Prime Time Sports Grill, Inc. v. DTW 1991 Underwriting Ltd.

• Decision Date: 17 December 2020
• Docket Number: Case No. 8:20-cv-771-T-36JSS
• Citation: 508 F.Supp.3d 1170
• Parties: PRIME TIME SPORTS GRILL, INC., Plaintiff, v. DTW 1991 UNDERWRITING LIMITED, Defendant.
• Court: U.S. District Court — Middle District of Florida

508 F.Supp.3d 1170

PRIME TIME SPORTS GRILL, INC., Plaintiff,

v.DTW 1991 UNDERWRITING LIMITED, Defendant.

Case No. 8:20-cv-771-T-36JSS

United States District Court, M.D. Florida, Tampa Division.

Signed December 17, 2020

Hannah E. Austin, Michael Vincent Laurato, Austin & Laurato, PA, Tampa, FL, for Plaintiff.

Armando Pedro Rubio, Fields Howell LLP, Miami, FL, Mark D. Tinker, Mary Lou Cuellar-Stilo, Cole, Scott & Kissane, P.A., Tampa, FL, for Defendant.

ORDER

Charlene Edwards Honeywell, United States District Judge

This matter comes before the Court upon Defendant's Motion to Dismiss Pursuant to Rule 12(b)(6) [Doc. 13], Plaintiff's response [Doc. 18], Defendant's reply [Doc 22] and the notices of supplemental authority filed by the parties [Docs. 39, 40, 41, 42, 43, 44, 47]. In the motion, Defendant argues that Plaintiff has failed to state a claim upon which relief can be granted as Plaintiff has not alleged any facts that give rise to coverage under its policy of commercial property insurance. The Court, having considered the motion and being fully advised in the premises, will GRANT Defendant's Motion to Dismiss Pursuant to Rule 12(b)(6).

I. BACKGROUND¹

a. Facts

Plaintiff Prime Time Sports Grill, Inc. operates a bar and restaurant in Tampa, Florida. [Doc. 6 ¶ 4]. In conducting business, Plaintiff ordinarily employs between 20 to 25 employees, 7 days a week, 365 days per year, from 11 a.m. until 3 a.m. daily. Id. Effective June 7, 2019, Plaintiff received commercial property insurance coverage from Defendant DTW 1991 Underwriting Limited through the international insurance marketplace known as Lloyd's, London. Id. ¶ 3. The policy protected Plaintiff from all risks that were not specifically excluded, including loss of net business profit and operating expenses. Id. Per the policy, this coverage extended through June 7, 2020. Id.

On March 17, 2020, Florida's Governor Ron DeSantis ordered all bars and restaurants in the state of Florida closed for 30 days in response to the COVID-19 pandemic. Id. ¶ 6.² That same day, Plaintiff notified Defendant that based on its monthly gross revenues and normal operating expenses, the governmental suspension would result in a loss of more than $15,000 in net profit and would cause it to incur more than $60,000.00 in operating expenses, including payroll from March 17, 2020 through April 1, 2020 and that the loss would be in excess of $30,000 in net profit and $120,000 in operating expenses, including payroll by April 17, 2020. Id. ¶¶ 6,7. Plaintiff also requested that Defendant pay all benefits owed under the policy for the COVID-19 governmental suspension of business. Id. ¶ 7. By letter dated March 23, 2020, Defendant denied the request. Id. ¶ 8.

b. Procedural history

Plaintiff then filed this action on April 2, 2020.³ [Doc. 1]. In the Amended Complaint, Plaintiff alleges it is in doubt as to its rights and Defendant's obligations to provide coverage for "the losses stemming from the governmental suspension as a result of the COVID-19 pandemic relating from the losses of income, business interruption, extra expense, contingent business interruption, ingress/egress, civil authority, all risk coverage, and other coverage extensions under the policy of insurance." [Doc. 6 ¶¶ 11, 12]. As such, Plaintiff has requested a declaration that the losses resulting from Covid-19 are covered by the policy issued by Defendant.

Defendant has moved to dismiss the action pursuant to Federal Rule of Civil Procedure 12(b)(6). [Doc. 13 at p. 2]. In the motion, Defendant argues that the Amended Complaint does not allege a claim that falls within the policy's Business Income insuring agreement as coverage only applies to a slowdown or cessation of operations if it is "caused by direct physical loss of or damage to property " at the insured premises and Plaintiff has not alleged any form of "physical" loss or damage to anything. Id. at pp. 7-8. Additionally, Defendant states that any claim for coverage under the Civil Authority provision of the policy fails as a matter of law as that provision requires, among other things, damage to property away from the insured premises, which also has not been alleged. Id. at pp. 20-21. Defendant further argues that the Court should dismiss the action with prejudice as Plaintiff cannot formulate any alternative basis for coverage out of the Governor's orders or COVID-19 in general as neither has created a direct physical loss to the property. Id. at p. 12.

