The Augusta GreenJackets are plaintiffs in a lawsuit filed Tuesday by over a dozen Minor League Baseball teams against five insurance agencies.
The lawsuit alleges the insurers have denied the team’s claims for coverage related to the coronavirus.
The lawsuit states that the cancellation of much or all of the Minor League Baseball season results in “catastrophic financial losses for all minor league teams.”
“Prudent” owners of MiLB teams purchased business-interruption insurance from the insurers “and paid significant premiums to protect themselves from business interruption, including the cancellation of games,” the complaint states.
The lawsuit states that insurers have failed to meet their obligations, thereby placing the teams in “serious risk of economic failure and jeopardizing the future of America’s Pastime as we know it.”
The COVID-19 virus, the government’s response to the pandemic and Major League Baseball’s failure to provide players have deprived the teams of their primary source of revenue – fans paying for tickets, merchandise, food and beverages, the complaint states.
It states the insurance providers have denied or will deny the claims the teams have made for coverage.
Those denials, the suit states, are on the grounds that the teams’ losses “do not result from direct physical loss or damage to property.” The other reason for denial the insurers have given, the complaint states, is an exclusion in the insurance policies. It excludes from coverage “loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease.”
The complaint says that exclusion is “void, unenforceable, and inapplicable.”
The complaint requests that the court award damages, judge in favor of the teams that the teams’ losses are covered under their policies, and declare that insurers are required to pay the teams up to the applicable limits of their policies.
"We the GreenJackets and all the other teams that are listed on there – and most teams across the country – we pay sizable premiums on a yearly basis to our insurance carriers for business interruption insurance," said Missy Martin, one of the operating minority owners of the GreenJackets and vice president of operations.
"Our business has been interrupted and our insurance carriers have denied our claims and they didn’t have any problem, the insurance companies didn’t have any problems with taking our premiums, we think they should pay our interruption insurance," Martin said.
The lawsuit mentions that many teams’ largest expense is the rent they pay to municipal owners of ballparks.
The GreenJackets play in SRP Park, which is owned by the city of North Augusta. Cammie Hayes, the North Augusta finance director, mentioned the stadium rent during a financial update on Riverside Village she gave City Council in May.
The stadium license agreement includes a force majeure clause referencing suspension of pay, so rent payments will be due to the city once play resumes. As of May 18, the rent on the stadium had not been paid.
City Council member Fletcher Dickert asked during that meeting what would happen if the season is canceled.
“That is still being discussed and deliberated with our bond counsel, but the rent would be due on occupying the facility. The retail space is currently occupied, so the city are not waiving any rental requirements.”
Yearly rent for the stadium and the rental space attached is $350,000.
The suit was filed in the U.S. District Court Eastern District of Pennsylvania.
The minor league clubs listed in the suit, in addition to the GreenJackets, are the Chattanooga Lookouts, Boise Hawks, Columbia Fireflies, Eugene Emeralds, Binghamton Rumble Ponies, Fort Wayne TinCaps, Frederick Keys, Greenville Drive, Idaho Falls Chukars, Inland Empire 66ers, Amarillo Sod Poodles, San Antonio Missions, Stockton Ports and Delmarva Shorebirds.
The North Augusta Star reached out to the city of North Augusta for comment. Rachelle Moody, interim city administrator, said the city had no comment.