CSK Tampa attorneys Mark Tinker and Mary Lou Cuellar-Stilo successfully obtained a dismissal, with prejudice, of a Tampa restaurant’s claim for lost income and business interruption coverage under a certificate of commercial property insurance issued by Certain Underwriters at Lloyd’s, London. The claim – filed by Prime Time Sports Grill, Inc. – alleged that, due to the COVID-19 pandemic, Governor Ron DeSantis issued a series of executive orders compelling it to close or severely restrict its operations. That suspension caused Prime Time to incur substantial lost income and operating expenses, so it sought reimbursement from Underwriters under the certificate’s Business Income coverage.
Mark and Mary Lou filed a motion to dismiss the claim on behalf of Underwriters, arguing that the complaint failed to state any facts falling within the certificate’s insuring agreement because the coverage requires a slowdown or cessation of operations “caused by direct physical loss of or damage to property.” There was no damage to Prime Time’s restaurant – its claimed harm resulted from government action – so the claim for coverage fails as a matter of law. The motion further stated that the defect could not be cured by amendment, such as by claiming the physical presence of the COVID-19 virus in the restaurant, because the virus may be harmful to people, but it cannot cause direct physical damage to any insured property.
In a December 17, 2020 Order, Middle District Judge Charlene Honeywell agreed and dismissed the case with prejudice. Judge Honeywell found that “there is no coverage, as a matter of law, for the claim,” and the issue cannot be cured by amendment; Prime Time “has not alleged any tangible damage whatsoever” and to the extent the virus is present in the restaurant, “under Florida law, an item or structure that merely needs to be cleaned has not suffered a ‘loss’ which is both ‘direct’ and ‘physical.’”
Click here to view the opinion
If you have any Covid related claims, please reach out to Mark, Mary-Lou or any of the attorneys in CSK’s Covid-19 defense group.
Our team is available to discuss the topics written here and ready to provide additional information contained in this article. Contact us for more information.