Cafe La Trova LLC v. Aspen Specialty Insurance Company

Filing 53

ORDER denying 30 Motion for Summary Judgment; Denying 32 Motion to Dismiss for Lack of Jurisdiction; granting 32 Motion for Summary Judgment. Signed by Judge Cecilia M. Altonaga on 2/16/2021. See attached document for full details. (ps1) Modified on 2/16/2021 to correct docket text (ps1).

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 20-22055-CIV-ALTONAGA/Goodman
CAFÉ LA TROVA LLC,
Plaintiff,
v.
ASPEN SPECIALTY INSURANCE
COMPANY,
Defendant.
_________________________________/
ORDER
THIS CAUSE is before the Court on Plaintiff, Café La Trova LLC’s Motion for Summary
Judgment (“Plaintiff’s Motion”) [ECF No. 30], filed on December 11, 2020; and Defendant, Aspen
Specialty Insurance Company’s Motion to Dismiss for Lack of Subject-Matter Jurisdiction, or in
the Alternative, for Summary Judgment (“Defendant’s Motion”) [ECF No. 32], filed on December
15, 2020. Defendant filed a Response to Plaintiff’s Motion [ECF No. 35], to which Plaintiff filed
a Reply [ECF No. 46]. Plaintiff filed a Response to Defendant’s Motion [ECF No. 48], to which
Defendant filed a Reply [ECF No. 52]. The Court has carefully considered the Complaint (see
[ECF No. 1-2] 4–10 1), the parties’ written submissions, 2 the record, and applicable law. For the
following reasons, Plaintiff’s Motion is denied, and Defendant’s Motion is granted.

1

The Court uses the pagination generated by the electronic CM/ECF database, which appears in the headers
of all court filings. Citations to deposition testimony rely on the pagination and line numbering in the
original document.

2

The parties’ factual submissions include: Plaintiff’s Statement of Material Facts in Support of Motion for
Summary Judgment (“Pl.’s SOF”) [ECF No. 31]; Defendant’s Counterstatement of Material Facts in
Response to Plaintiff’s Statement of Material Facts in Support of Its Motion for Summary Judgment
(“Def.’s Resp. SOF”) (see [ECF No. 36] 1–10); Defendant’s Additional Statement of Undisputed Material
Facts (“Def.’s Add. SOF”) (see id. 11–15); Plaintiff’s Reply Statement of Material Facts (“Pl.’s Reply
SOF”) [ECF No. 47]; Defendant’s Statement of Undisputed Material Facts in Support of Its Motion to
Dismiss for Lack of Subject-Matter Jurisdiction, or in the Alternative, for Summary Judgment (“Def.’s
SOF”) [ECF No. 33]; and Plaintiff’s Response to Defendant’s Statement of Undisputed Material Facts in

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I.

BACKGROUND

This declaratory judgment action involves an insurance coverage dispute regarding losses
suffered by Plaintiff in connection with the ongoing COVID-19 pandemic. Plaintiff owns and
operates a restaurant by the name of “Café La Trova.” (Compl. ¶ 2; Def.’s SOF ¶ 1). Effective
January 10, 2020 through January 10, 2021, Plaintiff purchased a commercial property insurance
policy (the “Policy”) from Defendant. (See Compl. ¶ 8; Pl.’s SOF ¶ 1; Def.’s SOF ¶ 17). The
Policy identifies the insured property as the Café La Trova restaurant located at 971 S.W. 8th Street
in Miami, Florida. (See Compl. ¶ 9; id., Ex. A, Policy 27).
In the Building and Personal Property Coverage Form, the Policy states, in part, that
Defendant “will pay for direct physical loss of or damage to” property covered by the Policy,
resulting from any covered cause. (Policy 58). Under the Business Income (and Extra Expense)
Coverage Form, the Policy further states Defendant “will pay for the actual loss of Business
Income [the insured] sustain[s] due to the necessary ‘suspension’ of [the insured’s] ‘operations’
during the ‘period of restoration[,]’” provided such suspension is “caused by direct physical loss
of or damage to” covered property resulting from a covered cause. (Id. 74 (alterations added)).
Finally, the Civil Authority provision of the Policy provides coverage for the loss of business
income “[w]hen a Covered Cause of Loss causes damage to property other than [the insured’s
covered] property” and, “in response to dangerous physical conditions resulting from th[at]
damage” or covered cause, an action of civil authority “prohibits access” to the covered property.
(Id. 75 (alterations added)).

Support of Its Motion to Dismiss for Lack of Subject-Matter Jurisdiction, or in the Alternative, for Summary
Judgment (“Pl.’s Resp. SOF”) [ECF No. 49].

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Plaintiff asserts that as a direct result of the global COVID-19 pandemic and certain
governmental orders that restricted restaurant operations in an effort to curb the spread of COVID19, it lost use of the covered property “for its intended use and purpose[.]” 3 (Pl.’s SOF ¶ 34
(alteration added); see also Compl. ¶ 22). Specifically, Plaintiff identifies an order issued by the
City of Miami on March 17, 2020, which prohibited restaurants from serving patrons for in-person
dining but permitted restaurants to offer food for delivery, carry-out, or drive-thru. (See Pl.’s SOF
¶ 32; Def.’s SOF ¶ 3). Plaintiff also identifies Emergency Order 07-20, issued by Miami-Dade
County on March 19, 2020, which incorporated Emergency Order 03-20 and provided, in part, that
restaurants had to close on-premises service to customers but could remain open for delivery, pickup, or take-out services. (See Compl. ¶ 20; Def.’s SOF ¶¶ 4–5). Plaintiff ceased all operations on
March 15, 2020. (See Compl. ¶ 21; Def.’s SOF ¶ 2).
As a result, Plaintiff alleges it “lost use of the Property, the restaurant and bar business was
interrupted, and business income was lost.” (Compl. ¶ 22). Plaintiff also contends it had to use
chemicals to clean surfaces, move furniture, install partitions, and discard spoiled food; and that
these actions caused damage to the property. 4 (See Pl.’s SOF ¶¶ 36–38). Plaintiff submitted notice

