Locke Lord Represents Underwriters as Metallica’s Claims Seeking Coverage for Cancelled Shows Barred by Communicable Disease Exclusion and Dismissed by Court

Mitchell Popham and William Mullen (both of Los Angeles) led a Locke Lord team that represented Certain London Underwriters Subscribing to Policy No. B1333ECB190291‎ (Underwriters) as the action filed by Frantic, Inc. (Frantic), the American hard rock band professionally known as Metallica, against its insurer, which related to Frantic’s claim for coverage under a ‎“Cancellation, Abandonment and Non-Appearance Insurance”‎ policy, was dismissed in its entirety. Frantic’s claims under this policy related to Metallica’s April 2020 concert shows scheduled in South America that were postponed in March 2020 due to the COVID-19 pandemic. 

On November 30, 2022, Judge Holly J. Fujie of the Los Angeles Superior Court granted Underwriters’ motion for summary judgment dismissing all of Frantic’s claims, deciding that “the proliferation of the COVID-19 [pandemic] caused the [concert] cancellations and that it falls under the Communicable Disease Exclusion” under the relevant insurance policy. The Complaint filed by Frantic in June 2021 alleged three claims, including for breach of contract and tortious breach of the implied covenant of good faith and fair dealing against Underwriters, as well as a declaratory relief cause of action, which all related to Underwriters’ proper denial of Frantic’s claim for coverage under the insurance policy for the postponed shows. Despite alleging that the South American concert shows were postponed by “Closure Orders” and travel restrictions, Frantic also pled that these orders issued by civil authorities in March 2020 were “in response to the worldwide spread of SARS-CoV-2,” another name for COVID-19. Frantic also produced during discovery copies of emergency travel restrictions from March 18 and 19, 2020 issued by Argentina, Chile and Brazil—where Metallica was scheduled to play—which all stated that they were implemented in response to the spread of the COVID-19 virus. 

Frantic argued in its opposition to Underwriters’ summary judgment motion that travel restrictions and government closure orders, not COVID-19, were the efficient proximate cause of its purported loss under the policy with Underwriters. The Court rejected this argument finding, based on the evidence submitted by Underwriters, that COVID-19 was the “efficient proximate cause of the concerts’ cancellations” since the “travel restrictions which caused the concert cancellations were a direct response to the burgeoning COVID-19 pandemic” which “spurred the travel restrictions to South America and restrictions on public gatherings.” Judge Fujie also determined that Frantic did not present any evidence showing that either of the exceptions to the Communicable Disease Exclusion in the policy applied to its claim. As a result, the Court dismissed the three causes of action alleged by Frantic and is expected to issue a judgment in favor of Underwriters soon.
Posted December 9, 2022