Vizza Wash LP d/b/a The Wash Tub v. Nationwide Mutual Insurance Co. et al.
The United States District Court for the Western District of Texas granted Nationwide’s motion to dismiss the petition of a carwash seeking COVID-19 related business interruption coverage. The carwash argued that the virus exclusion contained in the policy was ambiguous. Justice Orlando J. Garcia, while ceding that the language of the virus exclusion could have been more explicit, ultimately was not swayed and dismissed the case on the pleadings. Included in the order was also a denial of the plaintiff car wash’s motion to remand to state court. The motion called into question the federal court’s subject matter jurisdiction as the joinder of the defendant in question, an insurance agent and Texas resident, would defeat the defendants’ assertion of diversity jurisdiction. The court relied on well settled Texas law that dictates an insurance agent does not have a duty to explain every policy provision when it ruled that the claims against this defendant fail as a matter of law, and therefore the agent does not factor into the court’s determination of diversity jurisdiction.