(Bloomberg) --A California judge rejected the National Hockey League’s effort to collect more than $1 billion from an insurance company to compensate it for losses caused by the shuttering of arenas during the coronavirus pandemic.
In a tentative ruling Wednesday, Santa Clara Superior Court Judge Sunil Kulkarni dismissed the league’s argument that the spread of Covid-19 damaged its properties resulting in loss of revenue. However, the judge agreed to reconsider the league’s lawsuit if Factory Mutual Insurance Co. fails to honor a communicable disease clause in its policy.
Factory Mutual acknowledged the league policy covers against communicable diseases but it noted that it only has a “$1 million annual aggregate limit” -- far less than what the league was demanding.
The NHL and 20 of its teams sued Factory Mutual last year after the insurer rejected their claims for compensation under a property clause of its policy.
The league argued it had to take safety measures before reopening arenas -- such as installing plexiglass partitions and providing touchless payment devices. It said the “repairs” were were proof of property damage to its facilities.
The judge likened the repairs to modifications and rejected the league’s claim “that Covid-19 physically changed the air and surfaces at their properties.”
The case is San Jose Sharks LLC, et al. v. Factory Mutual Insurance Company, et al., 21CV383780, in California Superior Court (Santa Clara).
