The Federal District Court for the Easter District of Texas rejected the insurer's motion for judgment on the pleadings on the insured's claim for losses due to the coronavirus. Cinemark Holdings, Inc. v. Factory Mut. Ins. Co., 2021 U.S. Dist. LEXIS 90124 (E.D. Tex. May 5, 2021).      Cinemark operated the nation's third larges movie theater circuit. It held an "All Risks" policy from Factory Mutual. The policy expressly included coverage for physical loss or damage by a communicable disease. An additional coverage in the policy was issued for Interruption by Communicable Disease. Cinemark had paid over $3.7 million in premiums for its policies.      As a result of the COVID-19 pandemic, over 1700 Cinemark employees tested positive for, were exposed to, or displayed symptoms of COVID-19. Most of these employees were on Cinemark property just before testing positive. Cinemark was forced to close its theaters, incurring business income loss. A claim was filed with Factory Mutual. After months with no decision, Cinemark sued.     Factory Mutual filed a Motion for Judgment on the Pleadings, alleging that Cinemark did not allege physical loss or damage, and that the policy's contamination exclusion barred the claim. Factory Mutual relied upon the court's prior decision, Selery Fulfillment, Inc. v. Colony Ins. Co., 2021 WL 963742 (E.D. Tex. March 15, 2021).     The motion was denied. Cinemark stated plausible claims to defeat a Rule 12 (c) motion. Selery was distinguishable because there were no allegations that COVID-19 had entered the property, only that the pandemic prevented Selery from fully utilizing the property. Here, Cinemark alleged that COVID-19 was actually present and actually damaged the property by changing the content of the air. Further, Cinemark's policy was much broader that the one in Selery because it expressly covered loss and damage caused by "communicable disease." Both parties agreed that "communicable disease" encompassed COVID-19. Therefore, Cinemark met its burden to defeat the Rule 12 (c) motion.    

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