3

Defendant disputes this fact, complaining that Plaintiff has not offered any record citation in support of
this assertion. (See Def.’s Resp. SOF ¶ 34). Defendant further argues that “Plaintiff was not prohibited by
government order from offering take-out or delivery services but chose not to offer such services ‘simply
because it didn’t make business sense.’” (Id. (quoting Martinez Dep. [ECF No. 33-2] 122:24–25); see also
Def.’s SOF ¶ 10). Plaintiff does not dispute this statement. (See Pl.’s Resp. SOF 5).
4

Defendant disputes these actions were “a direct and proximate result of COVID-19 and/or government
orders[,]” stating “Plaintiff has not cited any order purporting to require [the use of chemicals to clean, the
moving of furniture, or the installation of partitions], and neither the cited City of Miami nor Miami-Dade
County orders did so.” (Def.’s Resp. SOF ¶ 36 (alterations added; quotation marks omitted)). Defendant
also argues Plaintiff’s answer to an interrogatory regarding physical damage to the property “makes no
mention whatsoever of the alleged damage recited in Plaintiff’s Statement of Material Facts” due to moving
furniture and installing partitions. (Id. ¶ 37). Finally, Defendant disputes that discarding spoiled food was
a “direct and proximate result of COVID-19 and/or government orders” because “Plaintiff was not
prohibited . . . from offering take-out or delivery services.” (Id. ¶¶ 36, 38 (alteration added; quotation marks
omitted)).

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of its claim under the Policy to Defendant on March 23, 2020. (See Compl. ¶ 26; id., Ex. B, Notice
of Claim 98–99). On March 24, 2020, Defendant assigned Plaintiff a claim number. (See Compl.
¶ 28).
On March 31, 2020, Plaintiff filed this action against Defendant, seeking a declaration that
its claim is fully covered by the Policy. (See generally Compl.). In particular, Plaintiff contends
its losses are covered by the Building and Personal Property, Business Income, and Civil Authority
coverages. (See generally Pl.’s Mot.). Defendant argues Plaintiff’s losses are not covered by the
Policy and, in any event, there is no justiciable controversy because Defendant did not deny or
have time to investigate Plaintiff’s claim before Plaintiff filed this suit against it. (See generally
Def.’s Mot.). The parties’ competing motions ask the Court to determine (1) whether there is a
justiciable controversy sufficient for the Court to exercise subject-matter jurisdiction, and (2)
whether the business income losses Plaintiff incurred relating to the COVID-19 pandemic are
covered by the Policy.
II.

LEGAL STANDARDS

A. Motion to Dismiss for Lack of Subject-Matter Jurisdiction
Federal Rule of Civil Procedure 12(h)(3) provides that, if a court “determines at any time
that it lacks subject-matter jurisdiction, the court must dismiss the action.” Fed. R. Civ. P. 12(h)(3).
Thus, the Court has “an independent obligation to determine whether subject-matter jurisdiction
exists, even in the absence of a challenge from any party.” Arbaugh v. Y & H Corp., 546 U.S. 500,
514 (2006) (citation omitted). Federal courts are courts of limited jurisdiction and “possess only
that power authorized by [the] Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of
Am., 511 U.S. 375, 377 (1994) (alterations added; citations omitted). It is therefore “presumed

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that a cause lies outside [the Court’s] limited jurisdiction, and the burden of establishing the
contrary rests upon the party asserting jurisdiction[.]” Id. (alterations added; citations omitted).
B. Motions for Summary Judgment
Summary judgment may only be rendered if the pleadings, discovery and disclosure
materials on file, and any affidavits show there is no genuine issue as to any material fact and the
movant is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a), (c). An issue of fact
is “material” if it might affect the outcome of the case under the governing law. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). It is “genuine” if the evidence could lead a
reasonable jury to find for the non-moving party. See id.; see also Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986). The Court draws all reasonable inferences in favor
of the party opposing summary judgment. See Chapman v. AI Transp., 229 F.3d 1012, 1023 (11th
Cir. 2000).
If the non-moving party bears the burden of proof at trial, the moving party may obtain
summary judgment simply by: (1) establishing the nonexistence of a genuine issue of material fact
as to any essential element of a non-moving party’s claim, and (2) showing the Court there is
insufficient evidence to support the non-moving party’s case. See Blackhawk Yachting, LLC v.
Tognum Am., Inc., No. 12-14209-Civ, 2015 WL 11176299, at *2 (S.D. Fla. June 30, 2015)
(citations omitted). “Once the moving party discharges its initial burden, a non-moving party who
bears the burden of proof must cite to . . . materials in the record or show that the materials cited
do not establish the absence or presence of a genuine dispute.” Id. (citing Fed. R. Civ. P. 56(c)(1);
alteration added; quotation marks omitted).
“Summary judgment may be inappropriate even where the parties agree on the basic facts
[] but disagree about the inferences that should be drawn from these facts.” Whelan v. Royal

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Caribbean Cruises Ltd., No. 1:12-cv-22481, 2013 WL 5583970, at *2 (S.D. Fla. Aug. 14, 2013)
(alteration added; citation omitted). Where “reasonable minds might differ on the inferences
arising from undisputed facts, then the Court should deny summary judgment” and proceed to trial.
Id. (citations omitted).
When the parties file cross-motions for summary judgment, the standard of review “does
not differ from the standard applied when one party files a motion, but simply requires a
determination of whether either of the parties deserves judgment as a matter of law on the facts
that are not disputed.” GEBAM, Inc. v. Inv. Realty Series I, LLC, 15 F. Supp. 3d 1311, 1315–16
(N.D. Ga. 2013) (citing Am. Bankers Ins. Grp. v. United States, 408 F.3d 1328, 1331 (11th Cir.
2005)); see also United States v. Oakley, 744 F.2d 1553, 1555 (11th Cir. 1984) (“Cross-motions .
. . will not, in themselves, warrant the court in granting summary judgment unless one of the parties
is entitled to judgment as a matter of law on facts that are not genuinely disputed.” (alteration
added; citation omitted)).
III.

