El Novillo Rest. v. Certain Underwriters at Lloyd's

• Decision Date: 07 December 2020
• Docket Number: CASE NO. 1:20-cv-21525-UU
• Citation: 505 F.Supp.3d 1343
• Parties: EL NOVILLO RESTAURANT, et al., Plaintiffs, v. CERTAIN UNDERWRITERS AT LLOYD'S, LONDON, et al., Defendants.
• Court: U.S. District Court — Southern District of Florida

505 F.Supp.3d 1343

EL NOVILLO RESTAURANT, et al., Plaintiffs,

v.CERTAIN UNDERWRITERS AT LLOYD'S, LONDON, et al., Defendants.

CASE NO. 1:20-cv-21525-UU

United States District Court, S.D. Florida.

Signed December 7, 2020

Benjamin Jacobs Widlanski, Frank Anthony Florio, Kozyak Tropin Throckmorton LLP, Miami, FL, Gail Ann McQuilkin, Harley Shepard Tropin, Kozyak Tropin & Throckmorton, Javier Asis Lopez, Robert J. Neary, Rachel Sullivan, Kozyak Tropin & Throckmorton, P.A., Curtis Bradley Miner, Colson Hicks Eidson, Coral Gables, FL, Allan Kanner, Pro Hac Vice, Kanner & Whiteley, LLC, New Orleans, LA, for Plaintiffs.

Armando Pedro Rubio, Fields Howell, Miami, FL, David E. Walker, Pro Hac Vice, Walker Wilcox Matousek, LLP, Chicago, IL, for Defendants.

ORDER

URSULA UNGARO, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court upon Defendants’ Motion to Dismiss Plaintiffs’ First Amended Class Action Complaint (the "Motion").D.E. 24.The Court has considered the Motion and the pertinent portions of the record and is otherwise fully advised in the premises.For the reasons that follow, the Motion is GRANTED.

I.Background

Unless otherwise indicated, the following facts come from Plaintiffs’ First Amended Class Action Complaint[D.E. 20](the "Amended Complaint") and are accepted as true.

Plaintiffs El Novillo Restaurant d/b/a DJJ Restaurant Corp.("DJJ") and El Novillo Restaurant d/b/a Triad Restaurant Corp.("Triad" and, together with DJJ, "Plaintiffs") each own, operate, manage, and control a restaurant by the name of "El Novillo."D.E. 20 ¶¶ 16, 17.On July 1, 2019, Defendants Certain Underwriters at Lloyd's London ("Defendants") issued commercial property insurance policy number 773TA10063 to DJJ and insurance policy number 773TA10064 to Triad (the "Policies").Id.¶ 19.DJJ's insurance policy describes the insured property as the El Novillo Restaurant located at 15450 New Barn Road in Hialeah, Florida.Id.¶ 40.And Triad's policy identifies the El Novillo Restaurant located at 6830 Bird Road in Miami, Florida as the insured property.Id.

Plaintiffs allege that the Policies are "all-risk" commercial property insurance policies, "which cover loss or damage to the covered premises resulting from all risks other than those expressly excluded."Id.¶ 30.The Policies include "business interruption coverage," which "promises to indemnify the insured for lost income and certain expenses in the event of a business interruption."Id.More specifically, each Policy includes a "Business Income (and Extra Expense) Coverage Form," which provides coverage for "Business Income" and "Extra Expense," as well as additional coverage for actions taken by a "Civil Authority."Id.¶¶ 32, 38, 39.

Plaintiffs allege that as a direct result of the global COVID-19 pandemic and certain governmental orders that restricted restaurant operations ostensibly designed to reduce the number of COVID-19cases, "Plaintiffs could not use their properties as intended."Id.¶ 48.Plaintiffs specifically identify Emergency Order 02-20, issued on March 16, 2020 by Miami-Dade County MayorCarlos Gimenez, which "restrict[ed] operating times for all restaurants within Miami-Dade County to 6 a.m. to 11 p.m. other than for delivery."Id.¶ 45.Plaintiffs also identify Emergency Order 03-20, issued by Mayor Gimenez on March 17, 2020, which had the effect of "closing all restaurants in Miami-Dade County other than for delivery or takeout."Id.¶ 46.Plaintiffs allege that they have "suffered both direct physical losses and damage to the properties in the form of diminished value, lost business income, a reduction in right of full ownership, and forced physical alterations during a period of restoration."Id.¶ 48.

Plaintiffs assert that Defendants"are denying claims for business income losses and other covered expenses resulting from the measures put in place by the civil authorities to stop the spread of COVID-19."Id.¶ 7.According to Plaintiffs, "Defendants have no intention of providing coverage" for Plaintiffs’ purported business income losses stemming from the COVID-19 pandemic.Id.¶ 50.And Defendants purportedly "have taken the position in this litigation that Plaintiffs’ losses are not covered."Id.

