Mena Catering, Inc. v. Scottsdale Ins. Co.

512 F.Supp.3d 1309

MENA CATERING, INC., Plaintiff,

v.SCOTTSDALE INSURANCE COMPANY, Defendant.

Case No. 1:20-cv-23661-BLOOM/Louis

United States District Court, S.D. Florida.

Signed January 8, 2021

Filed January 11, 2021

Alexis Gonzalez, Orion G. Callison, III, Law Office of Alexis Gonzalez, P.A., Coconut Grove, FL, Megha M. Mahajan, Mahajan Law P.A., Miami, FL, for Plaintiff.

Thomas Anthony Keller, Butler Pappas Weihmuller Katz Craig, Tampa, FL, for Defendant.

ORDER

BETH BLOOM, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court upon Defendant's Motion to Dismiss, ECF No. [11] ("Motion"). Plaintiff filed a response in opposition, ECF No. [17] ("Response"), to which Defendant filed a reply, ECF No. [24] ("Reply"). Defendant also filed a Notice of Filing Supplemental Authority in Support of its Motion, ECF No. [25]. The Court has considered the Motion, all supporting and opposing submissions, the record in this case, the applicable law, and is otherwise fully advised. For the reasons set forth below, the Motion is granted.

I. BACKGROUND

This matter stems from a lawsuit Plaintiff Mena Catering, Inc. initiated in the Eleventh Judicial Circuit in and for Miami-Dade County, Florida against Defendant Scottsdale Insurance Company on June 24, 2020. ECF No. [11-1] ("Complaint"). Defendant removed this lawsuit to this Court on September 2, 2020, pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. ECF No. [1].

According to the Complaint, Plaintiff is the owner and operator of a food catering company in Miami, Florida. ECF No. [1-1] at ¶ 1. Plaintiff entered into a surplus line commercial property insurance contract with Defendant to protect its business under a policy bearing Policy No. CPS3169238 ("Policy"),¹ effective May 25, 2019. Id. at ¶¶ 10-11. Plaintiff alleges that "[a]s a result of Florida's efforts to slow the spread of the SARS-CoV-2 global pandemic ["COVID-19"]" and government executive orders, Plaintiff "was forced to cease its regular business operations and sustain business interruption losses." Id. at ¶ 1. Specifically, in March 2020, state and county authorities in response to national and statewide public health emergencies "prohibited the use and occupancy of non-essential businesses, thereby affecting and preventing access to the Insured Property," and "[b]ased upon the closure of nearby non-essential businesses and the cessation of gatherings larger than ten people," Plaintiff was "forced by civil authorities to suspend business operations at the Insured Property." Id. at ¶¶ 22-24.² Plaintiff alleges that the "shutdown of non-essential business was the direct, proximate cause of significant losses and of [Plaintiff] incurring significant expense[.]" Id. at ¶ 24.

Plaintiff contends that it experienced a covered loss under the Policy's Business Interruption, Civil Authority, Extended Business Income, and Extra Expense coverages. Id. at ¶¶ 18, 21. In particular, Plaintiff alleges that its insured property was "damaged in that the sudden closure of nearby businesses and group gatherings resulted in the cancellation of numerous events for which [Plaintiff's] services has already been booked," resulting in spoilage of perishable food. Id. at ¶ 27. It adds that "more likely than not" but "cannot be known for certain," coronavirus has had a "continuous presence" "on or around [Plaintiff's] premises" and "upon information, rendered the premises contaminated, unsafe and unfit for its intended use and therefore caused physical property damage or loss under the policies." Id. at ¶ 29. According to Plaintiff, the "presence of coronavirus has caused a distinct alteration of the Insured Property which cannot be repaired through a one-time disinfection, and thus has some permanency." Id. Plaintiff submitted a claim for business interruption loss, but Defendant denied Plaintiff's claim on April 23, 2020 because the loss at issue did not come within the coverage grants of the Policy and separately was excluded by the Policy's virus and bacteria exclusion. Id. at ¶¶ 1, 19; ECF No. [11-2] at 94-100. The Complaint asserts two counts: declaratory relief (Count I) and breach of contract (Count II). ECF No. [11-1] at ¶¶ 43-60.

