20-12097-scc doc 63 filed 09/22/20 entered 09/22/20 13:11

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

CMMON Century 21 Department Stores LLC, 66 Pearl Retail, LLC, 66 Pearl Retail II, LLC, 66 Pearl Retail ISG, LLC, 173 Bway Blue LLC, 262 Mott Blue TIC LLC, 444 86 BLUE LLC, MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, TRUE BLUE ASSOCIATES LLC, STAR OF DAVID, IRAYMOND-77 WARREN LLC, SABRA ASSOCIATES LLC, 315 SEVENTH RETAIL LLC, WEBWAY ASSOCIATES LLC, AND CENTURY 21 INC.

Plaintiffs,

v.

STARR SURPLUS LINES INSURANCE CO., ALLIANZ GLOBAL RISKS US INSURANCE CO., AXIS SURPLUS LINES INSURANCE CO., LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE CO., EVANSTAN INSURANCE CO., LANDMARK AMERICAN INSURANCE CO., and CERTAIN UNDERWRITERS AT LLOYDS SUBSCRIBING TO POLICY Nos. PG1902704, PG1902346, PG1902696, PG1902698, PG1902707, PG1902702, and PG1902712

Defendants.

Case No. 20-cv-

Removed from the New York State Supreme Court, New York County, Index No. 652975/2020

NOTICE OF REMOVAL

TO THE HONORABLE COURT:

1. Century 21 Department Stores LLC (“C21”), a debtor in possession in the

chapter 11 cases captioned In re Century 21 Department Stores LLC, et al., No. 20-12097 (joint

administration pending) (the “Bankruptcy Cases”), pending before the United States Bankruptcy

Case 1:20-cv-07437-LGS Document 1 Filed 09/11/20 of 720-12097-scc Doc 63 Filed 09/22/20 Entered 09/22/20 13:11:37 Main Document Pg 1 of 7

2

Court for the Southern District of New York (the “Bankruptcy Court”), by and through its

undersigned counsel, hereby files this notice (the “Notice of Removal”) pursuant to 28 U.S.C.

§ 1452 and Rule 9027 of the Federal Rules of Bankruptcy Procedure to remove to this Court the

action pending in New York State Supreme Court, New York County, under Index

No. 652975/2020 (the “Insurance Action”), and respectfully states as follows:

2. C21 and several of its non-debtor affiliates (collectively, the “Plaintiffs” or

“Policyholders”) are named insureds under various insurance policies (collectively, the “Insurance

Policies”) that provide up to $350 million of insurance coverage, including for property damage,

business interruption and other situations that would prevent the public from entering C21’s chain

of department stores. Since 2007, the Policyholders have historically paid on average more than

$1.4 million per year in annual premiums to their insurance providers for such coverage.

Although the Plaintiffs’ losses as a result of the COVID-19 pandemic and ensuing store closures

are covered under the Insurance Policies, the defendant insurers (“Insurance Providers” or

“Defendants”) have refused to honor their obligations under the Insurance Policies.

3. As a result, and after lengthy delays by the Insurance Providers, on July 8,

2020, C21 and the other Plaintiffs commenced the Insurance Action against the Defendants (a)

alleging breach of the relevant Insurance Policies as a result of the Insurance Providers’ failure to

compensate the Plaintiffs for their losses under the Insurance Policies, (b) seeking damages of over

$175 million for the period March 2020 through May 31, 2020 and reserving their right to seek

additional amounts for subsequent time periods, and (c) seeking consequential damages in an

amount to be determined. As of the date of this filing, no Defendants have filed appearances,

answered or otherwise responded to the Complaint in the Insurance Action, and no judge has been

assigned.


http://www.google.com/search?q=28+u.s.c.+++1452

http://www.google.com/search?q=28+u.s.c.+++1452

3

4. On September 10, 2020, C21 and its affiliated debtors in possession

(collectively, the “Debtors”) commenced the Bankruptcy Cases with the Bankruptcy Court.

JURISDICTION

5. Pursuant to 28 U.S.C. §1452, “[a] party may remove any claim or cause of

action … to the district court where such civil action is pending, if such district court has

jurisdiction of such claim or cause of action under section 1334 of this title.” 11 U.S.C. §1452(a);

see also FED. R. BANKR. PROC. 9027.

6. Section 1334 provides that “the district courts shall have original but not

exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases

under title 11.” 28 U.S.C. §1334(b). The Second Circuit employs an “expansive test for ‘related

to’ jurisdiction articulated by the Third Circuit in In re Pacor.” In re Refco, Inc. Sec. Litig., 628 F.

Supp. 2d 432, 437 (S.D.N.Y. 2008). “Litigation is ‘related to’ a bankruptcy proceeding ‘if the

action’s outcome might have any conceivable effect on the bankruptcy estate.’” Post Investors

LLC v. Gribble, 2012 WL 4466619, *3 (S.D.N.Y. Sept. 27, 2012) (quoting Parmalat Capital Fin.

Ltd. v. Bank of Am. Corp., 639 F.3d 572, 579 (2d Cir. 2011) (quoting In re Cuyahoga Equip. Corp.,

980 F.2d 110, 114 (2d Cir. 1992))); see also In re Pacor, 743 F.2d 984, 994 (3d Cir. 1984) (“[T]he

test for determining whether a civil proceeding is related to bankruptcy is whether the outcome of

that proceeding could conceivably have any effect on the estate being administered in bankruptcy”).

“Proceedings ‘related to’ the bankruptcy include . . . causes of action owned by the debtor which

become property of the estate pursuant to 11 U.S.C. § 541 . . . . [This] type of ‘related to’

proceeding involves a claim like . . . state-law breach of contract action . . . .” Celotex Corp. v.

Edwards, 514 U.S. 300, 308 n. 5, 115 S.Ct. 1493, 131 L.Ed.2d 403 (1995).

7. The Insurance Action is “related to” the Bankruptcy Cases because the

outcome of the Insurance Action will have more than just a conceivable effect on C21’s bankruptcy


http://www.google.com/search?q=FRBP+9027

http://www.google.com/search?q=28++u.s.c.++1452

http://www.google.com/search?q=11+u.s.c.+1452(a)

http://www.google.com/search?q=28+u.s.c.+1334(b)

http://www.google.com/search?q=11+u.s.c.++541

http://scholar.google.com/scholar?q=639+f.3d+572&btnG=&hl=en&as_sdt=6



http://scholar.google.com/scholar?q=628+f.++supp.+2d+432&btnG=&hl=en&as_sdt=6

http://scholar.google.com/scholar?q=628+f.++supp.+2d+432&btnG=&hl=en&as_sdt=6

http://scholar.google.com/scholar?q=514+u.s.+300&btnG=&hl=en&as_sdt=6

http://scholar.google.com/scholar?q=115+s.ct.+1493&btnG=&hl=en&as_sdt=6

http://scholar.google.com/scholar?q=131+l.ed.2d+403&btnG=&hl=en&as_sdt=6

https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=2012%2Bwl%2B4466619&refPos=4466619&refPosType=s&clientid=USCourts

4

estate. Proceeds from the Insurance Policies are by far the largest asset of the chapter 11 estate.

Resolution of the Insurance Action in favor of the Plaintiffs – which C21 anticipates should yield

up to $175M, and perhaps more for the Plaintiffs – will have a profound impact on recoveries for

all of C21’s creditors, particularly unsecured creditors, whose recoveries may be in large part

dependent on the insurance proceeds. Conversely, a resolution of the Insurance Action in favor of

the Defendants could leave very little recovery for C21 and the other Debtors’ creditors.

Accordingly, this Court has jurisdiction over the Insurance Action pursuant to 28 U.S.C. § 1334(b).

8. Further, 28 U.S.C. § 1334(e) provides that the “district court in which a case

under title 11 is commenced or is pending shall have exclusive jurisdiction … of all the property,

wherever located, of the debtor as of the commencement of such case, and of property of the

estate….” The Insurance Action is a cause of action and/or a claim for relief asserted by C21,

which causes of action and/or claims for relief now belong to C21’s bankruptcy estate as a result

of the commencement of C21’s Bankruptcy Case and should be asserted for the benefit of C21’s

creditors. Pan Am. World Airways, Inc. v. Evergreen Int'l Airlines, Inc., 132 B.R. 4, 8 (S.D.N.Y.

1991) (“The notion that prepetition causes of action are not a proper subject for consideration by

the bankruptcy court is also undercut by 11 U.S.C. § 541(a)(1), which provides that the debtor's

estate includes ‘all legal and equitable interests of the debtor in property as of the commencement

of the action.’) The estate includes prepetition causes of action possessed by the debtor, and any

recovery inures to the benefit of the estate.”). Accordingly, the Court also has jurisdiction over

the Insurance Action under the provisions of 28 U.S.C. § 1334(e).

9. The non-debtor plaintiffs in the Insurance Action have consented to removal

of the Insurance Action.


http://www.google.com/search?q=28+u.s.c.++1334(b)

http://www.google.com/search?q=28+u.s.c.++1334(e)

http://www.google.com/search?q=11+u.s.c.++541(a)(1)

http://www.google.com/search?q=28+u.s.c.++1334(e)

http://scholar.google.com/scholar?q=132+b.r.+4&btnG=&hl=en&as_sdt=6

5

10. On this basis, C21 seeks to remove the Insurance Action to this Court

pending referral to the Bankruptcy Court. See Standing Order of Reference Re: Title 11, M-431

(Feb. 1, 2012) (“any or all cases under title 11 and any or all proceedings arising under title 11 or

arising in or related to a case under title 11 are referred to the bankruptcy judges for this district.”).

Other Requirements for Removal

11. The removal of the Insurance Action is timely pursuant to Rule

9027(a)(2)(A) of the Federal Rules of Bankruptcy Procedure because the Notice of Removal has

been filed with the Clerk of Bankruptcy Court within ninety days after the order for relief in the

Bankruptcy Case. F. R. BANKR. P. 9027(a)(2)(A).

12. The Insurance Action constitutes a core proceeding because resolution of

the claims asserted in the Insurance Action relates to matters concerning the administration of

C21’s and its affiliated-Debtors’ estates, counterclaims against persons filing claims against the

Debtors’ estates, orders to turn over property of the estates, proceedings affecting the liquidation

of the Debtors’ assets of the estates and the adjustment of the debtor-creditor relationship. See 28

U.S.C. §§ 157(b)(2)(A), (C), and (O).

13. C21 and the other Plaintiffs consent to the entry of a final judgment by the

Bankruptcy Court.

14. The United States District Court for the Southern District of New York is

the United States District embracing the Supreme Court for New York County, New York, where

the Insurance Action was filed and is pending. 28 U.S.C. § 112(a). Therefore, venue of the

removed Insurance Action is proper in this Court.

15. Because the Insurance Action is being removed on the basis of bankruptcy

jurisdiction, consent of all properly joined and served defendants is not required. In re WorldCom,


http://www.google.com/search?q=28++u.s.c.++157(b)(2)(a)

http://www.google.com/search?q=28++u.s.c.++157(b)(2)(a)

http://www.google.com/search?q=28++u.s.c.+157(c)

http://www.google.com/search?q=28++u.s.c.+157(o)

http://www.google.com/search?q=28+u.s.c.++112(a)

6

Inc. Sec. Litig., 293 B.R. 308, 300 (S.D.N.Y. 2003) (“It seems clear that Section 1452(a) does not

require the defendants’ unanimous consent to removal.”)

16. Copies of all process and pleadings filed in the Insurance Action are

attached hereto, as Exhibits A and B. The Defendants have not yet filed an answer to the Plaintiffs’

complaint in the Insurance Action.

NOTICE

17. Pursuant to 28 U.S.C. §1446(d) and Bankruptcy Rule 9027, a copy of this

Notice of Removal is being served on all adverse parties in the Insurance Action and filed with the

clerk for the Supreme Court for New York County, New York, where the Insurance Action was

originally filed.

WHEREFORE, C21 respectfully requests that the Insurance Action be removed to

this Court.

Dated: September 10, 2020

New York, New York Respectfully submitted,

/s/ Steve Y. Ma Steve Y. Ma Peter J. Young (pro hac vice pending) PROSKAUER ROSE LLP 2029 Century Park East, Suite 2400 Los Angeles, CA 90067-3010 Telephone: (310) 557-2900 Facsimile: (310) 557-2193 Email: [email protected] Email: [email protected] -and- Lucy F. Kweskin Matthew A. Skrzynski PROSKAUER ROSE LLP Eleven Times Square New York, New York 10036 Telephone: (212) 969-3000


http://www.google.com/search?q=28++u.s.c.++1446(d)

http://scholar.google.com/scholar?q=293+b.r.+308&btnG=&hl=en&as_sdt=6

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Facsimile: (212) 969-2900 Email: [email protected] Email: [email protected] -and- Jeff J. Marwil (pro hac vice pending) Brooke H. Blackwell (pro hac vice pending) PROSKAUER ROSE LLP 70 West Madison, Ste. 3800 Chicago, IL 60602-4342 Telephone: (962) 962-3550 Facsimile: (962) 962-3551

Proposed Attorneys for Debtor and Debtor in Possession Century 21 Department Stores LLC


JS 44C/SDNY REV. 06/01/17

CIVIL COVER SHEETThe JS-44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for use of the Clerk of Court for the purpose of initiating the civil docket sheet.

PLAINTIFFS DEFENDANTS

ATTORNEYS (FIRM NAME, ADDRESS, AND TELEPHONE NUMBER ATTORNEYS (IF KNOWN)

CAUSE OF ACTION (CITE THE U.S. CIVIL STATUTE UNDER WHICH YOU ARE FILING AND WRITE A BRIEF STATEMENT OF CAUSE)(DO NOT CITE JURISDICTIONAL STATUTES UNLESS DIVERSITY)

Has this action, case, or proceeding, or one essentially the same been previously filed in SDNY at any time? No YesJudge Previously Assigned

If yes, was this case Vol. Invol. Dismissed. No Yes If yes, give date _______________________ & Case No. ______________________

IS THIS AN INTERNATIONAL ARBITRATION CASE? No Yes

(PLACE AN [x] IN ONE BOX ONLY) NATURE OF SUIT

CONTRACT

[ ] 110 INSURANCE[ ] 120 MARINE[ ] 130 MILLER ACT[ ] 140 NEGOTIABLE

INSTRUMENT[ ] 150 RECOVERY OF

OVERPAYMENT &ENFORCEMENTOF JUDGMENT

[ ] 151 MEDICARE ACT[ ] 152 RECOVERY OF

DEFAULTEDSTUDENT LOANS(EXCL VETERANS)

[ ] 153 RECOVERY OFOVERPAYMENTOF VETERAN'SBENEFITS

[ ] 160 STOCKHOLDERSSUITS

[ ] 190 OTHERCONTRACT

[ ] 195 CONTRACTPRODUCTLIABILITY

[ ] 196 FRANCHISE

REAL PROPERTY

[ ] 210 LANDCONDEMNATION

[ ] 220 FORECLOSURE[ ] 230 RENT LEASE &

EJECTMENT[ ] 240 TORTS TO LAND[ ] 245 TORT PRODUCT

LIABILITY[ ] 290 ALL OTHER

REAL PROPERTY

TORTS

PERSONAL INJURY

[ ] 310 AIRPLANE[ ] 315 AIRPLANE PRODUCT

LIABILITY[ ] 320 ASSAULT, LIBEL &

SLANDER[ ] 330 FEDERAL

EMPLOYERS'LIABILITY

[ ] 340 MARINE[ ] 345 MARINE PRODUCT

LIABILITY[ ] 350 MOTOR VEHICLE[ ] 355 MOTOR VEHICLE

PRODUCT LIABILITY[ ] 360 OTHER PERSONAL

INJURY

ACTIONS UNDER STATUTES

CIVIL RIGHTS

PERSONAL INJURY

[ ] 365 PERSONAL INJURYPRODUCT LIABILITY

[ ] 368 ASBESTOS PERSONALINJURY PRODUCTLIABILITY

PERSONAL PROPERTY

[ ] 370 OTHER FRAUD[ ] 371 TRUTH IN LENDING

[ ] 380 OTHER PERSONALPROPERTY DAMAGE

[ ] 385 PROPERTY DAMAGEPRODUCT LIABILITY

PRISONER PETITIONS

[ ] 510 MOTIONS TOVACATE SENTENCE28 USC 2255

[ ] 530 HABEAS CORPUS[ ] 535 DEATH PENALTY[ ] 540 MANDAMUS & OTHER

PRISONER CIVIL RIGHTS

[ ] 550 CIVIL RIGHTS[ ] 555 PRISON CONDITION

FORFEITURE/PENALTY

21 USC 881

LABOR

[ ] 710 FAIR LABORSTANDARDS ACT

[ ] 720 LABOR/MGMTRELATIONS

[ ] 740 RAILWAY LABOR ACT[ ] 751 FAMILY MEDICAL LEAVE ACT (FMLA)

[ ] 790 OTHER LABORLITIGATION

[ ] 791 EMPL RET INCSECURITY ACT (ERISA)

IMMIGRATION

[ ] 462 NATURALIZATIONAPPLICATION

[ ] 465 OTHER IMMIGRATIONACTIONS

CONDITIONS OF CONFINEMENT

ACTIONS UNDER STATUTES

BANKRUPTCY

[ ] 422 APPEAL28 USC 158

[ ] 423 WITHDRAWAL28 USC 157

PROPERTY RIGHTS

[ ] 820 COPYRIGHTS[ ] 830 PATENT

[ ] 840 TRADEMARKSOCIAL SECURITY

[ ] 861 HIA (1395ff)[ ] 862 BLACK LUNG (923)[ ] 863 DIWC/DIWW (405(g))[ ] 864 SSID TITLE XVI[ ] 865 RSI (405(g))

FEDERAL TAX SUITS

[ ] 870 TAXES (U.S. Plaintiff orDefendant)

[ ] 871 IRS-THIRD PARTY26 USC 7609

OTHER STATUTES

[ ] 400 STATEREAPPORTIONMENT

[ ] 410 ANTITRUST[ ] 430 BANKS & BANKING[ ] 450 COMMERCE[ ] 460 DEPORTATION[ ] 470 RACKETEER INFLU-

ENCED & CORRUPTORGANIZATION ACT(RICO)

[ ] 480 CONSUMER CREDIT[ ] 490 CABLE/SATELLITE TV

[ ] 850 SECURITIES/COMMODITIES/EXCHANGE

[ ] 890 OTHER STATUTORYACTIONS

[ ] 891 AGRICULTURAL ACTS

[ ] 893 ENVIRONMENTALMATTERS

[ ] 895 FREEDOM OFINFORMATION ACT

[ ] 896 ARBITRATION[ ] 899 ADMINISTRATIVE

PROCEDURE ACT/REVIEW OR APPEAL OF AGENCY DECISION

Check if demanded in complaint:

CHECK IF THIS IS A CLASS ACTIONDO YOU CLAIM THIS CASE IS RELATED TO A CIVIL CASE NOW PENDING IN S.D.N.Y. AS DEFINED BY LOCAL RULE FOR DIVISION OF BUSINESS 13?

UNDER F.R.C.P. 23 IF SO, STATE:

DEMAND $______________ OTHER ______________ JUDGE _________________________________ DOCKET NUMBER_________________

Check YES only if demanded in complaintJURY DEMAND: YES NO NOTE: You must also submit at the time of filing the Statement of Relatedness form (Form IH-32).

[ ] 690 OTHER

[ ] 625 DRUG RELATEDSEIZURE OF PROPERTY

[ ] 560 CIVIL DETAINEE

DISABILITIES -OTHER[ ] 446 AMERICANS WITH

EMPLOYMENTDISABILITIES -

[ ] 445 AMERICANS WITHACCOMMODATIONS

[ ] 443 HOUSING/[ ] 442 EMPLOYMENT[ ] 441 VOTING

[ ] 440 OTHER CIVIL RIGHTS (Non-Prisoner)

[ ] 375 FALSE CLAIMS

[ ] 448 EDUCATION

[ ] 463 ALIEN DETAINEE

[ ] 362 PERSONAL INJURY -MED MALPRACTICE

[ ] 367 HEALTHCARE/PHARMACEUTICAL PERSONAL INJURY/PRODUCT LIABILITY

[ ] 950 CONSTITUTIONALITY OF STATE STATUTES

[ ] 376 QUI TAM

[ ] 835 PATENT-ABBREVIATED NEW DRUG APPLICATION1111111111111111111111111

Century 21 Department Stores LLC, 66 Pearl Retail, LLC, 66 Pearl Retail II, LLC, 66 Pearl Retail ISG, LLC, 173 Bway Blue LLC, 262 Mott Blue TIC LLC, 444 86 BLUE LLC, MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC TRUE BLUE ASSOCIATES LLC STAR OF DAVID IRAYMOND 77

STARR SURPLUS LINES INSURANCE CO., ALLIANZ GLOBAL RISKS US INSURANCE CO., AXIS SURPLUS LINES INSURANCE CO., LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE CO EVANSTAN

Steve Y. Ma Peter J. Young (pro hac vice pending) PROSKAUER ROSE LLP 2029 Century Park East Suite 2400

Removal of New York state court action to S.D.N.Y. and subsequently to S.D.N.Y Bankruptcy Court in connection with chapter 11 proceedin

✔

✖

✖

175,585,799

✖

Case 1:20-cv-07437-LGS Document 2 Filed 09/11/20 Page 1 of 2

1

20-12097-scc Doc 63-1 Filed 09/22/20 Entered 09/22/20 13:11:37 Doc 2 CivilCover sheet Pg 1 of 2

(PLACE AN x IN ONE BOX ONLY) ORIGIN1 Original

Proceeding2 Removed from

State Court

a. all parties represented

b. At least one party is pro se.

3 Remanded from Appellate Court

4 Reinstated or Reopened

5 Transferred from (Specify District)

6 Appeal to District Judge from Magistrate Judge

(PLACE AN x IN ONE BOX ONLY) BASIS OF JURISDICTION IF DIVERSITY, INDICATE1 U.S. PLAINTIFF 2 U.S. DEFENDANT 3 FEDERAL QUESTION 4 DIVERSITY

(U.S. NOT A PARTY)

CITIZENSHIP BELOW.

CITIZENSHIP OF PRINCIPAL PARTIES (FOR DIVERSITY CASES ONLY)

(Place an [X] in one box for Plaintiff and one box for Defendant)

PTF DEF PTF DEF PTF DEFCITIZEN OF THIS STATE [ ] 1 [ ] 1 CITIZEN OR SUBJECT OF A [ ] 3 [ ] 3 INCORPORATED and PRINCIPAL PLACE [ ] 5 [ ] 5

FOREIGN COUNTRY OF BUSINESS IN ANOTHER STATE

CITIZEN OF ANOTHER STATE [ ] 2 [ ] 2 INCORPORATED or PRINCIPAL PLACE [ ] 4 [ ] 4 FOREIGN NATION [ ] 6 [ ] 6 OF BUSINESS IN THIS STATE

PLAINTIFF(S) ADDRESS(ES) AND COUNTY(IES)

DEFENDANT(S) ADDRESS(ES) AND COUNTY(IES)

DEFENDANT(S) ADDRESS UNKNOWNREPRESENTATION IS HEREBY MADE THAT, AT THIS TIME, I HAVE BEEN UNABLE, WITH REASONABLE DILIGENCE, TO ASCERTAIN THE RESIDENCE ADDRESSES OF THE FOLLOWING DEFENDANTS:

Check one: THIS ACTION SHOULD BE ASSIGNED TO: WHITE PLAINS MANHATTAN

DATE

RECEIPT #

SIGNATURE OF ATTORNEY OF RECORD ADMITTED TO PRACTICE IN THIS DISTRICT[ ] NO[ ] YES (DATE ADMITTED Mo. _______ Yr. _______)Attorney Bar Code #

Magistrate Judge is to be designated by the Clerk of the Court.

Magistrate Judge _________________________________________________________ is so Designated.

Ruby J. Krajick, Clerk of Court by _____________ Deputy Clerk, DATED _____________________.

UNITED STATES DISTRICT COURT (NEW YORK SOUTHERN)

COURTHOUSE ASSIGNMENTI hereby certify that this case should be assigned to the courthouse indicated below pursuant to Local Rule for Division of Business 18, 20 or 21.

8

7Multidistrict Litigation (Transferred)

Multidistrict Litigation (Direct File)

**Bankruptcy Court Jurisdiction under 28 USC 1334**

S ACTION SHOULD BE ASSIGNED TO:

SIGNATURE OF ATTORNEY OF RECORD

✖

✖

Century 21 Department Stores LLC and Century 21, Inc.: 22 Cortlandt Street, New York, New York 10007; 66 Pearl Retail LLC, 66 Pearl Retail II LLC, 66 Pearl Retail ISG LLC: 66 Pearl Street, New York, NY 10004; 173 Bway Blue LLC: 173 Broadway New York, NY 10007; 262 Mott Blue TIC LLC: 262 Mott Street, New York, NY 10012; 444 86 Blue LLC: 444 86th Street, Brooklyn, NY 11209; Miami DD 101 Blue LLC: 101 Northeast 40th Street, Miami, FL 33137; 28 Newbury JSRE TIC LLC, True Blue

Starr Surplus Lines Insurance Co.: 399 Park Avenue 8th Floor New York, NY 10022; Allianz Global Risks US Insurance Co.: 225 West Washington Street, Suite 1800, Chicago, IL 60606; Axis Surplus Lines Insurance Co.: 111 South Wacker Drive, Suite 3500, Chicago, IL 60606; Liberty Mutual Fire Insurance Co.: 175 Berkeley Street, Boston, MA 02116; Steadfast Insurance Co.: 1400 American Lane, Schaumburg, IL 60196; Endurance American Specialty Insurance Co.: 750 3rd Avenue, New York, New

1001 C f 6001

✖

9/10/2020✖ Aug. 2015

5210182

✖


2

20-12097-scc Doc 63-1 Filed 09/22/20 Entered 09/22/20 13:11:37 Doc 2 CivilCover sheet Pg 2 of 2


CMMON Century 21 Department Stores LLC, 66 Pearl Retail, LLC, 66 Pearl Retail II, LLC, 66 Pearl Retail ISG, LLC, 173 Bway Blue LLC, 262 Mott Blue TIC LLC, 444 86 BLUE LLC, MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, TRUE BLUE ASSOCIATES LLC, STAR OF DAVID, IRAYMOND-77 WARREN LLC, SABRA ASSOCIATES LLC, 315 SEVENTH RETAIL LLC, WEBWAY ASSOCIATES LLC, AND CENTURY 21 INC.

Plaintiffs,

v.

STARR SURPLUS LINES INSURANCE CO., ALLIANZ GLOBAL RISKS US INSURANCE CO., AXIS SURPLUS LINES INSURANCE CO., LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE CO., EVANSTAN INSURANCE CO., LANDMARK AMERICAN INSURANCE CO., and CERTAIN UNDERWRITERS AT LLOYDS SUBSCRIBING TO POLICY Nos. PG1902704, PG1902346, PG1902696, PG1902698, PG1902707, PG1902702, and PG1902712

Defendants.

Case No. 20-cv-

Removed from the New York State Supreme Court, New York County, Index No. 652975/2020

CORPORATE DISCLOSURE STATEMENT PURSUANT TO FED. R. CIV. P. 7.1

Pursuant to Federal Rule of Civil Procedure 7.1, the undersigned Attorney of Record for

Plaintiff Century 21 Department Stores LLC, certifies as follows:

1. Century 21, Inc., which is one hundred percent (100%) owned solely by individuals,

owns one percent (1%) of the total membership interests, which comprise one

hundred percent (100%) of the voting rights, of C21 Department Stores Holdings

LLC (“C21 Holdings”). Ninety-nine percent (99%) of the total membership


1

20-12097-scc Doc 63-2 Filed 09/22/20 Entered 09/22/20 13:11:37 Doc 3 Rule7.1 Pg 1 of 2

http://www.google.com/search?q=FRCP+7.1


2

interests, which have no voting rights, of C21 Holdings are owned by individuals and

family trusts.

2. C21 Holdings owns one hundred percent (100%) of the membership interests in

Plaintiff Century 21 Department Stores LLC.

3. No publicly held corporation owns 10% or more of Century 21 Department Stores

LLC stock.

Dated: September 10, 2020 New York, New York

Respectfully submitted,

/s/ Steve Y. Ma

Steve Y. Ma PROSKAUER ROSE LLP 2029 Century Park East, Suite 2400 Los Angeles, CA 90067-3010 Telephone: (310) 557-2900 Facsimile: (310) 557-2193


2


-1-

UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK

Century 21 Department Stores LLC, 66 Pearl Retail, LLC, 66 Pearl Retail II, LLC, 66 Pearl Retail ISG, LLC, 173 Bway Blue LLC, 262 Mott Blue TIC LLC, 444 86 BLUE LLC, MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, TRUE BLUE ASSOCIATES LLC, STAR OF DAVID, IRAYMOND-77 WARREN LLC, SABRA ASSOCIATES LLC, 315 SEVENTH RETAIL LLC, WEBWAY ASSOCIATES LLC, AND CENTURY 21 INC. Plaintiffs, v. STARR SURPLUS LINES INSURANCE CO., ALLIANZ GLOBAL RISKS US INSURANCE CO., AXIS SURPLUS LINES INSURANCE CO., LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE CO., EVANSTAN INSURANCE CO., LANDMARK AMERICAN INSURANCE CO., and CERTAIN UNDERWRITERS AT LLOYDS SUBSCRIBING TO POLICY Nos. PG1902704, PG1902346, PG1902696, PG1902698, PG1902707, PG1902702, and PG1902712 Defendants.

