The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
PANE RUSTICA, INC. MANGIO
SANO ENTERPRISES, Domestic
Corporation d/b/a Pane Rustica
Plaintiff,
v. Case No: 8:20-cv-1783-KKM-AAS
GREENWICH INSURANCE
COMPANY, a Foreign Corporation,
Defendant.
/
ORDER
Before the Court is Defendant Greenwich Insurance Company’s Motion to
Dismiss (Doc. 5), Plaintiff’s Opposition and Memorandum of Law in Response (Doc.
15), and Defendant’s Reply (Doc. 20). Upon review, the Court concludes that
Defendant’s motion should be granted because Plaintiff has not alleged a direct physical
loss of or damage to its property and any potential coverage is expressly excluded if
caused by a virus. Because further amendment would be futile, the complaint is
dismissed with prejudice.
I. BACKGROUND
Greenwich Insurance Company (Greenwich) insured Plaintiff Pane Rustica, Inc.
Mangio Sano Enterprises (Pane Rustica), a Tampa based restaurant company (Doc. 1-
1 at 1–2). The insurance policy (the Policy) provided coverage to Pane Rustica’s
restaurants located at 3225 S. MacDill Avenue, #119, and 1910 Ola Avenue. (Doc. 1-1
at 2). Specifically, the Policy provided coverage for loss of “Business Income (and Extra
Expense)” when suspension of business operations is “caused by direct physical loss of
or damage to property at premises” and attendant “loss or damage” is caused by the
same. (Doc. 1-1 at 67).
Relatedly, the Policy included a “Civil Authority” provision allowing for
coverage of loss of business income caused by actions of a civil authority:
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) The action of civil authority is taken in response to
dangerous physical conditions resulting from the damage
or continuation of the Covered Cause of Loss that caused
the damage, or the action is taken to enable a civil
authority to have unimpeded access to the damaged
property.
(Doc. 1-1 at 68).
Lastly, the Policy included an exclusion for loss due to virus or bacteria:
We will not pay for loss or damage caused by or resulting
from any virus, bacterium or other microorganism that
induces or is capable of inducing physical distress, illness or
disease.
(Doc. 1-1 at 81).
Pane Rustica submitted a claim seeking recovery for business income and extra
expenses caused by state orders issued in response to the COVID-19 pandemic. (Doc.
1-1 at 3–4). Specifically, Pane Rustica claimed that the Hillsborough County Civil
Authority Order dated March 27, 2020, and Florida Governor Ron DeSantis’s
Executive Order Number 20-71—both suspending on-premises food consumption—
caused a loss of business subject to payment under the Policy. (Doc. 1-1 at 3–5).
Greenwich denied coverage for the claim because (1) there was no physical loss or
damage to the premises of the covered property and government action was not the
result of physical damage; and (2) the Policy excluded coverage for loss of use, loss of
market, acts or decisions of a governmental body, and loss or damage caused by a virus.
(Doc. 1-1 at 244–45).
In this action, Pane Rustica brings claims for breach of contract and declaratory
judgment to determine liability under the Policy. (Doc. 1-1 at 4–5). Pane Rustica’s
complaint does not include allegations that it was prevented from accessing the
properties as a result of COVID-19 or related government orders and does not describe
any physical loss or damage to the property. Greenwich moves to dismiss the complaint
under Rule 12(b)(6) for failure to state a claim. Specifically, Greenwich argues that (1)
the virus exclusion precludes Pane Rustica’s claims, (2) Pane Rustica’s claims for
Business Income and Extra Expense coverage require physical loss of or damage to the
property, and (3) Pane Rustica’s claims for Civil Authority coverage fail because there
was no damage to property and Pane Rustica was not prohibited from accessing its
property. (Doc. 5 at 7, 9, 15). The Court agrees. Accordingly, the motion to dismiss is
granted.
II. MOTION TO DISMISS
To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead sufficient
facts to state a claim that is “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). A claim is plausible on its face when a plaintiff “pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Id. When considering the motion, the court accepts all factual
allegations of the complaint as true and construes them in the light most favorable to
the plaintiff. Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008). Courts should
limit their “consideration to the well-pleaded factual allegations, documents central to
or referenced in the complaint, and matters judicially noticed.” La Grasta v. First Union
Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004).
Under Florida law, the interpretation of an insurance contract, including
resolution of ambiguity, is a question of law. Dahl-Eimers v. Mut. of Omaha Life Ins. Co.,
986 F.2d 1379, 1381 (11th Cir. 1993). Like all contracts, interpretation of an insurance
contract begins with “the plain meaning of the contract’s text.” State Farm Mut. Auto.
Ins. Co. v. Menendez, 70 So. 3d 566, 569 (Fla. 2011). “If the language used in an insurance
policy is plain and unambiguous, a court must interpret the policy in accordance with
the plain meaning of the language used so as to give effect to the policy as it was
written.” Id. at 569–70 (quoting Travelers Indem. Co. v. PCR Inc., 889 So. 2d 779, 785 (Fla.