Regarding Count I, id. at ¶¶ 43-54, Plaintiff seeks a declaratory judgment that it (1) sustained a Covered Cause of Loss; (2) there is coverage under the Additional Coverage, Business Income, Extra Expense, and Civil Authority provisions; (3) COVID-19 is not an excluded virus under the Policy's virus and bacteria exclusion; (4) there was "physical damage" to its property and damage to other property under the Policy; (5) the actions of civil authorities were partly based on seeking unimpeded access to the Insured Property; and (6) Defendant is obligated to pay Plaintiff's claim for losses under the Policy. Regarding Count II, id. at ¶¶ 55-60, Plaintiff alleges that Defendant breached the Policy by wrongfully denying coverage and failing to pay Plaintiff's claim.

Defendant now moves to dismiss the Complaint with prejudice as to both counts. ECF No. [11]. Defendant makes four general arguments. First, all claims as they relate to damage and losses to the property located at 7458 SW 48^th Street, Miami, Florida 33155 should be dismissed because the Policy does not afford coverage for Business Income for that particular location but only Business Personal Property coverage. Id. at 1-2, 9-11. Second, as to the remaining properties, Plaintiff's losses and damages are excluded by the Policy's virus exclusion and because there was no "direct physical loss" so as to trigger coverage. Id. at 2-3, 11-22. See also ECF No. [24] at 1-5 (arguing that the Complaint fails to plead "direct physical loss" under the Policy even if Plaintiff's allegations of the presence of the COVID-19 virus at the Insured Property are non-speculative). Third, the Civil Authority provision was not triggered, ECF No. [24] at 5-7, and fourth, there was no loss under the Policy's spoilage provision. Id. at 10.

Plaintiff responds with five main points. First, the Complaint alleges direct physical loss and/or damage. ECF No. [17] at 7-8. Second, there is a covered loss from actions by civil authorities. Id. at 9-10. Third, the virus exclusion does not bar business interruption coverage. Id. at 10-13. Fourth, Plaintiff alleges proper coverage for all of the insured locations, including 7458 SW 48^th Street, Miami, Florida 33155. Id. at 13-14. And fifth, Plaintiff has adequately stated claims for declaratory relief and breach of contract. Id. at 14-15.

The Motion, accordingly, is ripe for consideration.

II. LEGAL STANDARD

Rule 8 of the Federal Rules of Civil Procedure requires that a pleading contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Although a complaint "does not need detailed factual allegations," it must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; see Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (explaining that Rule 8(a)(2) ’s pleading standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation"). In the same vein, a complaint may not rest on " ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 557, 127 S.Ct. 1955 (alteration in original)). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. These elements are required to survive a motion brought under Rule 12(b)(6), which requests dismissal for "failure to state a claim upon which relief can be granted."

When reviewing a motion under Rule 12(b)(6), a court, as a general rule, must accept the plaintiff's allegations as true and evaluate all plausible inferences derived from those facts in favor of the plaintiff. See Miccosukee Tribe of Indians of Fla. v. S. Everglades Restoration Alliance , 304 F.3d 1076, 1084 (11th Cir. 2002) ; AXA Equitable Life Ins. Co. v. Infinity Fin. Grp., LLC , 608 F.Supp.2d 1349, 1353 (S.D. Fla. 2009). However, this tenet does not apply to legal conclusions, and courts "are not bound to accept as true a legal conclusion couched as a factual allegation." Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ; see Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ; Thaeter v. Palm Beach Cnty. Sheriff's Office , 449 F.3d 1342, 1352 (11th Cir. 2006). Moreover, "courts may infer from the factual allegations in the complaint ‘obvious alternative explanations,’ which suggest lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer." Am. Dental Ass'n v. Cigna Corp. , 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal , 556 U.S. at 682, 129 S.Ct. 1937 ).

A court considering a Rule 12(b)(6) motion is generally limited to the facts contained in the complaint and the attached exhibits, including documents referred to in the complaint that are central to the claim. See Wilchombe v. TeeVee Toons, Inc. , 555 F.3d 949, 959 (11th Cir. 2009) ; Maxcess, Inc. v. Lucent Technologies, Inc. , 433 F.3d 1337, 1340 (11th Cir. 2005) ("[A] document outside the four corners of the complaint may still be considered if it is central to the plaintiff's claims and is undisputed in terms of authenticity.") (citing Horsley v. Feldt , 304 F.3d 1125, 1135 (11th Cir. 2002) ). "[W]hen the exhibits contradict the general and conclusory allegations of the pleading, the exhibits govern." Griffin Indus., Inc. v. Irvin , 496 F.3d 1189, 1206 (11th Cir. 2007).

It is through this lens that the Court considers the Motion and the parties’ arguments.

III. DISCUSSION

Determining whether Defendant is entitled to dismissal of the Complaint raises two overarching issues. The first is whether the Complaint alleges facts that come within the scope of...