A view of the Hotel Constance, also known as DusitD2, taken in August 2018. (Via Twitter)
A Pasadena hotel this week filed a class action lawsuit against its insurer to offset losses suffered during the COVID-19 pandemic, according to court records.
Park Place Master Tenant LLC, which operated the Hotel Constance in Pasadena, filed a lawsuit against Zurich American Insurance Co. and Zurich North America in federal court in Illinois on Wednesday.
The case revolves around a clause in the insurance contract that excludes the insurer from “viruses, bacteria or other microorganisms that cause or can cause physical stress, illnesses or diseases”.
Zurich, citing the clause in the lawsuit, rejected claims for reimbursement of hotel losses during the pandemic.
But hotel officials claim it was largely government shutdown orders that caused the losses, not the virus itself.
“Based on the instructions, guidelines and protocols of the Governor of California, the Department of Health of the County of Los Angeles, [Pasadena Public] Health officer [Ying-Ying] Goh and the CDC (together the “Mandated Shutdown Rules” 20) received a significant number of hotel reservation cancellations and closed on March 16, 2020 to prevent the gathering of 10 or more people and stop the spread of COVID-19 “, it says in the lawsuit.
The hotel said it had filed an application for loss of business income on April 2, but it was “effectively rejected” by Zurich on April 30, citing the contract’s “virus exclusion”.
“… To the extent that the government orders in and of themselves constitute direct physical loss or damage to Plaintiff’s Covered Properties, the virus exclusion simply does not apply,” the hotel claims.
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