Case No. 1:20-cv-07437-LGS ANSWER OF LANDMARK AMERICAN INSURANCE CO

Defendant Landmark American Insurance Co. (“Landmark”), by its attorneys, for its

Answer in response to Plaintiffs’ Complaint, states as follows:

1. Landmark is without knowledge or information sufficient to form a belief as to the

truth of the allegations in paragraph 1 of the Complaint and, accordingly, denies the same.


1

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-2-

2. Steadfast is without knowledge or information sufficient to form a belief as to the












8. In response to paragraph 8 of the Complaint, Landmark admits that it received a

premium from its insured, Century 21 Department Stores, LLC (“Century 21”), in exchange for

insurance policies that are at issue in this action, and they have adjusted the COVID-19 insurance

claim submitted by Century 21. As to the remaining allegations in paragraph 8 of the Complaint,

Landmark is without knowledge or information sufficient to form a belief as to the truth of the

allegations and, accordingly, denies the same.

9. In response to paragraph 9 of the Complaint, Landmark states that it has timely

adjusted the insurance claim at issue in this action. Landmark denies the remaining allegations in

paragraph 9 of the Complaint insofar as they are directed to it. The remaining allegations in

paragraph 9 of the Complaint are not directed to Landmark. As such, a response is not required

from it. To the extent a response is deemed necessary, Landmark is without knowledge or


2


-3-

information sufficient to form a belief as to the truth of the allegations in paragraph 9 of the

Complaint and, accordingly, denies the same.

10. Landmark denies the allegations in paragraph 10 of the Complaint insofar as they

are directed to it. The remaining allegations in paragraph 10 of the Complaint are not directed to

Landmark. As such, a response is not required from it. To the extent a response is deemed

necessary, Landmark is without knowledge or information sufficient to form a belief as to the truth

of the allegations in paragraph 10 of the Complaint and, accordingly, denies the same.


















3


-4-

















27. The allegations in paragraph 27 of the Complaint are not directed to Landmark. As

such, a response is not required from it. To the extent a response is deemed necessary, Landmark

is without knowledge or information sufficient to form a belief as to the truth of the allegations in

paragraph 27 of the Complaint and, accordingly, denies the same.




4


-5-























34. Landmark admits the allegations in paragraph 34 of the Complaint.


5


-6-













38. Landmark admits that the scientific community refers to SARS-CoV-2 as the

coronavirus and COVID-19 as the disease from the coronavirus. As to the remaining allegations

in paragraph 38 of the Complaint, Landmark is without knowledge or information sufficient to

form a belief as to the truth of the allegations and, accordingly, denies the same.



40. Landmark admits that the World Health Organization has declared COVID-19 to

be a public health emergency. As to the remaining allegations in paragraph 40 of the Complaint,




6


-7-





43. Landmark admits that COVID-19 has received widespread media attention. As to

the remaining allegations in paragraph 43 of the Complaint, Landmark is without knowledge or

information sufficient to form a belief as to the truth of the allegations and, accordingly, denies the

same.

44. Landmark admits that the Center for Disease Control has made various

recommendations with respect to COVID-19. As to the remaining allegations in paragraph 44 of

the Complaint, Landmark is without knowledge or information sufficient to form a belief as to the

truth of the allegations and, accordingly, denies the same.



46. Landmark denies the allegations in paragraph 46 of the Complaint.









7


-8-



52. Landmark admits that state and/or local governments in jurisdictions where

Century 21 maintains stores issued orders with respect to COVID-19. As to the remaining

allegations in paragraph 52, Landmark is without knowledge or information sufficient to form a

belief as to the truth of those allegations and, accordingly, denies the same.



54. In response to paragraph 54 of the Complaint, Landmark admits that Plaintiffs

purport to quote from various orders issued by governmental authorities, states that such orders

are not attached to or quoted in their entirety in the Complaint and speak for themselves, and denies

the remaining allegations in paragraph 54 of the Complaint.

55. In response to paragraph 55 of the Complaint, Landmark denies that any

governmental order evidences damages being suffered by Plaintiffs. As to the remaining

allegations in paragraph 55 of the Complaint, Landmark is without knowledge or information

sufficient to form a belief as to the truth of the allegations and, accordingly, denies the same.



57. Landmark admits that Plaintiffs submitted a document entitled “Sworn Statement

in Partial Proof of Loss” to Landmark’s representative on or about May 26, 2020. Landmark

denies the remaining allegations in paragraph 57 of the Complaint.


8


-9-

58. Landmark admits that Plaintiffs submitted certain documentation with its “Sworn

Statement in Partial Proof of Loss” on or about May 26, 2020. Landmark denies the remaining

allegations in paragraph 58.

59. Landmark admits that Plaintiffs allege a breach of contract in this action, denies

that Plaintiffs are entitled to any relief in this action and denies that it has failed to pay any amounts

owed under its insurance policies at issue in this action. As to the remaining allegations in

paragraph 59 of the Complaint, Landmark is without knowledge or information sufficient to form

a belief as to the truth of the allegations and, accordingly, denies the same.

60. Answering the allegations in paragraph 60 of the Complaint, Landmark states that

it provided insurance policies to Century 21 with an inception date of August 1, 2019 and that the

limit of liability and other terms of coverage are set forth in the insurance policies. As to the

remaining allegations in paragraph 60 of the Complaint, Landmark is without knowledge or


same.

61. Answering the allegations in paragraph 61 of the Complaint, Landmark admits that

the policies it provide to Century 21, Policy Nos. LHT909485 and LHT909486, are listed on

Schedule A to the Complaint and that the limit of liability and other terms of coverage are set forth

in the insurance policies (the “Landmark Policies”). Answering further, Landmark states that the

Landmark Policies are subject to all of the terms, conditions, limitations, and exclusions set forth

therein and denies the allegations in paragraph 61, including Schedule A to the Complaint, to the

extent that they are inconsistent with those terms, conditions, limitations, and exclusions. As to

the remaining allegations in paragraph 61 of the Complaint, Landmark is without knowledge or


9


-10-


same.



63. Landmark admits that the Landmark Policies provide certain coverages and states

that the Landmark Policies are subject to all of the terms, conditions, limitations, and exclusions

set forth therein and denies the allegations in paragraph 63 to the extent that they are inconsistent

with those terms, conditions, limitations, and exclusions. As to the remaining allegations in



64. Landmark admits the allegations in paragraph 64 insofar as they relate to the

Landmark Policies. As to the remaining allegations in paragraph 64 of the Complaint, Landmark

is without knowledge or information sufficient to form a belief as to the truth of the allegations

and, accordingly, denies the same.

65. Landmark admits that the policy period for the Landmark Policies includes March

2020 and the filing date of Plaintiffs’ Complaint. As to the remaining allegations in paragraph 65

of the Complaint, Landmark is without knowledge or information sufficient to form a belief as to

the truth of the allegations and, accordingly, denies the same.

66. Landmark admits that the Landmark Policies are one of multiple property insurance

policies provided to Century 21 for the 219-2020 policy period and denies the remaining

allegations in paragraph 66 insofar as they relate to Landmark. As to the remaining allegations in




10


-11-

67. Landmark states that the Landmark Policies are subject to all of the terms,

conditions, limitations, and exclusions set forth therein and denies the allegations in paragraph 67

to the extent that they are inconsistent with those terms, conditions, limitations, and exclusions.

As to the remaining allegations in paragraph 67 of the Complaint, Landmark is without knowledge

or information sufficient to form a belief as to the truth of the allegations and, accordingly, denies

the same.

68. Landmark admits that the Landmark Policies contain, in part, the language quoted

in paragraph 68 of the Complaint. Answering further, Landmark states that the Landmark Policies

are subject to all of their terms, conditions, limitations, and exclusions. Landmark denies the

allegations of paragraph 68 to the extent that they are inconsistent with the terms, conditions,

limitations, and exclusions in the Landmark Policies. As to the remaining allegations in paragraph

68 of the Complaint, Landmark is without knowledge or information sufficient to form a belief as

to the truth of the allegations and, accordingly, denies the same.






in paragraph 70 of the Complaint and denies that this language correctly states the limit of liability

applicable to the Landmark Policies. Answering further, Landmark states that the Landmark

Policies are subject to all of its terms, conditions, limitations, and exclusions. Landmark denies

the allegations of paragraph 70 to the extent that they are inconsistent with the terms, conditions,



11


-12-



71. Landmark admits that the Landmark Policies provide certain coverages subject to

all of the terms, conditions, limitations, and exclusions set forth therein, and denies that the

allegations in paragraph 71 are a complete and accurate statement of any coverage provided by the

Landmark Policies. Landmark denies the allegations of paragraph 71 to the extent that they are

inconsistent with the terms, conditions, limitations, and exclusions in the Landmark Policies. As

to the remaining allegations in paragraph 71 of the Complaint, Landmark is without knowledge or


same.



are subject to all of its terms, conditions, limitations, and exclusions. Landmark denies the











12


-13-







75. Landmark admits that the Landmark Policies provide coverage for business

interruption subject to all of the terms, conditions, limitations, and exclusions in the Landmark

Policies, and denies that the allegations in paragraph 75 are a complete and accurate statement of

any coverage provided by the Landmark Policies. Landmark denies the allegations of paragraph

75 to the extent that they are insistent with the terms, conditions, limitations, and exclusions in the

Landmark Policies. As to the remaining allegations in paragraph 75 of the Complaint, Landmark













13


-14-







79. Landmark admits that the Landmark Policies provide coverage for contingent

business interruption subject to all of the terms, conditions, limitations, and exclusions in the

Landmark Policies, and denies that the allegations in paragraph 79 are a complete and accurate

statement of any coverage provided by the Landmark Policies. Landmark denies the allegations

of paragraph 79 to the extent that they are inconsistent with the terms, conditions, limitations, and

exclusions in the Landmark Policies. As to the remaining allegations in paragraph 79 of the

Complaint, Landmark is without knowledge or information sufficient to form a belief as to the












14


-15-





83. Landmark admits that the Landmark Policies provide coverage for extra expense

subject to all of the terms, conditions, limitations, and exclusions in the Landmark Policies, and

denies that the allegations in paragraph 83 are a complete and accurate statement of any coverage

provided by the Landmark Policies. Landmark denies the allegations of paragraph 83 to the extent

that they are inconsistent with the terms, conditions, limitations, and exclusions in the Landmark

Policies. As to the remaining allegations in paragraph 83 of the Complaint, Landmark is without

knowledge or information sufficient to form a belief as to the truth of the allegations and,

accordingly, denies the same.













15


-16-

86. Landmark admits that the Landmark Policies contain a section titled Rents and

Rental Values, which is subject to all of the terms, conditions, limitations, and exclusions in the


















89. Landmark admits that the Landmark Policies contain a section titled Interruption

by Civil Authority, which is subject to all of the terms, conditions, limitations, and exclusions in

the Landmark Policies, and denies that the allegations in paragraph 89 are a complete and accurate



16


-17-
















92. Landmark admits that the Landmark Policies contain a section titled

Ingress/Egress, which is subject to all of the terms, conditions, limitations, and exclusions in the








17


-18-












95. Landmark admits that the Landmark Policies contain a section titled Consequential

Reduction in Values, which is subject to all of the terms, conditions, limitations, and exclusions in

the Landmark Policies, and denies that the allegations in paragraph 95 are a complete and accurate











18


-19-















99. Landmark admits that the Landmark Policies provide certain coverages and states

that the Landmark Policies is subject to all of the terms, conditions, limitations, and exclusions set

forth therein, and denies the allegations in paragraph 99 to the extent that they are inconsistent





in paragraph 100 of the Complaint. Answering further, Landmark states that the Landmark



19


-20-



100 of the Complaint, Landmark is without knowledge or information sufficient to form a belief

as to the truth of the allegations and, accordingly, denies the same.

101. The allegations in paragraph 101 of the Complaint are not directed to Landmark.

As such, a response is not required from it. To the extent a response is deemed necessary,


allegations in paragraph 101 of the Complaint and, accordingly, denies the same.


relate to the Landmark Policies. As to the remaining allegations in paragraph 102 of the




in paragraph 103 of the Complaint and denies that it drafted the Landmark Policies. Answering

further, Landmark states that the Landmark Policies are subject to all of its terms, conditions,

limitations, and exclusions. Landmark denies the allegations of paragraph 103 to the extent that

they are inconsistent with the terms, conditions, limitations, and exclusions in the Landmark

Policies. As to the remaining allegations in paragraph 103 of the Complaint, Landmark is without







20


-21-










relate to the Landmark Policies. As to the remaining allegations in paragraph 106 of the










108. Landmark admits that Century 21 submitted a document entitled “Sworn Statement

in Partial Proof of Loss” with certain documentation to Landmark’s representative on or about

May 26, 2020. Landmark denies the remaining allegations in paragraph 108 of the Complaint.


21


-22-

109. The allegations in paragraph 109 of the Complaint state legal conclusions to which

no response is required. To the extent a response is deemed necessary, Landmark denies the


110. In response to paragraph 110 of the Complaint, Landmark states that on or about

June 16, 2020 it responded in writing to the proof of loss submitted by Century 21 Department

Stores, LLC, such response speaks for itself, and Landmark denies any allegations in paragraph

110 that are inconsistent with this response. Landmark denies the remaining allegations in

paragraph 110 of the Complaint.







117. In response to paragraph 117 of the Complaint, Landmark states that Plaintiffs have

provided some of the information requested by Landmark. Landmark denies the remaining

allegations in paragraph 117 of the Complaint.








22


-23-



123. Landmark repeats and incorporates by reference its responses to the allegations

contained in paragraph 1 through 122 of the Complaint as if each were set forth individually and

incorporated fully herein.

124. In response to paragraph 124 of the Complaint, Landmark states that it entered into

a contract with Century 21 and the other insureds under the Landmark Policies. As to the

remaining allegations in paragraph 124 of the Complaint, Landmark is without knowledge or


same.





129. Landmark repeats and incorporates by reference its responses to the allegations




no response is required. To the extent a response is deemed necessary, Landmark denies the






23


-24-


135. Landmark denies that Plaintiffs are entitled to the relief requested in the

unnumbered Wherefore paragraph following paragraph 134 of the Complaint.

ADDITIONAL DEFENSES

Landmark asserts the following separate defenses without assuming any burden of proof

or persuasion.

FIRST ADDITIONAL DEFENSE

The Complaint is barred, in whole or in part, to the extent that it fails to state a cause of

action against Landmark upon which relief may be granted.

SECOND ADDITIONAL DEFENSE

The Landmark Policies contain the following exclusion:

We will not pay for loss or damage caused directly or indirectly by the discharge, dispersal, seepage, migration, release, escape or application of any pathogenic or poisonous biological or chemical materials. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss. However, if both A. and B. below apply, we will pay up to a maximum of $10,000 for any and all claims for such loss or damage arising out of events occurring within the term of this policy: A. The pathogenic or poisonous biological or chemical materials are normally kept at or brought onto your premises, with your consent, for use in your business operations at your premises; and B. The discharge, dispersal, seepage, migration, release, escape or application of the pathogenic or poisonous biological or chemical materials is accidental and is not the result of a willful or malicious act against any persons, organizations, or property of any nature.

There is no coverage under the Landmark Policies because of the application of this exclusion.


24


-25-

THIRD ADDITIONAL DEFENSE

The Landmark Policies identify “Loss of market/Delay of Use” as excluded perils. There

is no coverage for Plaintiffs’ claims to the extent they arise from these perils.

FOURTH ADDITIONAL DEFENSE

Landmark already has paid to Century 21 the amount due under the Landmark Policies for

interruption of or interference with the insureds’ business in direct consequence of infectious or

contagious disease and thus Plaintiffs are entitled to no further recovery for their insurance claim.

FIFTH ADDITIONAL DEFENSE

Coverage under the Landmark Policies is barred to the extent that Plaintiffs seek to recover

amounts that do not arise from physical loss or damage to insured property.

SIXTH ADDITIONAL DEFENSE

Coverage under the Landmark Policies is barred to the extent that the losses and damages

alleged in the Complaint are not covered under the terms, conditions, exclusions, and/or limitations

of the Landmark Policies.

SEVENTH ADDITIONAL DEFENSE

Plaintiffs’ claim and alleged loss or damage are subject to, and limited by, limits, sublimits

and deductibles under Landmark Policies.

EIGHTH ADDITIONAL DEFENSE

Landmark’s obligation to Plaintiffs, if any, is subject to offset for recoveries by Plaintiffs

from other persons or entities, including any governmental entities, for Plaintiffs’ losses or

damages.


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-26-

NINTH ADDITIONAL DEFENSE

Plaintiffs are not entitled to recover their attorney’s fees under any cause of action asserted

in the Complaint or any other possible cause of action.

TENTH ADDITIONAL DEFENSE

Landmark reserves the right to offer and rely on any other terms, conditions, limitations,

requirements, deductibles, and exclusions contained in the Landmark Policies. In the event that

facts become known through discovery in this action that may support the assertion of additional

defenses or that may cause other terms, conditions, limitations, requirements, deductibles, and/or

exclusions contained in the Landmark Policies to apply to Plaintiffs’ claims, Landmark reserves

the right to seek leave from this Court to amend their defenses accordingly.

WHEREFORE Landmark respectfully request that this Court dismiss Plaintiffs’ Complaint

with prejudice, enter judgment in favor of Landmark, and grant such other relief as the Court shall

deem just and equitable.

ROBINS KAPLAN LLP /s/ Meegan F. Hollywood Meegan F. Hollywood 399 Park Avenue, Suite 3600 New York, NY 10022 Telephone: (212) 980 7400 Facsimile: (212) 980 7499 Email: [email protected] Matthew M. Burke, Esq. (pro hac vice motion forthcoming) ROBINS KAPLAN LLP 800 Boylston Street, Suite 2500 Boston, MA 02199 Telephone: (617) 859-2711 Facsimile: (617) 267-8288 [email protected]


26


-27-

Attorneys for Defendant Landmark American Insurance Co.


27


-28-

CERTIFICATE OF SERVICE

I, Meegan F. Hollywood, hereby certify that on this day, I electronically filed the within

document with the Clerk of the Court using the CM/ECF system that will send notification of such

filing(s) to all counsel of record. The document is available for viewing and downloading through

the ECF system.

Dated: September 18, 2020 /s/ Meegan F. Hollywood Meegan F. Hollywood

37124651.2


28


-1-




Case No. 1:20-cv-07437-LGS ANSWER OF LIBERTY MUTUAL FIRE INSURANCE CO.

Defendant Liberty Mutual Fire Insurance Co. (“Liberty Mutual”), by its attorneys, for its

Answer in response to Plaintiffs’ Complaint, states as follows:

1. Liberty Mutual is without knowledge or information sufficient to form a belief as

to the truth of the allegations in paragraph 1 of the Complaint and, accordingly, denies the same.


1


-2-













8. In response to paragraph 8 of the Complaint, Liberty Mutual admits that it received

a premium from its insured, Century 21 Department Stores, LLC (“Century 21”), in exchange for

the insurance policies at issue in this action, they have adjusted the COVID-19 insurance claim

submitted by Century 21, and have made payments under its insurance policies with respect to this

insurance claim. As to the remaining allegations in paragraph 8 of the Complaint, Liberty Mutual



9. In response to paragraph 9 of the Complaint, Liberty Mutual states that it has timely

adjusted the insurance claim at issue in this action and made payments under its insurance policies

with respect to this insurance claim. Liberty Mutual denies the remaining allegations in paragraph

9 of the Complaint insofar as they are directed to it. The remaining allegations in paragraph 9 of


2


-3-

the Complaint are not directed to Liberty Mutual. As such, a response is not required from it. To

the extent a response is deemed necessary, Liberty Mutual is without knowledge or information

sufficient to form a belief as to the truth of the allegations in paragraph 9 of the Complaint and,


10. Liberty Mutual denies the allegations in paragraph 10 of the Complaint insofar as

they are directed to it. The remaining allegations in paragraph 10 of the Complaint are not directed

to Liberty Mutual. As such, a response is not required from it. To the extent a response is deemed

necessary, Liberty Mutual is without knowledge or information sufficient to form a belief as to the

















3


-4-



















27. The allegations in paragraph 27 of the Complaint are not directed to Liberty Mutual.

As such, a response is not required from it. To the extent a response is deemed necessary, Liberty

Mutual is without knowledge or information sufficient to form a belief as to the truth of the



4


-5-









30. Liberty Mutual admits the allegations in paragraph 30 of the Complaint.
















5


-6-















38. Liberty Mutual admits that the scientific community refers to SARS-CoV-2 as the


in paragraph 38 of the Complaint, Liberty Mutual is without knowledge or information sufficient

to form a belief as to the truth of the allegations and, accordingly, denies the same.



40. Liberty Mutual admits that the World Health Organization has declared COVID-

19 to be a public health emergency. As to the remaining allegations in paragraph 40 of the


6


-7-

Complaint, Liberty Mutual is without knowledge or information sufficient to form a belief as to






43. Liberty Mutual admits that COVID-19 has received widespread media attention.

As to the remaining allegations in paragraph 43 of the Complaint, Liberty Mutual is without



44. Liberty Mutual admits that the Center for Disease Control has made various


the Complaint, Liberty Mutual is without knowledge or information sufficient to form a belief as




46. Liberty Mutual denies the allegations in paragraph 46 of the Complaint.







7


-8-





52. Liberty Mutual admits that state and/or local governments in jurisdictions where


allegations in paragraph 52, Liberty Mutual is without knowledge or information sufficient to form

a belief as to the truth of those allegations and, accordingly, denies the same.



54. In response to paragraph 54 of the Complaint, Liberty Mutual admits that Plaintiffs




55. In response to paragraph 55 of the Complaint, Liberty Mutual denies that any


allegations in paragraph 55 of the Complaint, Liberty Mutual is without knowledge or information




57. Liberty Mutual admits that Plaintiffs submitted a document entitled “Sworn

Statement in Partial Proof of Loss” to Liberty Mutual’s representative on or about May 26, 2020.

Liberty Mutual denies the remaining allegations in paragraph 57 of the Complaint.


8


-9-

58. Liberty Mutual admits that Plaintiffs submitted certain documentation with its

“Sworn Statement in Partial Proof of Loss” on or about May 26, 2020. Liberty Mutual denies the

remaining allegations in paragraph 58.

59. Liberty Mutual admits that Plaintiffs allege a breach of contract in this action,

denies that Plaintiffs are entitled to any relief in this action and denies that it has failed to pay any

amounts owed under its insurance policies that are at issue in this action. As to the remaining



60. Answering the allegations in paragraph 60 of the Complaint, Liberty Mutual states

it provided two insurance policies to Century 21 with an inception date of August 1, 2019 and that

the limit of liability and other terms of coverage are set forth in those insurance policies. As to the

remaining allegations in paragraph 60 of the Complaint, Liberty Mutual is without knowledge or


same.

61. Answering the allegations in paragraph 61 of the Complaint, Liberty Mutual admits

that the policies it provided to Century 21, Policy Nos. YS2-L9L-464440-019 and MQ2-L9L-

464440-029, are listed on Schedule A to the Complaint and that the limits of liability and other

terms of coverage are set forth in the insurance policies (the “Liberty Mutual Policies”).

Answering further, Liberty Mutual states that the Liberty Mutual Policies are subject to all of the

terms, conditions, limitations, and exclusions set forth therein and denies the allegations in

paragraph 61, including Schedule A to the Complaint, to the extent that they are inconsistent with

those terms, conditions, limitations, and exclusions. As to the remaining allegations in paragraph


9


-10-

61 of the Complaint, Liberty Mutual is without knowledge or information sufficient to form a

belief as to the truth of the allegations and, accordingly, denies the same.



63. Liberty Mutual admits that Liberty Mutual Policies provide certain coverages and

states that the Liberty Mutual Policies are subject to all of the terms, conditions, limitations, and

exclusions set forth therein and denies the allegations in paragraph 63 to the extent that they are

inconsistent with those terms, conditions, limitations, and exclusions. As to the remaining



64. Liberty Mutual admits the allegations in paragraph 64 insofar as they relate to the

Liberty Mutual Policies. As to the remaining allegations in paragraph 64 of the Complaint, Liberty



65. Liberty Mutual admits that the policy period for the Liberty Mutual Policies

includes March 2020 and the filing date of Plaintiffs’ Complaint. As to the remaining allegations

in paragraph 65 of the Complaint, Liberty Mutual is without knowledge or information sufficient


66. Liberty Mutual admits that the Liberty Mutual Policies are among the multiple

property insurance policies provided to Century 21 for the 219-2020 policy period and denies the

remaining allegations in paragraph 66 insofar as they relate to Liberty Mutual. As to the remaining




10


-11-

67. Liberty Mutual states that the Liberty Mutual Policies are subject to all of the terms,

conditions, limitations, and exclusions set forth therein and denies the allegations in paragraph 67





68. Liberty Mutual admits that the Liberty Mutual Policies contain, in part, the

language quoted in paragraph 68 of the Complaint. Answering further, Liberty Mutual states that

the Liberty Mutual Policies are subject to all of their terms, conditions, limitations, and exclusions.

Liberty Mutual denies the allegations of paragraph 68 to the extent that they are inconsistent with

the terms, conditions, limitations, and exclusions in Liberty Mutual Policies. As to the remaining








language quoted in paragraph 70 of the Complaint and denies that this language correctly states

the limit of liability applicable to the Liberty Mutual Policies. Answering further, Liberty Mutual

states that the Liberty Mutual Policies are subject to all of their terms, conditions, limitations, and

exclusions. Liberty Mutual denies the allegations of paragraph 70 to the extent that they are

inconsistent with the terms, conditions, limitations, and exclusions in the Liberty Mutual Policies.


11


-12-




71. Liberty Mutual admits that the Liberty Mutual Policies provide certain coverages

subject to all of the terms, conditions, limitations, and exclusions set forth therein, and denies that

the allegations in paragraph 71 are a complete and accurate statement of any coverage provided

by the Liberty Mutual Policies. Liberty Mutual denies the allegations of paragraph 71 to the extent

that they are inconsistent with the terms, conditions, limitations, and exclusions in the Liberty

Mutual Policies. As to the remaining allegations in paragraph 71 of the Complaint, Liberty Mutual







the terms, conditions, limitations, and exclusions in the Liberty Mutual Policies. As to the



same.






12


-13-




same.





75. Liberty Mutual admits that the Liberty Mutual Policies provide coverage for

business interruption subject to all of the terms, conditions, limitations, and exclusions in the

Liberty Mutual Policies, and denies that the allegations in paragraph 75 are a complete and accurate

statement of any coverage provided by the Liberty Mutual Policies. Liberty Mutual denies the


limitations, and exclusions in the Liberty Mutual Policies. As to the remaining allegations in

paragraph 75 of the Complaint, Liberty Mutual is without knowledge or information sufficient to









13


-14-


same.









79. Liberty Mutual admits that the Liberty Mutual Policies provide coverage for

contingent business interruption subject to all of the terms, conditions, limitations, and exclusions

in the Liberty Mutual Policies, and denies that the allegations in paragraph 79 are a complete and

accurate statement of any coverage provided by the Liberty Mutual Policies. Liberty Mutual

denies the allegations of paragraph 79 to the extent that they are inconsistent with the terms,

conditions, limitations, and exclusions in the Liberty Mutual Policies. As to the remaining









14


-15-



same.







83. Liberty Mutual admits that the Liberty Mutual Policies provide coverage for extra

expense subject to all of the terms, conditions, limitations, and exclusions in Liberty Mutual

Policies, and denies that the allegations in paragraph 83 are a complete and accurate statement of

any coverage provided by the Liberty Mutual Policies. Liberty Mutual denies the allegations of

paragraph 83 to the extent that they are inconsistent with the terms, conditions, limitations, and

exclusions in the Liberty Mutual Policies. As to the remaining allegations in paragraph 83 of the










15


-16-


same.





86. Liberty Mutual admits that the Liberty Mutual Policies contain a section titled

Rents and Rental Values, which are subject to all of the terms, conditions, limitations, and

exclusions in the Liberty Mutual Policies, and denies that the allegations in paragraph 86 are a

complete and accurate statement of any coverage provided by the Liberty Mutual Policies. Liberty

Mutual denies the allegations of paragraph 86 to the extent that they are inconsistent with the

terms, conditions, limitations, and exclusions in the Liberty Mutual Policies. As to the remaining










same.


16


-17-






Interruption by Civil Authority, which are subject to all of the terms, conditions, limitations, and

exclusions in the Liberty Mutual Policies, and denies that the allegations in paragraph 89 are a

complete and accurate statement of any coverage provided by the Liberty Mutual Policies. Liberty

Mutual denies the allegations of paragraph 89 to the extent that they are inconsistent with the

terms, conditions, limitations, and exclusions in the Liberty Mutual Policies. As to the remaining










same.




17


-18-




Ingress/Egress, which are subject to all of the terms, conditions, limitations, and exclusions in the

Liberty Mutual Policies, and denies that the allegations in paragraph 92 are a complete and accurate

statement of any coverage provided by the Liberty Mutual Policies. Liberty Mutual denies the


limitations, and exclusions in the Liberty Mutual Policies. As to the remaining allegations in

paragraph 92 of the Complaint, Liberty Mutual is without knowledge or information sufficient to









same.






18


-19-


Consequential Reduction in Values, which are subject to all of the terms, conditions, limitations,

and exclusions in the Liberty Mutual Policies, and denies that the allegations in paragraph 95 are

a complete and accurate statement of any coverage provided by the Liberty Mutual Policies.





same.








same.








19


-20-






same.