2004)). But the language of the policy is ambiguous if it is “susceptible to more than
one reasonable interpretation, one providing coverage and the other limiting coverage.”
Id. at 570 (quoting Travelers Indem. Co., 889 So. 2d at 785). “A provision is not
ambiguous, however, ‘simply because it is complex or requires analysis.’” Id. (quoting
Penzer v. Trasnsp. Ins. Co., 29 So. 3d 1000, 1005 (Fla. 2010)).
As a threshold matter, the Court agrees with Greenwich that the virus exclusion
precludes coverage for Pane Rustica’s claim. The Policy excludes coverage “for loss or
damage caused by or resulting from any virus, bacterium or other microorganism.”
(Doc. 1-1 at 81). That contract language is satisfied here: all loss stems from COVID-
19, as both Governor DeSantis and Hillsborough County enacted the two orders
suspending in-person dining solely to address the threat of the virus. See (Doc. 1-1 at
219 (“WHEREAS, Hillsborough County must continue to take emergency action to
lessen the spread of COVID-19”); Doc. 1-1 at 239 (“WHEREAS, on March 9, 2020, I
issued Executive Order 20-52 declaring a state of emergency for the entire State of
Florida as a result of COVID-19”)).
Pane Rustica argues that even if the Court finds that the virus exclusion applies,
the loss is still covered because the virus and government orders are concurrent causes.
(Doc. 15 at 10). Under Florida law, “when independent perils converge and no single
cause can be considered the sole or proximate cause,” the concurrent cause doctrine
applies. Sebo v. Am. Home Assurance Co., 208 So. 3d 694, 697 (Fla. 2016). But when one
peril can be discerned to “set the other in motion,” that peril is “the cause to which the
loss is attributable.” Id. Here, the virus is clearly the peril that precipitated the
government orders. Neither order would have existed but for the existence of the virus,
and the virus is the proximate cause of the orders. Accordingly, the virus is the cause
of the loss, and Pane Rustica’s claims are excluded under the Policy. See Edison Kennedy,
LLC v. Scottsdale Ins. Co., No. 8:20-cv-1416-T-02SPF, 2021 WL 22314, at *8 (M.D. Fla.
Jan. 4, 2021) (Jung, J.).
As confirmation of this interpretation, district courts around the country have
almost universally dismissed with prejudice claims for loss due to COVID-19
shutdowns based on identical or substantially similar virus exclusions. See, e.g., Mena
Catering, Inc. v. Scottsdale Ins. Co., 1:20-cv-23661-BLOOM/Louis, 2021 WL 86777, at *4,
9 (S.D. Fla. Jan. 11, 2021) (Bloom, J.) (listing cases and dismissing claim under exclusion
for “loss or damage caused by or resulting from any virus, bacterium or other
microorganism that induces or is capable of inducing physical distress, illness or
disease”); Edison Kennedy, LLC, 2021 WL 22314, at *7 (dismissing claim under exclusion
“for loss or damage caused by or resulting from any virus . . . that induces or is capable
of inducing physical distress, illness or disease”); Mauricio Martinez, DMD, P.A. Allied
Ins. Co. of Am., 483 F. Supp. 3d 1189, 1192 (M.D. Fla. 2020) (Badalamenti, J.) (“Because
Martinez’s damages resulted from COVID-19, which is clearly a virus, neither the
Governor’s executive order narrowing dental services to only emergency procedures
nor the disinfection of the dental office of the virus is a ‘Covered Cause of Loss’ under
the plain language of the policy’s exclusion.”); Newchops Rest. Comcast LLC v. Admiral
Indem. Co., No. 20-1949, 2020 WL 7395153, at *8–9 (E.D. Pa. Dec. 17, 2020) (Savage,
J.) (dismissing claim under identical virus exclusion for restaurants who were shut down
as a result of COVID-19 shutdown orders). The Court concludes that this provision is
not ambiguous and that the exclusion applies to the claim in this case.
Pane Rustica’s claims for coverage under the Policy rely on the Business Income
and Civil Authority provisions. But those provisions must be read in the light of the
virus exclusion provision, which expressly excludes all losses caused by or resulting
from a virus. Specifically, the virus exclusion “applies to all coverage under all forms and
endorsements that comprise this Coverage Part or Policy, including . . . endorsements
that cover business income, extra expense or action of civil authority.” (Doc 1-1 at 81
(emphasis added)). This text thereby renders the virus exclusion issue dispositive. See
Mauricio Martinez, 483 F. Supp. 3d at 1191–92 (concluding there was no coverage under
the business income or civil authority provisions of an insurance policy where the virus
excluded insurer liability for any loss or damage caused by a virus). Nonetheless, even
if the virus exclusion provision did not apply, Pane Rustica’s claims are not covered in
the first instance under the Policy for the following two reasons.
First, Pane Rustica’s claims are not covered under the Business Income provision
because Pane Rustica did not allege physical damage to its property. Under the Policy,
only loss of income due to the necessary suspension of operations caused by “direct
physical loss of or damage to property” is covered. (Doc. 1-1 at 67). “A ‘loss’ is the
diminution of value of something [ ]. Loss, Black’s Law Dictionary (10th ed. 2014).
