Mohawk Gaming Enters., LLC v. Affiliated FM Ins. Co., 8:20-CV-701

• Court: United States District Courts. 2nd Circuit. United States District Court of Northern District of New York
• Parties: MOHAWK GAMING ENTERPRISES, LLC, Plaintiff, v. AFFILIATED FM INSURANCE CO., Defendant.
• Docket Number: 8:20-CV-701
• Decision Date: 15 April 2021

MOHAWK GAMING ENTERPRISES, LLC, Plaintiff,
v.
AFFILIATED FM INSURANCE CO., Defendant.

8:20-CV-701

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK

April 15, 2021

APPEARANCES:	OF COUNSEL:
THE COPPOLA FIRM; Attorneys for Plaintiff; 3960 Harlem Road, Suite 7; Buffalo, NY 14226	LISA A. COPPOLA, ESQ.
MARSHA K. SCHMIDT,; ATTORNEY AT LAW; Attorneys for Plaintiff; 14928 Perrywood Drive; Burtonsville, MD 20866	MARSHA K. SCHMIDT, ESQ.
FINAZZO COSSOLINI O'LEARY; MEOLA & HAGER, LLC; Attorneys for Defendant; 67 East Park Place, Suite 901; Morristown, NJ 07960	ROBERT B. MEOLA, ESQ.; EDWARD TERRENCE; HAGAN, ESQ.; PIEL LORA, ESQ.; ROBERT FRANCIS; COSSOLINI, ESQ.

DAVID N. HURD United States District Judge

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MEMORANDUM-DECISION and ORDER

I. INTRODUCTION

This is a contract dispute between plaintiff Mohawk Gaming Enterprises, LLC ("Mohawk Gaming" or "plaintiff") and defendant Affiliated FM Insurance Company ("Affiliated FM" or "defendant") over coverage for loss caused by a business interruption at the Akwesasne Mohawk Casino Resort (the "Casino").

In early March of 2020, the Saint Regis Mohawk Tribe (the "Tribe") closed the Casino to the public following news of a COVID-19 exposure incident at St. Lawrence College (the "College"), which is located just a few miles away across the Canadian border in Kingston, Ontario.

Thereafter, Mohawk Gaming sought coverage for the business interruption from Affiliated FM under the terms of an insurance contract in effect at the time of the closure order. However, as the policy's deadline for the investigation and settlement of the claim neared, plaintiff came to believe that defendant planned to deny coverage, in bad faith and otherwise.

On June 23, 2021, Mohawk Gaming filed this four-count complaint alleging claims for declaratory judgment (Count One), breach of contract (Count Two), a violation of New York General Business Law § 349 (Count Three), and fraud (Count Four). Dkt. No. 1. Affiliated FM answered and asserted a panoply of affirmative defenses. Dkt. No. 11.

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On September 22, 2020, at an initial conference with U.S. Magistrate Judge Daniel J. Stewart, the parties agreed to conduct some preliminary motion practice on certain antecedent issues that might narrow the scope of (or perhaps even obviate the need for) discovery. See Dkt. No. 15.

On November 6, 2020, Mohawk Gaming moved under Federal Rule of Civil Procedure ("Rule") 56 for partial summary judgment on the question of whether a "contamination exclusion" in the insurance policy barred coverage for the business income lost at the Casino. Dkt. No. 18.

On December 17, 2020, Affiliated FM opposed and cross-moved under Rule 12(c) for a judgment on the pleadings based on its contention that, inter alia, the Tribe's closure order did not trigger coverage under the "civil authority provision" of the policy. Dkt. No. 19. Defendant also moved to strike an attorney affidavit filed by Mohawk Gaming in connection with the motion for partial summary judgment. Dkt. No. 21. These motions have been fully briefed and will be considered on the basis of the submissions without oral argument.

II. BACKGROUND¹

Mohawk Gaming is a limited liability company formed under the laws of the Tribe. Compl. ¶ 21. It owns the Casino, which is located on the Tribe's

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reservation land in Franklin County, New York. Id. Affiliated FM is an insurance company incorporated in Rhode Island and headquartered in California. Id. ¶ 22. It is registered to sell insurance in New York. Id.

On June 14, 2019, Affiliated FM issued to Mohawk Gaming insurance policy number SS722 (the "Policy"). Ex. 1 to Compl. at P0003.² Subject to various exclusions, the Policy covered the Casino and certain other Tribe-owned properties against "all risks of physical loss or damage" during the coverage period, which ran from July 1, 2019 through July 1, 2020. Id. at P0004, P0014-18. As relevant here, the Policy includes coverage for loss due to property damage and business interruption. Compl. ¶ 2; see also Policy at P0014-18, P0032-44.

On March 15, 2020, the College announced that it would be closing its campus because an unidentified student had tested positive for the novel coronavirus. Compl. ¶ 40. Although the College is located across the Canadian border in Kingston, Ontario, it is just 4.5 miles away from the Tribe's Casino in Hogansburg, New York. Id.

On March 16, 2020, in response to growing concern about the threat of the novel coronavirus, the Tribe declared a state of emergency. Compl. ¶¶ 43, 47.

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Later that day, members of the Tribal Council met with Mohawk Gaming representatives "to discuss the need to close the casino." Id. ¶ 46. Although Casino management hoped to continue operating with safety measures in place, concerns about the exposure at the nearby College eventually won out. Id. The Tribe issued a written order closing the Casino effective at 2:00 a.m. on March 17, 2020. Id. ¶ 47.

On March 19, 2020, Mohawk Gaming notified Affiliated FM in writing that it intended to make an insurance claim for business interruption coverage based on the Tribe's closure order. Compl. ¶ 57. As plaintiff explained, "it intended to claim coverage under the business interruption civil authority section of the policy." Id. ¶ 7. However, according to plaintiff, defendant "inexplicably acknowledged the claim as one for 'communicable disease' coverage." Id. ¶ 8.

On May 12, 2020, after some back and forth with a claims adjuster, Mohawk Gaming submitted to Affiliated FM a "Sworn Statement in Proof of Loss." Compl. ¶¶ 58-64. According to plaintiff's submission, the...