Foran Glennon shareholder Matthew Ponzi and partner Brian Devilling successfully obtained summary judgment on behalf of their insurer client in a $1.3 million business interruption dispute. The U.S. District Court for the District of Connecticut ruled that the policyholder, a cannabis product manufacturer, failed to establish a causal link between its operational suspension and its claimed income loss.
Case Background
The case arose from a February 2020 fire at the policyholder’s cannabis production facility in Watertown, Connecticut, which destroyed nearly 1,000 marijuana plants and damaged a key cultivation and processing area. While the insurer covered nearly $500,000 for property damage and repairs, the policyholder sought additional compensation under its business interruption coverage, claiming the fire significantly disrupted operations and resulted in over $1.3 million in lost income.
The insurer denied the claim, prompting the policyholder to sue in state court in 2022 before the case was quickly transferred to federal court.
The court ruled in favor of Foran Glennon’s client, granting a summary judgment after finding that the policyholder did not purchase crop insurance and that the commercial policy excluded coverage for cannabis products and plants. Additionally, the policy’s business interruption provision required that income loss be directly caused by the necessary suspension of operations due to physical damage to covered property. The court determined that ongoing repairs did not force the policyholder to scale back operations entirely, nor did the evidence support a direct causal link between the temporary facility closure and the claimed income loss.
Matt concentrates his practice on insurance coverage and commercial litigation, specifically in the analysis and litigation of commercial property, liability and reinsurance claims. Clients trust his extensive trial experience at both the federal and state level when faced with challenging litigation matters.
Brian concentrates his practice on first-party property insurance disputes, general civil defense litigation and commercial litigation. With experience providing counsel in over thirty states, clients trust Brian to handle matters in insurance coverage and personal injury defense.