99. Liberty Mutual admits that the Liberty Mutual Policies provide certain coverages

and states that the Liberty Mutual Policies are subject to all of the terms, conditions, limitations,

and exclusions set forth therein and denies the allegations in paragraph 99 to the extent that they

are inconsistent with those terms, conditions, limitations, and exclusions. As to the remaining










same.

101. The allegations in paragraph 101 of the Complaint are not directed to Liberty

Mutual. As such, a response is not required from it. To the extent a response is deemed necessary,


20


-21-

Liberty Mutual is without knowledge or information sufficient to form a belief as to the truth of

the allegations in paragraph 101 of the Complaint and, accordingly, denies the same.


they relate to the Liberty Mutual Policies. As to the remaining allegations in paragraph 102 of the




language quoted in paragraph 103 of the Complaint and denies that it drafted the Liberty Mutual

Policies. Answering further, Liberty Mutual states that the Liberty Mutual Policies are subject to

all of their terms, conditions, limitations, and exclusions. Liberty Mutual denies the allegations of


exclusions in the Liberty Mutual Policies. As to the remaining allegations in paragraph 103 of the










same.


21


-22-






they relate to the Liberty Mutual Policies. As to the remaining allegations in paragraph 106 of the










same.

108. Liberty Mutual admits that Century 21 submitted a document entitled “Sworn

Statement in Partial Proof of Loss” with certain documentation to Liberty Mutual’s representative

on or about May 26, 2020. Liberty Mutual denies the remaining allegations in paragraph 108 of

the Complaint.


no response is required. To the extent a response is deemed necessary, Liberty Mutual denies the



22


-23-

110. In response to paragraph 110 of the Complaint, Liberty Mutual states that on or

about June 16, 2020 it responded in writing to the proof of loss submitted by Century 21, such

response speaks for itself, and Liberty Mutual denies any allegations in paragraph 110 that are

inconsistent with this response. Liberty Mutual denies the remaining allegations in paragraph 110

of the Complaint.







117. In response to paragraph 117 of the Complaint, Liberty Mutual states that Plaintiffs

have provided some of the information requested by Liberty Mutual. Liberty Mutual denies the

remaining allegations in paragraph 117 of the Complaint.










23


-24-

123. Liberty Mutual repeats and incorporates by reference its responses to the allegations



124. In response to paragraph 124 of the Complaint, Liberty Mutual states that it entered

into a contract with Century 21 and the other insureds under the Liberty Mutual Policies. As to

the remaining allegations in paragraph 124 of the Complaint, Liberty Mutual is without knowledge


the same.





129. Liberty Mutual repeats and incorporates by reference its responses to the allegations




no response is required. To the extent a response is deemed necessary, Liberty Mutual denies the







24


-25-

135. Liberty Mutual denies that Plaintiffs are entitled to the relief requested in the


ADDITIONAL DEFENSES

Liberty Mutual asserts the following separate defenses without assuming any burden of

proof or persuasion.



action against Liberty Mutual upon which relief may be granted.


The Liberty Mutual Policies contain the following exclusion:

This policy does not insure against loss caused by the presence, discharge, dispersal, seepage, migration, release or escape of any pollutant(s) unless the presence, discharge, dispersal, seepage, migration, release or escape is itself caused by fire, lightning, aircraft, explosion, riot, civil commotion, smoke, vehicles, windstorm or hail to property contained in any building, vandalism, malicious mischief or leakage or accidental discharge from automatic fire protective systems. But if loss by any of the above twelve (12) perils ensues, then this Company shall be liable for only loss caused by the ensuing peril.

Nor, will the Company pay under this policy for the costs associated with the enforcement of any ordinance or law which requires any insured or others to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants.

The italicized term pollutant(s) as used in this endorsement means any solid, liquid, gaseous or thermal irritant or contaminant, including, but not limited to, fiber, smoke, vapor, soot, fumes, acid, alkalis, chemicals, biological, organic or bacterial agents and waste. Waste includes, but is not limited to, materials to be recycled, reconditioned or reclaimed. However, pollutant(s) does not include ammonia.

There is no coverage under the Liberty Mutual Policies because of the application of this exclusion.


25


-26-


The Liberty Mutual Policies identify “Loss of market/Delay of Use” as excluded perils.

There is no coverage for Plaintiffs’ claims to the extent they arise from these perils.


Liberty Mutual already has paid to Century 21 the amount due under the Liberty Mutual

Policies for interruption of or interference with the insureds’ business in direct consequence of

infectious or contagious disease and thus Plaintiffs are entitled to no further recovery for their

insurance claim.


Coverage under the Liberty Mutual Policies is barred to the extent that Plaintiffs seek to

recover amounts that do not arise from physical loss or damage to insured property.


Coverage under the Liberty Mutual Policies is barred to the extent that the losses and

damages alleged in the Complaint are not covered under the terms, conditions, exclusions, and/or

limitations of the Liberty Mutual Policies.



and deductibles under Liberty Mutual Policies.


Liberty Mutual’s obligation to Plaintiffs, if any, is subject to offset for recoveries by

Plaintiffs from other persons or entities, including any governmental entities, for Plaintiffs’ losses

or damages.


26


-27-





Liberty Mutual reserves the right to offer and rely on any other terms, conditions,

limitations, requirements, deductibles, and exclusions contained in the Liberty Mutual Policies. In

the event that facts become known through discovery in this action that may support the assertion

of additional defenses or that may cause other terms, conditions, limitations, requirements,

deductibles, and/or exclusions contained in the Liberty Mutual Policies to apply to Plaintiffs’

claims, Liberty Mutual reserves the right to seek leave from this Court to amend their defenses

accordingly.

WHEREFORE Liberty Mutual respectfully request that this Court dismiss Plaintiffs’

Complaint with prejudice, enter judgment in favor of Liberty Mutual, and grant such other relief

as the Court shall deem just and equitable.

ROBINS KAPLAN LLP /s/ Meegan F. Hollywood Meegan F. Hollywood 399 Park Avenue, Suite 3600 New York, NY 10022 Telephone: (212) 980 7400 Facsimile: (212) 980 7499 Email: [email protected] Matthew M. Burke, Esq. (pro hac vice motion forthcoming) ROBINS KAPLAN LLP 800 Boylston Street, Suite 2500 Boston, MA 02199 Telephone: (617) 859-2711


27


-28-

Facsimile: (617) 267-8288 [email protected]

Attorneys for Defendant Liberty Mutual Fire Insurance Co.


28


-29-





the ECF system.


37124629.2


29


-1-




Case No. 1:20-cv-07437-LGS ANSWER OF STARR SURPLUS LINES INSURANCE CO.

Defendant Starr Surplus Lines Insurance Co. (“Starr”), by its attorneys, for its Answer in

response to Plaintiffs’ Complaint, states as follows:

1. Starr is without knowledge or information sufficient to form a belief as to the truth



1


-2-













8. In response to paragraph 8 of the Complaint, Starr admits that it received a premium

from its insured, Century 21 Department Stores, LLC (“Century 21”), in exchange for an insurance

policy that is at issue in this action, they have adjusted the COVID-19 insurance claim submitted

by Century 21, and have made payments under its insurance policy with respect to this insurance

claim. As to the remaining allegations in paragraph 8 of the Complaint, Starr is without knowledge


the same.

9. In response to paragraph 9 of the Complaint, Starr states that it has timely adjusted

the insurance claim at issue in this action and made payments under its insurance policy with

respect to this insurance claim. Starr denies the remaining allegations in paragraph 9 of the

Complaint insofar as they are directed to it. The remaining allegations in paragraph 9 of the


2


-3-

Complaint are not directed to Starr. As such, a response is not required from it. To the extent a

response is deemed necessary, Starr is without knowledge or information sufficient to form a belief

as to the truth of the allegations in paragraph 9 of the Complaint and, accordingly, denies the same.

10. Starr denies the allegations in paragraph 10 of the Complaint insofar as they are

directed to it. The remaining allegations in paragraph 10 of the Complaint are not directed to Starr.

As such, a response is not required from it. To the extent a response is deemed necessary, Starr is

without knowledge or information sufficient to form a belief as to the truth of the allegations in

















3


-4-



















27. Starr admits the allegations in paragraph 27 of the Complaint.

28. The allegations in paragraph 28 of the Complaint are not directed to Starr. As such,

a response is not required from it. To the extent a response is deemed necessary, Starr is without

knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph

28 of the Complaint and, accordingly, denies the same.


4


-5-
























5


-6-















38. Starr admits that the scientific community refers to SARS-CoV-2 as the coronavirus

and COVID-19 as the disease from the coronavirus. As to the remaining allegations in paragraph

38 of the Complaint, Starr is without knowledge or information sufficient to form a belief as to the




40. Starr admits that the World Health Organization has declared COVID-19 to be a

public health emergency. As to the remaining allegations in paragraph 40 of the Complaint, Starr


6


-7-







43. Starr admits that COVID-19 has received widespread media attention. As to the

remaining allegations in paragraph 43 of the Complaint, Starr is without knowledge or information


44. Starr admits that the Center for Disease Control has made various recommendations

with respect to COVID-19. As to the remaining allegations in paragraph 44 of the Complaint,

Starr is without knowledge or information sufficient to form a belief as to the truth of the




46. Starr denies the allegations in paragraph 46 of the Complaint.









7


-8-



52. Starr admits that state and/or local governments in jurisdictions where Century 21

maintains stores issued orders with respect to COVID-19. As to the remaining allegations in

paragraph 52, Starr is without knowledge or information sufficient to form a belief as to the truth

of those allegations and, accordingly, denies the same.



54. In response to paragraph 54 of the Complaint, Starr admits that Plaintiffs purport

to quote from various orders issued by governmental authorities, states that such orders are not

attached to or quoted in their entirety in the Complaint and speak for themselves, and denies the


55. In response to paragraph 55 of the Complaint, Starr denies that any governmental

order evidences damages being suffered by Plaintiffs. As to the remaining allegations in paragraph





57. Starr admits that Plaintiffs submitted a document entitled “Sworn Statement in

Partial Proof of Loss” to Starr’s representative on or about May 26, 2020. Starr denies the



8


-9-

58. Starr admits that Plaintiffs submitted certain documentation with its “Sworn

Statement in Partial Proof of Loss” on or about May 26, 2020. Starr denies the remaining


59. Starr admits that Plaintiffs allege a breach of contract in this action, denies that

Plaintiffs are entitled to any relief in this action and denies that it has failed to pay any amounts

owed under the insurance policy it subscribed that is at issue in this action. As to the remaining

allegations in paragraph 59 of the Complaint, Starr is without knowledge or information sufficient


60. Answering the allegations in paragraph 60 of the Complaint, Starr states that it

provided an insurance policy to Century 21 with an inception date of August 1, 2019 and that the

limit of liability and other terms of coverage are set forth in the insurance policy. As to the

remaining allegations in paragraph 60 of the Complaint, Starr is without knowledge or information


61. Answering the allegations in paragraph 61 of the Complaint, Starr admits that the

policy it provided to Century 21, Policy No. SLSTPTY11215019, is listed on Schedule A to the

Complaint and that the limit of liability and other terms of coverage are set forth in the insurance

policy (the “Starr Policy”). Answering further, Starr states that the Starr Policy is subject to all of

the terms, conditions, limitations, and exclusions set forth therein and denies the allegations in

paragraph 61, including Schedule A to the Complaint, to the extent that they are inconsistent with





9


-10-



63. Starr admits that the Starr Policy provides certain coverages and states that the Starr

Policy is subject to all of the terms, conditions, limitations, and exclusions set forth therein and

denies the allegations in paragraph 63 to the extent that they are inconsistent with those terms,

conditions, limitations, and exclusions. As to the remaining allegations in paragraph 63 of the

Complaint, Starr is without knowledge or information sufficient to form a belief as to the truth of

the allegations and, accordingly, denies the same.

64. Starr admits the allegations in paragraph 64 insofar as they relate to the Starr Policy.

As to the remaining allegations in paragraph 64 of the Complaint, Starr is without knowledge or


same.

65. Starr admits that the policy period for the Starr Policy includes March 2020 and the

filing date of Plaintiffs’ Complaint. As to the remaining allegations in paragraph 65 of the



66. Starr admits that the Starr Policy is one of multiple property insurance policies

provided to Century 21 for the 219-2020 policy period and denies the remaining allegations in

paragraph 66 insofar as they relate to Starr. As to the remaining allegations in paragraph 66 of the



67. Starr states that the Starr Policy is subject to all of the terms, conditions, limitations,

and exclusions set forth therein and denies the allegations in paragraph 67 to the extent that they


10


-11-

are inconsistent with those terms, conditions, limitations, and exclusions. As to the remaining



68. Starr admits that the Starr Policy contains, in part, the language quoted in paragraph

68 of the Complaint. Answering further, Starr states that the Starr Policy is subject to all of its

terms, conditions, limitations, and exclusions. Starr denies the allegations of paragraph 68 to the

extent that they are inconsistent with the terms, conditions, limitations, and exclusions in the Starr

Policy. As to the remaining allegations in paragraph 68 of the Complaint, Starr is without








70 of the Complaint and denies that this language correctly states the limit of liability applicable

to the Starr Policy. Answering further, Starr states that the Starr Policy is subject to all of its terms,

conditions, limitations, and exclusions. Starr denies the allegations of paragraph 70 to the extent

that they are inconsistent with the terms, conditions, limitations, and exclusions in the Starr Policy.



same.


11


-12-

71. Starr admits that the Starr Policy provides certain coverages subject to all of the

terms, conditions, limitations, and exclusions set forth therein, and denies that the allegations in

paragraph 71 are a complete and accurate statement of any coverage provided by the Starr Policy.

Starr denies the allegations of paragraph 71 to the extent that they are inconsistent with the terms,

conditions, limitations, and exclusions in the Starr Policy. As to the remaining allegations in

paragraph 71 of the Complaint, Starr is without knowledge or information sufficient to form a



















12


-13-



75. Starr admits that the Starr Policy provides coverage for business interruption

subject to all of the terms, conditions, limitations, and exclusions in the Starr Policy, and denies

that the allegations in paragraph 75 are a complete and accurate statement of any coverage

provided by the Starr Policy. Starr denies the allegations of paragraph 75 to the extent that they

are inconsistent with the terms, conditions, limitations, and exclusions in the Starr Policy. As to

the remaining allegations in paragraph 75 of the Complaint, Starr is without knowledge or


same.















13


-14-



79. Starr admits that the Starr Policy provides coverage for contingent business

interruption subject to all of the terms, conditions, limitations, and exclusions in the Starr Policy,

and denies that the allegations in paragraph 79 are a complete and accurate statement of any

coverage provided by the Starr Policy. Starr denies the allegations of paragraph 79 to the extent

that they are inconsistent with the terms, conditions, limitations, and exclusions in the Starr Policy.



same.















14


-15-

83. Starr admits that the Starr Policy provides coverage for extra expense subject to all

of the terms, conditions, limitations, and exclusions in the Starr Policy, and denies that the

allegations in paragraph 83 are a complete and accurate statement of any coverage provided by the

Starr Policy. Starr denies the allegations of paragraph 83 to the extent that they are inconsistent

with the terms, conditions, limitations, and exclusions in the Starr Policy. As to the remaining














86. Starr admits that the Starr Policy contains a section titled Rents and Rental Values,

which is subject to all of the terms, conditions, limitations, and exclusions in the Starr Policy, and


provided by the Starr Policy. Starr denies the allegations of paragraph 86 to the extent that they



15


-16-



same.












89. Starr admits that the Starr Policy contains a section titled Interruption by Civil

Authority, which is subject to all of the terms, conditions, limitations, and exclusions in the Starr

Policy, and denies that the allegations in paragraph 89 are a complete and accurate statement of

any coverage provided by the Starr Policy. Starr denies the allegations of paragraph 89 to the






16


-17-












92. Starr admits that the Starr Policy contains a section titled Ingress/Egress, which is

subject to all of the terms, conditions, limitations, and exclusions in the Starr Policy, and denies

that the allegations in paragraph 92 are a complete and accurate statement of any coverage

provided by Starr the Policy. Starr denies the allegations of paragraph 92 to the extent that they




same.






17


-18-








95. Starr admits that the Starr Policy contains a section titled Consequential Reduction

in Values, which is subject to all of the terms, conditions, limitations, and exclusions in the Starr


any coverage provided by the Starr Policy. Starr denies the allegations of paragraph 95 to the






96 of the Complaint. Answering further, Starr states that the Starr Policy is subject to all of it







18


-19-












99. Starr admits that the Starr Policy provides certain coverages and states that the Starr

Policy is subject to all of the terms, conditions, limitations, and exclusions set forth therein, and

denies the allegations in paragraph 99 to the extent that they are inconsistent with those terms,

conditions, limitations, and exclusions. As to the remaining allegations in paragraph 99 of the









19


-20-



101. The allegations in paragraph 101 of the Complaint are not directed to Starr. As

such, a response is not required from it. To the extent a response is deemed necessary, Starr is



102. Starr denies the allegations in paragraph 102 of the Complaint insofar as they relate

to the Starr Policy. As to the remaining allegations in paragraph 102 of the Complaint, Starr is

without knowledge or information sufficient to form a belief as to the truth of the allegations and,



103 of the Complaint and denies that it drafted the Starr Policy. Answering further, Starr states

that the Starr Policy is subject to all of its terms, conditions, limitations, and exclusions. Starr


conditions, limitations, and exclusions in the Starr Policy. As to the remaining allegations in

paragraph 103 of the Complaint, Starr is without knowledge or information sufficient to form a








20


-21-







106. Starr denies the allegations in paragraph 106 of the Complaint insofar as they relate

to the Starr Policy. As to the remaining allegations in paragraph 106 of the Complaint, Starr is










108. Starr admits that Century 21 submitted a document entitled “Sworn Statement in

Partial Proof of Loss” with certain documentation to Starr’s representative on or about May 26,

2020. Starr denies the remaining allegations in paragraph 108 of the Complaint.


no response is required. To the extent a response is deemed necessary, Starr denies the allegations

in paragraph 109.


21


-22-

110. In response to paragraph 110 of the Complaint, Starr states that on or about June

16, 2020 it responded in writing to the proof of loss submitted by Century 21, such response speaks

for itself, and Starr denies any allegations in paragraph 110 that are inconsistent with this response.

Starr denies the remaining allegations in paragraph 110 of the Complaint.







117. In response to paragraph 117 of the Complaint, Starr states that Plaintiffs have

provided some of the information requested by Starr. Starr denies the remaining allegations in











22


-23-

123. Starr repeats and incorporates by reference its responses to the allegations contained

in paragraph 1 through 122 of the Complaint as if each were set forth individually and incorporated

fully herein.

124. In response to paragraph 124 of the Complaint, Starr states that it entered into a

contract with Century 21 and the other insureds under the Starr Policy. As to the remaining







129. Starr repeats and incorporates by reference its responses to the allegations contained

in paragraph 1 through 128 of the Complaint as if each were set forth individually and incorporated

fully herein.


no response is required. To the extent a response is deemed necessary, Starr denies the allegations

in paragraph 130.





135. Starr denies that Plaintiffs are entitled to the relief requested in the unnumbered

Wherefore paragraph following paragraph 134 of the Complaint.


23


-24-

ADDITIONAL DEFENSES

Starr asserts the following separate defenses without assuming any burden of proof or

persuasion.



action against Starr upon which relief may be granted.


The Starr Policy identifies “Loss of market/Delay of Use” as excluded perils. There is no

coverage for Plaintiffs’ claims to the extent they arise from these perils.


Starr already has paid to Century 21 the amount due under the Starr Policy for interruption

of or interference with the insureds’ business in direct consequence of infectious or contagious

disease and thus Plaintiffs are entitled to no further recovery for their insurance claim.


Coverage under the Starr Policy is barred to the extent that Plaintiffs seek to recover



Coverage under the Starr Policy is barred to the extent that the losses and damages alleged

in the Complaint are not covered under the terms, conditions, exclusions, and/or limitations of the

Starr Policy.



and deductibles under the Starr Policy.


24


-25-


Starr’s obligation to Plaintiffs, if any, is subject to offset for recoveries by Plaintiffs from

other persons or entities, including any governmental entities, for Plaintiffs’ losses or damages.





Starr reserves the right to offer and rely on any other terms, conditions, limitations,

requirements, deductibles, and exclusions contained in the Starr Policy. In the event that facts

become known through discovery in this action that may support the assertion of additional


exclusions contained in the Starr Policy to apply to Plaintiffs’ claims, Starr reserves the right to

seek leave from this Court to amend their defenses accordingly.

WHEREFORE Starr respectfully requests that this Court dismiss Plaintiffs’ Complaint

with prejudice, enter judgment in favor of Starr, and grant such other relief as the Court shall deem

just and equitable.

ROBINS KAPLAN LLP /s/ Meegan F. Hollywood Meegan F. Hollywood 399 Park Avenue, Suite 3600 New York, NY 10022 Telephone: (212) 980 7400 Facsimile: (212) 980 7499 Email: [email protected]


25


-26-

Matthew M. Burke, Esq. (pro hac vice motion forthcoming) ROBINS KAPLAN LLP 800 Boylston Street, Suite 2500 Boston, MA 02199 Telephone: (617) 859-2711 Facsimile: (617) 267-8288 [email protected]

Attorneys for Defendant Starr Surplus Lines Insurance Co.


26


-27-





the ECF system.


37124589.2


27


-1- 37127468.2




Case No. 1:20-cv-07437-LGS ANSWER OF STEADFAST INSURANCE COMPANY

Defendant Steadfast Insurance Co. (“Steadfast”), by its attorneys, for its Answer in

response to Plaintiffs’ Complaint, states as follows:




1

20-12097-scc Doc 63-6 Filed 09/22/20 Entered 09/22/20 13:11:37 Doc 7 AnswerPg 1 of 28

-2- 37127468.2













8. In response to paragraph 8 of the Complaint, Steadfast admits that it received a

premium from its insured, Century 21 Department Stores, LLC (“Century 21”), in exchange for

an insurance policy that is at issue in this action, they have adjusted the COVID-19 insurance claim

submitted by Century 21, and have made payments under its insurance policy with respect to this

insurance claim. As to the remaining allegations in paragraph 8 of the Complaint, Steadfast is



9. In response to paragraph 9 of the Complaint, Steadfast states that it has timely

adjusted the insurance claim at issue in this action and made payments under its insurance policy

with respect to this insurance claim. Steadfast denies the remaining allegations in paragraph 9 of

the Complaint insofar as they are directed to it. The remaining allegations in paragraph 9 of the


2


-3- 37127468.2

Complaint are not directed to Steadfast. As such, a response is not required from it. To the extent

a response is deemed necessary, Steadfast is without knowledge or information sufficient to form

a belief as to the truth of the allegations in paragraph 9 of the Complaint and, accordingly, denies

the same.

10. Steadfast denies the allegations in paragraph 10 of the Complaint insofar as they

are directed to it. The remaining allegations in paragraph 10 of the Complaint are not directed to

Steadfast. As such, a response is not required from it. To the extent a response is deemed

necessary, Steadfast is without knowledge or information sufficient to form a belief as to the truth

















3


-4- 37127468.2



















27. The allegations in paragraph 27 of the Complaint are not directed to Steadfast. As

such, a response is not required from it. To the extent a response is deemed necessary, Steadfast




4


-5- 37127468.2













31. Steadfast admits the allegations in paragraph 31 of the Complaint.












5


-6- 37127468.2















38. Steadfast admits that the scientific community refers to SARS-CoV-2 as the


in paragraph 38 of the Complaint, Steadfast is without knowledge or information sufficient to form




40. Steadfast admits that the World Health Organization has declared COVID-19 to be

a public health emergency. As to the remaining allegations in paragraph 40 of the Complaint,


6


-7- 37127468.2

Steadfast is without knowledge or information sufficient to form a belief as to the truth of the






Steadfast further states that, to the extent the Center for Disease Control issued statements

regarding COVID-19, such statements speak for themselves.

43. Steadfast admits that COVID-19 has received widespread media attention. As to

the remaining allegations in paragraph 43 of the Complaint, Steadfast is without knowledge or


same.

44. Steadfast admits that the Center for Disease Control has made various statements

with respect to COVID-19 and further states that such statements speak for themselves. As to the

remaining allegations in paragraph 44 of the Complaint, Steadfast is without knowledge or


same.



46. Steadfast denies the allegations in paragraph 46 of the Complaint.





7


-8- 37127468.2







52. Steadfast admits that state and/or local governments in jurisdictions where Century

21 maintains stores issued orders with respect to COVID-19 and states that such orders speak for

themselves. As to the remaining allegations in paragraph 52, Steadfast is without knowledge or

information sufficient to form a belief as to the truth of those allegations and, accordingly, denies

the same.



54. In response to paragraph 54 of the Complaint, Steadfast admits that Plaintiffs




55. In response to paragraph 55 of the Complaint, Steadfast denies that any


allegations in paragraph 55 of the Complaint, Steadfast is without knowledge or information





8


-9- 37127468.2

57. Steadfast admits that Plaintiffs submitted a document entitled “Sworn Statement in

Partial Proof of Loss” to Steadfast’s representative on or about May 26, 2020. Steadfast denies


58. Steadfast admits that Plaintiffs submitted certain documentation with its “Sworn

Statement in Partial Proof of Loss” on or about May 26, 2020. Steadfast denies the remaining


59. Steadfast admits that Plaintiffs allege a breach of contract in this action, denies that

Plaintiffs are entitled to any relief in this action and denies that it has failed to pay any amounts

owed under its insurance policy that is at issue in this action. As to the remaining allegations in

paragraph 59 of the Complaint, Steadfast is without knowledge or information sufficient to form


60. Answering the allegations in paragraph 60 of the Complaint, Steadfast states that it

provided an insurance policy to Century 21 with an inception date of August 1, 2019 and that the

limit of liability and other terms of coverage are set forth in the insurance policy. As to the



same.

61. Answering the allegations in paragraph 61 of the Complaint, Steadfast admits that

the policy it provided to Century 21, Policy No. XPP 5492113-06, is listed on Schedule A to the

Complaint and that the limit of liability and other terms of coverage are set forth in the insurance

policy (the “Steadfast Policy”). Answering further, Steadfast states that the Steadfast Policy is

subject to all of the terms, conditions, limitations, and exclusions set forth therein and denies the

allegations in paragraph 61, including Schedule A to the Complaint, to the extent that they are


9


-10- 37127468.2






63. Steadfast admits that the Steadfast Policy provides certain coverages and states that

the Steadfast Policy is subject to all of the terms, conditions, limitations, and exclusions set forth

therein and denies the allegations in paragraph 63 to the extent that they are inconsistent with those

terms, conditions, limitations, and exclusions. As to the remaining allegations in paragraph 63 of

the Complaint, Steadfast is without knowledge or information sufficient to form a belief as to the


64. Steadfast admits the allegations in paragraph 64 insofar as they relate to the

Steadfast Policy. As to the remaining allegations in paragraph 64 of the Complaint, Steadfast is



65. Steadfast admits that the policy period for the Steadfast Policy includes March 2020

and the filing date of Plaintiffs’ Complaint. As to the remaining allegations in paragraph 65 of the

Complaint, Steadfast is without knowledge or information sufficient to form a belief as to the truth

of the allegations and, accordingly, denies the same.

66. Steadfast admits that the Steadfast Policy is one of multiple property insurance

policies provided to Century 21 for the 2019-2020 policy period and denies the remaining

allegations in paragraph 66 insofar as they relate to Steadfast. As to the remaining allegations in


10


-11- 37127468.2

paragraph 66 of the Complaint, Steadfast is without knowledge or information sufficient to form


67. Steadfast states that the Steadfast Policy is subject to all of the terms, conditions,

limitations, and exclusions set forth therein and denies the allegations in paragraph 67 to the extent

that they are inconsistent with those terms, conditions, limitations, and exclusions. As to the



same.