ANALYSIS

A. Defendant’s Motion to Dismiss
Defendant moves to dismiss this declaratory judgment action arguing the lack of a
justiciable controversy deprives the Court of subject-matter jurisdiction. (See Def.’s Mot. 4–6).
When, as here, a claim seeking relief under Florida’s Declaratory Judgment Act is removed from
state court to federal court, the Court construes such claim as an action for declaratory relief under
the federal Declaratory Judgment Act, 28 U.S.C. section 2201. See Garden Aire Vill. Condo. Ass’n
Inc. v. QBE Ins. Corp., 774 F. Supp. 2d 1224, 1227 (S.D. Fla. 2011) (construing claim under
federal Declaratory Judgment Act because “Florida’s Declaratory Judgment Act is a procedural
mechanism . . . [that] does not confer any substantive rights” and “Florida’s procedural rules are

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inapplicable . . . [in] a diversity case” (alterations added; quotation marks and citation omitted)).
Subject-matter jurisdiction under the federal Declaratory Judgment Act depends on the existence
of an “actual controversy.” Emory v. Peeler, 756 F.2d 1547, 1551–52 (11th Cir. 1985) (quotation
marks omitted); Odyssey Marine Exploration, Inc. v. Unidentified, Shipwrecked Vessel or Vessels,
512 F. App’x 890, 895 (11th Cir. 2013) (explaining the actual controversy requirement “is
jurisdictional”). The actual controversy requirement, which is congruent with the “case or
controversy” requirement of Article III of the Constitution, is evaluated “on a case-by-case basis.”
Atlanta Gas Light Co. v. Aetna Cas. & Sur. Co., 68 F.3d 409, 414 (11th Cir. 1995) (quotation
marks and citation omitted); see MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007)
(“[T]he phrase ‘case of actual controversy’ in the Act refers to the type of ‘Cases’ and
‘Controversies’ that are justiciable under Article III.” (alteration added; citation omitted)).
For a justiciable controversy to exist, there must be a substantial, “definite and concrete”
dispute “touching the legal relations of parties having adverse legal interests.” MedImmune, Inc.,
549 U.S. at 127 (quotation marks and citation omitted)). The controversy cannot be “conjectural,
hypothetical, or contingent; it must be real and immediate, and create a definite, rather than
speculative threat of future injury.” Emory, 756 F.2d at 1552 (citations omitted).

The party

invoking jurisdiction generally “must show, at an ‘irreducible minimum,’ that at the time the
complaint was filed, he ha[d] suffered some actual or threatened injury resulting from the
defendant’s conduct, that the injury can be traced to the challenged action, and that the injury is
likely to be redressed by favorable court disposition.” Atlanta Gas Light Co., 68 F.3d at 414
(alteration added; citations omitted).
In Atlanta Gas Light Co., the Eleventh Circuit concluded that when the plaintiff, Atlanta
Gas, filed its lawsuit, no justiciable controversy existed between it and its insurer. See id. at 409.

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There, , gas company Atlanta Gas filed a declaratory judgment action to determine the extent of
its insurers’ liability for environmental cleanup costs. See id. at 411–12. One day before filing
suit, Atlanta Gas sent notice via mail to its insurers regarding their potential liability; the insurers
received the notice after the lawsuit had already been filed. See id. at 412. In other words, at the
time the complaint was filed, the insurers had no notice of the claim and no opportunity to respond
or take a position on the claim. See id. Moreover, at the time Atlanta Gas mailed notice and filed
suit, it had not yet incurred any actual cleanup costs, and “it was not clear that state and federal
environmental agencies would ever require cleanups at any of [Atlanta Gas’s] former [facilities].”
Id. at 415 (alterations added). Because Atlanta Gas provided inadequate notice for a merely
hypothetical loss, the Eleventh Circuit held there was no actual controversy when the complaint
was filed and a declaratory judgment was not warranted. See id.
Defendant argues this case presents no justiciable controversy because, as in Atlanta Gas
Light Co., Plaintiff did not provide adequate notice of its insurance claim before filing its
Complaint. 5 (See Def.’s Mot. 4–6). Plaintiff provided Defendant notice of its claim on March 23,
2020. (See Compl. ¶ 26; Notice of Claim 98–99; Def.’s SOF ¶¶ 32–33). A mere eight days later,
on March 31, 2020, Plaintiff filed this declaratory judgment action against Defendant. (See
generally Compl.; Def.’s SOF ¶ 36). Defendant contends it did not have the opportunity to
investigate Plaintiff’s claim and it had not yet taken a coverage position at the time Plaintiff filed
suit. (See Def.’s Mot. 6; Def.’s SOF ¶¶ 37–38; Compl. ¶ 29).

5

This case is factually distinguishable from Atlanta Gas Light Co. in at least two key respects: (1) Defendant
received notice of Plaintiff’s claim one week before Plaintiff filed this action, whereas the insurer in Atlanta
Gas Light Co. only received notice after the policyholder filed its lawsuit; and (2) Plaintiff here alleges it
has actually suffered a covered loss, whereas in Atlanta Gas Light Co., it was not clear that the policyholder
would ever incur a loss for which it would seek to file an insurance claim.

