Less than a week after federal judges reached a similar conclusion, a Florida appeals court ruled Wednesday that an insurer was not required to cover losses sustained by a Miami-Dade County restaurant that suspended operations early in the COVID-19 pandemic.
A three-judge panel of the state’s 3rd District Court of Appeal issued a 19-page decision that sided with the insurer Certain Underwriters at Lloyd’s, London in the dispute with GreenStreet Cafe, Inc. The Coconut Grove restaurant and bar suspended operations in 2020 after Miami-Dade County and the city of Miami blocked restaurants from serving customers in dining rooms to try to prevent the spread of COVID-19.
GreenStreet argued that financial losses it sustained because of the shutdown were covered under its “all-risk” commercial property-insurance policy and filed a lawsuit against Lloyd’s. A Miami-Dade County circuit judge rejected the lawsuit, ruling that the losses were not covered under part of the policy that applied to “direct physical loss of or damage to property.”
The Miami-based appeals court upheld that decision Wednesday. “(Under) this court’s case law and the plain language of the policy, loss of intended use alone does not constitute ‘direct physical loss,’” said the ruling, written by Judge Fleur Lobree and joined by Judges Thomas Logue and Eric Hendon.
“Instead, ‘direct physical loss of or damage to property’ requires actual, tangible alteration to the insured property for coverage to be triggered under the policy. GreenStreet’s allegation that it suffered economic losses due to the city of Miami and Miami-Dade County closure orders does not satisfy this requirement.”
Last Thursday, a panel of the Atlanta-based 11th U.S. Circuit Court of Appeals issued a similar ruling in consolidated cases involving restaurant operators from Destin, Palm Beach and St. Petersburg and a furniture retailer.