68. Steadfast admits that the Steadfast Policy contains, in part, the language quoted in

paragraph 68 of the Complaint. Answering further, Steadfast states that the Steadfast Policy is

subject to all of its terms, conditions, limitations, and exclusions. Steadfast denies the allegations


exclusions in the Steadfast Policy. As to the remaining allegations in paragraph 68 of the








paragraph 70 of the Complaint and denies that this language correctly states the limit of liability

applicable to the Steadfast Policy. Answering further, Steadfast states that the Steadfast Policy is



11


-12- 37127468.2





71. Steadfast admits that the Steadfast Policy provides certain coverages subject to all

of the terms, conditions, limitations, and exclusions set forth therein, and denies that the allegations

in paragraph 71 are a complete and accurate statement of any coverage provided by the Steadfast

Policy. Steadfast denies the allegations of paragraph 71 to the extent that they are inconsistent

with the terms, conditions, limitations, and exclusions in the Steadfast Policy. As to the remaining
















12


-13- 37127468.2







75. Steadfast admits that the Steadfast Policy provides coverage for business

interruption subject to all of the terms, conditions, limitations, and exclusions in the Steadfast


any coverage provided by the Steadfast Policy. Steadfast denies the allegations of paragraph 75

to the extent that they are inconsistent with the terms, conditions, limitations, and exclusions in the














13


-14- 37127468.2







79. Steadfast admits that the Steadfast Policy provides coverage for contingent business

interruption subject to all of the terms, conditions, limitations, and exclusions in the Steadfast

















14


-15- 37127468.2





83. Steadfast admits that the Steadfast Policy provides coverage for extra expense

subject to all of the terms, conditions, limitations, and exclusions in the Steadfast Policy, and


provided by the Steadfast Policy. Steadfast denies the allegations of paragraph 83 to the extent

that they are inconsistent with the terms, conditions, limitations, and exclusions in the Steadfast

Policy. As to the remaining allegations in paragraph 83 of the Complaint, Steadfast is without















15


-16- 37127468.2

86. Steadfast admits that the Steadfast Policy contains a section titled Rents and Rental

Values, which is subject to all of the terms, conditions, limitations, and exclusions in the Steadfast


















89. Steadfast admits that the Steadfast Policy contains a section titled Interruption by

Civil Authority, which is subject to all of the terms, conditions, limitations, and exclusions in the

Steadfast Policy, and denies that the allegations in paragraph 89 are a complete and accurate

statement of any coverage provided by the Steadfast Policy. Steadfast denies the allegations of


16


-17- 37127468.2
















92. Steadfast admits that the Steadfast Policy contains a section titled Ingress/Egress,

which is subject to all of the terms, conditions, limitations, and exclusions in the Steadfast Policy,

and denies that the allegations in paragraph 92 are a complete and accurate statement of any

coverage provided by the Steadfast Policy. Steadfast denies the allegations of paragraph 92 to the

extent that they are inconsistent with the terms, conditions, limitations, and exclusions in the





17


-18- 37127468.2












95. Steadfast admits that the Steadfast Policy contains a section titled Consequential

Reduction in Values, which is subject to all of the terms, conditions, limitations, and exclusions in

the Steadfast Policy, and denies that the allegations in paragraph 95 are a complete and accurate

statement of any coverage provided by the Steadfast Policy. Steadfast denies the allegations of










18


-19- 37127468.2















99. Steadfast admits that the Steadfast Policy provides certain coverages, states that the

Steadfast Policy is subject to all of the terms, conditions, limitations, and exclusions set forth

therein, and denies the allegations in paragraph 99 to the extent that they are inconsistent with


99 of the Complaint, Steadfast is without knowledge or information sufficient to form a belief as






19


-20- 37127468.2

of paragraph 100 to the extent that they are inconsistent with the terms, conditions, limitations,

and exclusions in the Steadfast Policy. As to the remaining allegations in paragraph 100 of the








relate to the Steadfast Policy. As to the remaining allegations in paragraph 102 of the Complaint,




paragraph 103 of the Complaint and denies that it drafted the Steadfast Policy. Answering further,

Steadfast states that the Steadfast Policy is subject to all of its terms, conditions, limitations, and

exclusions. Steadfast denies the allegations of paragraph 103 to the extent that they are

inconsistent with the terms, conditions, limitations, and exclusions in the Steadfast Policy. As to

the remaining allegations in paragraph 103 of the Complaint, Steadfast is without knowledge or


same.





20


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relate to the Steadfast Policy. As to the remaining allegations in paragraph 106 of the Complaint,










108. Steadfast admits that Century 21 submitted a document entitled “Sworn Statement

in Partial Proof of Loss” with certain documentation to Steadfast’s representative on or about May

26, 2020. Steadfast denies the remaining allegations in paragraph 108 of the Complaint.


21


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no response is required. To the extent a response is deemed necessary, Steadfast denies the


110. In response to paragraph 110 of the Complaint, Steadfast states that on or about

June 16, 2020 it responded in writing to the proof of loss submitted by Century 21, such response

speaks for itself, and Steadfast denies any allegations in paragraph 110 that are inconsistent with

this response. Steadfast denies the remaining allegations in paragraph 110 of the Complaint.







117. In response to paragraph 117 of the Complaint, Steadfast states that Plaintiffs have

provided some of the information requested by Steadfast. Steadfast denies the remaining









22


-23- 37127468.2



123. Steadfast repeats and incorporates by reference its responses to the allegations



124. In response to paragraph 124 of the Complaint, Steadfast states that it entered into

a contract with Century 21 and the other insureds under the Steadfast Policy. As to the remaining







129. Steadfast repeats and incorporates by reference its responses to the allegations




no response is required. To the extent a response is deemed necessary, Steadfast denies the







23


-24- 37127468.2

135. Steadfast denies that Plaintiffs are entitled to the relief requested in the unnumbered

Wherefore paragraph following paragraph 134 of the Complaint.

ADDITIONAL DEFENSES

Steadfast asserts the following separate defenses without assuming any burden of proof or

persuasion.



action against Steadfast upon which relief may be granted.


The Steadfast Policy contains the following exclusion:

This policy does not cover loss or damage caused by, resulting from, contributed by or made worse by actual, alleged or threatened release, discharge, escape, or dispersal of CONTAMINANTS OR POLLUTANTS all whether direct or indirect, proximate or remote or in whole or in part caused by, contributed to or aggravated by any physical damage insured by this policy.

….

CONTAMINANTS OR POLLUTANTS means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acid, alkalis, chemicals and waste, which after its release can cause or threaten damage to human health or human welfare or cause or threatens damage, deterioration, loss of value, marketability, or loss of use to property insured hereunder, including, but not limited to, bacteria, fungi, virus, or hazardous substances as listed in the federal water, Pollution Control act, Clean Water Air Act, Resource Conservation and Recovery Act of 1976, and Toxic Substances Control Act or as designated by the U.S. Environmental Protection agency. Waste includes materials to be recycled, reconditioned or reclaimed.

There is no coverage under the Steadfast Policy because of the application of this exclusion.


The Steadfast Policy identifies “Loss of market/Delay of Use” as excluded perils. There



24


-25- 37127468.2


Steadfast already has paid to Century 21 the amount due under the Steadfast Policy for

interruption of or interference with the insureds’ business in direct consequence of infectious or

contagious disease and thus Plaintiffs are entitled to no further recovery for their insurance claim.


Coverage under the Steadfast Policy is barred to the extent that Plaintiffs seek to recover



Coverage under the Steadfast Policy is barred to the extent that the losses and damages

alleged in the Complaint are not covered under the terms, conditions, exclusions, limitations,

definitions and/or endorsements of the Steadfast Policy.



and deductibles under the Steadfast Policy.


Steadfast’s obligation to Plaintiffs, if any, is subject to offset for recoveries by Plaintiffs

from other persons or entities, including through distributions, disbursements, credits, loans,

grants, government or private assistance, or other payments, for Plaintiffs’ losses or damages.





25


-26- 37127468.2


Steadfast reserves the right to offer and rely on any other terms, conditions, limitations,

requirements, deductibles, and exclusions contained in the Steadfast Policy. In the event that facts

become known through discovery in this action that may support the assertion of additional


exclusions contained in the Steadfast Policy to apply to Plaintiffs’ claims, Steadfast reserves the

right to seek leave from this Court to amend their defenses accordingly.

ELEVENTH ADDITIONAL DEFENSE

Plaintiffs’ claims are barred to the extent that Plaintiffs have failed to satisfy the

obligations, covenants, and conditions precedent and subsequent required under the Steadfast

Policy.

TWELFTH ADDITIONAL DEFENSE

Plaintiffs’ claims are barred, in whole or in part, to the extent Plaintiffs have waived or are

estopped to assert their rights under the Steadfast Policy.

THIRTEENTH ADDITIONAL DEFENSE

Plaintiffs’ recovery is barred to the extent that Plaintiffs have failed to mitigate their

damages.

FOURTEENTH ADDITIONAL DEFENSE

Plaintiffs’ claims are barred, in whole or in part, because Plaintiffs have suffered no

damages as a result of the matters alleged in Plaintiffs’ Complaint.

FIFTEENTH ADDITIONAL DEFENSE

Plaintiffs’ claims are barred to the extent that any Plaintiff is not an insured and/or does

not have an insurable interest.


26


-27- 37127468.2

WHEREFORE Steadfast respectfully request that this Court dismiss Plaintiffs’ Complaint

with prejudice, enter judgment in favor of Steadfast, and grant such other relief as the Court shall

deem just and equitable.

ROBINS KAPLAN LLP /s/ Meegan F. Hollywood Meegan F. Hollywood 399 Park Avenue, Suite 3600 New York, NY 10022 Telephone: (212) 980 7400 Facsimile: (212) 980 7499 Email: [email protected] Matthew M. Burke, Esq. (pro hac vice motion forthcoming) ROBINS KAPLAN LLP 800 Boylston Street, Suite 2500 Boston, MA 02199 Telephone: (617) 859-2711 Facsimile: (617) 267-8288 [email protected]

Attorneys for Defendant Steadfast Insurance Co.


27


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the ECF system.



28


-1- 37124192.2




Case No. 1:20-cv-07437 ANSWER OF CERTAIN UNDERWRITERS AT LLOYD’S SUBSCRIBING TO POLICY NOS. B0180PG1902346, B0180PG1902696, B0180PG1902698, B0180PG1902702, B0180PG1902704, B0180PG1902707, AND B0180PG1902712

Defendants Certain Underwriters at Lloyd’s Subscribing to Policy Nos. B0180PG1902346,

B0180PG1902696, B0180PG1902698, B0180PG1902702, B0180PG1902704,

B0180PG1902707, and B0180PG1902712 (“Underwriters”), by their attorneys, for their Answer

in response to Plaintiffs’ Complaint, state as follows:


1

20-12097-scc Doc 63-7 Filed 09/22/20 Entered 09/22/20 13:11:37 Doc 8 Amswer Pg 1 of 28

-2- 37124192.2

1. Underwriters are without knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph 1 of the Complaint and, accordingly, deny the same.













8. In response to paragraph 8 of the Complaint, Underwriters admit that they received

a premium from their insured, Century 21 Department Stores, LLC (“Century 21”), in exchange

for the insurance policies that are at issue in this action, they have adjusted the COVID-19

insurance claim submitted by Century 21, and have made payments under their insurance policies

with respect to this insurance claim. As to the remaining allegations in paragraph 8 of the

Complaint, Underwriters are without knowledge or information sufficient to form a belief as to

the truth of the allegations and, accordingly, deny the same.

9. In response to paragraph 9 of the Complaint, Underwriters state that they have

timely adjusted the insurance claim at issue in this action and made payments under their insurance


2


-3- 37124192.2

policies with respect to this insurance claim. Underwriters deny the remaining allegations in

paragraph 9 of the Complaint insofar as they are directed to them. The remaining allegations in

paragraph 9 of the Complaint are not directed to Underwriters. As such, a response is not required

from them. To the extent a response is deemed necessary, Underwriters are without knowledge or


Complaint and, accordingly, deny the same.

10. Underwriters deny the allegations in paragraph 10 of the Complaint insofar as they

are directed to them. The remaining allegations in paragraph 10 of the Complaint are not directed

to Underwriters. As such, a response is not required from them. To the extent a response is deemed

necessary, Underwriters are without knowledge or information sufficient to form a belief as to the

truth of the allegations in paragraph 10 of the Complaint and, accordingly, deny the same.














3


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27. The allegations in paragraph 27 of the Complaint are not directed to Underwriters.

As such, a response is not required from them. To the extent a response is deemed necessary,


4


-5- 37124192.2

Underwriters are without knowledge or information sufficient to form a belief as to the truth of the

allegations in paragraph 27 of the Complaint and, accordingly, deny the same.






















5


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37. Underwriters deny the allegations in paragraph 37 of the Complaint.

38. Underwriters admit that the scientific community refers to SARS-CoV-2 as the


in paragraph 38 of the Complaint, Underwriters are without knowledge or information sufficient

to form a belief as to the truth of the allegations and, accordingly, deny the same.




6


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40. Underwriters admit that the World Health Organization has declared COVID-19 to

be a public health emergency. As to the remaining allegations in paragraph 40 of the Complaint,


allegations and, accordingly, deny the same.





43. Underwriters admit that COVID-19 has received widespread media attention. As

to the remaining allegations in paragraph 43 of the Complaint, Underwriters are without


accordingly, deny the same.

44. Underwriters admit that the Center for Disease Control has made various


the Complaint, Underwriters are without knowledge or information sufficient to form a belief as

to the truth of the allegations and, accordingly, deny the same.








7


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52. Underwriters admit that state and/or local governments in jurisdictions where


allegations in paragraph 52, Underwriters are without knowledge or information sufficient to form

a belief as to the truth of those allegations and, accordingly, deny the same.



54. In response to paragraph 54 of the Complaint, Underwriters admit that Plaintiffs

purport to quote from various orders issued by governmental authorities, state that such orders are

not attached to or quoted in their entirety in the Complaint and speak for themselves, and deny the


55. In response to paragraph 55 of the Complaint, Underwriters deny that any


allegations in paragraph 55 of the Complaint, Underwriters are without knowledge or information

sufficient to form a belief as to the truth of the allegations and, accordingly, deny the same.




8


-9- 37124192.2

57. Underwriters admit that Plaintiffs submitted a document entitled “Sworn Statement

in Partial Proof of Loss” to Underwriters’ representative on or about May 26, 2020. Underwriters

deny the remaining allegations in paragraph 57 of the Complaint.

58. Underwriters admit that Plaintiffs submitted certain documentation with its “Sworn

Statement in Partial Proof of Loss” on or about May 26, 2020. Underwriters deny the remaining


59. Underwriters admit that Plaintiffs allege a breach of contract in this action, deny

that Plaintiffs are entitled to any relief in this action and deny that they have failed to pay any

amounts owed under the insurance policies they subscribed that are at issue in this action. As to

the remaining allegations in paragraph 59 of the Complaint, Underwriters are without knowledge

or information sufficient to form a belief as to the truth of the allegations and, accordingly, deny

the same.

60. Answering the allegations in paragraph 60 of the Complaint, Underwriters state that

they severally subscribed various insurance policies placed by Century 21 Department Stores, LLC

with an inception date of August 1, 2019 and that the limit of liability and other terms of coverage

are set forth in those insurance policies. As to the remaining allegations in paragraph 60 of the



61. Answering the allegations in paragraph 61 of the Complaint, Underwriters admit

that the policies they severally subscribed to Century 21, Policy Nos. B0180PG1902346,

B0180PG1902696, B0180PG1902698, B0180PG1902702, B0180PG1902704,

B0180PG1902707, and B0180PG1902712, are listed on Schedule A to the Complaint and that the

limit of liability and other terms of coverage are set forth in those insurance policies


9


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(“Underwriters’ Policies”). Answering further, Underwriters state that Underwriters’ Policies are

subject to all of the terms, conditions, limitations, and exclusions set forth therein and deny the

allegations in paragraph 61, including Schedule A to the Complaint, to the extent that they are






63. Underwriters admit that Underwriters’ Policies provide certain coverages and state

that Underwriters’ Policies are subject to all of the terms, conditions, limitations, and exclusions

set forth therein and deny the allegations in paragraph 63 to the extent that they are inconsistent


paragraph 63 of the Complaint, Underwriters are without knowledge or information sufficient to

form a belief as to the truth of the allegations and, accordingly, deny the same.

64. Underwriters admit the allegations in paragraph 64 insofar as they relate to

Underwriters’ Policies. As to the remaining allegations in paragraph 64 of the Complaint,



65. Underwriters admit that the policy period for Underwriters’ Policies includes

March 2020 and the filing date of Plaintiffs’ Complaint. As to the remaining allegations in




10


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66. Underwriters admit that Underwriters’ Policies are among the multiple property

insurance policies provided to Century 21 for the 219-2020 policy period and denies the remaining

allegations in paragraph 66 insofar as they relate to Starr. As to the remaining allegations in



67. Underwriters state that Underwriters’ Policies are subject to all of the terms,

conditions, limitations, and exclusions set forth therein and deny the allegations in paragraph 67


As to the remaining allegations in paragraph 67 of the Complaint, Underwriters are without



68. Underwriters admit that Underwriters’ Policies contain, in part, the language

quoted in paragraph 68 of the Complaint. Answering further, Underwriters state that

Underwriters’ Policies are subject to all of their terms, conditions, limitations, and exclusions.

Underwriters deny the allegations of paragraph 68 to the extent that they are inconsistent with the

terms, conditions, limitations, and exclusions in Underwriters’ Policies. As to the remaining








11


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quoted in paragraph 70 of the Complaint and deny that this language correctly states the limit of

liability applicable to Underwriters’ Policies. Answering further, Underwriters state that






71. Underwriters admit that Underwriters’ Policies provide certain coverages subject

to all of the terms, conditions, limitations, and exclusions set forth therein, and deny that the

allegations in paragraph 71 are a complete and accurate statement of any coverage provided by

Underwriters’ Policies. Underwriters deny the allegations of paragraph 71 to the extent that they

are inconsistent with the terms, conditions, limitations, and exclusions in Underwriters’ Policies.

As to the remaining allegations in paragraph 71 of the Complaint, Underwriters are without











12


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75. Underwriters admit that Underwriters’ Policies provide coverage for business

interruption subject to all of the terms, conditions, limitations, and exclusions in Underwriters’

Policies, and deny that the allegations in paragraph 75 are a complete and accurate statement of

any coverage provided by Underwriters’ Policies. Underwriters deny the allegations of paragraph

75 to the extent that they are inconsistent with the terms, conditions, limitations, and exclusions in









13


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79. Underwriters admit that Underwriters’ Policies provide coverage for contingent

business interruption subject to all of the terms, conditions, limitations, and exclusions in

Underwriters’ Policies, and deny that the allegations in paragraph 79 are a complete and accurate

statement of any coverage provided by Underwriters’ Policies. Underwriters deny the allegations


exclusions in Underwriters’ Policies. As to the remaining allegations in paragraph 79 of the








14


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83. Underwriters admit that Underwriters’ Policies provide coverage for extra expense

subject to all of the terms, conditions, limitations, and exclusions in Underwriters’ Policies, and

deny that the allegations in paragraph 83 are a complete and accurate statement of any coverage

provided by Underwriters’ Policies. Underwriters deny the allegations of paragraph 83 to the

extent that they are inconsistent with the terms, conditions, limitations, and exclusions in










15


-16- 37124192.2







86. Underwriters admit that Underwriters’ Policies contain a section titled Rents and

Rental Values, which is subject to all of the terms, conditions, limitations, and exclusions in

















16


-17- 37124192.2



89. Underwriters admit that Underwriters’ Policies contain a section titled Interruption

by Civil Authority, which is subject to all of the terms, conditions, limitations, and exclusions in


















92. Underwriters admit that Underwriters’ Policies contain a section titled

Ingress/Egress, which is subject to all of the terms, conditions, limitations, and exclusions in


17


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95. Underwriters admit that Underwriters’ Policies contain a section titled

Consequential Reduction in Values, which is subject to all of the terms, conditions, limitations,

and exclusions in Underwriters’ Policies, and deny that the allegations in paragraph 95 are a

complete and accurate statement of any coverage provided by Underwriters’ Policies.




18


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99. Underwriters admit that Underwriters’ Policies provide certain coverages and state

that Underwriters’ Policies are subject to all of the terms, conditions, limitations, and exclusions

set forth therein and deny the allegations in paragraph 99 to the extent that they are inconsistent


19


-20- 37124192.2







Underwriters deny the allegations of paragraph 100 to the extent that they are inconsistent with

the terms, conditions, limitations, and exclusions in Underwriters’ Policies. As to the remaining








relate to Underwriters’ Policies. As to the remaining allegations in paragraph 102 of the




quoted in paragraph 103 of the Complaint and deny that they drafted Underwriters’ Policies.

Answering further, Underwriters state that Underwriters’ Policies are subject to all of their terms,

conditions, limitations, and exclusions. Underwriters deny the allegations of paragraph 103 to the

extent that they are inconsistent with the terms, conditions, limitations, and exclusions in


20


-21- 37124192.2
















relate to Underwriters’ Policies. As to the remaining allegations in paragraph 106 of the



107. Underwriters admit that certain of Underwriters’ Policies contain, in part, the

language quoted in paragraph 107 of the Complaint. Answering further, Underwriters state that





21


-22- 37124192.2



108. Underwriters admit that Century 21 submitted a document entitled “Sworn

Statement in Partial Proof of Loss” with certain documentation to Underwriters’ representative on

or about May 26, 2020. Underwriters deny the remaining allegations in paragraph 108 of the

Complaint.


no response is required. To the extent a response is deemed necessary, Underwriters deny the


110. In response to paragraph 110 of the Complaint, Underwriters state that on or about

June 16, 2020 they responded in writing to the proof of loss submitted by Century 21, such

response speaks for itself, and Underwriters deny any allegations in paragraph 110 that are

inconsistent with this response. Underwriters deny the remaining allegations in paragraph 110 of

the Complaint.







117. In response to paragraph 117 of the Complaint, Underwriters state that Plaintiffs

have provided some of the information requested by Underwriters. Underwriters deny the



22


-23- 37124192.2









123. Underwriters repeat and incorporate by reference their responses to the allegations



124. In response to paragraph 124 of the Complaint, Underwriters state that they entered

into a contract with Century 21 and the other insureds under Underwriters’ Policies. As to the

remaining allegations in paragraph 124 of the Complaint, Underwriters are without knowledge or

information sufficient to form a belief as to the truth of the allegations and, accordingly, deny the

same.





129. Underwriters repeat and incorporate by reference their responses to the allegations




23


-24- 37124192.2


no response is required. To the extent a response is deemed necessary, Underwriters deny the






135. Underwriters deny that Plaintiffs are entitled to the relief requested in the


ADDITIONAL DEFENSES

Underwriters assert the following separate defenses without assuming any burden of proof

or persuasion.



action against Underwriters upon which relief may be granted.


Underwriters’ Policies contain the following exclusion:

This policy does not insure against loss caused by the presence, discharge, dispersal, seepage, migration, release or escape of any pollutant(s) unless the presence, discharge, dispersal, seepage, migration, release or escape is itself caused by fire, lightning, aircraft, explosion, riot, civil commotion, smoke, vehicles, windstorm or hail to property contained in any building, vandalism, malicious mischief or leakage or accidental discharge from automatic fire protective systems. But if loss by any of the above twelve (12) perils ensues, then this Company shall be liable for only loss caused by the ensuing peril.

Nor, will the Company pay under this policy for the costs associated with the enforcement of any ordinance or law which requires any insured or others to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants.


24


-25- 37124192.2

The italicized term pollutant(s) as used in this endorsement means any solid, liquid, gaseous or thermal irritant or contaminant, including, but not limited to, fiber, smoke, vapor, soot, fumes, acid, alkalis, chemicals, biological, organic or bacterial agents and waste. Waste includes, but is not limited to, materials to be recycled, reconditioned or reclaimed. However, pollutant(s) does not include ammonia.

There is no coverage under Underwriters’ Policies because of the application of this exclusion.


Underwriters’ Policies identify “Loss of market/Delay of Use” as excluded perils. There



Underwriters already have paid to Century 21 the amount due under Underwriters’ Policies

for interruption of or interference with the insureds’ business in direct consequence of infectious

or contagious disease and thus Plaintiffs are entitled to no further recovery for their insurance

claim.


Coverage under Underwriters’ Policies is barred to the extent that Plaintiffs seek to recover



Coverage under Underwriters’ Policies is barred to the extent that the losses and damages

alleged in the Complaint are not covered under the terms, conditions, exclusions, and/or limitations

of Underwriters’ Policies.



and deductibles under Underwriters’ Policies.


25


-26- 37124192.2


Underwriters’ obligation to Plaintiff, if any, is subject to offset for recoveries by Plaintiffs

from other persons or entities, including any governmental entities, for Plaintiffs’ losses or

damages.





Underwriters reserve the right to offer and rely on any other terms, conditions, limitations,

requirements, deductibles, and exclusions contained in Underwriters’ Policies. In the event that

facts become known through discovery in this action that may support the assertion of additional


exclusions contained in Underwriters’ Policies to apply to Plaintiffs’ claims, Underwriters reserve

the right to seek leave from this Court to amend their defenses accordingly.

WHEREFORE Underwriters respectfully request that this Court dismiss Plaintiffs’

Complaint with prejudice, enter judgment in favor of Underwriters, and grant such other relief as

the Court shall deem just and equitable.

ROBINS KAPLAN LLP /s/ Meegan F. Hollywood Meegan F. Hollywood 399 Park Avenue, Suite 3600 New York, NY 10022 Telephone: (212) 980 7400 Facsimile: (212) 980 7499 Email: [email protected]


26


-27- 37124192.2

Matthew M. Burke, Esq. (pro hac vice motion forthcoming) ROBINS KAPLAN LLP 800 Boylston Street, Suite 2500 Boston, MA 02199 Telephone: (617) 859-2711 Facsimile: (617) 267-8288 [email protected]

Attorneys for Defendants Certain Underwriters at Lloyd’s Subscribing to Policy Nos. B0180PG1902346, B0180PG1902696, B0180PG1902698, B0180PG1902702, B0180PG1902704, B0180PG1902707, and B0180PG1902712


27


-28- 37124192.2





the ECF system.



28


1


SOUTHERN DISTRICT OF NEW YORK

CENTURY 21 DEPARTMENT STORES, LLC, 66 PEARL RETAIL, LLC, 66 PEARL RETAIL II, LLC, 66 PEARL RETAIL ISG, LLC, 173 BWAY BLUE LLC, 262 MOTT BLUE TIC LLC, 444 86 BLUE LLC, MIAMI

DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, TRUE BLUE ASSOCIATES LLC, STAR OF DAVID, IRAYMOND-77 WARREN LLC, SABRA ASSOCIATES

LLC, 315 SEVENTH RETAIL LLC, WEBWAY ASSOCIATES LLC, and CENTURY 21, INC.,

Plaintiffs,

v.

STARR SURPLUS LINES INSURANCE CO., ALLIANZ GLOBAL RISKS US INSURANCE CO., AXIS SURPLUS LINES INSURANCE CO., LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE

CO., EVANSTON INSURANCE CO., LANDMARK AMERICAN INSURANCE CO., QBE SPECIALTY INSURANCE CO., GREAT AMERICAN FIDELITY INSURANCE CO., and CERTAIN UNDERWRITERS AT LLOYDS SUBSCRIBING TO POLICY Nos. PG1902704, PG1902346, PG1902696, PG1902698, PG1902707, PG1902702, and PG1902712,

Defendants.

.

Case No. 1:20-CV-07437 (LGS) (SLC)

NOTICE OF APPEARANCE

TO THE CLERK OF THE COURT AND ALL PARTIES OF RECORD:

Please enter my appearance as counsel in this case for Defendant Allianz Global Risks US

Insurance Co.

I certify that I am admitted to practice before this Court.

[SIGNATURES ON FOLLOWING PAGE]


1

20-12097-scc Doc 63-8 Filed 09/22/20 Entered 09/22/20 13:11:37 Doc 9 Notice Pg 1 of 2

2

Dated: New York, New York

September 18, 2020 Respectfully submitted,

DLA PIPER LLP (US)

/s/ Michael Hynes

Michael Hynes (MH5086)

DLA PIPER LLP (US)

1251 Avenue of the Americas

New York, NY 10020

Tel: (212) 335-4942

Fax: (212) 884-8642

[email protected]

Attorney for Defendant Allianz Global Risks

US Insurance Co.


2

20-12097-scc Doc 63-8 Filed 09/22/20 Entered 09/22/20 13:11:37 Doc 9 Notice Pg 2 of 2

1


SOUTHERN DISTRICT OF NEW YORK

CENTURY 21 DEPARTMENT STORES, LLC, 66 PEARL RETAIL, LLC, 66 PEARL RETAIL II, LLC, 66 PEARL RETAIL ISG, LLC, 173 BWAY BLUE LLC, 262 MOTT BLUE TIC LLC, 444 86 BLUE LLC, MIAMI

DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, TRUE BLUE ASSOCIATES LLC, STAR OF DAVID, IRAYMOND-77 WARREN LLC, SABRA ASSOCIATES

LLC, 315 SEVENTH RETAIL LLC, WEBWAY ASSOCIATES LLC, and CENTURY 21, INC.,

Plaintiffs,

v.

STARR SURPLUS LINES INSURANCE CO., ALLIANZ GLOBAL RISKS US INSURANCE CO., AXIS SURPLUS LINES INSURANCE CO., LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE

CO., EVANSTON INSURANCE CO., LANDMARK AMERICAN INSURANCE CO., QBE SPECIALTY INSURANCE CO., GREAT AMERICAN FIDELITY INSURANCE CO., and CERTAIN UNDERWRITERS AT LLOYDS SUBSCRIBING TO POLICY Nos. PG1902704, PG1902346, PG1902696, PG1902698, PG1902707, PG1902702, and PG1902712,

Defendants.

.


DEFENDANT ALLIANZ GLOBAL

RISKS US INSURANCE CO.’S

RULE 7.1 CORPORATE DISCLOSURE

STATEMENT

Pursuant to Rule 7.1 of the Federal Rules of Civil Procedure, Defendant Allianz Global

Risks US Insurance Co. (“AGR US”), states that it is a non-governmental corporation, organized

under the laws of Illinois, with its principal place of business in Chicago, Illinois. Allianz of

America, Inc. is the parent corporation for AGR US and owns eighty percent (80%) of its voting

stock. The remaining twenty percent (20%) of the AGR US voting stock is owned by AGCS

International Holding B.V. Each of Allianz of America, Inc. and AGCS International Holding


1


2

B.V. are wholly owned indirect subsidiaries of Allianz SE, a publicly traded company. Thus,

Allianz SE indirectly owns 10% percent or more of the AGR US Stock.


September 18, 2020 Respectfully submitted,

DLA PIPER LLP (US)

/s/ Michael Hynes

Michael Hynes (MH5086)

DLA PIPER LLP (US)

1251 Avenue of the Americas

New York, NY 10020

Tel: (212) 335-4942

Fax: (212) 884-8642

[email protected]

Attorney for Defendant Allianz Global Risks

US Insurance Co.


2


UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

CENTURY 21 DEPARTMENT STORES, LLC, 66 PEARL RETAIL, LLC, 66 PEARL RETAIL II, LLC, 66 PEARL RETAIL ISG, LLC, 173 BWAY BLUE LLC, 262 MOTT BLUE TIC LLC, 444 86 BLUE LLC, MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, TRUE BLUE ASSOCIATES LLC, STAR OF DAVID, IRAYMOND-77 WARREN LLC, SABRA ASSOCIATES LLC, 315 SEVENTH RETAIL LLC, WEBWAY ASSOCIATES LLC, and CENTURY 21, INC.,

Plaintiffs,

v.