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As the Eleventh Circuit has recognized, later events may ripen a controversy that was
previously nonjusticiable. See Progressive Mountain Ins. Co. v. Middlebrooks, 805 F. App’x 731,
734–35 (11th Cir. 2020) (noting that, while “actions for declaratory judgment on insurance
coverage are generally not justiciable until there has been at least a threat of a claim,” “subsequent
events may be able to ripen a case or controversy for decision” (citations omitted)); Yacht Club on
the Intracoastal Condo. Ass’n v. Lexington Ins. Co., 509 F. App’x 919, 922–23 (11th Cir. 2013)
(rejecting the insurer’s argument that breach of contract and declaratory judgment claims were not
justiciable because the insurer had not yet denied the claims when the lawsuit was filed, concluding
that “ripeness can be affected by events occurring after the case is filed” (collecting cases)); Atlanta
Gas Light Co., 68 F.3d at 415 n.12 (acknowledging “events that have transpired since the
complaint was filed could give rise to justiciable claims”).
For example, an insurer’s failure to timely respond to a policyholder’s claim can ripen that
claim during the pendency of the lawsuit, even if the claim was not justiciable at the time the suit
was filed. See Wilshire Condo. Ass’n v. QBE Ins. Corp., Case No. 10-23806-Civ, 2013 WL
12092532, at *5 (S.D. Fla. Apr. 10, 2013). In Wilshire Condominium Association, the policyholder
filed a declaratory judgment action on October 21, 2010, without first submitting notice to the
insurer. See id. at *1. The lawsuit itself served as “notice” to the insurer. Thereafter, on October
28, 2010, the policyholder contacted the insurer to try to resolve their dispute through
appraisal. See id.
The insurer filed a motion to dismiss for lack of justiciability 24 months later, in September
2012. See id. at *5. As of the date of the court’s decision in April 2013 — 31 months after the
policyholder filed the complaint — the insurer still had not denied the policyholder’s claim or
responded to its request for an appraisal. See id. On those facts, the court held that the insurer’s

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failure to timely respond to the policyholder’s claim was a sufficient basis to infer that the insurer
had constructively denied the claim. See id. (“For all intents and purposes, we view a written
denial . . . as the functional equivalent of a de facto denial of coverage resulting from [the insurer’s]
prolonged refusal to respond to [the insured’s] coverage claim.” (alterations added; citation
omitted)). The court therefore denied the motion to dismiss for lack of justiciability. See id.
Here, over 8 months elapsed between the date Plaintiff filed the Complaint and Defendant’s
Motion to Dismiss for lack of justiciability. As of the date of this decision — over 10 months after
the Complaint was filed — it appears Defendant has still not paid, denied, investigated, or
otherwise officially responded to Plaintiff’s insurance claim. (See Pl.’s SOF ¶ 40; 6 Pl.’s Resp.
SOF 10); see also, e.g., 200 Leslie Condo. Ass’n Inc. v. QBE Ins. Corp., No. 10-61984-Civ, 2011
WL 2470344, at *15 (S.D. Fla. June 21, 2011) (suggesting, but declining to decide, that the
insurer’s failure to respond to the policyholder’s demand letter for 8 months constituted a de facto
disagreement between the parties). Moreover, although Defendant has not yet denied the insurance
claim, it has made clear throughout these proceedings its position that Plaintiff’s losses are not
covered by the Policy. (See, e.g., Answer & Affirm. Defenses [ECF No. 6] 6–7 (“Café La Trova’s
claim is not covered . . . .” (alteration added)); id. 9 (seeking declaration “that there is no coverage
for Café La Trova under the [] Policy” (alteration added)); Def.’s Mot. 4 (“[T]he Policy does not
provide coverage for Plaintiff’s alleged business interruption claim.” (alteration added)); Def.’s
Reply 6 (“[Plaintiff’s] alleged loss of business income is not covered.” (alteration added))).

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Defendant disputes this fact, but states only that “Plaintiff has not identified the specific damages for
which it is making [its] claim.” (Def.’s Resp. SOF ¶ 40). Defendant also states Plaintiff has not made a
“specific, pinpoint reference to particular parts of record material” in support of this assertion. (Id.
(quotation marks omitted)).

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On these facts, the Court concludes that Defendant has constructively denied Plaintiff’s
claim and there is an “actual controversy” between the parties. Defendant’s Motion to Dismiss for
lack of justiciability is therefore denied.
B. Motions for Summary Judgment
The issue raised by the parties’ cross-motions for summary judgment is whether the Policy
covers Plaintiff’s loss of business income relating to the COVID-19 pandemic. Specifically, the
parties dispute whether Plaintiff’s alleged loss of use of the covered property for its intended
purpose constitutes a “direct physical loss” to trigger coverage under the Business Income (and
Extra Expense) Coverage Form and the Building and Personal Property Coverage Form. (See Pl.’s
Mot. 3–9; Def.’s Mot. 6–14). The parties also dispute whether the governmental orders issued by
the City of Miami and Miami-Dade County trigger coverage for the loss of business income under
the Civil Authority provision. (See Pl.’s Mot. 10–12; Def.’s Mot. 14–17). Finally, if the Policy
does provide coverage for Plaintiff’s losses, the parties dispute whether an exclusion applies. (See
Pl.’s Mot. 12–15; Def.’s Resp. 16–19).
1. Florida Insurance Law
The parties agree that the Policy is governed by Florida law. (See Pl.’s Mot. 3, 15–16;
Def.’s Resp. 4–5; Def.’s Mot. 7–8; Pl.’s Resp. 4). Under Florida law, when determining coverage
under an insurance policy, courts look at the policy “as a whole” and are required to give “every
provision its full meaning and operative effect.” State Farm Fire & Cas. Co. v. Steinberg, 393
F.3d 1226, 1230 (11th Cir. 2004) (quotation marks and citations omitted). “[I]nsurance contracts
are construed according to their plain meaning.” Garcia v. Fed. Ins. Co., 473 F.3d 1131, 1135
(11th Cir. 2006) (per curiam) (alteration added; quotation marks and citation omitted); see also
Siegle v. Progressive Consumers Ins. Co., 819 So. 2d 732, 736 (Fla. 2002) (“[The] terms of an

