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Law360 (April 26, 2021, 10:44 PM EDT) -- An Illinois federal judge on Monday allowed Zurich American Insurance Co. to transfer the Freebirds World Burrito chain's $100 million pandemic-related loss coverage suit to Florida, saying it would save judicial resources as Zurich has filed a "mirror-image" suit against the chain owner there.
U.S. District Judge John Fitzgerald Kness rejected the Tavistock Restaurant Group's bid to remand the case to state court and granted Zurich's request to move the case to Florida, saying that the policy in question had been obtained in the Sunshine State and suit dealing with the same issue was pending there.
"As Zurich notes, the pending Florida Action involves the same parties, the same insurance policy, the same claims, and the same defenses," the judge said. "If the Court were to transfer this action to the Middle District of Florida, it would almost certainly be consolidated with the pending action" to avoid unnecessary expenses and waste of judicial resources, he added.
Last July, Zurich sued Tavistock in Florida federal court, saying the losses at its more than 80 restaurants across the country were not covered and seeking a ruling from the court that it should not have to pay up. Two days later Tavistock filed the current declaratory judgment action against Zurich in Illinois state court before the insurer removed it to Illinois federal court.
Tavistock has alleged that Zurich wrongfully denied coverage under its all-risk policy for its pandemic-related losses and that there was a "direct physical loss or damage" from the inability to use its restaurants.
According to court records, the Florida-based Tavistock subsequently asked the court to remand the case to state court while Illinois-based Zurich wanted it sent to Florida. On Monday, Judge Knees rejected the restaurant owner's bid, saying there is no similar pending action in the state court.
Additionally, allowing the case to remain in Illinois federal court would be a waste of resources because a "mirror-image" suit is pending in Florida federal court, the judge said.
Tavistock has argued that the case should not be heard in Florida because it has restaurants across the United States. The judge disagreed on the grounds that the policy was delivered by a broker in Florida which was the "hub" of Tavistock's communications with Zurich.
"Tavistock also makes no attempt to argue that Illinois has any connection to the material events of this case. Even though Zurich is headquartered in Illinois, it is not clear that any of Zurich's employees in Illinois had any connection with the Policy," Judge added.
Counsel for the parties could not be immediately reached for comment on Monday.
Zurich is represented by Lisa Anne Pach of Strook Strook & Lavan and Shari L. Klevens of Dentons US LLP.
Tavistock is represented by John F. Romano of Romano Law Group and Antonio M. Romanucci, David A. Neiman and Gina A. DeBoni of Romanucci and Blandin LLC.
The case is Tavistock Restaurants Group LLC v. Zurich American Insurance Co., case number 1:20-cv-04364, in theU.S. District Court for the Northern District of Illinois.
The related case is Zurich American Insurance Co. v. Tavistock Restaurants Group LLC, case number 6:20-cv-01295, in the U.S. District Court for the Middle District of Florida.
--Additional reporting by Shawn Rice. Editing by Peter Rozovsky.
For a reprint of this article, please contact reprints@law360.com.
