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Hawaii court lets theater's COVID suit against Allianz unit go forward


A Hawaii state court has refused to dismiss COVID-19 business interruption litigation filed by a nonprofit Honolulu theater against an Allianz SE unit.

In Monday’s ruling, the state’s First Circuit Court in Honolulu held in Hawaii Theater Center v. American Insurance Co. that there were “adequate allegations in the complaint that state a possible viable claim and give reasonable notice to (defendant) on what the case is about.”

The case has had a peripatetic journey. It was first filed in state court in March but removed to federal court in Honolulu by Allianz unit The American Insurance Co. In August, that court granted the theater’s motion to return it to state court.

The federal district court’s ruling said, “While this district regularly interprets insurance policies under Hawaii law to determine an insurer’s obligation(s) to its insured … doing so under the circumstances would result in the unnecessary determination of state law.”

Plaintiff attorney Alan Van Ettan, with Deeley King Pang & Van Etten in Honolulu, said in a statement, “We would like to thank the court for its expeditious handling of this matter and its clear ruling, rightfully emphasizing Hawaii law."

Attorneys for the insurer did not respond to a request for comment.

David E. Weiss, a partner with Reed Smith LLP in San Francisco, who is not involved in the case, said in a statement, “The ruling further supports what we have been saying all along. That courts should not be deciding complex and novel fact issues, such as whether COVID-19 can cause physical loss or damage, on motions to dismiss.”

Last month, a jury in state court in Texas issued a $48.5 million verdict in favor of Baylor College of Medicine in COVID-19 business interruption coverage it filed against Lloyd’s underwriters, in the first such verdict on the issue.