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insurance policy should be taken and understood in their ordinary sense and the policy should
receive a reasonable, practical and sensible interpretation consistent with the intent of the parties.”
(alteration added; citation omitted)).
A policy’s unambiguous language is therefore controlling. See Steinberg, 393 F.3d at
1230. However, where the language is “susceptible to more than one reasonable interpretation,
one providing coverage and the other limiting coverage, the insurance policy is considered
‘ambiguous,’ and must be ‘interpreted liberally in favor of the insured and strictly against the
drafter who prepared the policy.’” Id. (quoting Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29,
34 (Fla. 2000)). An operative term is not necessarily ambiguous just because it is not defined in
the policy. See Amerisure Mut. Ins. Co. v. Am. Cutting & Drilling Co., Inc., No. 08-60967-Civ,
2009 WL 700246, at *4 (S.D. Fla. Mar. 17, 2009) (citation omitted). Ultimately, the interpretation
of an insurance contract — including whether a provision is ambiguous — is a question of law to
be determined by the court. See Pac. Emp’rs Ins. Co. v. Wausau Bus. Ins. Co., No. 3:05-cv-850,
2007 WL 2900452, at *4 (M.D. Fla. Oct. 2, 2007) (citation omitted).
When the parties dispute coverage and exclusions under a policy, a burden-shifting
framework applies. The insured bears the initial burden to “prov[e] a loss from causes within the
terms of the policy.” U.S. Liab. Ins. Co. v. Bove, 347 So. 2d 678, 680 (Fla. 3d DCA 1977)
(alteration added); see also Berkower v. USAA Cas. Ins. Co., No. 15-23947-Civ, 2017 WL
1250419, at *7 (S.D. Fla. Apr. 4, 2017) (“In Florida, the insured has the burden of proving facts
that bring its claim within an insurance policy’s affirmative grant of coverage.” (quotation marks
and citation omitted)). Once the insured shows its losses are covered, the burden shifts to the
insurer to establish that the losses are excluded from coverage under the policy’s terms. 7 See Bove,

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Plaintiff suggests that because the Policy does not contain a virus exclusion, its COVID-19-related losses
are covered. (See, e.g., Pl.’s Mot. 2 (“The Policy has a long list of exclusions, but the Policy does not have

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347 So. 2d at 680 (citation omitted); see also Scottsdale Ins. Co. v. Klub Kutter’s Bar & Lounge,
LLC, No. 17-cv-61321, 2018 WL 1933702, at *3 (S.D. Fla. Apr. 24, 2018) (“Although the insured
bears the burden of proving that a claim is covered by the insurance policy, the burden of proving
an exclusion to coverage . . . is on the insurer.” (omission in original; quotation marks and citations
omitted)). If the insurer establishes that an exclusion applies, the burden then shifts back to the
insured to demonstrate an exception to the exclusion. See Berkower, 2017 WL 1250419, at *7
(citation omitted); East Fla. Hauling, Inc. v. Lexington Ins. Co., 913 So. 2d 673, 678 (Fla. 3d DCA
2005) (citation omitted).
2. Business Income (and Extra Expense) Coverage Form and the Building and
Personal Property Coverage Form
Plaintiff argues the Business Income (and Extra Expense) Coverage Form and the Building
and Personal Property Coverage Form each provide coverage for its alleged “loss of business
income . . . suffered as a result of the COVID-19 pandemic and/or government closures.” (Pl.’s
Mot. 1–2 (alteration added); see id. 3–5). The Business Income (and Extra Expense) Coverage
Form states:
[Defendant] will pay for the actual loss of Business Income [Plaintiff] sustain[s]
due to the necessary “suspension” of [its] “operations” during the “period of
restoration.” The “suspension” must be caused by direct physical loss of or damage
to property at [covered] premises . . . . The loss or damage must be caused by or
result from a Covered Cause of Loss.
(Policy 74 (alterations and emphasis added)). The term “suspension” includes “[t]he slowdown or
cessation of [Plaintiff’s] business activities.” (Id. 82 (alterations added)). In certain circumstances,

any virus exclusion or other exclusion that would preclude coverage for the Claim.” (emphasis omitted))).
The Policy’s exclusionary provisions plainly cannot be used to establish coverage in the first instance. See
Siegle, 819 So. 2d at 740 (“[P]olicy exclusions cannot create coverage where there is no coverage in the
first place.” (alteration added; citation omitted)); id. (“[T]he existence or nonexistence of an exclusionary
provision in an insurance contract is not at all relevant until it has been concluded that the policy provides
coverage for the insured’s claimed loss.” (alteration added)). Such an approach would be “directly contrary
to the tenets of insurance contract interpretation.” Id.

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the Policy also provides Extra Expense coverage for “necessary expenses [Plaintiff] incur[s]
during the ‘period of restoration’ that [it] would not have incurred if there had been no direct
physical loss or damage to property caused by or resulting from a Covered Cause of Loss.” (Id.
74 (alterations and emphasis added)).
Similarly, the Building and Personal Property Coverage Form states: [Defendant] will pay
for direct physical loss of or damage to Covered Property at the premises described in the
Declarations caused by or resulting from any Covered Cause of Loss. (Id. 58 (alteration and
emphasis added)). A “Covered Cause of Loss” is defined as “direct physical loss unless the loss
is excluded or limited in th[e] [P]olicy.” (Id. 87 (alterations and emphasis added)).
Thus, to trigger coverage under the Business Income (and Extra Expense) Coverage Form
and the Building and Personal Property Coverage Form, Plaintiff must show it sustained “direct
physical loss of or damage to” the insured property. Plaintiff argues “direct physical loss” should
be construed to include loss of use of the property (Pl.’s Mot. 6–8 (quotation marks omitted)), and
that its claims should therefore be covered because it “suffered direct physical loss of the entire
Property for its intended use and purpose . . . due to the COVID-19 pandemic and related
government orders” (id. 8 (alteration added)). Plaintiff further contends its property was physically
impacted because its “customers were unable to enter the restaurant premises, sit at the tables, sit
at the bar, and dance and listen to music inside the nightclub.” (Id. 9).
Although the Policy does not define “direct physical loss,” numerous courts “have found
— both before and in response to the COVID-19-pandemic — that a direct physical loss
contemplates an actual change in insured property then in a satisfactory state, occasioned by
accident or other fortuitous event directly upon the property causing it to become unsatisfactory
for future use or requiring that repairs be made to make it so.” Graspa Consulting, Inc. v. United

