Georgetown Dental, LLC v. Cincinnati Ins. Co.
| Decision Date | 17 May 2021 |
| Docket Number | Case No. 1:21-cv-00383-TWP-MJD |
| Parties | GEORGETOWN DENTAL, LLC, Plaintiff, v. CINCINNATI INSURANCE COMPANY, and CINCINNATI CASUALTY COMPANY, Defendants. |
| Court | U.S. District Court — Southern District of Indiana |
This matter is before the Court on a Motion to Dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6) by Defendants Cincinnati Insurance Company and Cincinnati Casualty Company (collectively, "Defendants") (Filing No. 6). This action was initiated by Plaintiff Georgetown Dental, LLC ("Georgetown Dental") to recover under the insurance policy provided by Defendants for economic losses sustained due to closures necessitated by the global COVID-19 pandemic. Defendants moved to dismiss, arguing that the insurance policy "supplies property insurance coverage, not financial loss coverage in the absence of direct physical loss or damage to property." (Filing No. 7 at 1.) While sympathizing with the plight of Georgetown Dental and all businesses reckoning with the impact of COVID-19's terrible effects,1 the Court, for the following reasons, grants Defendants' Motion to Dismiss.
The following facts are not necessarily objectively true, but, as required when reviewing a motion to dismiss, the Court accepts as true all factual allegations in the Complaint and draws all inferences in favor of Georgetown Dental as the non-moving party. See Bielanski v. County of Kane, 550 F.3d 632, 633 (7th Cir. 2008).
At all relevant times, Defendants insured Georgetown Dental (Filing No. 1-1 at 3). Two portions under this "policy of insurance identified as Policy No. ECP 021 17 84" (the "Policy") are at play here: Form FM 101 05 16 (the main property coverage form) and Form FA 213 05 16 (an additional coverage form for business income loss). Id. These two forms are discussed below.
The Policy's "Building and Personal Property Coverage Form" ("Building Form") states, "We will pay for the direct 'loss' to Covered Property at the 'premises' caused by or resulting from any Covered Cause of Loss." Id. at 3, 5 (quoting Filing No. 6-1 at 23).2 "Loss" is defined in the Building Form as "accidental physical loss or accidental physical damage." (Filing No. 6-1 at 58.) "Covered Causes of Loss," in turn, comprise "direct 'loss' unless the 'loss' is excluded or limited." Id. at 25.
The Building Form also contains "'Business Income and Extra Expense' coverage." Id. (citing Filing No. 6-1 at 38-39). Under this coverage, Defendants " " Id. at 6 (quoting Filing No. 6-1 at 38). "Period of restoration" means "the period of time that a. [b]egins at the time of direct 'loss' [and] b. [e]nds on the earlier of (1) [t]he date when the property at the 'premises' should be repaired, rebuilt or replaced with reasonable speed and similar quality; or (2) [t]he date when business is resumed at a new permanent location." (Filing No. 6-1 at 59.) And, again, "loss" means "accidental physical loss or accidental physical damage." Id. at 58.
The Building Form additionally contains "Civil Authority" coverage, which instructs that "[w]hen a Covered Cause of Loss causes damage to property other than Covered Property at a 'premises,'" Defendants "'will pay for the actual loss of "Business Income" and necessary Extra Expense you sustain caused by action of civil authority that prohibits access to the "premises. Id. (quoting Filing No. 6-1 at 39). For this Civil Authority coverage to take effect, a civil authority must prohibit "[a]ccess to the area immediately surrounding the damaged property . . . as a result of the damage," and the civil authority must have taken the action "in response to dangerous physical conditions resulting from the damage or continuation of the Covered Cause of Loss that caused the damage, or the action [was] taken to enable a civil authority to have unimpeded access to the damaged property." (Filing No. 6-1 at 39.)
The Policy also contains a separate "Business Income (and Extra Expense) Coverage Form" ("Business Income Form") (Filing No. 1-1 at 5). The Business Income Form provides the same coverage as the Building Form concerning business income and extra expense resulting from suspension of operations during a "period of restoration" caused by a "loss." Id. (citing Filing No. 6-1 at 113-14). The Business Income Form provides identical "Civil Authority" coverage as the Building Form: Defendants "will pay for the actual loss of 'Business Income' you sustain and necessary Extra Expense you sustain caused by action of civil authority that prohibits access to the 'premises'" when "a Covered Cause of Loss causes direct damage to property other than Covered Property at the 'premises.'" (Filing No. 6-1 at 114.)