STARR SURPLUS LINES INSURANCE CO., ALLIANZ GLOBAL RISKS US INSURANCE CO., AXIS SURPLUS LINES INSURANCE CO., LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE CO., EVANSTON INSURANCE CO., LANDMARK AMERICAN INSURANCE CO., QBE SPECIALTY INSURANCE CO., GREAT AMERICAN FIDELITY INSURANCE CO., and CERTAIN UNDERWRITERS AT LLOYDS SUBSCRIBING TO POLICY Nos. PG1902704, PG1902346, PG1902696, PG1902698, PG1902707, PG1902702, and PG1902712,

Defendants.


ALLIANZ GLOBAL RISKS US INSURANCE CO.’S

ANSWER TO THE PLAINTIFFS’ COMPLAINT Michael Hynes (MH5086) DLA PIPER LLP (US) 1251 Avenue of the Americas New York, NY 10020 Tel: (212) 335-4942 Fax: (212) 884-8642

[email protected] Attorney for Defendant Allianz Global Risks US Insurance Co.


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Defendant ALLIANZ GLOBAL RISKS US INSURANCE CO. (“AGR US”) by its

attorneys, DLA PIPER (US), answering the Plaintiffs' Complaint, allege as follows:

RESPONSES TO ALLEGATIONS

INTRODUCTION

1. Defendant AGR US denies knowledge or information sufficient to form a belief as

to the truth of the allegations in paragraph 1 of the Complaint.






to the truth of the allegations in paragraph 4 of the Complaint.1

5. Defendant AGR US admits that Plaintiff Century 21 Department Stores, LLC (or

affiliated, subsidiary or otherwise related entities) operates retail department stores located in four

states. Defendant AGR US denies knowledge or information sufficient to form a belief as to the

truth of the balance of the allegations in paragraph 5 of the Complaint.





8. In response to paragraph 8 of the Complaint, Defendant AGR US admits that it

received a premium in connection with the insurance policies that it issued to Plaintiffs CENTURY

1 Defendant AGR US denies that the opinion attributed to a fictional television character in footnote 1 of the Complaint is a factual allegation requiring a response.


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21 DEPARTMENT STORES, LLC, 173 BWAY BLUE LLC, 262 MOTT BLUE TIC LLC, 444

86 BLUE LLC, MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, SABRA

ASSOCIATES LLC, 315 SEVENTH RETAIL LLC, and CENTURY 21, INC. Defendant AGR

US further admits that certain government entities issued orders in an attempt to stop the spread

of COVID-19. Defendant AGR US respectfully refers the Court to its policies for their terms,

conditions, exclusions and limitations. As to the remaining allegations in paragraph 8 of the

Complaint, Defendant AGR US is without knowledge or information sufficient to form a belief as

to the truth of the allegations.

9. In response to paragraph 9 of the Complaint, Defendant AGR US states that it has

timely adjusted the insurance claim at issue in this action and paid Plaintiffs $1 million in response

to the insurance claim. Defendant AGR US denies the remaining allegations in paragraph 9 of the

Complaint insofar as they are directed to AGR US.

10. Defendant AGR US denies the allegations in paragraph 10 of the Complaint.

PARTIES


to the truth of the allegations in paragraph 11 of the Complaint.2





2 Defendant AGR US notes that Plaintiff Century 21 Department Stores, LLC is the only party—Plaintiff or Defendant—that is currently a party to bankruptcy proceedings. See, e.g., Cause 20-12097; In Re Century 21 Department Stores LLC; in the U.S. Bankruptcy Court for the Southern District of New York at Dkt. 1.


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28. Defendant AGR US admits the allegations in paragraph 28 of the Complaint.


















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THE NOVEL CORONAVIRUS AND ITS EFFECTS

38. Defendant AGR US admits that SARS-CoV-2 is commonly referred to as COVID-

19 and a global pandemic. As to the remaining allegations in paragraph 38 of the Complaint,

Defendant AGR US denies knowledge or information sufficient to form a belief as to the truth of




40. Defendant AGR US denies knowledge or information to sufficient to form a belief

as to the truth of the remaining allegations in paragraph 40 of the Complaint and respectfully refers

the Court to the World Health Organization (the “WHO”) for the contents of its public statements.

41. Defendant AGR US admits that it is commonly understood that the SARS-COV-2

virus can be transmitted from one human to another. Defendant AGR US denies knowledge or

information sufficient to form a belief as to the truth of the balance of the allegations in paragraph

41 of the Complaint and respectfully refers the Court to the WHO for the contents to its public

statements to the unidentified studies referenced in paragraph 41 of the Complaint for its contents.


to the truth of the allegations in paragraph 42 of the Complaint and respectfully refers the Court to

the Center for Disease Control (“CDC”) for the content of its public statements.

43. Defendant AGR US admits that COVID-19 has received widespread media

attention and otherwise denies knowledge or information sufficient to form a belief as to the truth

of the remaining allegations in paragraph 43 of the Complaint.


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44. Defendant AGR denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph 44 of the Complaint and respectfully refers the Court to

the CDC for the content of its public statements.




48. Defendant AGR US respectfully refers the Court to the CDC for the content of its

public statements and to the unidentified studies referenced in paragraph 48 of the Complaint. for

their contents. Defendant AGR US otherwise denies knowledge or information sufficient to form

a belief as to the truth the allegations in paragraph 48 of the Complaint.

49. Defendant AGR US respectfully refers the Court to the referenced media article for

its contents and otherwise denies knowledge or information sufficient to form a belief as to the

truth of the allegations in paragraph 49 of the Complaint.

50. Defendant AGR US respectfully refers the Court to the referenced media article for

its contents and otherwise denies knowledge or information sufficient to form a belief as to the

truth the allegations in paragraph 50 of the Complaint.


to the truth the allegations in paragraph 51 of the Complaint.

52. Defendant AGR US admits that certain government entities issued orders to prevent

the spread of COVID-19 and respectfully refers the Court to those orders for their contents. As to

the remaining allegations in paragraph 52, Defendant AGR US denies knowledge or information

sufficient to form a belief as to the truth of those allegations in paragraph 52 of the Complaint.


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53. Defendant AGR US denies the allegations in paragraph 53 of the Complaint and

respectfully refers the Court to orders referenced in paragraph 53 of the Complaint for their

contents.

54. Defendant AGR US admits that Plaintiffs purport to quote from various orders

issued by certain government entities and respectfully refer the Court to those orders for their

contents. Defendant AGR US otherwise denies the allegations in paragraph 54 of the Complaint.




57. Defendant AGR US admits that Plaintiffs submitted a Sworn Statement in Partial

Proof of Loss dated May 26, 2020 and respectfully refers the Court to that submission for its


58. Defendant AGR US admits that Plaintiffs submitted certain documents as part of

its Sworn Statement in Partial Proof of Loss and respectfully refers the Court to those documents

for their contents. Defendant AGR US otherwise denies the allegations in paragraph 58 of the

Complaint.

THE CENTURY 21 INSURANCE PROGRAM

59. Defendant AGR US denies the allegations in paragraph 59 of the Complaint other

than to admit that Plaintiff asserts a breach of contract claim in this action.

60. Defendant AGR US admits that Plaintiffs procured a property insurance program

and respectfully refers the Court to the associated insurance policies for their terms, conditions,

exclusions and limitations. Defendant AGR US otherwise denies the allegations in paragraph 60

of the Complaint.


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61. To the extent that the allegations in paragraph 61 of the Complaint are directed

against Defendant AGR US, it admits that the policy it issued to Century 21 Department Stores,

LLC is listed on Schedule A to the Complaint and respectfully refers the Court to the AGR US

Policy for its terms, conditions, exclusions and limitations. As to the remaining allegations in

paragraph 61 of the Complaint, Defendant AGR US denies knowledge or information sufficient

to form a belief as to the truth of the allegations in paragraph 61 of the Complaint.

62. Defendant AGR US admits that Plaintiffs CENTURY 21 DEPARTMENT

STORES, LLC, 173 BWAY BLUE LLC, 262 MOTT BLUE TIC LLC, 444 86 BLUE LLC,

MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, SABRA ASSOCIATES LLC, 315

SEVENTH RETAIL LLC, and CENTURY 21, INC. are Named Insureds under the AGR US

Policy. Defendant AGR US respectfully refers the Court to AGR US Policy for its terms,

conditions, limitations and exclusions. Defendant AGR US otherwise denies knowledge or


Complaint.

63. Defendant AGR US admits that the AGR US Policy provides certain coverages to

Plaintiffs and respectfully refers the Court to AGR US Policy for its terms, conditions, limitations,

and exclusions. Defendant AGR US otherwise denies knowledge or information sufficient to form

a belief as to the truth of the allegations in paragraph 63 of the Complaint.

64. Defendant AGR US admits that the AGR US Policy has a Policy Period of August

1, 2019 to August 1, 2020 and respectfully refers the Court to the AGR US Policy for its terms,

conditions, exclusions and limitations. Defendant AGR US otherwise denies knowledge or


Complaint.


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65. Defendant AGR US admits that the AGR US Policy was in effect as of March 2020

and July 8, 2020 and respectfully refers the Court to the AGR US Policy for its terms, conditions,

exclusions and limitations. Defendant AGR US otherwise denies knowledge or information

sufficient to form a belief as to the truth of the allegations in paragraph 65 of the Complaint.

66. Defendant AGR US denies the allegations in paragraph 66 of the Complaint and

respectfully refers the Court to the AGR US Policy for its terms, conditions, limitations and

exclusions.

67. Defendant AGR US admits that the AGR US Policy contains the quoted language

in paragraph 67 of the Complaint (“all risk”) and respectfully refers the Court to the AGR US

Policy for its terms, conditions, limitations and exclusions. Defendant AGR US otherwise denies

the allegations in paragraph 67 of the Complaint.



69. Defendant AGR US admits that that the AGR US Policy contains the language

quoted in paragraph 69 of the Complaint and respectfully refers the Court to the AGR US Policy

for all of its terms, conditions, exclusions and limitations. Defendant AGR US otherwise denies


70. Defendant AGR US respectfully refers the Court to the AGR US Policy for its

terms, conditions, exclusions and limitations and otherwise denies knowledge or information

sufficient to form a belief as to the truth of the allegations in paragraph 70 of the Complaint.

71. Defendant AGR US admits that the AGR US Policy provides certain coverages

subject to its terms, conditions, limitations and exclusions. Defendant AGR US otherwise denies



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terms, conditions, exclusions and limitations, and otherwise denies the allegations in paragraph 72

of the Complaint.


terms, conditions, exclusions and limitations, and otherwise denies the allegations in paragraph 73

of the Complaint.

74. Defendant AGR US admits that the AGR US Policy contains the quoted language

in paragraph 74 of the Complaint and respectfully refers the Court to the AGR US Policy for its

terms, conditions, exclusions and limitations. Defendant AGR US otherwise denies the allegations

of paragraph 74 of the Complaint.


terms, conditions, limitations, and exclusions, and otherwise denies the allegations of paragraph

75 of the Complaint.



77. Defendant AGR US admits that the AGR US Policy contains the language quoted

in paragraph 77 of the Complaint, and respectfully refers the Court to the AGR US Policy for its








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79. Defendant AGR US denies the allegations in paragraph 79 of the Complaint, and

respectfully refers the Court to the AGR US Policy for its terms, conditions, exclusions and

limitations.






of paragraph 81.











86. Defendant AGR US is without knowledge or information sufficient to form a belief

as to the truth of the allegations.




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terms, conditions, exclusions and limitations and otherwise denies the allegations in paragraph 89

of the Complaint.






in paragraph 91 of the Complaint.


to the truth of the allegations in paragraph 92 of the Complaint, and respectfully refers the Court

to the AGR US Policy for its terms, conditions, exclusions and limitations. Defendant AGR US

otherwise denies the allegations in paragraph 92 of the Complaint..








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terms, conditions, exclusions and limitations, and otherwise denies the allegations of paragraph 95

of the Complaint.





terms, conditions, exclusions and limitations.



99. Defendant AGR US denies the allegations of paragraph 99 to the Complaint.














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106. Defendant AGR respectfully refers the Court to the AGR US Policy for its terms,

conditions, exclusions and limitations, and otherwise denies the allegations of paragraph 106 of

the Complaint.

107. Defendant AGR US admits that the AGR Policy contains the quoted language in

paragraph 107 of the Complaint, and respectfully refers the Court to the AGR US Policy for its

terms, conditions, exclusions and limitations. Defendant AGR US otherwise denies knowledge or

information sufficient to form a belief as to the truth of the balance of the allegations in paragraph

107 of the Complaint.

DEFENDANT AGR US’ RESPONSES TO PLAINTIFFS’ CLAIMED LOSSES

108. Defendant AGR US admits that Plaintiffs submitted a Sworn Statement in Partial

Proof of Loss dated May 26, 2020 and respectfully refers the Court to that submission for its



no response is required. To the extent a response is deemed necessary, AGR US denies the


110. Defendant AGR US admits that, on June 16, 2020, the Independent Adjuster

designated in the AGR US Policy sent Plaintiffs correspondence reserving all rights in response to

the Sworn Statement in Partial Proof of Loss and requesting information needed to investigate and

evaluate the claim. Defendants AGR US respectfully refers the Court to that correspondence for

its contents. Defendant AGR US otherwise denies the remaining allegations in paragraph 110 of

the Complaint.


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111. Defendant AGR US respectfully refers the Court to the correspondence between

Plaintiffs and the Independent Adjuster for their contents and otherwise denies the allegations in












117. Defendant AGR US respectfully refers the Court to the correspondence between

Plaintiffs and the Independent Adjuster for their contents and otherwise denies the allegations in









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ANSWER TO THE FIRST CAUSE OF ACTION (Breach of Contract)

123. Defendant AGR US repeats, reiterates and realleges each and every answer to each

and every allegation contained in paragraphs 1 through 122 of the Complaint with the same force

and effect as if fully set forth at length herein in answer to paragraph 123 of the Complaint.

124. Defendant AGR US admits that the AGR US Policy is a binding contract with the

Named Insureds and respectfully refers the Court to the AGR US Policy for its terms, conditions,

exclusions and limitations. Defendant AGR US otherwise denies knowledge or information

sufficient to form a belief as to the truth of the balance of the allegations in paragraph 124 of the

Complaint.





ANSWER TO THE SECOND CAUSE OF ACTION (Breach of Contract – Implied Covenant of Good Faith and Fair Dealing)

129. Defendant AGR US repeats, reiterates and realleges each and every answer to each

and every allegation contained in paragraphs 1 through 128 of the Complaint with the same force

and effect as if fully set forth at length herein in answer to paragraph 129 of the Complaint.


no response is required. To the extent a response is deemed necessary, Defendant AGR US denies

the allegations in paragraph 130.




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135. Defendant AGR US denies the Plaintiffs are entitled to the relief requested in the

unnumbered “Wherefore” paragraph following paragraph 134 of the Complaint.

AFFIRMATIVE AND OTHER DEFENSES

FIRST DEFENSE

136. This Court lacks jurisdiction over this action and each and every cause of action set

forth in the Complaint.

SECOND DEFENSE

137. The Complaint is barred, in whole or in part, because it fails to state a cause of

action against Defendant AGR US upon which relief may be granted.

THIRD DEFENSE

138. The AGR US Policy contains the following exclusion, “This ‘policy’ does not

cover . . . loss of market or loss of use.” There is no coverage for Plaintiffs’ claims to the extent

they arise from these perils.

FOURTH DEFENSE

139. The AGR US Policy contains the following exclusion:

This "policy" does not cover the following, but if physical loss or damage not otherwise excluded by this "policy" to Insured Property at Insured Location(s) results, then only such resulting physical loss or damage is covered by this "policy":

f. disease, infestation.

There is no coverage under the AGR US Policy because of the application of this exclusion.

FIFTH DEFENSE

140. The Allianz Policy also excludes coverage for:


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(1) loss, damage, cost or expense incurred by the Insured; and (2) fines or penalties imposed on the Insured at the order of any government agency, court or any other authority; in connection with the actual or suspected presence of "contaminants" arising or resulting from any cause whatsoever, except as otherwise provided under DECONTAMINATION COSTS and LAND AND WATER CONTAMINANTS CLEANUP, REMOVAL AND DISPOSAL.

The Allianz Policy defines "contaminants" to include "virus." There is no coverage for Plaintiffs’

claims because of the application of this exclusion.

SIXTH DEFENSE

141. Defendant AGR US has already paid to Plaintiffs the maximum amount due under

the AGR US Policy in response to their claims, and thus Plaintiffs are entitled to no further

recovery for their insurance claim.

SEVENTH DEFENSE

142. The obligations of Defendant AGR US are strictly defined, limited and controlled

by the terms, conditions, exclusions and limitations of the AGR US Policy, including without

limitation the "Other Insurance" clause set forth in Section V.G. of the AGR US Policy, and

Defendant AGR US has no other legally enforceable obligation to any Plaintiff.

EIGHTH DEFENSE

143. The coverage obligations of Defendant AGR US, if any, are strictly limited to the

participation of AGR US in the AGR US Policy, which is "$50,000,000 (being 20% ) part of

$250,000 excess of Policy deductible.”

NINTH DEFENSE

144. Plaintiffs have the burden of proving any alleged direct physical damage, their

alleged losses, that their damages were caused by a covered cause of loss, and that each and every


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one of the elements required to trigger coverage has occurred or otherwise been satisfied. Since

Plaintiffs have not done so, there is no coverage under the AGR US Policy.

TENTH DEFENSE

145. Plaintiffs' claims are not covered under the AGR US Policy because there has been

no direct physical loss or damage to any Insured Property at Insured Location(s) or any other

relevant property as required by the AGR US Policy.

ELEVENTH DEFENSE

146. Plaintiffs' claims are or may be barred in whole or in part to the extent any Plaintiff

failed to perform or satisfy obligations, covenants, conditions precedent or conditions subsequent

under the AGR US Policy, including without limitation the "Requirements in Case of Loss" clause

in Section IV.C.8. of the AGR US Policy.

TWELFTH DEFENSE

147. Defendant AGR US has performed all of its obligations and has otherwise satisfied

all of the terms and conditions for which it is responsible under the AGR US Policy, in accordance

with the terms, conditions, exclusions, limitations and other provisions of the AGR US Policy.

THIRTEENTH DEFENSE

148. Coverage under the AGR US Policy is barred to the extent that the losses and

damages alleged in the Complaint are not covered under the terms, conditions, exclusions and

limitations of the AGR US Policy.

FOURTEENTH DEFENSE

149. Plaintiffs’ claim and alleged loss or damage are subject to, and limited by, limits,

sub limits and deductibles under the AGR US Policy.

FIFTEENTH DEFENSE


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150. Plaintiffs have failed to make reasonable efforts to mitigate or avoid their damages,

if any.

SIXTEENTH DEFENSE

151. Plaintiffs are not entitled to recover from Defendant AGR US their costs, expenses,

or attorney's fees in this action.

SEVENTEENTH DEFENSE

152. Plaintiffs are not entitled to recover from Defendant AGR US any liquidated,

consequential or other extra-contractual damages.

EIGHTEENTH DEFENSE

153. Defendant AGR US avails itself of and adopts such other defenses raised by any

other Defendant(s) as may be applicable to Defendant AGR US.

NINETEENTH DEFENSE

154. Any Plaintiff that is not an insured under and as defined by the AGR US Policy

has failed to state a claim upon which relief can be granted.

TWENTIETH DEFENSE

155. Some or all of the Plaintiffs lack standing, capacity or authority to have brought

this action or to maintain it.

TWENTY-FIRST DEFENSE

156. Plaintiffs have no rights, title or interest in the Plaintiffs' alleged insurance claim,

or are otherwise not a real party in interest.

TWENTY-SECOND DEFENSE

157. Defendant AGR US reserves the right to amend, supplement or otherwise modify

this Answer or any of the defenses set forth herein, including by asserting any and all applicable


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defenses which may later appear to be applicable.

WHEREFORE, Defendant AGR US respectfully requests this Honorable Court enter

judgment in its favor and against Plaintiffs as follows:

(1) On the First Cause of Action, declaring Defendant AGR US has not breached the AGR

US Policy and that Defendant AGR US has no liability in respect of the Plaintiffs' claimed loss or

any other amounts;

(2) On the Second Cause of Action, declaring Defendant AGR US has not breached the

AGR US Policy or any of its duties, contractual or otherwise, to Plaintiffs, and that Defendant

AGR US has no liability in respect of the Plaintiffs' claimed loss, attorney's fees, costs or any other

amounts;

(3) Declaring Plaintiffs are not entitled to any fees or costs of this action;

(4) Dismissing the Complaint with prejudice, together with the costs and disbursements of

this action and for any expenses incurred in the defense thereof, including without limitation

attorney's fees and costs;

(5) Declaring there is no coverage for Plaintiffs’ insurance claims as against AGR US ;

(6) Declaring Plaintiffs' claims, whether or not related to insurance, to be without merit;

and

(7) Awarding to Defendant AGR US such further equitable, declaratory or other relief to

which AGR US may be entitled and which this Court may determine is fair and just.


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Dated: New York, New York September 18, 2020 Respectfully submitted, DLA PIPER LLP (US)

/s/ Michael Hynes Michael Hynes (MH5086) DLA PIPER LLP (US) 1251 Avenue of the Americas New York, NY 10020 Tel: (212) 335-4942 Fax: (212) 884-8642

[email protected] Attorney for Defendant Allianz Global Risks US Insurance Co.


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Century 21 Department Stores LLC, 66 Pearl Retail, LLC, 66 Pearl Retail II, LLC, 66 Pearl Retail ISG, LLC, 173 Bway Blue LLC, 262 Mott Blue TIC LLC, 444 86 BLUE LLC, MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, TRUE BLUE ASSOCIATES LLC, STAR OF DAVID, IRAYMOND-77 WARREN LLC, SABRA ASSOCIATES LLC, 315 SEVENTH RETAIL LLC, WEBWAY ASSOCIATES LLC, AND CENTURY 21 INC.

Plaintiffs, v. STARR SURPLUS LINES INSURANCE CO., ALLIANZ GLOBAL RISKS US INSURANCE CO., AXIS SURPLUS LINES INSURANCE CO., LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE CO., EVANSTAN INSURANCE CO., LANDMARK AMERICAN INSURANCE CO., and CERTAIN UNDERWRITERS AT LLOYDS SUBSCRIBING TO POLICY Nos. PG1902704, PG1902346, PG1902696, PG1902698, PG1902707, PG1902702, and PG1902712

Defendants.

Civil Action No.: 1:20-cv-07437-LGS NOTICE OF APPEARANCE OF COUNSEL

PLEASE TAKE NOTICE that Joanna L. Young of Kennedys CMK LLP hereby enters her

appearance as counsel for Defendant, AXIS Surplus Insurance Company i/s/h/a AXIS Surplus

Lines Insurance Co., in the above-entitled case. The Court and counsel are requested to

serve Joanna L. Young of Kennedys CMK LLP with all pleadings, correspondence and notices.

Dated: New York, New York September 18, 2020

KENNEDYS CMK LLP

/s/ Joanna L. Young Joanna L. Young, Esq. Attorneys for Defendant AXIS Surplus Insurance Company i/s/h/a AXIS Surplus Lines Insurance Co. 570 Lexington Avenue, 8th Floor New York, New York 10022 (212) 252-0004 Fax. (212) 832-4920 [email protected]


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mailto:[email protected]




Defendants.

Civil Action No.: 1:20-cv-07437-LGS NOTICE OF APPEARANCE OF COUNSEL

PLEASE TAKE NOTICE that Kristin V. Gallagher of Kennedys CMK LLP hereby enters her

appearance as counsel for Defendant, AXIS Surplus Insurance Company i/s/h/a AXIS Surplus

Lines Insurance Co., in the above-entitled case. The Court and counsel are requested to

serve Kristin V. Gallagher of Kennedys CMK LLP with all pleadings, correspondence and

notices.


KENNEDYS CMK LLP

/s/ Kristin V. Gallagher Kristin V. Gallagher, Esq. Attorneys for Defendant AXIS Surplus Insurance Company i/s/h/a AXIS Surplus Lines Insurance Co. 120 Mountain View Boulevard Post Office Box 650 Basking Ridge, New Jersey 07920 (908) 848-6300


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Fax. (908) 647-8390 [email protected]


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Defendants.

Civil Action No.: 1:20-cv-07437-LGS

Rule 7.1 CORPORATE DISCLOSURE

STATEMENT

Under Rule 7.1 of the Federal Rules of Civil Procedure, and to enable District Judges

and Magistrate Judges of the Court to evaluate possible disqualification or recusal, the

undersigned counsel for AXIS Surplus Insurance Company (a private non-governmental party)

certifies that the following are corporate parents, affiliates and/or subsidiaries of said party,

which are publicly held.

• AXIS Surplus Insurance Company is an Illinois domiciled insurer that is

wholly owned by AXIS Insurance Company, also an Illinois domiciled

insurer, which in turn is wholly owned by AXIS Specialty U.S.

Holdings, Inc., a Delaware domiciled holding company, which in turn

is wholly owned by AXIS Specialty Global Holdings Limited, an Ireland


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domiciled holding company, which is wholly owned by AXIS Capital

Holdings Limited, a Bermuda domiciled holding company that is

publicly traded on the New York Stock Exchange.


KENNEDYS CMK LLP /s/ Kristin V. Gallagher Kristin V. Gallagher Joanna L. Young Attorneys for Defendant AXIS Surplus Insurance Company i/s/h/a AXIS Surplus Lines Insurance Co. 570 Lexington Avenue – 8th Floor New York, New York 10022 (212) 252-0004


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Defendants.

Civil Action No.: 1:20-cv-07437-LGS ANSWER

Defendant, AXIS Surplus Insurance Company i/s/h/a AXIS Surplus Lines Insurance Co.

(hereinafter “AXIS”), by and through its counsel, Kennedys CMK LLP, answers the Complaint

upon information and belief as follows:

INTRODUCTION

1. The allegations contained in paragraph 1 of the Complaint contains a statement of

Plaintiff’s position, to which no answer is required. To the extent that an answer is required, AXIS

denies having knowledge or information sufficient to form a belief as to the truth and accuracy of

the allegations contained in paragraph 1 of the Complaint.




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8. Defendant, AXIS, denies the allegations contained in paragraph 8 of the

Complaint as alleged.


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Complaint.

PARTIES

11. Defendant, AXIS, denies having knowledge or information sufficient to form a

belief as to the truth and accuracy of the allegations contained in paragraph 11 of the

Complaint.



Complaint.



Complaint.



Complaint.



Complaint.



Complaint.


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4



Complaint.



Complaint.



Complaint.



Complaint.



Complaint.



Complaint.



Complaint.



Complaint.


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5



Complaint.



Complaint.



Complaint.



Complaint.

29. Defendant, AXIS, denies the allegation contained in paragraph 29 of the

Complaint as alleged, except admits that AXIS Surplus Insurance Company was and is a

foreign corporation organized and existing under and by virtue of the laws of Illinois, having

its principal place of business in Atlanta, Georgia.



Complaint.



Complaint.



Complaint.


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Complaint.



Complaint.



Complaint.



Complaint.



Complaint.

THE NOVEL CORONA VIRUS AND ITS EFFECTS










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Complaint.


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8



Complaint.



Complaint.



Complaint.



Complaint.



Complaint.



Complaint.



Complaint.



Complaint.


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9



Complaint.



Complaint.



Complaint.



Complaint.



Complaint.








Complaint.




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Complaint, except admits that AXIS issued an excess property policy to Century 21, LLC

under policy number EAF632184-19, in effect for the policy period April 1, 2019 to April 1,

2020, with limits of $15 million excess of $100,000 million excess of deductibles.



Complaint insofar as they concern other insurers and/or insurance policies, and denies the

allegations contained in paragraph 62 of the Complaint as alleged with respect to the AXIS

Policy.



Complaint insofar as they concern other insurers and/or insurance policies, and denies the

allegations contained in paragraph 63 of the Complaint as alleged with respect to the AXIS

Policy.



Complaint insofar as they concern other insurers and/or insurance policies, except admits

that the AXIS policy was in effect August 1, 2019 to August 1, 2020.



Complaint insofar as they concern other insurers and/or insurance policies, and with respect

to AXIS, denies the allegations in paragraph 65 of the Complaint as alleged.






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the allegations contained in paragraph 68 as they apply to AXIS.



Complaint.







Complaint insofar as they concern other insurers and/or insurance policies, except denies

the allegations contained in paragraph 71 as alleged as they apply to AXIS.








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Complaint.











Complaint.



Complaint.








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Complaint.



Complaint.











Complaint.








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the allegations contained in paragraph 87 as alleged.



Complaint.











Complaint.










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Complaint.











Complaint.












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Complaint.















Complaint.






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Complaint.


Complaint.


Complaint.



Complaint.



Complaint.



Complaint.



Complaint.


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Complaint.



Complaint.



Complaint.



Complaint.



Complaint.


Complaint.


Complaint.



Complaint.


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AS A FOR A FIRST CAUSE OF ACTION AGAINST ALL DEFENDANTS

123. Defendant, AXIS, repeats, reiterates and realleges each and every response to

the allegations contained in paragraphs 1 through 122, inclusive, as if fully set forth at length

herein.



Complaint.



Complaint.




Complaint.


Complaint.