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Nat’l Ins. Co., No. 20-23245-Civ, 2021 WL 199980, at *5 (S.D. Fla. Jan. 20, 2021) (alteration
adopted; quotation marks and citations omitted). The words “‘[d]irect’ and ‘physical’ modify loss
and impose the requirement that the damage be actual.” Mama Jo’s Inc. v. Sparta Ins. Co., 823 F.
App’x 868, 879 (11th Cir. 2020) (alteration added; citing Homeowners Choice Prop. & Cas. v.
Maspons, 211 So. 3d 1067, 1069 (Fla. 3d DCA 2017); other citation omitted). “Direct physical
loss” therefore “exclude[s] alleged losses that are intangible or incorporeal[,]” including “when
the insured merely suffers a detrimental economic impact unaccompanied by a distinct,
demonstrable, physical alteration of the property.” Mama Jo’s Inc. v. Sparta Ins. Co., No. 17-cv23362, 2018 WL 3412974, at *9 (S.D. Fla. June 11, 2018) (alterations added; quotation marks and
citation omitted).
Contrary to Plaintiff’s assertion, under Florida law, loss of use of property for its intended
purpose does not constitute “direct physical loss.” 8 See Atma Beauty, Inc. v. HDI Global Specialty
SE, No.: 1:20-cv-21745, 2020 WL 7770398, at *4 (S.D. Fla. Dec. 30, 2020) (“While Plaintiff
argues that a loss of functionality of, access to, or intended use of the [property] constitutes
physical loss or damage, it is not supported by the plain language of the Policy or Florida law.”
(alteration added)); SA Palm Beach LLC v. Certain Underwriters at Lloyd’s, London, No. 9:20cv-80677, 2020 WL 7251643, at *5 (S.D. Fla. Dec. 9, 2020) (finding no direct physical loss where
plaintiff alleged that it was “unable to use [its] property for its intended purpose” (alteration in
original; quotation marks omitted)); Malaube, LLC v. Greenwich Ins. Co., No. 20-22615-Civ, 2020
WL 5051581, at *5–8 (S.D. Fla. Aug. 26, 2020) (rejecting plaintiff’s argument that policy provided
coverage for temporary inability to use restaurant for indoor dining due to government orders

8

Defendant also argues the Policy excludes loss or damage resulting from “loss of use.” (Def.’s Resp. 16–
17; Policy 89). Because the Court concludes Plaintiff’s claims are not covered by the Policy, the Court
does not consider whether any exclusions apply to Plaintiff’s losses.

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relating to COVID-19 because the property did not suffer any “tangible, actual, or physical” harm);
10E, LLC v. Travelers Indem. Co. of Conn., No. 2:20-cv-04418, 2020 WL 5359653, at *5 (C.D.
Cal. Sept. 2, 2020) (holding the plaintiff could not recover for income lost as a result of government
shutdown orders because impaired use or value of covered property is not equivalent to physical
loss or damage).
By now, a growing number of courts have rejected claims that economic losses due to
COVID-19 or related government orders are covered under insurance policy provisions identical
or similar to those at issue here. See, e.g., Raymond H Nahmad DDS PA v. Hartford Cas. Ins. Co.,
No. 1:20-cv-22833, 2020 WL 6392841, at *8 (S.D. Fla. Nov, 2, 2020) (no coverage for business
income losses under clause providing coverage for “direct physical loss of or physical damage [to
Covered Property] caused by or resulting from a Covered Cause of Loss” where plaintiffs’
property did not suffer “any physical harm” (alteration added; quotation marks omitted));
Malaube, LLC, 2020 WL 5051581, at *7 (“[A]ny interruption in business must be caused by some
physical problem with the covered property . . . which must be caused by a covered cause of loss.”
(first alteration added; emphasis and omission in original; quotation marks and citations omitted));
Infinity Exhibits, Inc. v. Certain Underwriters at Lloyd’s London Known as Syndicate PEM 4000,
No. 8:20-cv-1605, 2020 WL 5791583, at *5 (M.D. Fla. Sept. 28, 2020) (finding “there is simply
no coverage” under an insurance policy requiring “direct or physical loss of or damage” to property
for economic losses associated with COVID-19 closures (quotation marks omitted)); Emerald
Coast Rests., Inc. v. Aspen Specialty Ins. Co., No. 3:20-cv-5898, 2020 WL 7889061, at *2 (N.D.
Fla. Dec. 18, 2020) (“[A] growing number of state and federal courts in Florida and around the
country have considered the issue and have almost uniformly held that economic losses resulting
from state and local government orders closing businesses to slow the spread of COVID-19 are

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not covered under ‘all-risk’ policy language identical to that in this case because such losses were
not caused by direct physical loss or damage to the insured property.” (alteration added; collecting
cases)). Rather, to establish coverage, Plaintiff must show that its loss of business income occurred
because its covered property suffered some actual, physical harm.
Plaintiff’s contention that its loss was “direct” and “physical” because “it is possible or
likely that COVID-19 may have been present at the insured premises[,]” while creative, is
unavailing. (Pl.’s Resp. SOF 6 (alteration added); see also Compl. ¶ 25 (alleging COVID-19 “is
highly contagious and it lingers in the air and on surfaces, thus impacting the physical use of the
insured premise[s] and causing direct physical loss” (alteration added))). “[T]he mere presence of
the virus on the physical structure of the premises” does not amount to “direct physical loss.”
Mena Catering, Inc. v. Scottsdale Ins. Co., No. 1:20-cv-23661, 2021 WL 86777, at *7 (S.D. Fla.
Jan. 11, 2021) (alteration added; quotation marks and citations omitted); see also id. (noting
plaintiff does not suffer “direct physical loss” by “the presence of the virus on its physical surfaces”
because “coronavirus does not physically alter the appearance, shape, color, structure, or other
material dimension of the property” (quotation marks omitted; quoting Sandy Point Dental, PC v.
Cincinnati Ins. Co., No. 20 cv 2160, 2020 WL 5630465, at *2–3 (N.D. Ill. Sept. 21, 2020)); Carrot
Love, LLC v. Aspen Specialty Ins. Co., No. 20-23586-Civ, 2021 WL 124416, at *2 (S.D. Fla. Jan.
13, 2021) (adopting “the nearly unanimous view that COVID-19 does not cause direct physical
loss or damage to a property sufficient to trigger coverage” under similar policy language)).
Accordingly, in the absence of any record evidence that COVID-19 physically damaged or altered
the property, the virus’s mere presence is insufficient to trigger coverage.
Plaintiff nevertheless insists it has suffered “direct physical loss” because it had to discard
spoiled food, use chemicals to clean surfaces, and move furniture and install partitions, which

