8th Circuit: COVID Stay-at-Home Orders Did Not ‘Quarantine’ Skiers

Government orders that restricted access to non-essential businesses during the early days of the COVID-19 pandemic were not “quarantines” that require a travel insurer to reimburse policyholders who did not get full use of their ski passes, a panel of the 8th Circuit Court of Appeals ruled in late February.

The appellate panel affirmed a decision by the U.S. District Court for Western Missouri to dismiss a purported class-action lawsuit filed by people who sought partial refunds after the pandemic put an early end to the 2019-2020 ski season.

The Ski Pass Preserver policy sold by Arch Insurance Co. promised coverage for travelers who are “quarantined,” which the panel majority said means “compulsory isolation.”

Public health orders issued by authorities in California and Colorado did not fit the bill, the majority said.

“Although these measures and the closure of ski resorts restrained the plaintiffs from certain activities, the degree and manner of the restraints imposed cannot plausibly be considered a mandatory requirement to isolate from others,” the panel’s opinion says.

Mark Rossi, Ronald Osborn and Nolte Mehnert each purchased an Ikon Pass for the 2019-2020 ski season and an optional Ski Pass Preserver policy from Arch. The passes, which cost from $600 to $1,000 each, allowed unlimited use of several ski resorts.

The ski season was cut short because of the COVID-19 outbreak. The three skiers and others from throughout the country sued after Arch denied their claims for partial refunds. They argued that they were “quarantined” by the stay-at-home orders issued in March 2020, or at least that the policy language was ambiguous.

The Judicial Panel on Multidistrict Litigation assigned the actions to the Western District of Missouri for pre-trial proceedings. U.S. District Court Judge Brian C. Wimes in Kansas City granted Arch’s motion to dismiss the lawsuit. Rossi, Osborn and Mehnert appealed.

The 8th Circuit panel said the Arch policy used the word “quarantine” as a verb which means “to isolate.” Individuals who are quarantined are compelled to stay at a specific location. The panel said while the public health orders issued by California and Colorado restricted movement, they did not require the skiers to stay anywhere.

“In sum, the ordinary person at the time the Ski Pass Preserver policy was purchased would have understood ‘quarantined’ to mean the compulsory isolation of the insured,” the opinion says.

“Reading the policy as a whole, this is the only reasonable construction, and we agree with the district court that the policy language is unambiguous.”

Circuit Judge L. Steven Grasz wrote a concurring opinion. Although he agreed with the result, Grasz said he disagreed that the term “quarantined” is unambiguous. He said most travelers would understand stay-at-home orders to be one form of quarantine.

The policy, however, also excluded a loss caused by the failure to supply services by a travel supplier. Grass said he agrees that the lawsuit should be dismissed, but because of the exclusion, not because the skiers weren’t quarantined.