The United States Southern District Court of Florida Judge Federico Moreno ruled on February 26, 2021, in Town Kitchen LLC v. Certain Underwriters at Lloyd’s, et al, Case No. 20-22832-CIV-MORENO (Feb. 26, 2021), that the harm from Covid-19 is “from having living, breathing human beings inside one’s business—it is not damage to the physical business itself, it is damage done to other living, breathing human beings.” *13-14. The Court noted that any actual presence of Covid-19 in the restaurant could be easily cleaned. *14.
The Court specifically addressed the issue of what constituted a direct physical loss. Many insurance policies, including the one in Town Kitchen, require a direct physical loss or damage to the insured property to cover financial loss. Like Plaintiff in Town Kitchen, it is common for insureds to allege that Covid-19 particles were present on the premises and caused direct physical loss and damage to the property.
The Court asserted that the Plaintiff’s property did not change, “[t]he world around it did.” * 8. The property did not require a repair or change for it to be useable, “the world must change.” *8. “Put simply, Plaintiff seeks to recover from economic losses caused by something physical—not physical losses.” The Court found that the Covid-19 shutdowns were similar to a zoning change, lost liquor license or a road blocked by a parade. *9. The Court thoroughly discussed the multitude of other Florida cases dismissed in the past year because Plaintiff failed to assert direct physical loss or damage in its claim for financial loss related to Covid-19.
The Court properly dismissed Plaintiff’s Complaint for failure to state a claim upon which relief may be granted. Like virtually all other courts in Florida, property claims related to Covid-19 have been dismissed in their entirety.
To access this article written by GM Attorney, Sara K. Blackwell, click HERE.
