Editor's note and update: This case was dismissed by agreement on April 9, 2021, according to information posted in the online docket maintained by the clerk of the U.S. District Court for the Northern DIstrict of Illinois.
A federal judge has refused to ground a nationwide class action against Nationwide Insurance for refusing to cover the cost of airfare for people who had purchased travel insurance for trips that were scuttled by the onset of the COVID-19 pandemic.
On Sept. 29, U.S. District Judge Virginia M. Kendall ruled a New Lenox woman could continue with at least part of the lawsuit she had filed earlier this year, accusing Nationwide of wrongfully denying out of hand her loss claims, and those of many other travelers, allegedly at the instruction of a major cruise line.
The plaintiffs to this point “state plausible claim for relief … because they suggest that Nationwide refused to conduct a reasonable investigation and failed to provide a reasonable and accurate explanation for the denial” of coverage, Judge Kendall said.
The lawsuit dates to June, when named plaintiff Christine Dowding, of suburban New Lenox, filed suit in Cook County Circuit Court. The lawsuit was filed by attorneys with the firms of Edelman Combs Latturner & Goodwin LLC and Taft Stettinius & Hollister LLP, both of Chicago.
According to the complaint, Dowding had booked a cruise with Carnival Cruise Lines, departing from Florida on March 30. To reach the departure port, she also booked airfare on Frontier Airlines from Chicago to Miami.
At the same time, Dowding purchased a travel insurance policy to cover her trip from Nationwide, which allegedly should have covered her expenses for the trip should she fall ill or if she or any of her five traveling companions were to be quarantined, among other occurrences that would prevent travel.
Prior to departure, Dowding became ill, and was diagnosed with bronchitis, just as Illinois Gov. JB Pritzker imposed his so-called stay at home order, which purportedly forbade Illinoisans from traveling, in response to the onset of the COVID-19 pandemic.
Carnival then cancelled Dowding’s cruise out of concern for COVID-19. The cruise line refunded Dowding’s “full cost of the cruise.”
According to court documents, Frontier provided Dowding with a “travel voucher” for future travel. However, the voucher would be good for only 90 days after it was issued.
“Dowding had no need to travel during the ninety days following the issue of the voucher, nor was she in a position to use the funds due to the ongoing COVID-related travel restrictions,” Judge Kendall noted.
Dowding then also filed a claim against her travel insurance, for the costs of her entire cancelled trip.
Nationwide denied coverage completely, prompting Dowding to file suit.
In the complaint, Dowding asserted she pressed Nationwide for an explanation, but was told only “that Carnival had instructed Nationwide to deny all claims.”
The lawsuit seeks to expand the action to include a class of potentially many others like Dowding who had similarly been denied travel insurance coverage by Nationwide, without adequate explanation, following COVID-19 cancellations.
Nationwide sought to ground the lawsuit, and asked the judge to deny the class request. The insurer said the refund she received from the cruise line and the voucher she got from the airline should be sufficient reimbursement. To allow her to also collect on her insurance policy would not just make her whole, but would allow her to improperly profit from the cancellations, the insurer said.
On the question of the cruise line cancellations, Judge Kendall agreed. She said the refund is sufficient to thwart her claims against Nationwide on that count.
However, on the question of the airfare, the judge said Nationwide needs to do more to demonstrate why it simply denied her coverage.
The judge said the voucher falls short of the full value of the airfare that Nationwide appeared to agree to reimburse, should illness or quarantine prevent her from completing her trip.
“Regardless of what value the voucher may have to some, the voucher does not equate to the full cost of her ticket because of its requirement that it be used during a nationwide pandemic when air travel was being discouraged and her cruise had been cancelled,” the judge wrote. “In fact, the only reason she had purchased the airfare was to get to the cruise ship and therefore the voucher is worthless to her.”
Dowding’s policy, issued by Nationwide, “requires full reimbursement in the event of a trip cancellation occasioned by illness or quarantine, either of which plausibly applies in this situation.”
In addition to claims for breach of contract and improper claims practice, the judge said she would allow Dowding to move her class action forward on claims accusing Nationwide of violating Illinois’ consumer fraud law.
She also refused Nationwide’s request, for now, to shut down the class allegations. Kendall said any questions concerning the strength of the class aspects to the lawsuit could be ironed out in future proceedings and arguments.
Nationwide is represented in the action by attorneys with the firms of Carpenter Lipps & Leland LLP, of Chicago and Columbus, Ohio; and Squire Patton Boggs LLP, of Atlanta and Columbus.