Sun Cuisine, LLC v. Certain Underwriters at Lloyd's London
| Decision Date | 31 August 2021 |
| Docket Number | 1:20-cv-21827-GAYLES/OTAZO-REYES |
| Court | U.S. District Court — Southern District of Florida |
| Parties | SUN CUISINE, LLC d/b/a ZEST RESTAURANT and MARKET, individually and on behalf of all others similarly situated, Plaintiff, v. CERTAIN UNDERWRITERS AT LLOYD'S LONDON Subscribing to Contract Number B0429BA1900350 Under Collective Certificate Endorsement 350OR100802, Defendants. |
THIS CAUSE comes before the Court on Defendants Certain Underwriters at Lloyd's, London Subscribing to Policy No 350TA100802's[1] Motion to Dismiss the Amended Class Action Complaint (the “Motion”) [ECF No. 46]. The Court has reviewed the Motion and the record and is otherwise fully advised. For the reasons that follow, the Motion is granted.
BACKGROUND[2]
Plaintiff Sun Cuisine, LLC d/b/a Zest Restaurant and Market owns operates, manages, and controls restaurants and related food and beverage operations at a location in Miami, Florida. On February 23, 2020, Defendants issued a standard form ISO all-risk commercial property insurance policy (the “Policy”) to Plaintiff under which Plaintiff agreed to make premium payments in exchange for Defendants' promise to indemnify Plaintiff for losses. Those losses include, but are not limited to, business income losses at the insured properties. The Policy provides coverage for the period between February 23, 2020, and February 23, 2021.
Under the Policy, the general coverage provision states “[w]e will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.” [ECF No. 45-1 at 25] (emphasis added). The Policy includes a standard policy form titled “Business Income (and Extra Expense) Coverage Form ” which provides for business income losses and states in relevant part:
Id. at 41 (emphasis added).
The Policy also provides additional coverage for business income loss caused by actions of civil authority:
Id. at 42 (emphasis added).
On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a worldwide pandemic. COVID-19 is a highly contagious virus, which can be transmitted from person-to-person, from surface-to-person, and through particles suspended in the air. On March 16, 2020, President Donald J. Trump, the Centers for Disease Control and Prevention (“CDC”), and members of the White House Coronavirus Task Force issued guidance to the American public to limit the spread of COVID-19. The transmission of COVID-19 is particularly acute in places where the public normally gathers to socialize, eat, and drink. Accordingly, this guidance advised individuals to adopt far-reaching social distancing measures such as limiting gatherings of more than ten people and staying away from bars, restaurants, and food courts.
Following this guidance, former Miami-Dade County Mayor Carlos Gimenez issued Emergency Order 03-20 on March 17, 2020, closing all restaurants in Miami-Dade County other than for delivery to slow the spread of COVID-19 through person-to-person and surface-to-person contact. On March 30, 2020, Governor Ron DeSantis issued Executive Order 20-69 restricting public access to businesses and facilities deemed non-essential, including restaurants in South Florida. As a result, Plaintiff was unable to welcome patrons into its restaurant and was required to drastically alter its property to reduce its operations to take-out and delivery.
On May 1, 2020, Plaintiff filed this action seeking insurance coverage under the Policy for business interruption related to the COVID-19 pandemic. [ECF No. 1]. On August 10, 2020, Defendants filed a Motion to Dismiss, arguing that Plaintiff failed to allege any physical loss or damage to the property. [ECF No. 11]. On December 28, 2020, the Court granted the Motion to Dismiss in part. [ECF No. 40]. Plaintiff filed its Amended Class Action Complaint on January 28, 2021, asserting two counts: (1) Declaratory Judgment (Count I) and (2) Anticipatory Breach of Contract (Count II). [ECF No. 45]. Plaintiff alleges that it suffered physical loss and damage to its property because COVID-19 altered the property to an unsatisfactory and highly dangerous state, unusable, inhabitable, and unfit for its intended purpose; this loss caused significant business income loss and extra expenses. On February 17, 2021, Defendants filed the instant Motion seeking dismissal of Plaintiff's claims.
To survive a motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6), a claim “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face, '” meaning that it must contain “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). While a court must accept well-pleaded factual allegations as true, “conclusory allegations . . . are not entitled to an assumption of truth-legal conclusions must be supported by factual allegations.” Randall v. Scott, 610 F.3d 701, 709-10 (11th Cir. 2010). “[T]he pleadings are construed broadly, ” Levine v. World Fin. Network Nat'l Bank, 437 F.3d 1118, 1120 (11th Cir. 2006), and the allegations in the complaint are viewed in the light most favorable to the plaintiff, Bishop v. Ross Earle & Bonan, P.A., 817 F.3d 1268, 1270 (11th Cir. 2016). At bottom, the question is not whether the claimant “will ultimately prevail . . . but whether [its] complaint [is] sufficient to cross the federal court's threshold.” Skinner v. Switzer, 562 U.S. 521, 530 (2011).
Defendants seek dismissal with prejudice of Plaintiff's Amended Complaint for two main reasons. First, Defendants argue that Plaintiff's allegations do not trigger coverage under the Policy. Specifically, Defendants argue that the Amended Complaint fails to allege either “direct physical loss of or damage to” the insured property or a nearby property as to trigger coverage under the Policy's Business Income and Civil Authority provisions. Second Defendants argue that coverage is barred by the Policy's microorganism and pollution exclusions.
“In insurance coverage cases under Florida law, courts look at the insurance policy as a whole and give every provision its ‘full meaning and operative effect.'” State Farm Fire & Cas. Co. v. Steinberg, 393 F.3d 1226, 1230 (11th Cir. 2004). “[I]nsurance contracts are construed according to their plain meaning, ” Garcia v. Fed. Ins. Co., 473 F.3d 1131, 1135 (11th Cir. 2006) (citation omitted); that is, courts begin their analysis by looking at the “plain language of the policy, as bargained for by the parties, ” Hyman v. Nationwide Mut. Fire Ins. Co., 304 F.3d 1179, 1186 (11th Cir. 2002) (citation omitted). Where coverage is in dispute, “an insured claiming under an all-risks policy has the burden of proving that the insured property suffered a loss while the policy was in effect.” Jones v. Federated Nat'l Ins. Co., 235 So.3d 936, 941 (Fla. 4th DCA 2018). If the insured satisfies its burden, “the burden then shifts to the insurer to prove that the cause of the loss was excluded from coverage under the policy's terms.” Id. (citations omitted).
To trigger coverage under the Business Income or Civil Authority provisions of the Policy, Plaintiff must prove that there was “direct physical loss of or damage to” the insured property or a nearby property while the Policy was in effect. There is no dispute that the alleged loss occurred while the Policy was in effect. Thus, a showing of direct physical loss of or damage to the property or a nearby property is the fundamental predicate to Plaintiff's claims. However, Plaintiff's Amended Complaint fails to meet this burden.
Plaintiff claims that the “omnipresence of the coronavirus” caused direct physical loss of the insured property and other nearby properties. The Policy does not explicitly define “direct physical loss or damage.” As such Plaintiff contends that the lack of definition in the Policy must be construed in Plaintiff's favor. However, where a term in a policy is not defined, courts use the plain meaning of the word. Graspa Consulting, Inc. v. United Nat'l Ins. Co., No. 20-CIV-23245, 2021 WL 1540907, at *5 (S.D. Fla. Apr. 16, 2021);...
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