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resulted in broken chairs, scratched floors, and damage from drilling holes to affix partitions. (See
Pl.’s Mot. 9–10; Pl.’s SOF ¶¶ 36–38). This argument misses the mark for several reasons. First,
the Policy provides coverage for spoilage when the cause of loss is a breakdown or contamination
caused by a “[c]hange in temperature or humidity resulting from mechanical breakdown or failure
of refrigerating, cooling[,] or humidity control apparatus . . ., [c]ontamination by the refrigerant[,]”
or a “[p]ower outage . . . resulting from a cause of loss by a covered peril on the premises, due to
conditions beyond [Plaintiff’s] control.” (Policy 54–55 (alterations added)). Plaintiff states it had
to discard spoiled food because its restaurant was closed “as a direct and proximate result of
COVID-19 and/or government orders” and “[b]ecause there was no one to consume it.” (Pl.’s
Reply SOF 3 (alteration added; quotation marks omitted)). Its spoilage losses were not the result
of a covered cause, such as temperature or humidity changes or a power outage. See Mena
Catering, Inc., 2021 WL 86777, at *6 (under identical provision, finding “there is no ‘Covered
Cause of Loss,’ as defined above, because even if there was spoilage of perishable food, it was
allegedly caused by cancellations, not because of breakdowns or contaminations related to
temperature or humidity changes or power outages”). The Policy therefore does not provide
coverage for Plaintiff’s spoilage losses.
Second, the use of cleaning products on covered property does not constitute actual harm,
as required for coverage under both the Business Income (and Extra Expense) Coverage Form and
the Building and Personal Property Coverage Form. “[U]nder Florida law, an item or structure
that merely needs to be cleaned has not suffered a ‘loss’ which is both ‘direct’ and ‘physical.’”
Mama Jo’s, 823 F. App’x at 879 (alteration added; collecting cases). As such, this purported loss
does not satisfy the “direct physical loss” requirement under the Policy.

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Finally, the Court is unpersuaded by Plaintiff’s argument that damage caused by moving
furniture and installing partitions is sufficient to trigger coverage for its business income losses.
The Business Income (and Extra Expense) Coverage Form provides coverage for business income
“due to the necessary suspension of your operations,” which “must be caused by direct physical
loss of or damage to property.” (Policy 74 (quotation marks omitted)). Plaintiff does not suggest
that the suspension of its operations and loss of business income were caused by the damage it
asserts it sustained. For instance, Plaintiff does not argue it closed its restaurant and bar because
of broken chairs, scratched floors, and holes drilled for installing partitions. Plaintiff instead
argues its economic losses were caused by the COVID-19 pandemic and related government
orders. (Pl.’s Mot. 1–2; Pl.’s Resp. 4). See Mama Jo’s Inc., 2018 WL 3412974, at *10 (concluding
the plaintiff “cannot recover under the Business Income (And Extra Expense) Coverage because
[the p]laintiff cannot show that there was any suspension of operations caused by ‘physical
damage’” (alteration and emphasis added; citation omitted)).
Furthermore, the Policy only provides coverage for business income lost during the “period
of restoration,” which begins “72 hours after the time of direct physical loss or damage” and ends
either “[t]he date when the property . . . should be repaired, rebuilt[,] or replaced with reasonable
speed and similar quality” or “[t]he date when business is resumed at a new permanent location,”
whichever occurs first. (Policy 74, 82 (alterations added; quotation marks omitted)). In other
words, the Policy provides coverage only during the period that the property is being “repaired,
rebuilt[,] or replaced.” (Id. 82 (alteration added)). Plaintiff’s rearranging of furniture and
installation of partitions cannot “reasonably be described as repairing, rebuilding, or replacing.”
Indep. Rest. Grp v. Certain Underwriters at Lloyd’s, London, No. cv 20-2365, 2021 WL 131339,
at *7 (E.D. Pa. Jan. 14, 2021).

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Remarkably, under Plaintiff’s logic, the “repair[s]” it undertook while its operations were
suspended caused the very “damage” it now asserts is sufficient to invoke coverage in the first
instance under the Business Income provision. Such a construction is nonsensical. See Malaube,
LLC, 2020 WL 5051581, at *9 (observing “[t]he words ‘repair’ and ‘replace’” contemplate that
the insured premises suffered some previous “physical damage” necessitating those repairs or
replacements (alteration added; quotation marks and citations omitted)). The Policy simply does
not provide Business Income coverage for Plaintiff’s losses due to moving furniture and installing
partitions. See El Novillo Rest. v. Certain Underwriters at Lloyd’s, London, No. 1:20-cv-21525,
2020 WL 7251362, at *6 (S.D. Fla. Dec. 7, 2020) (rejecting the plaintiffs’ argument that “forced
physical alterations” undertaken during COVID-19-related restaurant closure constitute physical
damage to establish coverage under identical Business Income Coverage provision (quotations
marks omitted)).
Likewise, Plaintiff’s business income losses are not covered under the Building and
Personal Property Coverage Form. The Form states Defendant “will pay for direct physical loss
of or damage to Covered Property . . . caused by or resulting from any Covered Cause of Loss.”
(Policy 58 (alteration added)). “As an initial matter, business income is not included within the
list of Covered Property” for purposes of the Building and Personal Property Coverage Form.
Nahmad, 2020 WL 6392841, at *6. In fact, the Policy expressly states money and accounts are
not Covered Property. (See Policy 59). In any event, the Building and Personal Property coverage
applies only to the damaged property itself. Accordingly, any physical damage caused by moving
furniture and installing partitions is insufficient to provide coverage for Plaintiff’s economic
losses. For these reasons, neither the Building and Personal Property Coverage Form nor the