Plaintiffs filed the Amended Complaint on July 6, 2020, asserting two causes of action of Defendants: Declaratory Judgment (Count I) and Anticipatory Breach of Contract (Count II).Defendants filed the Motion on July 16, 2020, seeking dismissal of the Amended Complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6).The Motion is fully briefed and ripe for adjudication.

II.Legal Standard

To state a claim, Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief."While the Court must consider the allegations contained in the plaintiff's complaint as true, this rule "is inapplicable to legal conclusions."

Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868(2009).In addition, the complaint's allegations must include "more than an unadorned, the-defendant-unlawfully-harmed-me accusation."Id.(citingBell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929(2007) ).Thus, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."Id.(citingTwombly , 550 U.S. at 555, 127 S.Ct. 1955 ).

In practice, to survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim of relief that is plausible on its face.’ "Id.(quotingTwombly , 550 U.S. at 570, 127 S.Ct. 1955 ).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.The plausibility standard requires more than a sheer possibility that a defendant has acted unlawfully.Id.Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.Id.Determining whether a complaint states a plausible claim for relief is a context-specific undertaking that requires the court to draw upon its judicial experience and common sense.Id. at 679, 129 S.Ct. 1937.A court may dismiss a case with prejudice if the allegations of a complaint, even when taken as true, afford no basis for relief or when amendment would be futile.E.g. , Burger King Corp. v. Weaver , 169 F.3d 1310, 1320(11th Cir.1999);Chiron Recovery Ctr., LLC v. United Healthcare Servs., Inc. , 438 F. Supp. 3d 1346, 1356(S.D. Fla.2020).

III.Analysis

Florida law places the initial burden on an insured seeking to recover under an all-risk policy of proving that a loss occurred.SeeS.O. Beach Corp. v. Great Am. Ins. Co. of New York , 305 F. Supp. 3d 1359, 1364(S.D. Fla.2018), aff'd , 791 F. App'x 106(11th Cir.2019).At this stage of the litigation, therefore, Plaintiffs must sufficiently allege that their purported losses are covered under the Policies.SeeTimber Pines Plaza, LLC v. Kinsale Ins. Co. , 192 F. Supp. 3d 1287, 1293(M.D. Fla.2016).In determining coverage under an insurance policy, a court's inquiry begins with "the plain language of the policy, as bargained for by the parties."State Farm Fire & Cas. Co. v. Steinberg , 393 F.3d 1226, 1230(11th Cir.2004)(quotingAuto-Owners Ins. Co. v. Anderson , 756 So. 2d 29, 34(Fla.2000) ).In other words, "insurance contracts are construed according to their plain meaning."Garcia v. Federal Ins. Co. , 473 F.3d 1131, 1135(11th Cir.2006).If an insurance policy's language is unambiguous, it governs.Steinberg , 393 F.3d at 1230.But where "the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and the other limiting coverage, the insurance policy is considered ambiguous, and must be ‘interpreted liberally in favor of the insured and strictly against the drafter who prepared the policy.’ "Id.(quotingAnderson , 756 So. 2d at 34 ).

A.The Policies

Under the Business Income (and Extra Expense) Coverage Form, the Policies provide coverage for lost income and certain expenses in the event of a business interruption or suspension.D.E. 24-1, pp. 37–45;D.E. 24-2, pp. 37–45.Relevant here, the Policies provide coverage for "Business Income" and "Extra Expense," as well as additional coverage for actions taken by a "Civil Authority."Id. at 37–38.The Business Income Coverage section states, in relevant part:

We will pay for the actual loss of Business Income you sustain due to the necessary "suspension" of your "operations" during the "period of restoration".The "suspension" must be caused by direct physical loss of or damage to property at premises which are described in the Declarations and for which a Business Income Limit of Insurance is shown in the Declarations.The loss or damage must be caused by or result from a Covered Cause of Loss.

Id. at 37.The Extra Expense Coverage section provides coverage for "necessary expenses you incur during the ‘period of restoration’ that you would not have incurred if there had been no direct physical loss or damage to property caused by or resulting from a Covered Cause of Loss.Id.The Civil Authority Additional Coverage section provides:

When a Covered Cause of Loss causes damage to property other than property at the described premises, we will pay for the actual loss of Business Income you sustain and necessary Extra Expense caused by action of civil authority that prohibits access to the described premises, provided that both of the following apply:

(1) Access to the area immediately surrounding the damaged property is prohibited by civil authority as a result of the damage, and the described premises are within that area but are not more than one mile from the damaged property; and

(2

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