SA Palm Beach LLC v. Certain Underwriters at Lloyd's

• Decision Date: 09 December 2020
• Docket Number: CASE NO. 9:20-cv-80677-UU
• Citation: 506 F.Supp.3d 1248
• Parties: SA PALM BEACH LLC, Plaintiff, v. CERTAIN UNDERWRITERS AT LLOYD'S, LONDON, et al., Defendants.
• Court: U.S. District Court — Southern District of Florida

506 F.Supp.3d 1248

SA PALM BEACH LLC, Plaintiff,

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

CASE NO. 9:20-cv-80677-UU

United States District Court, S.D. Florida.

Signed December 9, 2020

Michael Joseph Sacks, Parkland, FL, Paul Jeffrey Geller, Stuart Andrew Davidson, Robbins Geller Rudman & Dowd LLP, Boca Raton, FL, Christopher A. Seeger, Stephen A. Weiss, Seeger Weiss LLP, Ridgefield Park, NJ, James E. Cecchi, Carella, Byrne, Cecchi, Olstein, Brody & Agnello, P.C., Roseland, NJ, Lindsey H. Taylor, Carella, Byrne, Cecchi, Olstein, Brody & Agnello, P.C., Roseland, NY, Samuel H. Rudman, Robbins Geller Rudman & Dowd LLP, Melville, NY, for Plaintiff.

Armando Pedro Rubio, Fields Howell Miami, FL, for Defendants.

ORDER

URSULA UNGARO, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court upon Defendants’ Motion to Dismiss the Amended 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’ Amended Complaint[D.E. 22](the "Amended Complaint") and are accepted as true.

Plaintiff SA Palm Beach LLC operates a restaurant by the name of "Sant Ambroeus Palm Beach," located at 340 Royal Poinciana Way in Palm Beach, Florida.D.E. 22 ¶ 16.Defendants Certain Underwriters at Lloyd's London ("Defendants") issued to Plaintiff commercial property insurance policy number PXA0001184-0, covering the policy period December 12, 2019 through December 12, 2020(the "Policy").Id.¶ 17.Plaintiff describes the Policy as an "all-risk" commercial property insurance policy, "which cover[s] loss or damage to the covered premises resulting from all risks other than those expressly excluded."Id.¶ 35.The Policy provides "business interruption coverage," which "would indemnify Plaintiff for lost income and profits in the event that its business was shut down."Id.¶ 37.More specifically, the Policy includes a "Business Income (and Extra Expense) Coverage Form" that provides coverage for "Business Income" and "Extra Expense," as well as additional coverage for actions taken by a "Civil Authority."Id.¶¶ 38–41.

Plaintiff alleges that as a direct result of the global COVID-19 pandemic and certain governmental orders that restricted restaurant operations, Plaintiff has "suffered a direct physical loss of [its] property" because it has "been unable to use [its] property for its intended purpose."Id.¶ 44.Plaintiff identifies "a series of Executive Orders relating to coronavirus protection" issued by Florida Governor Ron DeSantis.Id.¶ 34.Specifically, Executive Order 20-68, issued on March 17, 2020, "provided that restaurants were to operate at 50% capacity, maintain 6-foot distances between parties, and prohibit any employees from working if they exhibited any listed symptoms of COVID-19."Id.In addition, Executive Order 20-70, issued on March 20, 2020, "ordered all bars and food-serving establishments in Broward and Palm Beach Counties closed except for delivery and take-out service."Id.Executive Order 20-71, also issued on March 20, 2020, "imposed similar restrictions on restaurants state-wide in Florida."Id.And under Executive Order 20-89, issued on March 30, 2020, Governor DeSantis "closed all non-essential businesses in Palm Beach County."Id.Plaintiff alleges that as a result of these orders, it "lost the physical use of its property and was forced to suspend and curtail business operations," and that it "suffered a direct physical loss to the property in the form of diminished value, lost business income, and forced physical alterations during a period of restoration."Id.¶ 45.

On April 8, 2020, Plaintiff notified Defendants of its purported business income losses and extra expenses pursuant to the relevant policy provisions.Id.¶ 49.Thereafter, by letter dated July 10, 2020, Defendants allegedly informed Plaintiff"that the claim will be investigated, and identified several policy exclusions they contend may apply."Id.¶ 52.According to Plaintiff, however, Defendants"have no intention of providing any coverage or indemnification under the polic[y]" for Plaintiff's purported business income losses stemming from the COVID-19 pandemic.Id.¶ 57.Plaintiff asserts that Defendants"are summarily denying the obligation to pay for business income losses and other covered expenses incurred by policyholders for the physical loss and damage to the insured property from measures put in place by civil authorities."Id.¶ 7.

Plaintiffs filed the Amended Complaint on July 13, 2020, asserting several causes of action against Defendants for declaratory judgment, breach of contract, and anticipatory breach of contract.Defendants filed the Motion on July 27, 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, Plaintiff must sufficiently allege that its purported losses are covered under the Policy.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 Policy

Under the Business Income (and Extra Expense) Coverage Form, the Policy provides coverage for lost income and certain expenses in the event of a business interruption or suspension.D.E. 24-1, pp. 60–70.Relevant here, the Policy provides coverage for "Business Income" and "Extra Expense," as well as additional coverage for actions taken by a "Civil Authority."Id. at 60–61.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 60.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:

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

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