinois (4), Maryland
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`(1), Massachusetts (2), Nevada (2), North Carolina (2), and Pennsylvania (2).
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`Texas
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`26.
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`On March 19, 2020, Texas Governor Greg Abbott issued Executive Order No. GA-
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`08 relating to COVID-19 preparedness and mitigation, which prohibited certain business activities
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`in order to contain the Coronavirus, requiring that Texans avoid social gatherings of more than 10
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`people and avoid eating or drinking in restaurants or bars or visiting gyms or massage parlors.
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`During this period, a number of counties in Texas, including Harris County and Dallas County,
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`had begun issuing their own more stringent stay-at-home orders.
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`______________________________________________________________________________
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`27.
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`Also on March 19, 2020, John W. Hellerstedt, M.D., the Commissioner of the
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`Texas Department of State Health Services, in accordance with Section 81.082(d) of the Texas
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`Health and Safety Code, declared a state of public health disaster for the entire State of Texas for
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`the first time since 1901.
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`28.
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`On March 31, 2020, the Governor of Texas issued Executive Order GA-14, which
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`required that Texans minimize social gatherings or in-person contact with those outside their own
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`household, except as required to provide or to obtain essential services.
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`29.
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`Frosch’s offices in Texas are located at:
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`One Greenway Plaza, Suite 800
`Houston, TX 77046
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`1411 East Sandy Lake Road, #120
`Coppell, TX 75019
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`2001 Bryan Street, Suite 2135
`Dallas, TX 75201
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`New York
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`30.
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`On March 7, 2020, the Governor of New York issued Executive Order 202,
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`declaring a state disaster emergency for the State of New York. On March 19, 2020, the Governor
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`of New York issued Executive Order 202.8, which required all non-essential businesses to reduce
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`their in-person workforce by 100% by March 22, 2020. New York has been particularly hard hit
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`by the coronavirus epidemic.
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`31.
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`Frosch’s office in New York is located at:
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`909 Third Avenue, FL 12
`New York, NY 10022
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`
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`New Jersey
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`32.
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`On March 9, 2020, the Governor of New Jersey issued Executive Order 103,
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`declaring a State of Emergency and a Public Health Emergency for the State of New Jersey. On
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`March 16, 2020, the Governor of New Jersey issued Executive Order 104, establishing aggressive
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`social distancing measures for the State of New Jersey. On March 21, 2020, the Governor of New
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`Jersey issued Executive Order 107, requiring all residents of the State of New Jersey to remain
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`home, with a few exceptions enumerated for obtaining and providing essential needs and services.
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`33.
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`On April 7, 2020, the Governor of New Jersey issued Executive Order 118, closing
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`State and County parks in the State of New Jersey to further social distancing. Also on April 7,
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`2020, the Governor of New Jersey issued Executive Order 119, extending the Public Health
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`Emergency in the State of New Jersey.
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`34.
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`Frosch’s office in New Jersey is located at:
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`800 Inman Avenue
`Colonia, NJ 07067
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`California
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`35.
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`On March 19, Governor Gavin Newson of California issued Executive Order N-
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`33-20, which ordered all residents to stay home “excepted as needed to maintain continuity of
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`operations of the federal critical infrastructure sectors” and access “such necessities as food,
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`prescriptions, and health care.” Residents are specifically ordered to heed all public health
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`directives of the California Department of Public Health.
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`36.
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`Frosch’s offices in California are located at:
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`Raleigh Studios
`5300 Melrose Ave. E
`Los Angeles, CA 90038
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`878 Eastlake Parkway, Suite 1310
`Chula Vista, CA 91914
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`Luxe Travel Management,
`A FROSCH Company
`16450 Bake Parkway
`Irvine, CA 92618
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`100 Larkspur Landing Circle, Ste. 104
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`825 Santa Cruz Avenue
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`PAGE 8 OF 23
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`700 Airport Boulevard, Suite 360
`Burlingame, CA 94010
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`2647 Gateway Road, Suite 103
`Carlsbad, CA 92009
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`Luxe Travel Management,
`A FROSCH Company
`18650 MacArthur Blvd., Suite 100
`Irvine, CA 92612
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`Larkspur, CA 94939
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`4640 Lankershim Blvd., Suite 305
`North Hollywood, CA 91602
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`11885 Carmel Mountain Rd., Suite 906
`San Diego, CA 92128
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`5850 Canoga Ave., Suite 550
`Woodland Hills, CA 91367
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`Menlo Park, CA 94025
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`73950 El Paseo, Suite B
`Palm Desert, CA 92260
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`9710 Scranton Road, Suite 170
`San Diego, CA 92121
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`Arizona
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`37.
