Two businesses associated with dentist Raymond H. Nahmad sued in May claiming the insurance company was breaching a contract by declining to cover the dentist's losses following orders from the governor of Florida and the mayor of Miami-Dade County in March to suspend non-emergency or elective dental care to help stop the spread of COVID-19.
U.S. District Judge Beth Bloom dismissed the lawsuit with prejudice, ruling that the insurance policy covers a physical loss to the property and not a loss of revenue. The judge also said that even if a loss of revenue could be construed as a physical loss, there is a specific virus exclusion in the policy.
"As an initial matter, business income is not included within the list of covered property under the policy," the judge said. "In fact, money and accounts are expressly excluded from the definition. But more importantly, the complaint itself alleges that there were no physical harms to the insured premises because plaintiffs' injuries are purely economic."
The judge added, "Federal courts in Florida that have examined whether economic losses caused by COVID-19 business closures or suspensions constitute a 'direct physical loss' or 'physical harm' have rejected plaintiffs' arguments."
Among the cases cited by the judge was the Southern District of Florida's 2020 ruling in Malaube, LLC v. Greenwich Ins. Co.
, where a restaurant sought coverage for losses from COVID-19. The court found there was no allegation COVID-19 was physically present on the premises, and also cited other rulings in Florida that found emergency government orders were insufficient to state a claim for COVID-19 looses because "there must be some allegation of actual harm."Judge Bloom also said that even if she assumed "for argument's sake that plaintiffs had alleged facts triggering coverage under the policy, the virus exclusion would still apply to bar coverage for plaintiffs' losses."
The judge added, "Upon consideration, the court does not agree that plaintiffs' distinction between the government orders versus the virus as the immediate cause of their losses avoids the plain language of the virus exclusion."
A second claim seeking declaratory judgment was also dismissed by the judge, who said it was "duplicative" of the breach of contract allegation and also failed to state a claim.
Counsel for the parties did not immediately respond to requests for comment.
The plaintiffs are represented by Nicole S. Houman and Daniel M. Ilani of The Property People FL PA.
Hartford is represented by Tracy A. Jurgus of Butler Weihmuller Katz Craig LLP and Sarah D. Gordon, John J. Kavanagh and Caitlin R. Tharp of Steptoe & Johnson LLP.
The case is Raymond H Nahmad DDS PA v. Hartford Casualty Insurance Company, case number 1:20-cv-22833, in the U.S. District Court for the Southern District of Florida.
--Editing by Emily Kokoll.
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