AS AND FOR A SECOND CAUSE OF ACTION AGAINST ALL DEFENDANTS

129. Defendant, AXIS, repeats, reiterates and realleges each and every response to

the allegations contained in paragraphs 1 through 128, inclusive, as if fully set forth at length

herein.




Complaint.


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Complaint.


Complaint.


Complaint.

AS AND FOR A FIRST SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

There has been no physical loss of or damage to the property insured under the AXIS

policy and, therefore, coverage under the AXIS policy has not been triggered by Plaintiffs’

claims.

AS AND FOR A SECOND SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The Business Interruption coverage under the AXIS Policy has not been implicated by

the claims asserted by Plaintiffs because there has been no damage caused directly to the

insured property by a peril not otherwise excluded by the AXIS policy.

AS AND FOR A THIRD SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The Extra Expense coverage under the AXIS Policy has not been implicated by the

claims asserted by Plaintiffs, as there has been no damage or destruction to insured

property.

AS AND FOR A FOURTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The Rents and Rental Value coverage under the AXIS Policy has not been implicated

by the claims asserted by Plaintiffs because there has been no damage or loss to the

insured property and there is no evidence that the insured property, or a portion thereof, is

untentantable or has rendered any portion of the insured property untenantable.


20


21

AS AND FOR A FIFTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The Interruption by Civil Authority coverage under the AXIS Policy has not been

implicated by the claims asserted by Plaintiffs because access to the vicinity has not been

restricted by order of civil authority due to a peril not otherwise excluded.

AS AND FOR A SIXTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

There is no Ingress/Egress coverage available under the AXIS Policy for the claims

asserted by Plaintiffs because there has been no direct physical loss or damage to property

of a type insured under the AXIS policy within five statute miles of the insured property, by

a peril not otherwise excluded, where ingress to or egress from the insured property is

restricted.

AS AND FOR A SEVENTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

There is no Consequential Reduction in Values coverage under the AXIS Policy for the

claims asserted by Plaintiffs because (1) there has not been damage to one member of a

pair or set through insured peril; (2) there has been no reduction in value of undamaged

inventory located at a distribution/warehouse owned and/or operated by the Plaintiffs due

to damage at a covered retail location resulting from an insured peril; and (3) there has

been no reduction in value of undamaged inventory located at a covered retail location due

to damage at that location resulting from an insured peril.

AS AND FOR AN EIGHTH SEPARATE, DISTINCT AND

COMPLETE AFFIRMATIVE DEFENSE

The Pollutants and Contaminants Exclusion to the AXIS policy applies to bar

coverage for the claim because pollutants or contaminants includes those materials that

can cause or threaten damage to human health or human welfare or cause or threaten


21


22

damage, deterioration, loss of value, marketability or loss of use to property, and

specifically includes, virus.

AS AND FOR A NINTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The Nuclear, Chemical and Biological Exclusion endorsement applies to bar coverage

for the claim because it precludes coverage for loss or damage arising directly or indirectly

from the dispersal, application or release of, or exposure to, biological materials or agents

that are harmful to property or human health, all whether controlled or uncontrolled, or

due to any act or condition incident to any of the foregoing, whether such loss be direct or

indirect, proximate or remote, or be in whole or in part caused by, contributed to, or

aggravated by, any physical loss or damage insured against by the AXIS policy, however

such dispersal, application, release or exposure may have been caused.

AS AND FOR A TENTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

Plaintiffs, Miami DD 101 Blue LLC, True Blue Associates LLC, Star of David,

IRaymond-77 Warren LLC, Sabra Associates LLC, Webway Associates LLC and Century 21,

Inc. are not insureds or additional insureds under the AXIS policy.

AS AND FOR AN ELEVENTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The AXIS policy contains a $250,000 per occurrence deductible for all retail

locations, except a $100,000 per occurrence deductible for 1085 Old Country Road a/k/a

89 Frost Street a/k/a 1111 Old Country Road a/k/a 770 Main Street, Westbury, New York.

AS AND FOR A TWELFTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The Loss of Market/Delay of Use exclusion to the AXIS policy bars coverage for the

claim resulting from loss of market or delay of use due to the COVID-19 pandemic and

resulting governmental orders.


22


23

AS AND FOR A THIRTEENTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The AXIS policy defines “occurrence” to mean any one loss, disaster or casualty or

series of losses, disasters or casualties arising out of one event.

AS AND FOR A FOURTEENTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The Commercial Property Exclusion endorsement to the AXIS policy applies to bar

coverage for the claim, including (a) loss or damage caused by, resulting from, contributed

to or made worse by actual, alleged or threatened release, discharge, escape or dispersal

of pollutants or contaminants, however caused; (e) costs associated with the enforcement

or any ordinance or law which requires the Insured or others to test for, monitor, clean up,

remove, contain, treat, detoxify or neutralize, or in any way respond to or assess the

effects of pollutants or contaminants; (g) any cost to store or otherwise dispose of any

property because pollutants or contaminants infect the property; or (h) any expense for the

investigation or defense of any loss, damages or any cost, loss of use expense, fine or

penalty or for any expense or claim or suit related to any of the above.

AS AND FOR A FIFTEENTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The AXIS policy does not include the Murder, Suicide and Infectious or Contagious

Disease Extension.

AS AND FOR A SIXTEENTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The AXIS policy has sublimits of $2,500,000 per occurrence for Extra Expense

coverage and sublimits of $2,500,000 per occurrence for Contingent Business Income

coverage.


23


24

AS AND FOR A SEVENTEENTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The claims asserted by Plaintiffs are barred, in whole or in part, because the

Complaint for Declaratory Judgment fails to state facts sufficient to constitute a cause of

action upon which relief may be granted.

AS AND FOR A EIGHTEENTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The claims asserted by Plaintiffs are barred because coverage is not implicated under

the AXIS policy.

AS AND FOR A NINETEENTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

All or part of the sums for which Plaintiffs seek coverage may be precluded by the

applicable provisions, terms, conditions, limitations and exclusions of the AXIS policy placed

at issue herein, and/or by public policy or express provision of law.

AS AND FOR A TWENTIETH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

To the extent the AXIS policy is applicable to the instant matter, the rights and

obligations of Plaintiffs and AXIS are defined and controlled by the limits of liability, terms,

exclusions, conditions and other provisions of the AXIS policy placed at issue herein. The

terms, exclusions, conditions and other provisions of the AXIS policy are too voluminous to

itemize as affirmative defenses, and are therefore incorporated by reference herein.

AS AND FOR A TWENTY-FIRST SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

Plaintiffs’ claims are barred by the doctrines of waiver, estoppel and laches.

AS AND FOR A TWENTY-SECOND SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

Insurance coverage does not exist for all or part of the claims at issue pursuant to the

terms of the AXIS policy.


24


25

AS AND FOR A TWENTY-THIRD SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The Contingent Business Interruption coverage under the AXIS Policy has not been

implicated by the claims asserted by Plaintiffs because there has been no damage to or

destruction by peril not otherwise excluded to Real or Personal property or facilities of

Suppliers or Customers which wholly or partially prevented the receipt or delivery of

materials to the Plaintiffs.

AS AND FOR A TWENTY-FOURTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The Pollutants and Contaminants Exclusion to the AXIS policy precludes coverage for

(a) all loss or damage caused by, resulting from, contributed to or made worse by actual,

alleged or threatened release, discharge, escape or dispersal of pollutants or contaminants,

however caused; and (e) the costs associated with the enforcement or any ordinance or law

which requires the Plaintiffs or others to test for, monitor, clean up, remove, contain,

treat, detoxify or neutralize, or in any way respond to or assess the effects of pollutants or

contaminant

AS AND FOR A TWENTY-FIFTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

Prior to the issuance of the AXIS Primary and Excess policies, on or about August 1,

2019, plaintiffs and/or their agents and/or representatives were aware and had knowledge,

and agreed, that the Murder, Suicide and Infectious or Contagious Disease Extension would

not be included in, or made a part of, the AXIS policy.

AS AND FOR A TWENTY-SIXTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

Coverage under the AXIS Excess policy has not been triggered because the underlying

$100,000,000 in insurance, and all applicable deductibles, have not been properly

exhausted by payment of the claim.


25


26

AS AND FOR A TWENTY-SEVENTH SEPARATE, DISTINCT AND COMPLETE AFFIRMATIVE DEFENSE

The AXIS Primary and Excess policies were issued on October 25, 2019, pursuant to a

binder that did not include the Murder, Suicide and Infectious or Contagious Disease

Extension.

WHEREFORE, Defendant, AXIS, prays for the following judgment:

1. That a judgment be entered in this action dismissing the Complaint against AXIS with prejudice, together with costs and disbursements; and

2. For any and other relief as this Court deems just.


September 18, 2020

KENNEDYS CMK LLP /s/ Kristin V. Gallagher Kristin V. Gallagher Joanna L. Young Attorneys for Defendant AXIS Surplus Insurance Company i/s/h/a AXIS Surplus Lines Insurance Co. 570 Lexington Avenue – 8th Floor New York, New York 10022 (212) 252-0004

TO: WEG AND MYERS, P.C. Dennis T. D’Antonio, Esq. Attorneys for Plaintiffs Federal Plaza 52 Duane Street, 2nd Floor New York, New York 10007 (212) 227-4210


26


DEFENDANT QBE SPECIALTY INSURANCE COMPANY’S ANSWER & AFFIRMATIVE DEFENSES Page 1


-----------------------------------------------------------------x

CENTURY 21 DEPARTMENT STORES, LLC, 66 PEARL RETAIL, LLC, 66 PEARL RETAIL II, LLC, PEARL RETAIL ISG, LLC, 173 BWAY BLUE LLC, 262 MOTT BLUE TIC LLC, 444 86 BLUE LLC, MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, TRUE BLUE ASSOCIATES LLC, STAR OF DAVID, IRAYMOND-77 WARREN LLC, SABRA ASSOCIATES LLC, 315 SEVENTH RETAIL LLC, WEBWAY ASSOCIATES LLC, and CENTURY 21, INC., Plaintiffs,

- against –

STARR SURPLUS LINES INSURANCE CO., ALLIANZ GLOBAL RISKS US INSURANCE CO., AXIS SURPLUS LINES INSURANCE CO., LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE CO., EVANSTON INSURANCE CO., LANDMARK AMERICAN INSURANCE CO., QBE SPECIALTY INSURANCE CO., GREAT AMERICAN FIDELITY INSURANCE CO., and CERTAIN UNDERWRITERS AT LLOYDS SUBSCRIBING TO POLICY Nos. PG1902704, PG1902346, PG1902696, PG1902698, PG1902707, PG1902702, and PG1902712,

Defendants.

-----------------------------------------------------------------x

Case No. 1:20-cv-07437-LGS Removed from the New York State Supreme Court, New York County, Index No. 652975/2020

DEFENDANT QBE SPECIALTY INS. CO.’S ANSWER

Defendant QBE Specialty Insurance Company (“QBE”), by its attorneys, Zelle LLP, as

and for its Answer to Plaintiffs’ Complaint alleges, upon information and belief, as follows:


1



INTRODUCTION

1. QBE denies knowledge or information sufficient to form a belief as to the truth of

the allegations set forth in paragraph 1 of Plaintiffs’ Complaint, and reserves and refers all

questions of law, fact and/or conclusions therein to the District Court.




















2



8. QBE admits that QBE issued Policy No. CFE1317141 to Century 21 Department

Stores, LLC for a policy period from August 1, 2019 to August 1, 2020 (“QBE Policy”), subject

to all policy terms, conditions, limitations, and exclusions. QBE admits that Plaintiffs have paid

insurance premiums for the QBE Policy. QBE denies knowledge or information sufficient to

form a belief regarding the truth of the remaining allegations of paragraph 8 of Plaintiffs’

Complaint, and reserves and refers all questions of law, fact and/or conclusions therein,

including the interpretation of the Policies, to the District Court.

9. QBE denies each and every allegation set forth in paragraph 9 of Plaintiffs’

Complaint, and reserves and refers all questions of law, fact and/or conclusions therein to the

District Court.



District Court.

PARTIES











3

























4





















27. The allegations contained in paragraph 27 of Plaintiffs’ Complaint do not pertain

to QBE and, therefore, no response is required. To the extent a response is necessary, QBE

denies knowledge or information sufficient to form a belief regarding the truth of the allegations

in paragraph 27 of Plaintiffs’ Complaint, and reserves and refers all questions of law, fact and/or

conclusions therein to the District Court.


5



























6















35. QBE admits the allegations set forth in paragraph 35 of Plaintiffs’ Complaint.












7



THE NOVEL CORONAVIRUS AND ITS EFFECTS


the allegations set forth in paragraph 38 of Plaintiffs’ Complaint, except avers that the novel

coronavirus, SARS-CoV-2 (“COVID-19”), is a global pandemic. QBE reserves and refers all



the allegations set forth in paragraph 39 of Plaintiffs’ Complaint, except avers that people

became infected with COVID-19 beginning the winter of 2019. QBE reserves and refers all



the allegations set forth in paragraph 40 of Plaintiffs’ Complaint, except avers that the World

Health Organization issued several declarations and statements regarding COVID-19. QBE

reserves and refers all questions of law, fact and/or conclusions therein to the District Court.


the allegations set forth in paragraph 41 of Plaintiffs’ Complaint, except avers that COVID-19 is

transmitted by human-to-human contact. QBE denies knowledge or information sufficient to

form a belief regarding the truth of the remaining allegations in paragraph 41 of Plaintiffs’


District Court.

42. QBE denies knowledge or information sufficient to form a belief regarding the

truth of the allegations set forth in paragraph 42 of Plaintiffs’ Complaint, and reserves and refers

all questions of law, fact and/or conclusions therein to the District Court.


8



43. QBE admits that the COVID-19 pandemic received media attention, as alleged in

paragraph 43 of Plaintiffs’ Complaint. QBE denies knowledge or information sufficient to form a

belief regarding the truth of the remaining allegations in paragraph 43 of Plaintiffs’ Complaint,

and reserves and refers all questions of law, fact and/or conclusions therein to the District Court.

44. QBE admits that federal, state, and local agencies began recommending certain

preventive measures. QBE denies knowledge or information sufficient to form a belief regarding

the truth of the remaining allegations in paragraph 44 of Plaintiffs’ Complaint, and reserves and

refers all questions of law, fact and/or conclusions therein to the District Court.




46. QBE denies that Plaintiffs’ loss was caused by physical loss of or damage covered

by the QBE Policy and any Underlying Policies. QBE denies knowledge or information

sufficient to form a belief as to the truth of the allegations in paragraph 46 of Plaintiffs’

Complaint, and reserves and refers all questions of law, fact and/or conclusions therein,




sufficient to form a belief as to the truth of the allegations in paragraph 47 of Plaintiffs’

Complaint that Plaintiffs’ properties have been damaged and, accordingly, deny the same. QBE

reserves and refers all questions of law, fact and/or conclusions therein, including the

interpretation of the Policies, to the District Court.


9




truth of the remaining allegations in paragraph 48 of Plaintiffs’ Complaint, and reserves and

















54. Paragraph 54 of Plaintiffs’ Complaint contains a summary statement of the case to

which no response is required. To the extent that a response is required, QBE denies that the

relevant orders referred to in Paragraph 54 of Plaintiffs’ Complaint trigger coverage under the

QBE Policy and any Underlying Policies. QBE reserves and refers all questions of law, fact

and/or conclusions therein, including the interpretation of the Policies, to the District Court.


10





sufficient to form a belief regarding the truth of the remaining allegations in paragraph 55 of

Plaintiffs’ Complaint, and reserves and refers all questions of law, fact and/or conclusions

therein, including the interpretation of the Policies, to the District Court.



sufficient to form a belief regarding the truth of the remaining allegations in paragraph 56 of

Plaintiffs’ Complaint, and reserves and refers all questions of law, fact and/or conclusions










which no response is required. To the extent that a response is required, QBE denies that it

breached Policy No. CFE1317141, issued by QBE to Century 21 Department Stores, LLC, and

reserves and refers all questions of law, fact and/or conclusions therein, including the

interpretation of the Policies, to the District Court.


11



60. QBE denies the allegations set forth in paragraph 60 of Plaintiffs’ Complaint,

except avers that Plaintiffs procured a layered program of property insurance. QBE states that the

Policies speak for themselves, and are subject to all terms, conditions, limitations, and

exclusions. QBE reserves and refers all questions of law, fact and/or conclusions therein to the

District Court.


which no response is required. To the extent that a response is required, QBE states that the

Policies speak for themselves, and are subject to all terms, conditions, limitations, and

exclusions. QBE reserves and refers all questions of law, fact and/or conclusions therein,



except avers that coverage under the Policies is subject to all terms, conditions, limitations, and

exclusions. QBE states that the Policies speak for themselves, and are subject to all terms,

conditions, limitations, and exclusions. QBE reserves and refers all questions of law, fact and/or











12


























13









except avers that Policies have a limit of liability and that coverage under the Policies is subject

to all terms, conditions, limitations, and exclusions. QBE states that the Policies speak for

themselves, and are subject to all terms, conditions, limitations, and exclusions. QBE reserves

and refers all questions of law, fact and/or conclusions therein to the District Court.


except avers that coverage under the Policies for insured property and business interruption

subject to all terms, conditions, limitations, and exclusions. QBE states that the Policies speak for

themselves, and are subject to all terms, conditions, limitations, and exclusions. QBE reserves

and refers all questions of law, fact and/or conclusions therein to the District Court.







except avers that Policies include an “Automatic Cover” provision subject to all terms,

conditions, limitations, and exclusions. QBE states that the Policies speak for themselves, and


14



are subject to all terms, conditions, limitations, and exclusions. QBE reserves and refers all























15



























16



























17


























18



























19




conclusions therein to the District Court


to QBE and, therefore, no response is required. To the extent a response is necessary, denies

knowledge or information sufficient to form a belief regarding the truth of the allegations in

paragraph 97 of Plaintiffs’ Complaint, and reserves and refers all questions of law, fact and/or


















20






in paragraph 101 of Plaintiffs’ Complaint, and reserves and refers all questions of law, fact

and/or conclusions therein to the District Court .



District Court.















and/or conclusions therein to the District Court.


21













TIMELY RESPONSE


truth of the allegations set forth in paragraph 108 of Plaintiffs’ Complaint, and reserves and


109. The allegations contained in paragraph 109 of Plaintiffs’ Complaint constitute

legal conclusions to which no response is required. To the extent a response is necessary, QBE






refers all questions of law, fact and/or conclusions therein to the District Court .


22

























23






119. Paragraph 119 of Plaintiffs’ Complaint contains a summary statement of the case

to which no response is required. To the extent that a response is required, QBE denies that

Plaintiffs’ claim is covered under the Policies. By way of further response, QBE denies

knowledge or information sufficient to form a belief regarding the truth of the remaining

allegations in paragraph 119 of Plaintiffs’ Complaint, and reserves and refers all questions of

law, fact and/or conclusions therein to the District Court.



District Court.



District Court.






CAUSE OF ACTION – BREACH OF CONTRACT


24



123. In response to paragraph 123 of Plaintiffs’ Complaint, QBE repeats, reiterates,

and realleges each and every response made in response to paragraphs “1” through “122” with

the same force and effect as though more fully set forth herein.


except avers that the QBE Policy is a binding contract, subject to its terms, conditions,

limitations, and exclusions. QBE reserves and refers all questions of law, fact and/or conclusions



Complaint, including the allegation that Plaintiffs complied with all conditions precedent under

the Policies, except avers that Plaintiffs submitted a Sworn Statement Proof of Loss and that

Plaintiffs have paid insurance premiums for the QBE Policy. QBE reserves and refers all

questions of law, fact and/or conclusions therein, including the interpretation of the Policies, to

the District Court.



District Court.



District Court.



District Court.

CAUSE OF ACTION – BREACH OF CONTRACT IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING


25



129. In response to paragraph 129 of Plaintiffs’ Complaint, QBE repeats, reiterates,

and realleges each and every response made in response to paragraphs “1” through “128” with

the same force and effect as though more fully set forth herein.

130. The allegations contained in paragraph 130 of Plaintiffs’ Complaint constitute

legal conclusions to which no response is required. To the extent a response is necessary, QBE






District Court.



District Court.



District Court.



District Court.


26



QBE’S AFFIRMATIVE DEFENSES

First Affirmative Defense

Plaintiffs’ claims are barred, in whole or in part, on the basis that Plaintiffs’ Complaint

fails to state a claim against QBE upon which relief can be granted.

Second Affirmative Defense

Plaintiffs’ claims are barred, in whole or in part, by Plaintiffs’ failure to meet all

conditions precedent under the Policies.

Third Affirmative Defense

Plaintiffs’ claims are barred, in whole or in part, to the extent that Plaintiffs’ alleged

damages are not covered under the Policies.

Fourth Affirmative Defense

Plaintiffs’ claim is subject to and limited by all of the terms, conditions, limitations,

exclusions, and deductibles contained in the QBE Policy, as well as the terms and conditions of

any and all underlying insurance policies (the “Underlying Policies”) (collectively the

“Policies”).

Fifth Affirmative Defense

Plaintiffs’ claim is barred, in whole or in part, to the extent that it was not caused by

physical loss of or damage covered by the QBE Policy and any Underlying Policies.

Sixth Affirmative Defense

Coverage for Plaintiffs’ claim is limited by the applicable limits and any sub-limits

contained in the QBE Policy and any Underlying Policies.


27



Seventh Affirmative Defense

Plaintiffs’ claim for Business Interruption is limited, in whole or in part, to the extent the

loss did not result from physical loss of or damage, as covered by the Policies to real and/or

personal property insured by the Policies, occurring during the term of the Policies.

Eighth Affirmative Defense

Plaintiffs’ claim for Extra Expense is limited, in whole or in part, to the extent any

claimed expenses were not incurred to continue operations protecting real or personal property

insured for only such length of time that would be required with the exercise of due diligence

and dispatch to rebuild, repair or replace such part of the property as having been damaged or

destroyed, and such expenses were incurred that would not normally have been incurred to

conduct the business, over and above cost(s) that would normally have been insured to conduct

the business had no loss occurred.

Ninth Affirmative Defense

To the extent Plaintiffs are seeking coverage under the Policies’ Interruption by a Civil

Authority provision, Plaintiffs claim is limited, in whole or in part, to the extent Plaintiffs did not

lose access to the vicinity due to order of civil authority. Interruption by Civil Authority

coverage would also be limited by the Policies’ 60-day limitation period.

Tenth Affirmative Defense

To the extent Plaintiffs are seeking coverage under the Policies’ Ingress/Egress provision,

Plaintiffs’ claim is limited, in whole or in part, to the extent Plaintiffs’ did not sustain physical

loss of or damage covered by the Policies and occurring at property located within a five (5)

statute miles of the Insured’s premises, ingress to or egress from the Insured’s premises by the

Policies was prevented. Ingress/Egress coverage would also be limited by the Policies’ 60-day

limitation period.


28



Eleventh Affirmative Defense

To the extent Plaintiffs are seeking coverage under the Policies’ Contingent Business

provision, Plaintiffs’ claim is limited, in whole or in part, to the extent Plaintiffs did not sustain

physical loss of or damage covered by the Policies at the facilities of Suppliers or Customers

which wholly or partially prevents the receipt or delivery of materials to the account of the

Insured and results in a necessity interruption of the Insured’s normal business operations.

Twelfth Affirmative Defense

To the extent Plaintiffs seek Business Interruption coverage, including rental income, tax

interruption, tuition income, and extra expense coverage during an Extended Period of Liability,

that coverage is limited to the extent Plaintiff’s property did not sustain a covered loss requiring

rebuilding, repairing or replacement of covered property.

Thirteenth Affirmative Defense

To the extent Plaintiffs seek coverage under the Policies’ Rents and Rental Value

provision, that coverage is limited to the extent Plaintiffs’ property did not sustain direct damage

to one portion of the building by an insured peril which causes a tenant in an undamaged portion

of the building to abate their lease or be forced to vacate the premises even though there is no

direct damage to their premises, or if Plaintiffs’ loss is not a result of loss at a covered location or

at a location within proximity of a covered location, tenants vacate the premises due to their

inability and/or unwillingness to pay their rent.

Fourteenth Affirmative Defense

Plaintiff’s claim is barred, in whole or in part, by the Policies’ exclusion for any increase

of loss which may be occasioned by the suspension, lapse, or cancellation of any lease or license,

contract or order, unless such suspension, lapse, or cancellation results directly from the

interruption of business caused by direct physical loss or damage covered by the Policies.


29



Fifteenth Affirmative Defense

Plaintiffs’ claim is barred, in whole or in part, by the Policies’ exclusion for loss of

market/delay of use.

Sixteenth Affirmative Defense

To the extent Plaintiffs seek coverage under the Policies’ Consequential Reduction in

Values provision, coverage is limited to the extent Plaintiffs’ loss is not a result of any part or

parts of garments lost or damaged within the coverage of the Policies, thereby rendering the

remaining undamaged part or parts unmerchantable as complete garments.

Seventeenth Affirmative Defense

Plaintiffs’ claim is barred, in whole or in part, to the extent that Plaintiffs’ claim involves

loss of inventory not caused by physical loss of or damage covered by the Policies.

Eighteenth Affirmative Defense

QBE’s Policy has not been triggered because the underlying layers have not been

exhausted.

Nineteenth Affirmative Defense

Plaintiffs’ claim against QBE is barred, in whole or in part, because the insurers of the

Underlying Policies have not paid, admitted liability for, or been held legally liable for the full

amount of their respective participation in the ultimate net loss, as specified in the Schedule of

Underlying Insurance.

Twentieth Affirmative Defense

Plaintiffs’ claim is barred, in whole or in part, by the QBE Policy’s Microorganism

Exclusion Endorsement, which states, in relevant part:

MICROORGANISM EXCLUSION (MAP) (Absolute)


30



This Policy does not insure any loss, damage, claim, cost, expense or other sum directly or indirectly arising out of or relating to:

mold, mildew, fungus, spores or other microorganism of any type, nature, or description, including but not limited to any substance whose presence poses an actual or potential threat to human health.

This exclusion applies regardless where there is (i) any physical loss or damage to insured property; (ii) any insured peril or cause, whether or not contributing concurrently or in any sequence; (iii) any loss of use, occupancy, or functionality; or (iv) any action required, including but not limited to repair, replacement, removal, cleanup, abatement, disposal, relocation, or steps taken to address medical or legal concerns. This exclusion replaces and supersedes any provision in the Policy that provides insurance, in whole or in part, for these matters.

Twenty-first Affirmative Defense

Plaintiffs’ claim is barred, in whole or in part, by the QBE Policy’s Seepage and

Pollution Exclusion Endorsement, which states, in relevant part:

SEEPAGE AND POLLUTION EXCLUSION

This policy does not insure the following: Against loss or damage caused by, resulting from, contributed to or made worse by actual, alleged or threatened release, discharge, escape or dispersal of CONTAMINANTS OR POLLUTANTS, all whether direct or indirect, proximate or remote or in whole or in part caused by, contributed to or aggravated by any physical damage insured by this policy. Nevertheless, if fire is not excluded from this policy and a fire arises directly or indirectly from seepage or contamination or pollution, any loss or damage insured under this policy arising directly from that fire is insured, subject to the provisions of this policy. Contaminants or Pollutants means any material which after its release can cause or threaten damage to human health or human welfare or causes or threatens damage, deterioration, loss of value, marketability or loss of use to property insured hereunder, including, but not limited to, bacteria, fungi, virus, or hazardous substances. This exclusion shall not apply when loss or damage is directly caused by fire, lightning or discharge from automatic fire protective systems.


31



Twenty-second Affirmative Defense

Plaintiffs’ claim is barred, in whole or in part, by the QBE Policy’s Nuclear,

Biological, Chemical and Radiological Hazards Exclusion Endorsement, which states, in

relevant part:

NUCLEAR, BIOLOGICAL, CHEMICAL AND RADIOLOGICAL HAZARDS EXCLUSION

This endorsement modifies insurance provided under the following: I. We will not pay for any loss, damage, cost or expense, whether real or alleged, that is caused, results from, is exacerbated by or otherwise impacted by, either directly or indirectly, any of the following:

***

2) Biological Hazard – including, but not limited to, any biological and/or poisonous or pathogenic agent, material, product or substance, whether engineered or naturally occurring, that induces or is capable of inducing physical distress, illness, or disease;

Twenty-third Affirmative Defense

To the extent Plaintiffs seek coverage under the Policies’ Murder, Suicide and Infectious

or Contagious Disease Extension, that coverage is limited to the aggregate $5,000,000 limit of

liability.

Twenty-fourth Affirmative Defense

To the extent there is any coverage under the Policies, no liability shall attach under the

QBE Policy until and only after the underlying coverage shall apply first, until the applicable

attachment point has been reached, upon exhaustion of the limit of liability of the underlying

coverage, subject to the Insurer’s limit of liability as specified in the QBE Policy.


32



Twenty-fifth Affirmative Defense

To the extent there is any coverage under the Policies, Plaintiffs’ claim to QBE shall be

offset by any other insurance due and payable to Plaintiffs. The QBE Policy shall not cover to

the extent of any other insurance whether prior or subsequent hereto in date and by whomsoever

effected, directly or indirectly covering the same property against the same perils.

Twenty-sixth Affirmative Defense

To the extent there is any coverage under the Policies, Plaintiffs’ claim to QBE shall be

offset by any other insurance proceeds recovered by Plaintiffs from an insurer not named in this

action for damage of the type sought by Plaintiffs in this action.

Twenty-seventh Affirmative Defense

Plaintiffs’ claim is barred, in whole or in part, to the extent Plaintiff and/or its agents’ acts

or omissions proximately caused or contributed to Plaintiffs’ injury.