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`On March 11, 2020, the Governor of Arizona issued a declaration of a Public Health
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`State of Emergency due to the necessity to prepare for, prevent, respond to, and mitigate the spread
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`of COVID-19. On March 30, 2020, the Governor of Arizona issued a “Stay Home, Stay Healthy,
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`Stay Connected Order,” Executive Order 2020-18, that limited residents time away from home to
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`accessing essential services or providing essential services or other limited activities not relevant
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`here. The order further provides that “Individuals shall limit use of public transportation to when
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`absolutely necessary to obtain or conduct Essential Activities or attend work in an Essential
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`Function.”
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`38.
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`Frosch’s office in Arizona is located at:
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`6991 East Camelback Road, Suite D100
`Scottsdale, AZ 85251
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`Colorado
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`39.
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`On March 10, 2020, the Governor of Colorado declared a disaster emergency,
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`which was confirmed by corresponding Executive Order D 2020 003 on March 11, 2020. On
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`March 14, 2020, the Governor of Colorado ordered downhill ski operators to suspend operations.
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`On March 25, 2020, the Governor of Colorado directed all Coloradans to stay at home, subject to
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`limited exceptions to obtain necessities, work at critical businesses, or care for dependents or
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`vulnerable persons. All non-critical businesses were ordered to close temporarily.
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`40.
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`Frosch’s offices in Colorado are located at:
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`1125 Kelly Johnson Blvd., Suite 111
`Colorado Springs, CO 80920
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`3538 JFK Parkway, Suite 2
`Fort Collins, CO 80525
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`6070 Greenwood Plaza Blvd., Suite 100
`Greenwood Village, CO 80111
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`2012 Greeley Mall
`Greeley, CO 80631
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`Washington, DC
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`41.
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`On March 11, 2020, the Mayor of Washington, DC issued Mayor’s Order 2020-
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`046, declaring a public emergency and a public health emergency. On March 24, 2020, the Mayor
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`of Washington, DC issued Mayor’s Order 2020-053, which temporarily ceased all non-essential
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`business activities in the District of Columbia, specifically including touring services. Gatherings
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`of 10 or more persons were prohibited. On March 30, 2020, the Mayor of Washington, DC issues
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`Mayor’s Order 2020-054, which directed residents of the District of Columbia to stay at home,
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`except to engage in essential activities, essential business, essential travel, or allowable
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`recreational activities.
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`42.
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`Frosch’s office in Washington, DC is located at:
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`1025 Thomas Jefferson Street NW
`Washington, DC 20007
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`Florida
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`43.
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`On March 9, 2020, the Governor of Florida issued Executive Order 20-52, which
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`declared a state of emergency for the entire State of Florida. On March 17, 2020, the Governor of
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`Florida issued Executive Order 20-68, which effectively closed bars, pubs, and nightclubs for 30
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`days, limited public access beaches to groups of 10 or less while social distancing of six (6) feet,
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`and restricted restaurants to 50% occupancy and parties of 10 or less while social distancing of six
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`(6) feet.
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`44.
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`On March 20, 2020, the Governor of Florida issued Executive Order 20-70, which
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`required all restaurants, bars, taverns, pubs, night clubs, banquet halls, cocktail lounges, cabarets,
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`breweries, cafeterias and any other alcohol and/or food service business establishment with seating
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`for more than ten (10) people in Broward County and Palm Beach County to close on-premises
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`service. In addition, the order required that all movie theatres, concert houses, auditoriums,
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`playhouses, bowling alleys, arcades, gymnasiums, fitness studios and beaches in Broward County
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`and Palm Beach County shall close.
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`45.
