Duane Morris Class Action Review - 2023 - Report - Page 342
In Alley 64, Inc., et al. v. Society Insurance, 2022 Ill. App. LEXIS 153 (Ill. App. Mar. 30,
2022), the plaintiff, an owner and operator of a restaurant bar and grill, filed a class
action against its insurer for a declaratory action following the Illinois Governor’s
executive order prohibiting on-premises consumption of food and beverage during
COVID-19. Although the order suspended on-premises consumption, Illinois restaurants
could continue to operate via delivery, drive-through, curbside pickup, and carryout
services. The defendant insurer provided business property coverage to the plaintiff,
which had a coverage clause related to “contamination.” The plaintiff alleged that the
presence and threat of COVID-19 particulates and of persons infected with the virus
within the establishment’s premises rendered it unsafe, and that it was “highly probable”
that people carrying the particulates of the virus were present on the premises during
the policy’s effective dates. Id. at *13. The plaintiff defined the putative class as all
Illinois non-essential businesses maintaining a policy with the same operative language
who were denied contamination coverage arising from the Governor’s shut-down order.
Id. Finding that the class met the numerosity requirement, the common issues over
coverage predominated, class counsel was adequate, and class action adjudication
would be efficient, the trial court certified the class. Id. at *30-32. On appeal, the Illinois
appellate court addressed the threshold question of whether the plaintiff’s underlying
claim was actionable in considering whether to uphold class certification. Id. at 36. The
plaintiff argued that the trial court was required to accept the allegations of the complaint
as true when deciding class certification. Id. at *42. The appellate court disagreed and
noted that consideration of the underlying validity of the coverage claim was a
necessary aspect of its interlocutory review. Id. at *46. At the heart of the analysis was
whether the suspension of operations was due to contamination. The appellate court
found that the plaintiff’s failure to allege that the virus was actually in the establishment
was fatal, because without actual contamination there was no coverage. Having
decided that the plaintiff did not state an underlying claim for coverage, the appellate
court reversed the class certification order and remanded the case back to the trial
court. Id. at 64.
Indiana
Indiana courts also addressed class actions related to COVID, and effectively nullified
state legislation enacted to shield defendants from class actions.
In Mellowitz, et al. v. Ball State University, 2022 Ind. App. LEXIS 326 (Ind. App. Oct. 5,
2022), the plaintiff, a college student at the defendant Ball State University, filed a class
action complaint against Ball State and its board of trustees for breach of contract and
unjust enrichment stemming from the defendant’s cancelation of in-person classes
during COVID-19 and retaining tuition and fees. Subsequently, the Indiana Governor
signed and the General Assembly passed Indiana Code Section 34-12-5-7 (Section 7)
stating "a claimant may not bring, and a court may not certify, a class action lawsuit
against a covered entity for loss or damages arising from COVID-19 in a contract,
implied contract, quasi contract, or unjust enrichment claim." Id. at *3. Relying on
Section 7, the defendant filed a motion for relief pursuant to Indiana Trial Rule 23(D)(4),
allowing the trail court to eliminate allegations as to the representation of absent
persons. Id. at *4. The plaintiff filed a response asserting that Section 7 was a
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Duane Morris Class Action Review – 2023