Twenty-eighth Affirmative Defense

To the extent there is any coverage under the Policies, Plaintiffs’ failure to mitigate,

minimize, or otherwise avoid any losses or damages, must reduce any recovery against QBE.

Twenty-ninth Affirmative Defense

To the extent that Plaintiffs seek exemplary, extra contractual and/or punitive damages,

such damages are not recoverable or warranted in this action.

Thirtieth Affirmative Defense

To the extent that Plaintiffs seek consequential damages, such damages are not

recoverable or warranted in this action and Plaintiff has failed to set forth any proof or support.

Thirty-first Affirmative Defense

Plaintiffs’ claims are barred, in whole or in part, by the equitable doctrines of unclean

hands, waiver, estoppel and/or laches.


33



Thirty-second Affirmative Defense

None of the acts alleged by Plaintiffs against QBE constitute deceptive acts or practices

or a violation of law, nor were they misleading, unreasonable, or unfair in any material respect.

RESERVATION OF RIGHTS

Defendant QBE Specialty Insurance Company reserves the right to assert additional

defenses with respect to such losses or damages as additional information becomes available or

apparent as this litigation proceeds.

PRAYER FOR RELIEF

WHEREFORE, Defendant QBE Specialty Insurance Company respectfully requests that

the Court (i) dismiss the case with prejudice; (ii) enter judgment in Defendant QBE Specialty

Insurance Company’s favor; (iii) award Defendant QBE Specialty Insurance Company the costs

of defending this action, including its attorney’s fees and expenses; and (iv) grant QBE Specialty

Insurance Company such other and further relief as the Court deems just and proper.

Dated: September 18, 2020 New York, New York ZELLE LLP

______________________ Isabella Stankowski-Booker, Esq. 45 Broadway, Suite 920 New York, New York 10006 Tel.: (646) 876-4410 -and-

Shannon O’Malley, Esq. (to be admitted pro hac) M. Paige Tackett, Esq. (to be admitted pro hac)

901 Main Street; Suite 4000 Dallas, Texas 75202


34



ATTORNEYS FOR DEFENDANT QBE SPECIALTY INSURANCE COMPANY


35




I hereby certify that on the 18th day of September, 2020, a true and correct copy of the foregoing document was served via ECF and/or email to all attorneys of record. ZELLE LLP

_______________________ Isabella Stankowski-Booker, Esq. 45 Broadway, Suite 920 New York, New York 10006 Tel.: (646) 876-4410

4817-0158-8939v1


36


DLA Piper LLP (US) 1251 Avenue of the Americas 27th Floor New York, New York 10020-1104 www.dlapiper.com Michael D. Hynes [email protected] T 212.335.4942 F 212.884.8642

September 18, 2020

BY ECF

The Honorable Lorna G. Schofield

United States District Judge

United States District Court

Southern District of New York

500 Pearl Street

New York, NY 10007

Re: Century 21 Department Stores, LLC et al. v. Starr Surplus Lines Insurance Co. et al.,

Case No. 1:20-cv-07437, Request for Pre-Motion Conference for Motion to Withdraw

Reference

Dear Judge Schofield:

On behalf of Defendant Allianz Global Risks US Insurance Co. (“AGR US”), we write to request

a telephonic conference to address Defendant AGR US’s forthcoming motion to withdraw the

automatic referral of the referenced case to the United States Bankruptcy Court for the Southern

District of New York.

As a general matter, Rule 5011(a) of the Federal Rules of Bankruptcy Procedure states that a

motion to withdraw automatic referral shall be heard by the District Court, but the motion itself is

to be filed with the Bankruptcy Court, which will then transmit the motion and supporting

documents to the District Court. See Local Bankruptcy Rules for the Southern District of New

York, Rule 5011-1. However, Rule III.A.1 of Your Honor’s Individual Rules requires the parties

to file a pre-motion letter seeking a conference with the Court prior to filing any motion.

This unusual scenario arose because Plaintiffs originally commenced this action in New York state

court before filing for bankruptcy and removing its own case to this Court. In the interest of

following Your Honor’s Individual Rules as closely as possible, and after consultation with Your

Honor’s clerk, we submit this pre-motion letter before the motion to withdraw is filed in the

Southern District of New York Bankruptcy Court.

By way of background, Plaintiff Century 21 Department Stores, LLC (“Century 21”) and related

plaintiffs originally brought this insurance coverage action in the Supreme Court of the State of

New York, County of New York (Index No. 652975/2020) on July 8, 2020 (the “Insurance

Action”). In their Complaint, Plaintiffs allege that they lost $175 million in revenue when they

closed their department stores after “various government entities,” including New York City and


1

20-12097-scc Doc 63-16 Filed 09/22/20 Entered 09/22/20 13:11:37 Doc 17Letter Pg 1 of 3

Page Two

Philadelphia, issued social distancing orders intended to protect the general public against the

spread of COVID-19. Plaintiffs further claim that AGR US and other defendant-insurers breached

their insurance policies by not paying the Plaintiffs’ $175 million claim and acted in bad faith.1

Century 21 subsequently filed for bankruptcy on September 10, 2020. The next day, Plaintiffs

removed their entire Insurance Action to this Court with the expectation that the case would be

automatically referred to the Bankruptcy Court pursuant to a standing order. In re Standing Order

of Reference Re Title 11, 12 Misc. 32 (S.D.N.Y. Feb. 1, 2012). Plaintiffs have already indicated

their intent to pursue their non-core insurance claims against Defendants in the Bankruptcy Court.

See Memorandum in Support of Debtors’ Chapter 11 Petition, Case No. 20-1209-SCC, at 2

(Docket No. 15).2

Pursuant to 28 U.S.C. § 157(d), however, “a district court may withdraw, in whole or in part, any

case or proceeding referred [to the bankruptcy court] under this section, on its own motion or on

timely motion of any party, for cause shown.” Scott v. AIG Prop. Cas. Co., 1:17-CV-1052-GHW,

2017 WL 1380607, at *2 (S.D.N.Y. Apr. 17, 2017). The Second Circuit has articulated a number

of non-exhaustive factors that district courts should consider in determining whether to withdraw

a reference under § 157(d). See In re Orion Pictures Corp., 4 F.3d 1095 (2d Cir. 1993). They are:

(1) whether the claim is core or non-core; (2) what is the most efficient use of judicial resources;

(3) what is the delay and what are the costs to the parties; (4) what will promote uniformity of

bankruptcy administration; (5) what will prevent forum shopping; and (6) other related factors. Id.

Pre-petition claims for breach of contract have routinely been treated as non-core proceedings

subject to withdrawal. See id. at 1102 (“It is clear that to the extent that the claim is for pre-petition

contract damages, it is non-core.”) (internal citations omitted); In re Coudert Bros., No. 11-cv-

4949, 2011 WL 7678683, at *5 (S.D.N.Y. Nov. 23, 2011) (“Where a contract sued upon was

formed prior to the bankruptcy petition, it will generally be highly unlikely that a proceeding based

on that contract turns on the bankruptcy laws.”). This includes insurance coverage disputes, like

the Insurance Action. See, e.g., In re EMS Fin. Servs., LLC, 491 B.R. 196, 203 (E.D.N.Y. 2013)

(treating insurance coverage action as a non-core proceeding because “the contract claims are not

1 Courts from around the country, including the Southern District of New York, have already rejected claims just like

the one asserted by the Plaintiffs here. See Social Life Magazine, Inc., v. Sentinel Insurance Company Limited, Case

No. 1:20-cv-03311-VEC; 2020 WL 2904834, at *15 (S.D.N.Y. May 14, 2020); accord Diesel Barbershop, LLC v.

State Farm Lloyds, No. 5:20-CV-461-DAE, 2020 WL 4724305, at *5 (W.D. Tex. Aug. 13, 2020); Rose’s 1, LLC v.

Erie Ins. Exchange, No. 2020 CA 002424 B, 2020 WL 4589206, at *4 (D.C. Super. Aug. 06, 2020); Gavrilides

Management Co. v. Michigan Insurance Co., Case No. 20-000258-CB (Mich. Cir. Ct. July 1, 2020).

2 Notably, most of the Plaintiffs who commenced the Insurance Action in the Supreme Court, County of New York

have not filed for bankruptcy protection.


2


http://www.google.com/search?q=28++u.s.c.++++157(d)

http://scholar.google.com/scholar?q=4++f.3d++1095&btnG=&hl=en&as_sdt=6

http://scholar.google.com/scholar?q=491++b.r.++196&btnG=&hl=en&as_sdt=6

https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=2017%2B%2Bwl%2B%2B1380607&refPos=1380607&refPosType=s&clientid=USCourts


http://scholar.google.com/scholar?q=12++misc.++32&btnG=&hl=en&as_sdt=6

https://nysd-ecf.sso.dcn/n/cmecfservices/rest/file/finddoc?caseYear=2020&caseNum=07437&caseType=cv&caseOffice=1&docNum=15





Page Three

rendered core simply because they involve property of the estate.”); DeWitt Rehab. & Nursing

Ctr., Inc. v. Columbia Cas. Co., 464 B.R. 587, 591 (S.D.N.Y. 2012); Scott, 2017 WL 1380607, at

*4 (“[T]he breach of a pre-petition contract and breach of the implied covenant of good faith and

fair dealing are clearly non-core claims.”) (emphasis added).

Since 28 U.S.C. § 157(d) and Rule 5011(a) of the Federal Rules of Bankruptcy Procedure provide

that it is the District Court that decides whether to withdraw the reference, AGR US respectfully

requests that this Court schedule a pre-motion conference to set a schedule for the parties to brief

whether the automatic referral of the Insurance Action should be withdrawn. AGR US will confer

with counsel for all parties prior to the conference in an attempt to find a mutually agreeable

briefing schedule to present to this Court at that time.

We remain available to address any questions or concerns that the Court may have in the meantime.

Thank you very much for your attention to this matter.

Sincerely,

Michael D. Hynes

cc: All Counsel of Record (via ECF)


3





UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -----------------------------------------------------------------------------X CENTURY 21 DEPARTMENT STORES, LLC, 66 PEARL RETAIL, LLC, 66 PEARL RETAIL II, LLC, 66 PEARL RETAIL ISG, LLC, 173 BWAY BLUE LLC, 262 MOTT BLUE TIC LLC, 444 86 BLUE LLC, MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, TRUE BLUE ASSOCIATES LLC, STAR OF DAVID, IRAYMOND-77 WARREN LLC, SABRA ASSOCIATES LLC, 315 SEVENTH RETAIL LLC, Case No. 20-cv-07437 WEBWAY ASSOCIATES LLC, and CENTURY 21, INC., (LGS) (SLC) Plaintiffs, NOTICE OF APPEARANCE -against- STARR SURPLUS LINES INSURANCE CO., ALLIANZ GLOBAL RISKS US INSURANCE CO., AXIS SURPLUS LINES INSURANCE CO., LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE CO., EVANSTON INSURANCE CO., LANDMARK AMERICAN INSURANCE CO., QBE SPECIALTY INSURANCE CO., GREAT AMERICAN FIDELITY INSURANCE CO., and CERTAIN UNDERWRITERS AT LLOYD'S SUBSCRIBING TO POLICY Nos. PG1902704, PG1902346, PG1902696, PG1902698, PG1902707, PG1902702, and PG1902712, Defendants. -----------------------------------------------------------------------------X


Please enter my appearance as counsel in this case for Defendant Endurance American

Specialty Insurance Co.



1

20-12097-scc Doc 63-17 Filed 09/22/20 Entered 09/22/20 13:11:37 Doc 18Notice of Appearance Pg 1 of 2


CLYDE & CO US LLP

By: /s/Corey R. Greenwald

Corey R. Greenwald

The Chrysler Building

405 Lexington Avenue, 16th Floor

New York, New York 10174

Tel: (212) 710-3900

Fax: (212) 710-3950

Email: [email protected]

Attorneys for Defendant Endurance American Specialty Insurance Co.


2



UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -----------------------------------------------------------------------------X CENTURY 21 DEPARTMENT STORES, LLC, 66 PEARL RETAIL, LLC, 66 PEARL RETAIL II, LLC, 66 PEARL RETAIL ISG, LLC, 173 BWAY BLUE LLC, 262 MOTT BLUE TIC LLC, 444 86 BLUE LLC, MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, TRUE BLUE ASSOCIATES LLC, STAR OF DAVID, IRAYMOND-77 WARREN LLC, SABRA ASSOCIATES LLC, 315 SEVENTH RETAIL LLC, Case No. 20-cv-07437 WEBWAY ASSOCIATES LLC, and CENTURY 21, INC., (LGS) (SLC) Plaintiffs, CORPORATE DISCLOSURE -against- STATEMENT OF DEFENDANT STARR SURPLUS LINES INSURANCE CO., ENDURANCE ALLIANZ GLOBAL RISKS US INSURANCE CO., AMERICAN SPECIALTY AXIS SURPLUS LINES INSURANCE CO., INSURANCE CO. LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE CO., EVANSTON INSURANCE CO., LANDMARK AMERICAN INSURANCE CO., QBE SPECIALTY INSURANCE CO., GREAT AMERICAN FIDELITY INSURANCE CO., and CERTAIN UNDERWRITERS AT LLOYD'S SUBSCRIBING TO POLICY Nos. PG1902704, PG1902346, PG1902696, PG1902698, PG1902707, PG1902702, and PG1902712, Defendants. -----------------------------------------------------------------------------X

Pursuant to Federal Rule of Civil Procedure 7.1, the undersigned counsel of record for

Endurance American Specialty Insurance Company, (“Endurance”), makes the following

corporate disclosure:

1. Endurance American Specialty Insurance Company is 100% owned by Endurance

American Insurance Company, which is 100% owned by Endurance Assurance Corporation.


1



2. Endurance Assurance Corporation is a wholly owned subsidiary of Endurance

U.S. Holdings Corp., which is wholly owned by Endurance Specialty Insurance Ltd.

3. Endurance Specialty Insurance Ltd. is a wholly owned subsidiary of Sompo

International Holdings Ltd.

4. Sompo International Holdings Ltd. is a wholly owned subsidiary of Sompo Japan

Nipponkoa Insurance Inc.

5. Sompo Japan Nipponkoa Insurance Inc. is a wholly owned subsidiary of Sompo

Holdings, Inc., a holding company headquartered in Japan.

6. No entity owns 10% or more of the stock of Sompo Holdings, Inc.


CLYDE & CO US LLP


Corey R. Greenwald

William M. Cooney




Tel: (212) 710-3900

Fax: (212) 710-3950


[email protected]



2




UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -----------------------------------------------------------------------------X CENTURY 21 DEPARTMENT STORES, LLC, 66 PEARL RETAIL, LLC, 66 PEARL RETAIL II, LLC, 66 PEARL RETAIL ISG, LLC, 173 BWAY BLUE LLC, 262 MOTT BLUE TIC LLC, 444 86 BLUE LLC, MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, TRUE BLUE ASSOCIATES LLC, STAR OF DAVID, IRAYMOND-77 WARREN LLC, SABRA ASSOCIATES LLC, 315 SEVENTH RETAIL LLC, Case No. 20-cv-07437 WEBWAY ASSOCIATES LLC, and CENTURY 21, INC., (LGS) (SLC) Plaintiffs, ANSWER OF DEFENDANT -against- ENDURANCE AMERICAN SPECIALTY STARR SURPLUS LINES INSURANCE CO., INSURANCE CO. ALLIANZ GLOBAL RISKS US INSURANCE CO., AXIS SURPLUS LINES INSURANCE CO., LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE CO., EVANSTON INSURANCE CO., LANDMARK AMERICAN INSURANCE CO., QBE SPECIALTY INSURANCE CO., GREAT AMERICAN FIDELITY INSURANCE CO., and CERTAIN UNDERWRITERS AT LLOYD'S SUBSCRIBING TO POLICY Nos. PG1902704, PG1902346, PG1902696, PG1902698, PG1902707, PG1902702, and PG1902712, Defendants. -----------------------------------------------------------------------------X

Defendant ENDURANCE AMERICAN SPECIALTY INSURANCE CO. (“Endurance”)

by its attorneys, CLYDE & CO US LLP, answering the Plaintiffs' Complaint, alleges as follows. To

the extent any allegation in the Plaintiffs' Complaint is not expressly admitted or otherwise

addressed in the specific responses set forth below, it is denied:


1


2

1. Defendant Endurance denies knowledge or information sufficient to form a belief

as to the truth of the allegations in paragraph 1 of the Complaint.






as to the truth of the allegations in paragraph 4 of the Complaint.1







8. Defendant Endurance admits that it received a premium payment in respect of its

participation in the risk. Defendant Endurance denies knowledge or information sufficient to

form a belief as to the truth of the balance of the allegations in paragraph 8 of the Complaint.

9. Defendant Endurance admits, on information and belief, that one or more

Plaintiffs have received, from certain other Defendants, payment of the only portion of Plaintiffs'

insurance claim that has been determined to constitute a covered claim, which is not at issue in

this litigation and for which Defendant Endurance indisputably does not have any liability.

Defendant Endurance denies knowledge or information sufficient to form a belief as to whether

1 Defendant Endurance denies that the opinion attributed to a fictional television character in footnote 1 of the Complaint is a factual allegation requiring a response.


2


3

Plaintiffs received a partial payment of their insurance claim on June 15, 2020. Defendant

Endurance denies the balance of the allegations in paragraph 9 of the Complaint.

10. Defendant Endurance denies the allegations in paragraph 10 of the Complaint as

to Defendant Endurance. Defendant Endurance denies knowledge or information sufficient to





















3


4
























4


5



32. Defendant Endurance admits the allegations in paragraph 32 of the Complaint.











38. Defendant Endurance admits that the scientific community refers to SARS-CoV-2

as the coronavirus and COVID-19 as the disease from the coronavirus. Defendant Endurance

denies knowledge or information sufficient to form a belief as to the truth of the balance of the




40. Defendant Endurance admits that the World Health Organization has declared

COVID-19 to be a public health emergency. Defendant Endurance denies knowledge or

information sufficient to form a belief as to the truth of the balance of the allegations in



5


6





43. Defendant Endurance admits that COVID-19 has received widespread media

attention. Defendant Endurance denies knowledge or information sufficient to form a belief as

to the truth of the balance of the allegations in paragraph 43 of the Complaint.





46. Defendant Endurance denies the allegations in paragraph 46 of the Complaint.










52. Defendant Endurance denies that all civil authority orders issued by states and

localities where Plaintiffs maintain their stores required the relevant properties to close their


6


7

doors to the public. Defendant Endurance denies knowledge or information sufficient to form a

belief as to the truth of the balance of the allegations in paragraph 52 of the Complaint.



54. Defendant Endurance admits that Plaintiffs purport to quote from various orders

issued by governmental authorities, states that such orders are not attached to or quoted in their

entirety in the Complaint and speak for themselves. Defendant Endurance denies the balance of


55. Defendant Endurance denies that any order is evidence of damages suffered by

Plaintiffs. Defendant Endurance denies knowledge or information sufficient to form a belief as

to the truth of the balance of the allegations in paragraph 55 of the Complaint.



57. Defendant Endurance admits that Plaintiffs submitted a sworn statement in partial

proof of loss on May 26, 2020. Defendant Endurance denies the balance of the allegations in




60. Defendant Endurance admits the allegations in paragraph 60 of the Complaint

with respect to its own participation. Defendant Endurance denies knowledge or information


Complaint.


7


8

61. Defendant Endurance admits the allegations in paragraph 61 of the Complaint

with respect to its own participation. Defendant Endurance denies knowledge or information


Complaint.

62. Defendant Endurance admits that Plaintiffs CENTURY 21 DEPARTMENT

STORES, LLC; 173 BWAY BLUE LLC; 262 MOTT BLUE TIC LLC; 444 86 BLUE LLC; 28

NEWBURY JSRE TIC LLC; and 315 SEVENTH RETAIL LLC are Named Insureds under the

policy issued by Endurance (Policy No. ARP10011564202) and incorporating the Alliant-headed

manuscript policy form followed by Endurance (as well as other insurers) (said policy hereafter

referred to as the "Endurance Policy"), subject to all of its terms, conditions, exclusions, limits,

sublimits, limitations, definitions and other provisions. Defendant Endurance denies knowledge

or information sufficient to form a belief as to the truth of the balance of the allegations in


63. Defendant Endurance admits that the Endurance Policy provides certain

coverages, subject to all of the terms, conditions, exclusions, limits, sublimits, limitations,

definitions and other provisions of the Endurance Policy. Defendant Endurance denies the

allegations in paragraph 63 of the Complaint to the extent that they are inconsistent with those

terms, conditions, exclusions, limits, sublimits, limitations, definitions and other provisions.

Defendant Endurance denies knowledge or information sufficient to form a belief as to the truth

of the balance of the allegations in paragraph 63 of the Complaint.

64. Defendant Endurance admits that, subject to all of its terms, conditions,

exclusions, limits, sublimits, limitations, definitions and other provisions, the Endurance Policy

has a Policy Period of August 1, 2019 to August 1, 2020. Defendant Endurance denies


8


9

knowledge or information sufficient to form a belief as to the truth of the balance of the




was in effect as of March 2020. Defendant Endurance denies knowledge or information


Complaint.




68. Defendant Endurance admits that paragraph 68 of the Complaint quotes the

"Perils Insured" clause (Section IV.) of the Endurance Policy, which is subject to all of the terms,

conditions, exclusions, limits, sublimits, limitations, definitions and other provisions of the

Endurance Policy. Defendant Endurance denies knowledge or information sufficient to form a




70. Defendant Endurance admits that paragraph 70 of the Complaint quotes a portion

of the "Limits of Liability" clause (Section V.A.) of the Endurance Policy, which is subject to all

of the terms, conditions, exclusions, limits, sublimits, limitations, definitions and other

provisions of the Endurance Policy. Defendant Endurance denies knowledge or information


Complaint.


9


10

71. Defendant Endurance admits that the Endurance Policy provides certain

coverages, subject to all of the terms, conditions, exclusions, limits, sublimits, limitations,

definitions and other provisions of the Endurance Policy. Defendant Endurance denies the

allegations in paragraph 71 of the Complaint to the extent that they are inconsistent with those

terms, conditions, exclusions, limits, sublimits, limitations, definitions and other provisions.

Defendant Endurance denies that the allegations in paragraph 71 are a complete and accurate

statement of any coverage provided by the Endurance Policy. Defendant Endurance denies




of the "Interest and Property Covered" clause (Section VIII.A.(1)) of the Endurance Policy,

which is subject to all of the terms, conditions, exclusions, limits, sublimits, limitations,

definitions and other provisions of the Endurance Policy. Defendant Endurance denies




"Automatic Cover" clause (Section VIII.B.) of the Endurance Policy, which is subject to all of

the terms, conditions, exclusions, limits, sublimits, limitations, definitions and other provisions

of the Endurance Policy. Defendant Endurance denies knowledge or information sufficient to





10


11

75. Defendant Endurance admits that the Endurance Policy provides coverage for

business interruption subject to all of the terms, conditions, exclusions, limits, sublimits,

limitations, definitions and other provisions of the Endurance Policy. Defendant Endurance

denies that the allegations in paragraph 75 of the Complaint are a complete and accurate

statement of any coverage provided by the Endurance Policy. Defendant Endurance denies the


exclusions, limits, sublimits, limitations, definitions and other provisions of the Endurance

Policy. Defendant Endurance denies knowledge or information sufficient to form a belief as to

the truth of the balance of the allegations in paragraph 75 of the Complaint.


of the "Business Interruption" clause (Section VIII.C.) of the Endurance Policy, which is subject

to all of the terms, conditions, exclusions, limits, sublimits, limitations, definitions and other



Complaint.





79. Defendant Endurance admits that the Endurance Policy provides coverage for

contingent business interruption subject to all of the terms, conditions, exclusions, limits,

sublimits, limitations, definitions and other provisions of the Endurance Policy. Defendant

Endurance denies that the allegations in paragraph 79 of the Complaint are a complete and


11


12

accurate statement of any coverage provided by the Endurance Policy. Defendant Endurance


conditions, exclusions, limits, sublimits, limitations, definitions and other provisions of the

Endurance Policy. Defendant Endurance denies knowledge or information sufficient to form a



"Contingent Business Interruption" clause (Section VIII.D.) of the Endurance Policy, which is

subject to all of the terms, conditions, exclusions, limits, sublimits, limitations, definitions and

other provisions of the Endurance Policy. Defendant Endurance denies knowledge or









provides coverage for Extra Expense. Defendant Endurance denies knowledge or information


Complaint.


"Extra Expense" clause (Section VIII.J.) of the Endurance Policy, which is subject to all of the

terms, conditions, exclusions, limits, sublimits, limitations, definitions and other provisions of


12


13

the Endurance Policy. Defendant Endurance denies knowledge or information sufficient to form

a belief as to the truth of the balance of the allegations in paragraph 84 of the Complaint.





provides coverage for loss of Rents. Defendant Endurance denies knowledge or information


Complaint.


"Rents and Rental Value" clause (Section VIII.K.) of the Endurance Policy, which is subject to

all of the terms, conditions, exclusions, limits, sublimits, limitations, definitions and other



Complaint.





provides coverage for interruption by civil authority. Defendant Endurance denies the balance of



"Interruption by Civil Authority" clause (Section VIII.L.) of the Endurance Policy, which is


13


14









provides coverage for restriction of ingress to or egress from the Insured's premises. Defendant

Endurance denies the balance of the allegations in paragraph 92 of the Complaint.

93. Defendant Endurance objects to the allegations of paragraph 93 of the Complaint

as vague. Without waiving this objection, Defendant Endurance admits that paragraph 93 of the

Complaint quotes the "Ingress/Egress" clause (Section VIII.M.) of the Endurance Policy, which

is subject to all of the terms, conditions, exclusions, limits, sublimits, limitations, definitions and








provides coverage for consequential reduction in values. Defendant Endurance denies the

balance of the allegations in paragraph 95 of the Complaint.


14


15


of the "Consequential Reduction in Values" clause (Section VIII.O.) of the Endurance Policy,

which is subject to all of the terms, conditions, exclusions, limits, sublimits, limitations,

definitions and other provisions of the Endurance Policy. Defendant Endurance denies






(Section IX.D.) of the Endurance Policy, which is subject to all of the terms, conditions,

exclusions, limits, sublimits, limitations, definitions and other provisions of the Endurance

Policy. Defendant Endurance denies knowledge or information sufficient to form a belief as to

the truth of the balance of the allegations in paragraph 98 of the Complaint.



"Special Allowance" clause (Section X.K.) of the Endurance Policy, which is subject to all of the

terms, conditions, exclusions, limits, sublimits, limitations, definitions and other provisions of

the Endurance Policy. Defendant Endurance denies knowledge or information sufficient to form

a belief as to the truth of the balance of the allegations in paragraph 100 of the Complaint.




15


16




103. Defendant Endurance admits that paragraph 103 of the Complaint quotes a

portion of the "Manuscript Wording" clause (Section XXV.A.) of the Endurance Policy, which is











107. Defendant Endurance admits that paragraph 107 of the Complaint quotes a

portion of the "Murder, Suicide and Infectious or Contagious Disease Extension" of the

Endurance Policy, which is subject to all of the terms, conditions, exclusions, limits, sublimits,

limitations, definitions and other provisions of the Endurance Policy. Defendant Endurance

denies knowledge or information sufficient to form a belief as to the truth of the balance of the



16


17

108. Defendant Endurance admits that Plaintiffs submitted a sworn statement in partial

proof of loss on May 26, 2020. Defendant Endurance denies the balance of the allegations in



110. Defendant Endurance admits that on June 16, 2020 the Independent Adjuster

designated in the Endurance Policy, acting on behalf of Endurance as well as other insurers, sent

Plaintiff Century 21 Department Stores, LLC correspondence reserving all rights in respect of

the May 26, 2020 proof of loss and requesting information needed in order for insurers to

investigate and evaluate whether the claim is covered. Defendant denies the balance of the


111. Defendant Endurance denies that any of Defendants' requests for information

were delayed. Defendant Endurance denies knowledge or information sufficient to form a belief

as to the truth of the balance of the allegations in paragraph 111 of the Complaint.












17


18




120. Defendant Endurance denies that the response to the May 26, 2020 proof of loss

was untimely, and otherwise denies the allegations in paragraph 120 of the Complaint.


122. Defendant Endurance admits that the webpage cited in paragraph 122 of the

Complaint is entitled "Business Interruption Coverage Frequently Asked Questions (FAQs)."

Defendant Endurance admits that paragraph 122 of the Complaint quotes a portion of the

webpage cited in paragraph 122 of the Complaint. Defendant Endurance admits that "[t]he

presence, or the suspected or feared presence, of COVID-19 generally will not mean that

property has suffered 'physical loss or damage'." Defendant Endurance denies knowledge or



AS AND FOR AN ANSWER TO THE FIRST CAUSE OF ACTION (Breach of Contract)

123. Defendant Endurance repeats, reiterates and realleges each and every answer to

each and every allegation contained in paragraphs 1 through 122 of the Complaint with the same

force and effect as if fully set forth at length herein in answer to paragraph 123 of the Complaint.


exclusions, limits, sublimits, limitations, definitions and other provisions, Endurance entered into

the Endurance Policy with the Named Insureds identified in the Endurance Policy. Defendant

Endurance denies knowledge or information sufficient to form a belief as to the truth of the

balance of the allegations in paragraph 124 of the Complaint.


18


19





128. Defendant Endurance denies that it has breached any policies, and otherwise

denies the allegations in paragraph 128 of the Complaint.

