Graspa Consulting, Inc. v. United Nat'l Ins. Co.
| Decision Date | 19 January 2021 |
| Docket Number | Case No. 20-23245-CIV-WILLIAMS |
| Court | U.S. District Court — Southern District of Florida |
| Parties | GRASPA CONSULTING, INC., Plaintiff, v. UNITED NATIONAL INSURANCE COMPANY, Defendant. |
Benjamin Jacobs Widlanski, Frank Anthony Florio, Kozyak Tropin Throckmorton LLP, Miami, FL, Daniel Edward Tropin, Jonathan Marc Streisfeld, Kopelowitz Ostrow, Ferguson Weiselberg Gilbert, Fort Lauderdale, FL, Gail Ann McQuilkin, Harley Shepard Tropin, Javier Asis Lopez, Kozyak Tropin & Throckmorton PA, Coral Gables, FL, for Plaintiff.
Collin Doern Jackson, Litchfield Cavo LLP, Delray Beach, FL, Jason Michael Chodos, Litchfield Cavo, LLP, Fort Lauderdale, FL, for Defendant.
THIS MATTER is before the Court on Magistrate Judge Torres’ Report & Recommendation. (DE 27). The Report recommends that the Court grant Defendant's motion to dismiss. Plaintiff filed objections to the Report. (DE 32). After a careful review of the Report, the record, and applicable case law, it is ORDERED AND ADJUDGED as follows:
1. The Report (DE 27) is AFFIRMED AND ADOPTED.
2. Defendant's motion to dismiss (DE 15) is GRANTED.
3. As set forth in the Report, if viable under Rule 11, Plaintiff may file an amended complaint within fourteen days of this Order.
DONE AND ORDERED in Chambers in Miami, Florida, this 19th day of January, 2021.
This matter is before the Court on United National Insurance Company's ("Defendant") motion to dismiss Graspa Consulting, Inc.’s ("Plaintiff") amended complaint. [D.E. 15]. Plaintiff responded to Defendant's motion on October 7, 2020 [D.E. 20] to which Defendant replied on October 21, 2020. [D.E. 23]. Therefore, Defendant's motion is now ripe for disposition. After careful consideration of the motion, response, reply, relevant authority, and for the reasons discussed below, Defendant's motion to dismiss should be GRANTED .1
Plaintiff is a commercial enterprise in the restaurant industry that purchased a commercial insurance policy with a period running from May 28, 2019 to May 28, 2020. The policy provided protection against losses and other expenses that might result from an involuntary interruption in business operations.2 In March 2020, Florida Governor Ron DeSantis issued several executive orders that restricted the public's access to the restaurant industry. Although these orders were later lifted in the months to follow, local governments issued additional orders that restricted access to all non-essential business operations in response to the COVID-19 pandemic. As a result, Plaintiff suffered significant losses and other expenses that now threaten the future of its business.
When Plaintiff demanded payment for these losses, Defendant denied Plaintiff's claim because Plaintiff did not meet one of the prerequisites for coverage – allegations and evidence of physical loss or damage to the insured property. Defendant also takes the position that there is no coverage under the insurance policy because it contains a broadly worded exclusion for any loss resulting from a virus or a pollutant. Plaintiff disagrees because "[d]angerous conditions prohibited access to Plaintiff's property and caused Plaintiff to suffer a direct physical loss when its business operations were suspended and it lost the use of its property." [D.E. 12 at ¶ 61]. Plaintiff therefore filed this action on June 11, 2020 in Florida state court for breach of contract, seeking compensatory damages, prejudgment interest, court costs, and fees.3
Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a claim for failure to state a claim upon which relief can be granted. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Conclusory statements, assertions or labels will not survive a 12(b)(6) motion to dismiss. Id. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. ; see also Edwards v. Prime, Inc. , 602 F.3d 1276, 1291 (11th Cir. 2010) (). "Factual allegations must be enough to raise a right to relief above the speculative level[.]" Twombly , 550 U.S. at 555, 127 S.Ct. 1955 (citation omitted). Additionally:
Although it must accept well-pled facts as true, the court is not required to accept a plaintiff's legal conclusions. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (). In evaluating the sufficiency of a plaintiff's pleadings, we make reasonable inferences in Plaintiff's favor, "but we are not required to draw plaintiff's inference." Aldana v. Del Monte Fresh Produce, N.A., Inc. , 416 F.3d 1242, 1248 (11th Cir. 2005). Similarly, "unwarranted deductions of fact" in a complaint are not admitted as true for the purpose of testing the sufficiency of plaintiff's allegations. Id. ; see also Iqbal , 556 U.S. at 681, 129 S.Ct. 1937 ().