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Business Income (and Extra Expense) Coverage Form provides coverage for Plaintiff’s lost
business income relating to the COVID-19 pandemic.
3. Civil Authority Provision
Plaintiff also argues its business income losses are covered under the Policy’s Civil
Authority provision. The Civil Authority provision states:
When a Covered Cause of Loss causes damage to property other than property at
the described premises, [Defendant] will pay for the actual loss of Business Income
[Plaintiff] sustain[s] and necessary Extra Expense caused by action of civil
authority that prohibits access to the described premises, provided that both of the
following apply:
(1) Access to the area immediately surrounding the damaged property is
prohibited by civil authority as a result of the damage, and the described
premises are within that area . . . ; and
(2) The action of civil authority is taken in response to dangerous physical
conditions resulting from the damage or continuation of the Covered
Cause of Loss that caused the damage, or the action is taken to enable a
civil authority to have unimpeded access to the damaged property.
(Policy 75 (alterations added); see also id. 23 (requirement that described premises be within one
mile from the damaged property does not apply in Florida)). This section of the Policy provides
coverage for the loss of business income only “[w]hen a Covered Cause of Loss causes damage to
property other than [the insured’s covered] property.” (Id. 75 (alterations added)). As previously
defined, “Covered Cause of Loss” means a “direct physical loss unless the loss is excluded or
limited in this policy.” (Id. 87 (emphasis added)).
Plaintiff generally contends “the government orders were issued because COVID-19 was
rapidly spreading in neighboring properties, our community, our country, and worldwide.” (Pl.’s
Resp. 5; Pl.’s Reply 3). Plaintiff further submits “COVID-19 was everywhere, causing loss and
damage, including physical, tangible damage.” (Pl.’s Resp. 5; Pl.’s Reply 3). Plaintiff does not
argue, however, that any property in the immediately surrounding area suffered any physical
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damage. As several courts have found, there is no civil authority coverage in the absence of
physical damage to surrounding properties. See Mena Catering, Inc., 2021 WL 86777, at *7 (no
civil authority coverage where the plaintiff alleged “civil orders were issued in response to slow
the global pandemic, not because of actual damage to any specific property near the premises”
(citations omitted)); El Novillo Rest., 2020 WL 7251362, at *7 (granting motion to dismiss civil
authority coverage claim where the plaintiffs “fail to allege any physical damage to any property
in the immediate area[,]” instead alleging that “[t]he COVID-19 pandemic and the ensuing
governmental orders . . . are physically impacting private commercial property in Miami-Dade
County” (first alteration added; quotation marks omitted)); Dime Fitness, LLC v. Markel Ins. Co.,
No. 20-ca-5467, 2020 WL 6691467, at *4 (Fla. Cir. Ct. Nov. 10, 2020) (no civil authority coverage
where the only “‘damaged property’ is lost business income” and “[t]here is no allegation of any
physical damage to physical property” (alteration added)); id. (“Again, the Executive Order was
issued to address a public health crisis. There was no damage to other property which caused the
issuance of the Executive Order. Nor was the Executive Order issued in response to a dangerous
physical condition that caused property damage.”).
The Civil Authority provision also requires that an action of civil authority “prohibit[]
access” to the covered property. (Policy 75 (alteration added)). Plaintiff argues the government
orders it cites prohibited access to its covered property because its “customers were unable to enter
the restaurant premises, sit at the table, sit at the bar, and dance and listen to music inside the
nightclub.” (Pl.’s Resp. 6; Pl.’s SOF ¶ 35). But as Defendant points out — and Plaintiff does not
dispute — the emergency directives Plaintiff relies on merely restricted indoor, in-person dining;
the orders explicitly permitted restaurants to remain open to offer food for delivery, pick-up, or
drive-thru services. (Def.’s SOF ¶¶ 3–5). “Merely restricting access” to Plaintiff’s restaurant,

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without completely prohibiting access, “does not trigger coverage under the Policy’s Civil
Authority provision.” Nahmad, 2020 WL 6392841, at *9 (citation omitted); see also El Novillo
Rest., 2020 WL 7251362, at *7 (no civil authority coverage where the government order “merely
restricted access to indoor dining,” but the restaurants could “remain[] open for delivery and
takeout” (alteration added)); SA Palm Beach, 2020 WL 7251643, at *6 (no civil authority coverage
where government orders “did not prohibit customer access to [the p]laintiff’s restaurant, but
merely restricted access to indoor dining” (alteration added)). Accordingly, Plaintiff is not entitled
to coverage for its business income losses under the Civil Authority provision as a matter of law. 9
IV.

CONCLUSION

For the foregoing reasons, it is ORDERED AND ADJUDGED as follows:
1. Defendant, Aspen Specialty Insurance Company’s Motion to Dismiss for Lack of
Subject-Matter Jurisdiction, or in the Alternative, for Summary Judgment [ECF No.
32] is DENIED as to the Motion to Dismiss and GRANTED as to the Motion for
Summary Judgment.
2. Plaintiff, Café La Trova’s Motion for Summary Judgment [ECF No. 30] is DENIED.
3. Final judgment will issue by separate order.
DONE AND ORDERED in Miami, Florida, this 16th day of February, 2021.

_________________________________
CECILIA M. ALTONAGA
UNITED STATES DISTRICT JUDGE
cc:

counsel of record

9

Because Plaintiff’s losses are not covered under the Policy, there is no need for the Court to evaluate
whether any exclusions apply. See Atma Beauty, Inc., 2020 WL 7770398, at *4 n.4 (“Having found no
coverage under the Policy, it is not necessary for the Court to determine whether any exclusions under the
Policy apply . . . .” (alteration added)).

23