‘Direct’ and ‘physical’ modify loss and impose the requirement that the damage be
actual.” Mama Jo’s Inc. v. Sparta Ins. Co., 823 F. App’x 868, 879 (11th Cir. 2020) (alteration
in original) (quoting Homeowners Choice Prop. & Cas. v. Maspons, 211 So. 3d 1067, 1069
(Fla. 3d DCA 2017)). “Courts across the country have held that [coverage for COVID-
19 government shutdowns] does not exist where, as here, policyholders fail to plead
facts showing physical property damage.” Infinity Exhibits, Inc. v. Certain Underwriters at
Lloyd’s London Known as Syndicate PEM 4000, No. 8:20-cv-1605-T-30AEP, 2020 WL
5791583, at *4 (M.D. Fla. 2020) (Moody, J.) (citing, for example, Turek Enters. v. State
Farm Mut. Auto. Ins., No. 20-11655, 2020 WL 5258484 (E.D. Mich. Sept. 3, 2020)). Pane
Rustica has alleged only economic damage, not physical damage; consequently, its claim
is not covered. See Mama Jo’s, 823 F. App’x at 879 (concluding that a business income
claim for closures due to cleaning was not a loss that was both “direct” and “physical”);
see also Edison Kennedy, 2021 WL 22314, at *5 (“Absent direct physical damage or loss,
there is no covered cause of loss per the terms of the policies.”).
Second, Pane Rustica argues that the Civil Authority provision requires only
“damage” to a property within a mile of the covered property, not physical loss or
damage, such that the shutdown of two nearby restaurants establishes coverage. (Doc.
15 at 11–13). The terms of the Policy provide coverage for “damage to property other
than property at the described premises” if and only if (1) “[a]ccess to the area
immediately surrounding the damaged property is prohibited by civil authority” and (2)
“[t]he action of civil authority is taken in response to dangerous physical conditions
resulting from the damage . . . or to enable civil authority to have unimpeded access to
the damaged property.” (Doc. 1-1 at 68). This provision requires damage to another
property within one mile of the covered premises that causes a civil authority to prohibit
access to the covered premises. See Edison Kennedy, 2021 WL 22314, at *7.
Pane Rustica’s allegations on this score are again insufficient. To begin, the Civil
Authority provision—similar to the Business Income provision—requires physical
damage to a nearby premises. “To recover under the civil authority provision, tangible
damage to a property other than the insured premises is required to satisfy the terms of
the policies.” Edison Kennedy, 2021 WL 22314, at *7 (interpreting a civil authority
provision identical to this one). This interpretation is supported by a plain reading of
the Policy which requires damage to property, not damage generally or economic loss,
and which particularly addresses physical conditions and access to the damaged
property. (Doc. 1-1 at 68).
Pane Rustica alleges that two other restaurants were shut down by the same
government orders, (Doc. 1-1 at 4), not that they had dangerous physical conditions or
had damage to their property. Edison Kennedy, 2021 WL 22314, at *7 (“Plaintiffs do not
satisfy the [civil authority] provision because the amended complaints do not allege any
direct physical damage was caused to [the nearby property] or that any such damage
also caused the denial of access to [the plaintiffs’ properties].”). Moreover, even if Pane
Rustica’s interpretation was correct, it does not allege facts sufficient to meet the
conditions of the provision. Pane Rustica never alleges it was denied access to its
property or that access to the area surrounding the other two restaurants was denied
because of any damage that those restaurants sustained. See Raymond H Nahmad DDS
PA v. Hartford Cas. Ins. Co., 1:20-cv-22833-BLOOM/Louis, 2020 WL 6392841, at *8–9
(S.D. Fla. 2020) (Bloom, J.) (concluding that a civil authority provision was not satisfied
where plaintiff did not allege their access to the premises was prohibited). Indeed, they
were all shut down for the same reason: a government response to stop the spread of
the COVID-19 virus. Finally, Pane Rustica does not allege “dangerous physical
conditions” resulting from the damage to these restaurants or that the government ever
sought access to them, both of which are required to qualify under the Civil Authority
provision. Accordingly, that provision does not provide coverage for Pane Rustica’s
claims.
III. CONCLUSION
Pane Rustica has failed to state claims upon which relief can be granted because
the Policy does not provide coverage based on Pane Rustica’s allegations. It is also
apparent that amendment would be futile under these circumstances as any amendment
would be insufficient as a matter of law. See Burger King Corp. v. Weaver, 169 F.3d 1310,
1320 (11th Cir. 1999). Accordingly, Defendant Greenwich Insurance Company’s
Motion to Dismiss (Doc. 5), is GRANTED. The Complaint (Doc. 1-1) 1s
DISMISSED with prejudice. The Clerk of Court is directed to close this case and
terminate any pending motions as moot.
ORDERED in Tampa, Florida, on March 22, 2021.
J Kimball Mizelle
United States District Judge
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