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Insurers win Florida COVID business interruption rulings

business interruption

The 11th U.S. Circuit Court of Appeals in Atlanta has upheld dismissal of four separate Florida COVID-19 related business interruption cases filed by three restaurants and a furniture chain against several insurers in a joint opinion.

The appeals court said in last Thursday’s ruling it consolidated its opinion following oral argument because the cases “present a common question of insurance coverage prompted by the COVID-9 pandemic, which was whether the plaintiffs’ policies provided coverage for direct physical damage.” A three-judge panel held the policies did not provide coverage.

The cases were:

-SA Palm Beach v. Certain Underwriters at Lloyd’s London, which was filed by a Palm Beach fine dining restaurant. The ruling upheld a lower court decision by the U.S. District Court in Palm Beach.

-Emerald Coast Restaurants, Inc. v. Aspen Specialty Insurance Co., which was filed by a Destin sports bar and restaurant and upheld a ruling by the U.S. District Court in Pensacola.

-Rococo Steak LLC, s.b.a. Rococo Steak v. Aspen Specialty Insurance Co., filed by a St. Petersburg steakhouse, which affirmed a ruling by the U.S. District Court in Tampa; and

-R.T.G. Furniture Corp. v. Aspen Specialty Insurance Co.; Crum & Forster Specialty Insurance Co.; Evanston Insurance Co.; Everest Indemnity Insurance Co.; Hallmark Specialty Insurance Co., et al.  The appeal court’s decision in that case, which was filed by a Seffer, Florida-based furniture retailer that operates more than 150 stores in several states, affirmed a ruling by another U.S. District Court in Tampa.

In affirming the lower court rulings, the panel said it considered how the Florida Supreme Court might rule on the issue in making its decision.

“As far as we can tell, every federal and state appellate court that has decided the meaning of ‘physical loss of or damage to’ property (or similar language) in the context of the COVID-19 pandemic has come to the same conclusions and held that some tangible alteration of the property is required,” the ruling said.

“As an independent matter, we conclude that the majority position is legally sound under Florida law,” it said, in upholding dismissal of most of the charges.

The ruling said the district court did not dismiss a spoilage provision claim made by Emerald Coast, and remanded that issue for further consideration as to whether it survives Aspen’s motion to dismiss.

Attorneys in the case did not respond to requests for comment.