Mama Jo’s, Inc., dba Berries v. Sparta Insurance Company

The central question in this matter is what constitutes physical damage to property for the purposes of triggering coverage under an all-risk insurance policy. Amongst the jurisdictions, it is generally agreed that an all-risk insurance policy covers all fortuitous, “direct” and “physical” losses which are not specifically excluded or limited therein. The Circuit Courts are split as to what constitutes “direct physical loss”. Some Circuits employ a more expansive definition in favor of insurance coverage for policyholders. Other Circuits employ a more narrow and restrictive interpretation in favor of insurance carriers. Although this case involves physical construction dust and debris damage to a restaurant, certain issues presented overlap with the recent proliferation of COVID-19 insurance cases across the country. Additionally, these proceedings present the question of what level of testing, if any, is required to satisfy the Daubert standard and whether the district court may circumvent the role of the jury by ruling on the veracity of the opinion of a causation expert. This Court has held that a court’s gatekeeper role is not intended to supplant the role of the jury. Instead, vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof to the jury are the traditional and appropriate means to attack expert testimony. The questions presented are:

1. Whether construction dust and debris damage to covered property constitutes “direct physical loss” under an all-risk insurance policy.

2. Whether it was appropriate for the lower court to impose a heightened testing standard and supplant