AS AND FOR AN ANSWER TO THE SECOND CAUSE OF ACTION (Breach of Contract – Implied Covenant of Good Faith and Fair Dealing)

129. Defendant Endurance repeats, reiterates and realleges each and every answer to

each and every allegation contained in paragraphs 1 through 128 of the Complaint with the same

force and effect as if fully set forth at length herein in answer to paragraph 129 of the Complaint.



132. Defendant Endurance denies that it is under any obligation to have paid Plaintiffs'

claim, and otherwise denies the allegations in paragraph 132 of the Complaint.



AFFIRMATIVE DEFENSES

AS AND FOR A FIRST AFFIRMATIVE DEFENSE

135. The Complaint, and each and every one of its causes of action, fails to state a

claim upon which relief can be granted.

AS AND FOR A SECOND AFFIRMATIVE DEFENSE

136. There is an insufficiency of service of process upon Defendant Endurance.


19


20

AS AND FOR A THIRD AFFIRMATIVE DEFENSE

137. This Court lacks subject matter jurisdiction over this action and each and every

cause of action set forth in the Complaint.

AS AND FOR A FOURTH AFFIRMATIVE DEFENSE

138. This Court lacks personal jurisdiction over Defendant Endurance with respect to

the Complaint and each and every cause of action set forth in the Complaint.

AS AND FOR A FIFTH AFFIRMATIVE DEFENSE

139. This Court is an improper venue with respect to the Complaint and each and every

cause of action set forth in the Complaint.

AS AND FOR A SIXTH AFFIRMATIVE DEFENSE

140. This Court is a forum non conveniens with respect to the Complaint and each and

every cause of action set forth in the Complaint.

AS AND FOR A SEVENTH AFFIRMATIVE DEFENSE

141. The Complaint, and each and every one of its causes of action, is barred by

applicable statutes of limitations or repose.

AS AND FOR AN EIGHTH AFFIRMATIVE DEFENSE

142. Some or all of the Plaintiffs lack standing, capacity or authority to have brought

this action or to maintain it.

AS AND FOR A NINTH AFFIRMATIVE DEFENSE

143. Some or all of the Plaintiffs have no rights, title or interest in the property or other

things that are the subject of Plaintiffs' insurance claim, or are otherwise not a real party in

interest.


20


21

AS AND FOR A TENTH AFFIRMATIVE DEFENSE

144. The Complaint, and each and every one of its causes of action, is barred by the

doctrine of waiver.

AS AND FOR AN ELEVENTH AFFIRMATIVE DEFENSE


doctrine of estoppel.

AS AND FOR A TWELFTH AFFIRMATIVE DEFENSE


doctrine of laches.

AS AND FOR A THIRTEENTH AFFIRMATIVE DEFENSE


doctrines of res judicata or collateral estoppel.

AS AND FOR A FOURTEENTH AFFIRMATIVE DEFENSE

148. The obligations of Defendant Endurance are strictly defined, limited and

controlled by the terms, conditions, exclusions, limits, sublimits, limitations, definitions and

other provisions of the Endurance Policy, including without limitation the "Other Insurance"

clause set forth in Section XIII.D. of the Endurance Policy, and Defendant Endurance has no

other legally enforceable obligation to any Plaintiff.

AS AND FOR A FIFTEENTH AFFIRMATIVE DEFENSE

149. The coverage obligations of Defendant Endurance, if any, are strictly limited to

the participation of Endurance in the Endurance Policy, which is "15% or USD 2,250,000 part of

USD 15,000,000 excess of USD 10,000,000 excess of deductibles", regardless of the number of

coverages or locations that may be involved.


21


22

AS AND FOR A SIXTEENTH AFFIRMATIVE DEFENSE

150. Any Plaintiff that is not an insured under and as defined by the Endurance Policy

has failed to state a claim upon which relief can be granted.

AS AND FOR A SEVENTEENTH AFFIRMATIVE DEFENSE

151. Plaintiffs have the burden of proving their damages, that their damages were

caused by a covered cause of loss, and that each and every one of the elements required to trigger

coverage has occurred or otherwise been satisfied. To the extent any Plaintiff is unable to do so,

that Plaintiff's claims do not trigger coverage under the Endurance Policy.

AS AND FOR AN EIGHTEENTH AFFIRMATIVE DEFENSE

152. Plaintiffs' claims do not trigger coverage under the Endurance Policy because

there has been no physical loss or damage to any relevant property by a covered peril.

AS AND FOR A NINETEENTH AFFIRMATIVE DEFENSE

153. Coverage for Plaintiffs' claims, if any, is limited or excluded by the Loss of

market/Delay of Use exclusion, which is set forth in Section XI.E. of the Endurance Policy.

Defendant Endurance continues to reserve all of its rights to rely on this exclusion to preclude

coverage for Plaintiffs' claims.

AS AND FOR A TWENTIETH AFFIRMATIVE DEFENSE

154. Plaintiffs' claims are or may be barred in whole or in part to the extent any

Plaintiff failed to perform or satisfy obligations, covenants, conditions precedent or conditions

subsequent under the Endurance Policy, including without limitation the "Inspection & Audit"

clause in Section XXIV.B. of the Endurance Policy.


22


23

AS AND FOR A TWENTY-FIRST AFFIRMATIVE DEFENSE

155. Defendant Endurance has performed all of its obligations and has otherwise

satisfied all of the terms and conditions for which it is responsible under the Endurance Policy, in

accordance with the terms, conditions, exclusions, limits, sublimits, limitations, definitions and

other provisions of the Endurance Policy.

AS AND FOR A TWENTY-SECOND AFFIRMATIVE DEFENSE

156. Plaintiffs have failed to make reasonable efforts to mitigate or avoid their

damages, if any.

AS AND FOR A TWENTY-THIRD AFFIRMATIVE DEFENSE

157. Plaintiffs are not entitled to recover from Defendant Endurance their costs,

expenses, or attorney's fees in this action.

AS AND FOR A TWENTY-FOURTH AFFIRMATIVE DEFENSE

158. Plaintiffs are not entitled to recover from Defendant Endurance any liquidated,

consequential or other extra-contractual damages.

AS AND FOR A TWENTY-FIFTH AFFIRMATIVE DEFENSE

159. Defendant Endurance avails itself of and adopts such other defenses raised by any

other Defendant(s) as may be applicable to Defendant Endurance.

AS AND FOR A TWENTY-SIXTH AFFIRMATIVE DEFENSE

160. Defendant Endurance reserves the right to amend, supplement or otherwise

modify this Answer or any of the defenses set forth herein, including by asserting any and all

applicable defenses which may later appear to be applicable.


23


24

WHEREFORE, Defendant Endurance respectfully requests this Honorable Court enter

judgment in its favor and against Plaintiffs as follows:

(1) On the First Cause of Action, declaring Defendant Endurance has not breached the

Endurance Policy and that Defendant Endurance has no liability in respect of the Plaintiffs'

claimed loss or any other amounts;

(2) On the Second Cause of Action, declaring Defendant Endurance has not breached the

Endurance Policy or any of its duties, contractual or otherwise, to Plaintiffs or any of them, and

that Defendant Endurance no liability in respect of the Plaintiffs' claimed loss, attorney's fees,

costs or any other amounts;

(3) Declaring Plaintiffs are not entitled to any fees or costs of this action;

(4) Dismissing the Complaint with prejudice, together with the costs and disbursements

of this action and for any expenses incurred in the defense thereof, including without limitation

attorney's fees and costs;

(5) Declaring there is no coverage for Plaintiffs, or any of them, for their insurance

claims;

(6) Declaring Plaintiffs' claims, whether or not related to insurance, to be without merit;

and

(7) Awarding to Defendant Endurance such other and further equitable, declaratory or

other relief to which Endurance may be entitled and which this Court may determine is just in

the premises.


24


25


CLYDE & CO US LLP


Corey R. Greenwald

William M. Cooney




Tel: (212) 710-3900

Fax: (212) 710-3950


[email protected]



25




UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -----------------------------------------------------------------------------X CENTURY 21 DEPARTMENT STORES, LLC, 66 PEARL RETAIL, LLC, 66 PEARL RETAIL II, LLC, 66 PEARL RETAIL ISG, LLC, 173 BWAY BLUE LLC, 262 MOTT BLUE TIC LLC, 444 86 BLUE LLC, MIAMI DD 101 BLUE LLC, 28 NEWBURY JSRE TIC LLC, TRUE BLUE ASSOCIATES LLC, STAR OF DAVID, IRAYMOND-77 WARREN LLC, SABRA ASSOCIATES LLC, 315 SEVENTH RETAIL LLC, Case No. 20-cv-07437 WEBWAY ASSOCIATES LLC, and CENTURY 21, INC., (LGS) (SLC) Plaintiffs, NOTICE OF APPEARANCE -against- STARR SURPLUS LINES INSURANCE CO., ALLIANZ GLOBAL RISKS US INSURANCE CO., AXIS SURPLUS LINES INSURANCE CO., LIBERTY MUTUAL FIRE INSURANCE CO., STEADFAST INSURANCE CO., ENDURANCE AMERICAN SPECIALTY INSURANCE CO., EVANSTON INSURANCE CO., LANDMARK AMERICAN INSURANCE CO., QBE SPECIALTY INSURANCE CO., GREAT AMERICAN FIDELITY INSURANCE CO., and CERTAIN UNDERWRITERS AT LLOYD'S SUBSCRIBING TO POLICY Nos. PG1902704, PG1902346, PG1902696, PG1902698, PG1902707, PG1902702, and PG1902712, Defendants. -----------------------------------------------------------------------------X


Please enter my appearance as counsel in this case for Defendant Endurance American

Specialty Insurance Co.



1



CLYDE & CO US LLP

By: /s/

William M. Cooney




Tel: (212) 710-3900

Fax: (212) 710-3950




2



DLA Piper LLP (US) 1251 Avenue of the Americas 27th Floor New York, New York 10020-1104 www.dlapiper.com

Michael D. Hynes [email protected] T 212.335.4942 F 212.884.8642

September 18, 2020

BY ECF

The Honorable Lorna G. Schofield

United States District Judge

United States District Court

Southern District of New York

500 Pearl Street

New York, NY 10007

Re: Century 21 Department Stores, LLC et al. v. Starr Surplus Lines Insurance Co. et al.,

Case No. 1:20-cv-07437, Request for Pre-Motion Conference for Motion to Withdraw

Reference

Dear Judge Schofield:

On behalf of Defendant Allianz Global Risks US Insurance Co. (“AGR US”), we write to request

a telephonic conference to address Defendant AGR US’s forthcoming motion to withdraw the

automatic referral of the referenced case to the United States Bankruptcy Court for the Southern

District of New York.

As a general matter, Rule 5011(a) of the Federal Rules of Bankruptcy Procedure states that a

motion to withdraw automatic referral shall be heard by the District Court, but the motion itself is

to be filed with the Bankruptcy Court, which will then transmit the motion and supporting

documents to the District Court. See Local Bankruptcy Rules for the Southern District of New

York, Rule 5011-1. However, Rule III.A.1 of Your Honor’s Individual Rules requires the parties

to file a pre-motion letter seeking a conference with the Court prior to filing any motion.

This unusual scenario arose because Plaintiffs originally commenced this action in New York state

court before filing for bankruptcy and removing its own case to this Court. In the interest of

following Your Honor’s Individual Rules as closely as possible, and after consultation with Your

Honor’s clerk, we submit this pre-motion letter before the motion to withdraw is filed in the

Southern District of New York Bankruptcy Court.

By way of background, Plaintiff Century 21 Department Stores, LLC (“Century 21”) and related

plaintiffs originally brought this insurance coverage action in the Supreme Court of the State of

New York, County of New York (Index No. 652975/2020) on July 8, 2020 (the “Insurance

Action”). In their Complaint, Plaintiffs allege that they lost $175 million in revenue when they

closed their department stores after “various government entities,” including New York City and

By September 28, 2020, Plaintiffs shall file a response on ECF to this pre-motion letter not to exceed 3 single spaced pages.

SO ORDERED.

Dated: September 21, 2020 New York, New York


1

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Page Two

Philadelphia, issued social distancing orders intended to protect the general public against the

spread of COVID-19. Plaintiffs further claim that AGR US and other defendant-insurers breached

their insurance policies by not paying the Plaintiffs’ $175 million claim and acted in bad faith.1

Century 21 subsequently filed for bankruptcy on September 10, 2020. The next day, Plaintiffs

removed their entire Insurance Action to this Court with the expectation that the case would be

automatically referred to the Bankruptcy Court pursuant to a standing order. In re Standing Order

of Reference Re Title 11, 12 Misc. 32 (S.D.N.Y. Feb. 1, 2012). Plaintiffs have already indicated

their intent to pursue their non-core insurance claims against Defendants in the Bankruptcy Court.

See Memorandum in Support of Debtors’ Chapter 11 Petition, Case No. 20-1209-SCC, at 2

(Docket No. 15).2

Pursuant to 28 U.S.C. § 157(d), however, “a district court may withdraw, in whole or in part, any

case or proceeding referred [to the bankruptcy court] under this section, on its own motion or on

timely motion of any party, for cause shown.” Scott v. AIG Prop. Cas. Co., 1:17-CV-1052-GHW,

2017 WL 1380607, at *2 (S.D.N.Y. Apr. 17, 2017). The Second Circuit has articulated a number

of non-exhaustive factors that district courts should consider in determining whether to withdraw

a reference under § 157(d). See In re Orion Pictures Corp., 4 F.3d 1095 (2d Cir. 1993). They are:

(1) whether the claim is core or non-core; (2) what is the most efficient use of judicial resources;

(3) what is the delay and what are the costs to the parties; (4) what will promote uniformity of

bankruptcy administration; (5) what will prevent forum shopping; and (6) other related factors. Id.

Pre-petition claims for breach of contract have routinely been treated as non-core proceedings

subject to withdrawal. See id. at 1102 (“It is clear that to the extent that the claim is for pre-petition

contract damages, it is non-core.”) (internal citations omitted); In re Coudert Bros., No. 11-cv-

4949, 2011 WL 7678683, at *5 (S.D.N.Y. Nov. 23, 2011) (“Where a contract sued upon was

formed prior to the bankruptcy petition, it will generally be highly unlikely that a proceeding based

on that contract turns on the bankruptcy laws.”). This includes insurance coverage disputes, like

the Insurance Action. See, e.g., In re EMS Fin. Servs., LLC, 491 B.R. 196, 203 (E.D.N.Y. 2013)

(treating insurance coverage action as a non-core proceeding because “the contract claims are not

1 Courts from around the country, including the Southern District of New York, have already rejected claims just like

the one asserted by the Plaintiffs here. See Social Life Magazine, Inc., v. Sentinel Insurance Company Limited, Case

No. 1:20-cv-03311-VEC; 2020 WL 2904834, at *15 (S.D.N.Y. May 14, 2020); accord Diesel Barbershop, LLC v.

State Farm Lloyds, No. 5:20-CV-461-DAE, 2020 WL 4724305, at *5 (W.D. Tex. Aug. 13, 2020); Rose’s 1, LLC v.

Erie Ins. Exchange, No. 2020 CA 002424 B, 2020 WL 4589206, at *4 (D.C. Super. Aug. 06, 2020); Gavrilides

Management Co. v. Michigan Insurance Co., Case No. 20-000258-CB (Mich. Cir. Ct. July 1, 2020).

2 Notably, most of the Plaintiffs who commenced the Insurance Action in the Supreme Court, County of New York

have not filed for bankruptcy protection.


2



http://scholar.google.com/scholar?q=4++f.3d++1095&btnG=&hl=en&as_sdt=6




http://scholar.google.com/scholar?q=12++misc.++32&btnG=&hl=en&as_sdt=6






Page Three

rendered core simply because they involve property of the estate.”); DeWitt Rehab. & Nursing

Ctr., Inc. v. Columbia Cas. Co., 464 B.R. 587, 591 (S.D.N.Y. 2012); Scott, 2017 WL 1380607, at

*4 (“[T]he breach of a pre-petition contract and breach of the implied covenant of good faith and

fair dealing are clearly non-core claims.”) (emphasis added).

Since 28 U.S.C. § 157(d) and Rule 5011(a) of the Federal Rules of Bankruptcy Procedure provide

that it is the District Court that decides whether to withdraw the reference, AGR US respectfully

requests that this Court schedule a pre-motion conference to set a schedule for the parties to brief

whether the automatic referral of the Insurance Action should be withdrawn. AGR US will confer

with counsel for all parties prior to the conference in an attempt to find a mutually agreeable

briefing schedule to present to this Court at that time.

We remain available to address any questions or concerns that the Court may have in the meantime.

Thank you very much for your attention to this matter.

Sincerely,

Michael D. Hynes

cc: All Counsel of Record (via ECF)


3





Case 1:12-mc-00032-LAP Document 1 Filed 02/01/12 Page 1 of 1Case 1:12-cv-03662-UA Document 3 Filed 05/08/12 Page 1 of 1Case 1:20-cv-07437-LGS Document 23 Filed 09/22/20 Page 1 of 1

1

20-12097-scc Doc 63-22 Filed 09/22/20 Entered 09/22/20 13:11:37 Doc 23 SDNYTransfer Order Pg 1 of 1

CLOSED,BKREF,ECF

U.S. District CourtSouthern District of New York (Foley Square)

CIVIL DOCKET FOR CASE #: 1:20-cv-07437-LGSInternal Use Only

Century 21 Department Stores LLC et al v. Starr Surplus LinesInsurance C0. et alAssigned to: Judge Lorna G. SchofieldCase in other court: Supreme Court, County of New York,

652975-2020Cause: 28:1452 R&R re motions to remand (non-core)

Date Filed: 09/10/2020Date Terminated: 09/22/2020Jury Demand: NoneNature of Suit: 110 InsuranceJurisdiction: Federal Question

Plaintiff

Century 21 Department Stores LLC represented by Steve Y. MaProskauer Rose LLP (NYC)11 Times SquareNew York, NY 10036(212)-969-3488Email: [email protected] TO BE NOTICED

Plaintiff

66 Pearl Retail, LLC

Plaintiff

66 Pearl Retail II, LLC

Plaintiff

66 Pearl Retail ISG, LLC

Plaintiff

173 Bway Blue LLC

Plaintiff

262 Mott Blue TIC LLC

Plaintiff

444 86 Blue LLC

Plaintiff

Miami DD 101 Blue LLC

Plaintiff

28 Newbury JSRE TIC LLC

Plaintiff

SDNY CM/ECF NextGen Version 1.2 https://nysd-ecf.sso.dcn/cgi-bin/DktRpt.pl?284620637713837-L_1_0-1

1 of 6 9/22/2020, 11:35 AM

20-12097-scc Doc 63-23 Filed 09/22/20 Entered 09/22/20 13:11:37 SDNY DocketSheet Pg 1 of 6

True Blue Associates LLC

Plaintiff

Star of David

Plaintiff

IRaymond-77 Warren LLC

Plaintiff

Sabra Associates LLc

Plaintiff

315 Seventh Retail LLC

Plaintiff

Webway Axxociates LLC

Plaintiff

Century 21 Inc.

V.

Defendant

Starr Surplus Lines Insurance C0. represented by Meegan F. HollywoodRobins Kaplan LLP (NYC)399 Park Avenue, 36th FloorNew York, NY 10022212-980-7400Fax: 212-980-7499Email: [email protected] TO BE NOTICED

Defendant

Allianz Global Risks US Insurance Co. represented by Michael D. HynesDLA Piper US LLP (NY)1251 Avenue of the Americas, 27th FloorNew York, NY 10020(212) 335-4500Fax: (212) 335-4501Email: [email protected] ATTORNEYATTORNEY TO BE NOTICED

Defendant

Axis Surplus Lines Insurance Co. represented by Kristin Vonderhorst GallagherKennedys120 Mountain View BoulevardP.O. Box 650Basking Ridge, NJ 07920


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908-848-6300Fax: 908-647-8390Email:[email protected] ATTORNEYATTORNEY TO BE NOTICED

Joanna Lyn YoungKennedys CMK LLP570 Lexington Avenue8th FloorNew York, NY 10022(212)-252-0004Fax: (212)-252-0444Email: [email protected] TO BE NOTICED

Defendant

Liberty Mutual Fire Insurance Co. represented by Meegan F. Hollywood(See above for address)ATTORNEY TO BE NOTICED

Defendant

Steadfast Insurance Co. represented by Meegan F. Hollywood(See above for address)ATTORNEY TO BE NOTICED

Defendant

Endurance American SpecialtyInsurance Co.

represented by Corey Russell GreenwaldClyde & Co US LLP (NYC)405 Lexington AveNew York, NY 10174(212)-710-3900Fax: (212)-710-3950Email: [email protected] ATTORNEYATTORNEY TO BE NOTICED

William Michael CooneyClyde & Co US LLP (NYC)405 Lexington AveNew York, NY 10174212-710-3900Fax: 212-710-3950Email: [email protected] ATTORNEYATTORNEY TO BE NOTICED

Defendant

Evanstan Insurance Co.


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Defendant

Landmark American Insurance Co. represented by Meegan F. Hollywood(See above for address)ATTORNEY TO BE NOTICED

Defendant

Certain Underwriters At LloydsSubscribing To Policy Nos. PG1902704,PG1902346, PG1902696, PG1902698,PG1902707, PG1902702, andPG1902712

represented by Meegan F. Hollywood(See above for address)ATTORNEY TO BE NOTICED

Defendant

QBE Specialty Insurance Company represented by Isabella Karlina Stankowski-BookerZelle, LLP45 Broadway, Suite 720New York, NY 10006(864) 766-9998Email: [email protected] TO BE NOTICED

Date Filed # Docket Text

09/11/2020 1 NOTICE OF REMOVAL from Supreme Court, County of New York. Case Number:652975/2020. (Filing Fee $ 400.00, Receipt Number ANYSDC-21601520).Documentfiled by Century 21 Department Stores LLC. (Attachments: # 1 Exhibit A: Summonsand Complaint, # 2 Exhibit B: Affidavit of Service).(Ma, Steve) (Entered:09/11/2020)

09/11/2020 2 CIVIL COVER SHEET filed..(Ma, Steve) (Entered: 09/11/2020)

09/11/2020 3 RULE 7.1 CORPORATE DISCLOSURE STATEMENT. Identifying Other AffiliateCentury 21, Inc., Other Affiliate C21 Department Stores Holdings LLC for Century21 Department Stores LLC. Document filed by Century 21 Department StoresLLC..(Ma, Steve) (Entered: 09/11/2020)

09/11/2020 ***NOTICE TO ATTORNEY REGARDING PARTY MODIFICATION. Noticeto attorney Steve Y. Ma. The party information for the following party/partieshas been modified: 444 86 BLUE LLC; MIAMI DD 101 BLUE LLC ; 28NEWBURY JSRE TIC LLC ; TRUE BLUE ASSOCIATES LLC ; STAR OFDAVID ;IRAYMOND-77 WARREN LLC ; SABRA ASSOCIATES LLC ; 315SEVENTH RETAIL LLC. The information for the party/parties has beenmodified for the following reason/reasons: party name was entered in all caps.(dnh) (Entered: 09/11/2020)

09/11/2020 CASE OPENING INITIAL ASSIGNMENT NOTICE: The above-entitled action isassigned to Judge Lorna G. Schofield. Please download and review the IndividualPractices of the assigned District Judge, located at https://nysd.uscourts.gov/judges/district-judges. Attorneys are responsible for providing courtesy copies to judgeswhere their Individual Practices require such. Please download and review the ECFRules and Instructions, located at https://nysd.uscourts.gov/rules/ecf-related-


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instructions..(dnh) (Entered: 09/11/2020)

09/11/2020 Magistrate Judge Sarah L. Cave is so designated. Pursuant to 28 U.S.C. Section636(c) and Fed. R. Civ. P. 73(b)(1) parties are notified that they may consent toproceed before a United States Magistrate Judge. Parties who wish to consent mayaccess the necessary form at the following link: https://nysd.uscourts.gov/sites/default/files/2018-06/AO-3.pdf. (dnh) (Entered: 09/11/2020)

09/11/2020 Case Designated ECF. (dnh) (Entered: 09/11/2020)

09/18/2020 4 ANSWER to Complaint. Document filed by Landmark American InsuranceCo...(Hollywood, Meegan) (Entered: 09/18/2020)

09/18/2020 5 ANSWER to Complaint. Document filed by Liberty Mutual Fire InsuranceCo...(Hollywood, Meegan) (Entered: 09/18/2020)

09/18/2020 6 ANSWER to Complaint. Document filed by Starr Surplus Lines InsuranceC0...(Hollywood, Meegan) (Entered: 09/18/2020)

09/18/2020 7 ANSWER to Complaint. Document filed by Steadfast Insurance Co...(Hollywood,Meegan) (Entered: 09/18/2020)

09/18/2020 8 ANSWER to Complaint. Document filed by Certain Underwriters At LloydsSubscribing To Policy Nos. PG1902704, PG1902346, PG1902696, PG1902698,PG1902707, PG1902702, and PG1902712..(Hollywood, Meegan) (Entered:09/18/2020)

09/18/2020 9 NOTICE OF APPEARANCE by Michael D. Hynes on behalf of Allianz Global RisksUS Insurance Co...(Hynes, Michael) (Entered: 09/18/2020)

09/18/2020 10 RULE 7.1 CORPORATE DISCLOSURE STATEMENT. Identifying Corporate ParentAGCS International Holding B.V., Corporate Parent Allianz SE, Corporate ParentAllianz of America, Inc. for Allianz Global Risks US Insurance Co.. Document filedby Allianz Global Risks US Insurance Co...(Hynes, Michael) (Entered: 09/18/2020)

09/18/2020 11 ANSWER to Complaint. Document filed by Allianz Global Risks US InsuranceCo...(Hynes, Michael) (Entered: 09/18/2020)

09/18/2020 12 NOTICE OF APPEARANCE by Joanna Lyn Young on behalf of Axis Surplus LinesInsurance Co...(Young, Joanna) (Entered: 09/18/2020)

09/18/2020 13 NOTICE OF APPEARANCE by Kristin Vonderhorst Gallagher on behalf of AxisSurplus Lines Insurance Co...(Gallagher, Kristin) (Entered: 09/18/2020)

09/18/2020 14 RULE 7.1 CORPORATE DISCLOSURE STATEMENT. Identifying Corporate ParentAXIS Insurance Company, Other Affiliate AXIS Specialty Global Holdings Limited,Other Affiliate Axis Capital Holding Limited, Other Affiliate AXIS Specialty U.S.Holdings, Inc. for Axis Surplus Lines Insurance Co.. Document filed by Axis SurplusLines Insurance Co...(Gallagher, Kristin) (Entered: 09/18/2020)

09/18/2020 15 ANSWER to Complaint. Document filed by Axis Surplus Lines InsuranceCo...(Gallagher, Kristin) (Entered: 09/18/2020)

09/18/2020 16 ANSWER to Complaint. Document filed by QBE Specialty Insurance Company..(Stankowski-Booker, Isabella) (Entered: 09/18/2020)


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09/18/2020 17 LETTER addressed to Judge Lorna G. Schofield from Michael D. Hynes datedSeptember 18, 2020 re: Request for Pre-Motion Conference. Document filed byAllianz Global Risks US Insurance Co...(Hynes, Michael) (Entered: 09/18/2020)

09/18/2020 18 NOTICE OF APPEARANCE by Corey Russell Greenwald on behalf of EnduranceAmerican Specialty Insurance Co...(Greenwald, Corey) (Entered: 09/18/2020)

09/18/2020 19 RULE 7.1 CORPORATE DISCLOSURE STATEMENT. Identifying Corporate ParentEndurance American Insurance Company, Corporate Parent Endurance U.S. HoldingsCorp., Corporate Parent Endurance Specialty Insurance Ltd., Corporate ParentEndurance Assurance Corporation, Corporate Parent Sompo Japan NipponkoaInsurance Inc., Corporate Parent Sompo Holdings, Inc., Corporate Parent SompoInternational Holdings Ltd. for Endurance American Specialty Insurance Co..Document filed by Endurance American Specialty Insurance Co...(Greenwald, Corey)(Entered: 09/18/2020)

09/18/2020 20 ANSWER to Complaint. Document filed by Endurance American SpecialtyInsurance Co...(Greenwald, Corey) (Entered: 09/18/2020)

09/18/2020 21 NOTICE OF APPEARANCE by William Michael Cooney on behalf of EnduranceAmerican Specialty Insurance Co...(Cooney, William) (Entered: 09/18/2020)

09/21/2020 22 MEMO ENDORSEMENT on re: 17 Letter filed by Allianz Global Risks USInsurance Co. ENDORSEMENT: By September 28, 2020, Plaintiffs shall file aresponse on ECF to this pre-motion letter not to exceed 3 single spaced pages.(Signed by Judge Lorna G. Schofield on 9/21/2020) (cf) (Entered: 09/21/2020)

09/22/2020 23 DUPLICATE ORIGINAL AMENDED STANDING ORDER REFERRING CASE toBankruptcy Court as related to Bankruptcy Court Case No. 20-12097. Pursuant to 28U.S.C. Section 157(a) any or all cases under title 11 and any or all proceedings arisingunder title 11 or arising in or related to a case under title 11 are referred to thebankruptcy judges for this district. (See 1:12-mc-00032 (M-10-468) Order FiledFebruary 1, 2012) (Signed by Judge Loretta A. Preska on 1/31/2012) (gp) (Entered:09/22/2020)

09/22/2020 CASE TRANSFERRED OUT from the U.S.D.C. Southern District of New York tothe United States Bankruptcy Court - Southern District of New York..(gp) (Entered:09/22/2020)


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20-12097-scc doc 63 filed 09/22/20 entered 09/22/20 13:11

Documents