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`On March 24, 2020, the Governor of Florida issued Executive Order 20-82, which
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`required all travelers entering Florida from a place where “shelter-in-place” orders were being
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`implemented to be self-quarantined for fourteen (14) days. On March 27, 2020, the Governor of
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`Florida issued Executive Order 20-86, adding further restrictions on travelers entering Florida from
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`Louisiana and establishing checkpoints on roadways to address incoming travelers. On March 27,
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`2020, the Governor of Florida also issued Executive Order 20-87, suspending vacation rental
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`operations. On March 31, 2020, the Governor of Florida issued Executive Order 20-90, extending
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`the closures in Broward County and Palm Beach County.
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`46.
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`On April 1, 2020, the Governor of Florida issued Executive Order 20-91, requiring
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`all high-risk residents to remain home and all other residents to limit movements to only those
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`necessary to obtain or provide essential services or conduct essential activities. On April 10, 2020,
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`the Governor of Florida issued Executive Order 20-103, extending the closures of vacation rental
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`operations.
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`47.
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`Frosch’s offices in Florida are located at:
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`GAMA Business Travel,
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`A FROSCH Company
`4800 N. Federal Highway, Suite 207D
`Boca Raton, FL 33431
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`1616 W. Cape Coral Parkway, #103
`Cape Coral, FL 33914
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`7640 N. Wickham Rd., #107
`Melbourne, FL 32940
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`1201 US Highway 1, Suite 230
`North Palm Beach, FL 33408
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`729 SW Federal Highway, Suite 104
`Stuart, FL 34994
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`616 21st Street
`Vero Beach, FL 32960
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`Luxe Travel Management,
`A FROSCH Company
`1515 S. Federal Highway, Suite 102
`Boca Raton, FL 33432
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`8595 College Parkway, #150
`For Myers, FL 33919
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`8799 Tamiami Trail North
`Naples, FL 34108
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`2451 East Atlantic Boulevard
`Pompano Beach, FL 33062
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`3265 Cardinal Drive
`Vero Beach, FL 32963
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`Illinois
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`48.
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`On March 9, 2020, JB Pritzker, Governor of Illinois, declared all counties in the
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`State of Illinois as a disaster area under a Gubernatorial Disaster Proclamation. On March 13,
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`2020, the Governor of Illinois issued Executive Order 2020-04, which cancelled all public and
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`private gatherings in the State of Illinois of 1,000 or more people, including but not limited to
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`concerts, festivals, conferences, and sporting events.
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`49.
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`On March 20, 2020, the Governor of Illinois issued Executive Order 2020-10,
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`requiring all residents to stay at home, all non-essential business and operations to cease, and
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`prohibiting travel of any kind except for Essential Travel and Essential Activities. On April 1,
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`2020, the Governor of Illinois issued Executive Order 2020-18, extending the Stay at Home order.
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`50.
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`Frosch’s offices in Illinois are located at:
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`190 S. LaSalle Street, Suite 1540
`Chicago, IL 60603
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`522 N. Washington Street
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`7625 W. 159th Street
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`500 Lake Cook Road, Suite 450
`Deerfield, IL 60015
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`Naperville, IL 60563
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`Tinley Park, IL 60477
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`Maryland
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`51.
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`On March 30, 2020, the Governor of Maryland issued Executive Order 20-03-30-
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`01, “prohibiting large gatherings and events and closing senior centers, and all non-essential
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`businesses and other establishments, and additionally requiring all persons to stay at home.”
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`52.
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`Frosch’s office in Maryland is located at:
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`600 Wyndhurst Avenue, Suite 100
`Baltimore, MD 21210
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`Massachusetts
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`53.
`
`On March 13, 2020, the Governor of Massachusetts issued the Order Prohibiting
`
`Gatherings of More than 250 People. On March 15, 2020, the Governor of Massachusetts issued
`
`the Order Prohibiting Gatherings of More than 25 People and On-Premises Consumption of Food
`
`or Drink. On March 23, 2020, the Governor of Massachusetts issued Order No. 13, which
`
`temporarily closed all non-essential services, businesses, and organizations, and prohibited
`
`gatherings of more than 10 people. On March 31, 2020, the Governor of Massachusetts issued
`
`Order No. 21, extending the Stay at Home Advisory and closures of non-essential businesses.