On February 24, 2020, "the United States Center[s] for Disease Control[ and Prevention] [(the "CDC")] and the American Dental Association [(the "ADA")] suggested postponing non-emergency or elective dental procedures due to the presence of Covid-19 in the State of Indiana." (Filing No. 1-1 at 3.) A few weeks later, on March 6, 2020, Indiana Governor Eric Holcomb ("Governor Holcomb") issued Executive Order 20-02, declaring "a public health emergency in the State of Indiana and urg[ing] coordination of the entire healthcare infrastructure of Indiana to help prevent the spread of disease and to conserve and optimize the use of personal protection equipment." Id. at 4 (citing Filing No. 6-2).3 Ten days later, on March 16, 2020, Governor Holcomb issued Executive Order 20-04, which required "the postponement of non-essential elective and non-urgent surgical procedures at hospital and ambulatory surgery centers." Id. (citing Filing No. 6-3). A week later, Governor Holcomb issued Executive Order 20-08, calling "for Indiana residents to 'stay at home' and further urg[ing] dental offices to use good judgment to avoid potentially contributing to caus[ing] the spread of Covid-19." Id. (citing Filing No. 6-4). On March 30, 2020, Governor Holcomb issued Executive Order 20-13, which "ordered dentists to cancel or postpone elective and non-urgent procedures." Id. (citing Filing No. 6-5).
Eventually, Governor Holcomb issued Executive Order 20-22, permitting "dentists to resume providing services as of 11:59 p.m. on Sunday, April 26th, 2020." (Filing No. 1-1 at 4 (citing Filing No. 6-6).) Executive Order 20-22 was subject to weekly reevaluation and "encouraged businesses to comply with social distancing requirements." Id. (citing Filing No. 6-6). On April 24, 2020, Governor Holcomb issued Executive Order 20-24, "allowing the resumption of elective and non-urgent medical procedures, 'so long as they have adopted policies and best practices that protect patients, physicians and staff against Covid-19 and also have sufficient quantities of PPE.'" Id. (citing Filing No. 6-7). Executive Order 20-24 "urged healthcare providers to, 'consult the best practices and recommendations developed by their respective medical associations or industries, many of which can be found online.'" Id. at 5 (citing Filing No. 6-7). Because of the guidelines and orders from the CDC, the ADA, and the State of Indiana, Georgetown Dental was entirely closed from March 12, 2020 to May 11, 2020. Id. It "also experienced significant periods of partial closure." Id. Because of these mandated closures, Georgetown Dental has "sustained a loss of income" and has "incurred various expenses in connection with the property and dental practice due to the Covid-19 pandemic." Id.
Outlining coverage under the Building Form and the Business Income Form described above, Georgetown Dental now seeks a declaratory judgment against Defendants that the Policy "provides coverage for the damages sustained by [it] during the closure of the dental office due to the Covid-19 pandemic." (Filing No. 1-1 at 7.) Georgetown Dental also requests that the Court determine the damages owed under the Policy. Id. In response, Defendants moved to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) (Filing No. 6).
Federal Rule of Civil Procedure 12(b)(6) allows a defendant to move to dismiss a complaint that has failed to "state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). When deciding a motion to dismiss under Rule 12(b)(6), the Court accepts as true all factual allegations in the complaint and draws all inferences in favor of the plaintiff. Bielanski, 550 F.3d at 633. But courts need not "accept as true legal conclusions or unsupported conclusions of fact." Hickey v. O'Bannon, 287 F.3d 656, 658 (7th Cir. 2002).
The complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). In Bell Atlantic Corp. v. Twombly, the Supreme Court explained that the complaint must allege facts that are "enough to raise a right to relief above the speculative level." 550 U.S. 544, 555 (2007). Although "detailed factual allegations" are not required, mere "labels," "conclusions," or "formulaic recitation[s] of the elements of a cause of action" are insufficient. Id.; see also Bissessur v. Ind. Univ. Bd. of Trs., 581 F.3d 599, 603 (7th Cir. 2009) (). The allegations must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Twombly, 550 U.S. at 555. Stated differently, the complaint must include "enough facts to state a claim...
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