In Cafe International Holding Company LLC v. Westchester Surplus Lines Insurance Company, the U.S. district court dismissed, with prejudice (essentially meaning that the plaintiff can’t refile with this court on the same grounds), the plaintiff’s motion.

In the decision, the court opined:

Passion. Creativity. Tenacity. These are all traits exhibited by Plaintiff’s counsel in their opposition to Defendant Westchester Surplus Lines Insurance Company’s motion for judgment on the pleadings [ECF No. 58] in this putative class action lawsuit for damages a restaurant allegedly sustained because of the COVID-19 pandemic. But these virtues, admirable as they may be, must be squared against the unambiguous language of the commercial property insurance policy.

The Plaintiff-proffered legal arguments, while fascinating and adroit and maybe even an illustration of “outside-the-box” thinking, are not enough to permit the insured restaurant-owning corporation to avoid the same conclusions and results which dozens of courts applying Florida law have decided in insurer’s favor about COVID-19-related insurance claims.

In its Opposition, Plaintiff mentions its desire to file an amended complaint. At the hearing, counsel slightly amplified the reasons for this comment, but he did not pinpoint any specifics sufficient to overcome the overwhelming authority establishing that the virus did not trigger coverage because there are no plausible, sufficiently specific allegations of direct physical loss of or damage to the restaurant.

Even if experts were permitted to inspect the restaurant and even if they concluded that the virus contaminated the restaurant or its equipment, this hypothetical new series of allegations would still be inadequate. See Mama Jo’s, 823 F. App’x at 879 (stating under Florida law, “an item or structure that merely needs to be cleaned has not suffered a ‘loss’ which is both ‘direct’ and ‘physical’”).

I wrote about the “direct physical loss of or damage to property” issue in this blog post:

What Does “Direct Physical Loss Of Or Damage To Property” Mean?

And, of course, if you want to dig even deeper into the issues, there is my book:

Why Insurance Doesn’t Cover the COVID-19 Pandemic


P.S.  Thanks to attorney Roy Mura for his LinkedIn post on this case.

The following two tabs change content below.

Bill Wilson

Founder at
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information