`
`54.
`
`Frosch’s offices in Massachusetts are located at:
`
`
`The Travel Center,
`A FROSCH Company
`193 Rockland Street
`
`Hanover, MA 02339
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Wayland Travel,
`A FROSCH Company
`308 Commonwealth Road
`Wayland, MA 01778
`
`Nevada
`
`55.
`
`On March 12, 2020, the Governor of Nevada issued a proclamation, declaring a
`
`state of emergency for the State of Nevada. On March 31, 2020, the Governor of Nevada issued
`
`Declaration of Emergency Directive 010, extending the March 12 Declaration of Emergency and
`
`______________________________________________________________________________
`PLAINTIFFS’ ORIGINAL COMPLAINT
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`Case 4:20-cv-01478 Document 1 Filed on 04/24/20 in TXSD Page 14 of 23
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`ordering all individuals to stay in their residences and prohibiting gatherings of individuals outside
`
`the home, except for Essential Healthcare operations, Essential Infrastructure operations, or
`
`Essential Licensed Businesses.
`
`56.
`
`Frosch’s offices in Nevada are located at:
`
`7324 West Cheyenne Avenue, Suite 6
`Las Vegas, NV 89129
`
`
`
`
`
`
`1489 W. Warm Springs Road, Suite 110
`Henderson, NV 89014
`
`North Carolina
`
`57.
`
`On March 10, 2020, Governor Roy Cooper of North Carolina issued Executive
`
`Order No. 116, declaring a State of Emergency to coordinate the State’s response and protective
`
`actions to address the coronavirus. On March 17, 2020, the Governor of North Carolina issued
`
`Executive Order No. 118, limiting the operations of bars and restaurants to carry-out, drive-
`
`through, and delivery only. On March 27, 2020, the Governor of North Carolina issued Executive
`
`Order No. 121, requiring that North Carolina residents stay at home. Residents are allowed to leave
`
`only for essential activities, essential governmental operations, or to participate or access COVID-
`
`19 essential businesses and operations. Only travel for essential activities is permitted.
`
`58.
`
`Frosch’s offices in North Carolina are located at:
`
`
`4400 Park Road
`Charlotte, NC 28209
`
`
`
`
`
`
`
`
`
`
`9350 Falls of Neuse Road, Suite 201
`Raleigh, NC 27615
`
`Pennsylvania
`
`59.
`
`On March 6, 2020, Governor Tom Wolf of the Commonwealth of Pennsylvania
`
`declared a disaster emergency in response to the coronavirus. On March 19, 2020, the Governor
`
`of Pennsylvania issued an order “regarding the closure of all businesses that are not life
`
`sustaining.” And on March 23, 2020, the Governor of Pennsylvania issued an executive order for
`
`______________________________________________________________________________
`PLAINTIFFS’ ORIGINAL COMPLAINT
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`PAGE 14 OF 23
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`Case 4:20-cv-01478 Document 1 Filed on 04/24/20 in TXSD Page 15 of 23
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`individuals to stay at home. Individuals “are ordered to stay at home except as needed to access,
`
`support, or provide life sustaining business, emergency, or government services.”
`
`60.
`
`Frosch’s offices in Pennsylvania are located in:
`
`1100 Horizon Circle, Suite 101
`Chalfont, PA 18914
`
`
`
`
`
`
`
`
`
`15 Maple Avenue
`Paoli, PA 19301
`
`International Offices
`
`61.
`
`Frosch also has offices in China, the Philippines, Singapore, the United Kingdom,
`
`Australia, Brazil, Canada, Colombia, Germany, Ireland, Hong Kong, India, Israel, Japan,
`
`Malaysia, Mexico, the Netherlands, Poland, South Africa, and the United Arab Emirates.
`
`62.
`
`These offices have likewise been subject to shelter-in-place orders prohibiting
`
`employees from entering the workplace and prohibiting Frosch’s customers from traveling.
`
`D. The Policy Covers Frosch’s Damage and Losses Sustained and Costs and Expenses
`Incurred.
`
`63.
