Tokio Marine Specialty Insurance Co. doesn't have to provide coverage to Mignonette simply because government orders prevented the restaurant from operating or because an employee had been exposed to the virus, U.S. District Judge James Lawrence King decided.
Judge King pointed to an Eleventh Circuit ruling last year against a restaurant seeking coverage for cleaning costs and lost income due to nearby roadwork. The panel ruled that "direct physical loss or damage" needs to involve actual, physical damage, the judge said.
Mignonette "does not allege any actual, concrete damage to the property. The potential existence of COVID-19 at the restaurant does not suffice," the judge said.
Mignonette sought insurance coverage in March 2020 for lost income and extra expenses due to COVID-19 and filed suit in Florida state court that August after coverage was denied, according to the judge.
The restaurant had argued that it sustained direct physical loss because it was "'unable to utilize something in the real, material, or bodily world, resulting from a given cause (i.e., COVID-19),'" the judge noted.
Tokio Marine moved the suit to federal court in September and argued in its motion to dismiss that the restaurant didn't allege any actual physical loss or damage to the property, according to the judge.
Among federal rulings on motions to dismiss COVID-19 coverage suits, more than 80% have been fully dismissed with prejudice, according to the University of Pennsylvania's COVID Coverage Litigation Tracker.
Representatives and counsel for the parties did not immediately respond to requests for comment.
Mignonette is represented by Alaina Fotiu-Wojtowicz, Benjamin H. Brodsky and Joshua Truppman of Brodsky Fotiu-Wojtowicz PLLC and Keith A. Truppman of Mintz Truppman PA.
Tokio Marine is represented by Michael Simon and Brian S. Jacobson of Simon Reed & Salazar PA and Jeffrey A. Zachman of Dentons.
The case is Mignonette Miami LLC v. Tokio Marine Specialty Insurance Co., case number 1:20-cv-23924, in the U.S. District Court for the Southern District of Florida.
--Additional reporting by Jeff Sistrunk. Editing by Daniel King.
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