In its response, Plaintiff presents a number of arguments as to why Defendant's coverage decision is wrong and the motion should be denied. [Doc. 18 at pp. 12-24]. Plaintiff contends that it has sufficiently alleged that a "covered cause of loss" caused "direct physical loss of or damage to" insured "property." Id. at pp. 2, 12. Plaintiff specifically explains that the policy offers "all-risk" coverage and all fortuitous loss occurring during the policy period is covered unless it results from misconduct or fraud and there is no specific exclusion in the policy for losses caused by governmental suspension orders or viruses. Id. at pp. 12-15. Additionally, Plaintiff contends that business income is covered commercial property that suffered a loss or damage when business operations were suspended, and that Defendant conflates coverage with causation and indiscriminately shifts between cause of loss and the loss suffered. Id. at p. 16. Plaintiff further contends that the failure of the property to perform its function constituted a "direct" and "physical" loss to the property within the meaning of the policy, even in the absence of "damage." Id. at pp. 18-19.

In reply, Defendant again argues that Plaintiff has not experienced or claimed any "direct physical loss of or damage to property at premises which are described in the Declarations," which must exist for coverage to exist under the policy. [Doc. 22 at p. 2]. Defendant also argues that loss of use and loss of market caused by the enforcement of, or compliance with laws regulating the use of property has never been a covered cause of loss. Id. In fact, Defendant posits that Plaintiff's claim that coverage exists is based on an attempt to avoid the plain language of the policy, which controls. Id. Defendant also argues that business income does not constitute covered property under the policy, as the policy defines covered property as including the building, business fixtures, and related equipment, but not accounts, bills, currency, money, notes or securities, among other similar items. Id. at p. 3. Further, Defendant again points out that Plaintiff's suspension was allegedly caused by governmental orders, not physical loss of or damage to property at the insured premises and the monetary loss was not a covered cause of loss as defined in the policy. Id. at p. 4. Lastly, Defendant argues that because there are no facts to develop, the Court need not defer the issue to summary judgment as Plaintiff requests in its response. Id.

II. LEGAL STANDARD

When deciding whether to grant a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must accept "the complaint's allegations as true and constru[e] them in the light most favorable to the plaintiff." Castillo v. Allegro Resort Mktg. , 603 F. App'x 913, 915 (11th Cir. 2015) (quoting Chaparro v. Carnival Corp. , 693 F.3d 1333, 1335 (11th Cir. 2012) ). "A court is generally limited to reviewing what is within the four corners of the complaint on a motion to dismiss." Austin v. Modern Woodman of Am. , 275 F. App'x 925, 926 (11th Cir. 2008) (quoting Bickley v. Caremark RX, Inc. , 461 F.3d 1325, 1329 n.7 (11th Cir. 2006) ). This includes attachments or exhibits provided with the complaint. See Gill as Next Friend of K.C.R. v. Judd , 941 F.3d 504, 511 (11th Cir. 2019) ("The Civil Rules provide that an attachment to a complaint generally becomes ‘part of the pleading for all purposes,’ Fed. R. Civ. P. 10(c), including for ruling on a motion to dismiss."); Hoefling v. City of Miami , 811 F.3d 1271, 1277 (11th Cir. 2016) (noting that attached exhibits to a complaint can be considered on a motion to dismiss). "[W]hen exhibits attached to a complaint ‘contradict the general and conclusory allegations of the pleading, the exhibits govern.’ " Gill , 941 F.3d at 514.

To survive a motion to dismiss under Rule 12(b)(6), a pleading must include a "short and plain statement of the claim showing that the pleader is entitled to relief." Ashcroft v. Iqbal , 556 U.S. 662, 677–78, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted) (quoting Fed. R. Civ. P. 8(a)(2) ). Labels, conclusions and formulaic recitations of the elements of a cause of action are not sufficient. Id. at 678, 129 S.Ct. 1937 (citing Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Furthermore, mere naked assertions are not sufficient. Id. A complaint must contain sufficient factual matter, which, if accepted as true, would "state a claim to relief that is plausible on its face." Id. (quoting Twombly , 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. (citation omitted). The Court, however, is not bound to accept as true a legal conclusion stated as a "factual allegation" in the complaint. Id.

III. DISCUSSION

Policy Construction

Plaintiff seeks a declaration as to the rights and obligations under a policy of commercial property insurance issued to it by Defendant. The determination as to whether there is coverage for the loss alleged by Plaintiff starts and ends with the policy of insurance. In construing the language of the policy, Defendant contends that Florida Law applies, and Plaintiff has briefed the issue in accordance with Florida law. "Florida courts have traditionally adopted the lex loci contractus...