`
`The damage and loss sustained by Frosch as a result of the Coronavirus are covered
`
`
`
`by the Policy (Exhibit A) issued by Defendants to Frosch, and no exclusions or defenses alleviate
`
`Defendants’ obligation to Frosch under the Policy.
`
`64.
`
`The commercial insurance issued by Defendants to Frosch promises “DELUXE”
`
`insurance coverage. Exhibit A, IL T3 18 05 11, Pages 1-2 of 2; DXT0001112.
`
`65.
`
`Contamination, and potential contamination, of the insured premises by the
`
`Coronavirus constitutes a direct physical loss needing remediation to clean the surfaces of, and the
`
`surfaces of objects at, the establishment.
`
`66.
`
`The Policy promises to “pay for direct physical loss of or damage to Covered
`
`Property.” Exhibit A, DXT1 001112, Page 1 of 38.
`
`______________________________________________________________________________
`PLAINTIFFS’ ORIGINAL COMPLAINT
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`PAGE 15 OF 23
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`Case 4:20-cv-01478 Document 1 Filed on 04/24/20 in TXSD Page 16 of 23
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`67.
`
`Frosch has sustained direct physical loss and/or damage to property arising from
`
`and/or related to the Coronavirus, Coronavirus contamination, the threat of Coronavirus
`
`contamination, and/or the Civil Authority response related to the Coronavirus.
`
`68.
`
`The Policy promises to “pay for [] [t]he actual loss of Business Income . . .
`
`sustain[ed] due to the necessary ‘suspension’ of your ‘operations’’” Exhibit A, DXT1 011112,
`
`Page 1 of 13.
`
`69.
`
`The Policy promises to pay for additional coverages, including Civil Authority
`
`coverage for business income and extra expenses. Exhibit A, DXT1 011112, Page 2 of 13.
`
`70.
`
`The Policy promises to pay for Accounts Receivable losses and associated expenses
`
`incurred. Exhibit A, DXT1 001112, Page 11 of 38.
`
`71.
`
`Frosch has sustained a suspension of travel-related services as a result of the
`
`Coronavirus and civil authority orders related to the Coronavirus. Frosch employees have been
`
`ordered to shelter in place at various locations and Frosch customers have been ordered in shelter
`
`in place in virtually all, if not all, of the markets it serves, effectively closing its travel business.
`
`72.
`
`Frosch has sustained loss of income and incurred expenses as a result of civil
`
`authorities prohibiting travel for customers in its markets and as a result of civil authorities
`
`prohibiting Frosch employees from entering their workplaces.
`
`73.
`
`The commercial, business, and property losses and damages, business interruption,
`
`income losses sustained, and costs and expenses incurred, as a result of the Coronavirus and the
`
`civil authority response to the Coronavirus, are covered by the Policy. Defendants owe Plaintiffs
`
`compensation for Frosch’s damages, losses, costs, and expenses arising from and related to the
`
`Coronavirus, Coronavirus contamination, the threat of Coronavirus contamination, and/or the
`
`Civil Authority response related to the Coronavirus.
`
`______________________________________________________________________________
`PLAINTIFFS’ ORIGINAL COMPLAINT
`
`PAGE 16 OF 23
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`E. Defendants Denied Frosch’s Claim.
`
`74.
`
`In compliance with the prerequisites for coverage, including the notice
`
`prerequisites, Frosch submitted a claim for coverage for the damage and losses sustained and costs
`
`and expenses incurred as a result of the Coronavirus, as more fully discussed herein, fulfilling all
`
`notice provisions in the Policy.
`
`75.
`
`The claim Frosch submitted to Defendants under the policy was summarily denied
`
`without any meaningful investigation.
`
`76.
`
`The letter from Defendant, dated April 6, 2020, offered the following reasons for
`
`denying the claim:
`
`a. Frosch had not suffered a cessation of business because, although Frosch had
`
`fewer customers, its business was still open and its business property had not
`
`sustained any damage;
`
`b. Frosch had reported no direct physical loss or damage to the insured premises;
`
`c. A civil authority had not prohibited access to the premises due to loss or damage
`
`to property other than the insured premises;
`
`d. Ingress or egress had not been prevented from the insured premises by direct
`
`physical loss of property near the insured premises;
`
`e. The policy