Sinaltrainal v. Coca-Cola , 578 F.3d 1252, 1260 (11th Cir. 2009), abrogated on other grounds by Mohamad v. Palestinian Auth. , 566 U.S. 449, 453 n.2, 132 S.Ct. 1702, 182 L.Ed.2d 720 (2012). The Eleventh Circuit has endorsed "a ‘two-pronged approach’ in applying these principles: 1) eliminate any allegations in the complaint that are merely legal conclusions; and 2) where there are well-pleaded factual allegations, ‘assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.’ " American Dental Ass'n v. Cigna Corp. , 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ).
Defendant seeks to dismiss Plaintiff's amended complaint for two reasons.4
First, Defendant argues that the insurance policy fails to provide coverage because Plaintiff failed to allege that it suffered any direct physical loss as a result of an involuntary business closure. Defendant claims that this is a requirement for coverage and that every provision in the policy includes this condition. Second, Defendant argues that, even if a direct physical loss had been alleged, the policy contains broad exclusions for viruses and other pollutants that apply to the COVID-19 pandemic. Before we turn to the merits, we must consider the general principles governing the interpretation of insurance contracts under Florida law. These principles are necessary, as they will inform the analysis that follows.
"Under Florida law, an insurance policy is treated like a contract, and therefore ordinary contract principles govern the interpretation and construction of such a policy." Pac. Emp'rs Ins. Co. v. Wausau Bus. Ins. Co. , 2007 WL 2900452, at *4 (M.D. Fla. Oct. 2, 2007) (citing Graber v. Clarendon Nat'l Ins. Co. , 819 So. 2d 840, 842 (Fla. 4th DCA 2002) ). The interpretation of an insurance contract – including the question of whether an insurance provision is ambiguous – is a question of law. See id. ; Travelers Indem. Co. of Illinois v. Hutson , 847 So. 2d 1113 (Fla. 1st DCA 2003) ().
In addition, "[u]nder Florida law, insurance contracts are construed according to their plain meaning." Garcia v. Fed. Ins. Co. , 473 F.3d 1131, 1135 (11th Cir. 2006) (quoting Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co. , 913 So. 2d 528, 532 (Fla. 2005) ). The "terms of an insurance policy should be taken and understood in their ordinary sense and the policy should receive a reasonable, practical and sensible interpretation consistent with the intent of the parties-not a strained, forced or unrealistic construction." Siegle v. Progressive Consumers Ins. Co. , 819 So. 2d 732, 736 (Fla. 2002) (quoting Gen. Accident Fire & Life Assurance Corp. v. Liberty Mut. Ins. Co. , 260 So. 2d 249 (Fla. 4th DCA 1972) ); see also Gilmore v. St. Paul Fire & Marine Ins. , 708 So. 2d 679, 680 (Fla. 1st DCA 1998) ().
However, if there is more than one reasonable interpretation of an insurance policy, an ambiguity exists and it "should be construed against the insurer." Pac. Emp'rs Ins. , 2007 WL 2900452, at *4 (citing Purrelli v. State Farm Fire & Cas. Co., 698 So. 2d 618, 620 (Fla. 2d DCA 1997) ). Where an interpretation "involve[s] exclusions to insurance contracts, the rule is even clearer in favor of strict construction against the insurer: exclusionary provisions which are ambiguous or otherwise susceptible to more than one meaning must be construed in favor of the insured."
Sphinx Int'l, Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa., 412 F.3d 1224, 1228 (11th Cir. 2005) (quoting State Farm Mut. Auto. Ins. Co. v. Pridgen, 498 So. 2d 1245, 1248 (Fla. 1986) ). An insurance policy must, of course, be ambiguous before it is subject to these rules. See Taurus Holdings, Inc. , 913 So. 2d at 532 (). An ambiguous policy must, for example, have a genuine inconsistency, uncertainty, or ambiguity in meaning after the court has applied the ordinary rules of construction. See Deni Assocs. of Florida, Inc. v....
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