SCHERDER, DMD

v.

ASPEN AMERICAN INSURANCE COMPANY

“In interpreting an insurance contract, [courts] are bound by the plain meaning of the contract’s text.” State Farm. Mut. Auto. Ins. Co. v. Menendez, 70 So. 3d 566, 569 (Fla. 2011). When faced with an undefined term, the Court “‘may consult references’ such as dictionaries to discern the plain meaning of an insurance policy’s language.” Bioscience W., Inc. v. Gulfstream Prop. and Cas. Ins. Co., 185 So. 3d 638, 640 (Fla. 2d DCA 2016) (quoting Garcia v. Fed. Ins. Co., 969 So. 2d 288, 292 (Fla. 2007)). “If the language used in an insurance policy is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning of the language used so as to give effect to the policy as it was written.” Menendez, 70 So. 3d at 569–70 (quoting Travelers Indem. Co. v. PCR Inc., 889 So. 2d 779, 785 (Fla. 2004)). Last, “courts should read each policy as a whole, endeavoring to give every provision its full meaning and operative effect.” U.S. Fire Ins. Co. v. J.S.U.B., Inc., 979 So. 2d 871, 877 (Fla. 2007) (quoting Auto–Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla.2000)).⁴ A reading of the unambiguous Civil Authority provision (together with other applicable Policy provisions) readily yields the conclusion that the mere loss of income or access to property, without more, is insufficient to trigger coverage under the Policy. Instead, that claim must arise from “direct physical damage to property.” The Court’s resolution of this dispute will therefore turn on the meaning of the undefined phrase “direct physical,” which modifies both “damage to property” and risk of “loss.” (Doc. 1-1 at 121, 132.)

A reading of the Policy’s other lost income provisions supports this conclusion. For example, along with the Civil Authority provision that Dr. Scherder specifically invokes (Doc. 34 at 7), the Policy also provides for a claim of lost income under the “Practice Income” and “Extra Expense” provisions. (Doc. 1-1 at 117 § I.A.3.a, 118 § I.A.4.) Both, like the Civil Authority provision, limit coverage to losses arising from some sort of direct physical damage to property. (Id.) But where the Civil Authority provision limits the scope of any claim to “30 consecutive days,” the “Practice Income” and “Extra expense” provisions contemplate coverage during a “period of restoration.” (Id.) The Policy defines a “period of restoration” as the period that “begins 24 hours immediately following direct physical damage . . . caused by or resulting from any [risk of direct physical loss]” and ends “on the date when the property . . . should be repaired, rebuilt or replaced with reasonable speed and similar quality.” (Doc. 1-1 at 134 (emphasis added).) Dr. Scherder briefly contends that Aspen’s motion to dismiss on this point is irrelevant to the specific claims he brings under the Civil Authority provision.

The above provisions and definitions, which confine the scope of coverage for a claim of lost income, provide important context for what “direct physical damage to property” means in the Civil Authority provision. The “period of restoration” requires that the insured property be repaired, rebuilt, or replaced—implying that the property has suffered physical change to its structure. It would make little sense for the Policy to contemplate some physical alteration in the “Practice Income” and “Extra expense” provisions but not the Civil Authority provision when all three require “direct physical damage to property” for coverage. See Nationwide Mut. Fire Ins. Co. v. Olah, 662 So. 2d 980, 982 (Fla. 2d DCA 1995) (“When construing an insurance policy to determine coverage the pertinent provisions should be read in pari materia.”).⁶ Thus, the question now becomes whether a virus can physically alter a property’s structure.

People may take measures that modify property to protect themselves from any direct physical loss or damage caused by a virus, like putting up plexiglass barriers at a grocery store checkout area. But these physical measures are not there to protect property in the same way that, for example, hurricane shutters and sandbags protect property from direct physical loss or damage. Rather, these measures were meant to protect people from contracting the virus. Town Kitchen

LLC v. Certain Underwriters at Lloyd’s, London, No. 20-22832-CIV-MORENO, 2021 WL 768273, at *4 (S.D. Fla. Feb. 26, 2021) (“[C]oronavirus particles damage lungs, they do not damage buildings.”); Johnson v. Hartford Fin. Servs. Grp., Inc., No. 1:20-cv-2000-SDG, 2021 WL 37573, at *5 (N.D. Ga. Jan.⁴, 2021) (“Any ‘actual’ change [to property where coronavirus is present] is instead premised on the omnipresent specter of COVID-19, a generalized ‘alteration’ experienced by every home, office, or business that welcomes individuals into an indoor setting across the globe.”). Moreover, the Executive Order says nothing about protecting property—it too protects people and preserves certain types of medical equipment. Dr. Scherder suspended operations not because coronavirus physically damaged any property, but because of a mandate intended to curb the spread of the coronavirus to humans. The Policy’s use of the phrase “direct physical” makes clear that coverage is limited to scenarios when property suffers a material change in its physical structure, something a submicroscopic thing is not ordinarily understood to cause. III. The Policy does not cover the mere loss of access to a property without direct physical damage to its structure. Dr. Scherder posits that a physical loss occurred when the coronavirus rendered his and others’ property uninhabitable and unusable for their intended purpose. (Doc. 29-1 at ¶ 48; Doc. 34 at 16–18.) In making this argument, he relies on a few unpersuasive cases from outside the Eleventh Circuit.⁷ One problem with these cases (and Dr. Scherder’s argument) is that they swim against the tidal wave of “virtually every decision rendered in Florida since the COVID-19 pandemic [that] has reached the same conclusion and required actual physical harm.” Graspa Consulting, Inc. v. United Nat’l Ins. Co., No. 20-23245-CIV, 2021 WL 1540907, at *6 (S.D. Fla. Apr. 16, 2021) (Torres, Mag. J.) (emphasis in original). Put differently, his cases are directly at odds with the requirement that the loss or damage to property physically alter the property’s structure—a requirement which Florida’s state and federal courts almost universally apply. See, e.g., Malaube, LLC v. Greenwich Ins. Co., No. 20-22615-Civ-WILLIAMS/TORRES, 2020 WL 5051581, at *6–8 (S.D. Fla. Aug. 26, 2020) (Torres, Mag. J.) (discussing and rejecting reasoning of Dr. Scherder’s cited cases).

impermissibly stretches the Policy’s language to cover things it plainly does not cover. His argument assumes “the words ‘access to’ are somehow implied in the relevant coverage language. By [Dr. Scherder’s] argument, then, ‘direct physical loss[]’ [of] property is equivalent to ‘direct physical loss of access to’ property.” AE Mgmt, LLC v. Ill. Union Ins. Co., No. 20-22925-Civ-Scola, 2021 WL 827192, at *3 (S.D. Fla. Mar.⁴, 2021) (emphasis in original). But that language, which he proposes qualifies “direct physical loss,” is not contained in the Policy. And such an interpretation would render the phrase “direct physical damage to property” a mere nullity. Again, no person would think a virus to be capable of preventing access to property because the virus physically damaged the property (i.e., damaged a property’s brick and mortar structure)—at least, not in the sense that any person would ordinarily understand these words. And the Executive Order suspended non-emergency dental procedures because the impact of the coronavirus could harm people—not buildings. At bottom, Dr. Scherder’s loss of income was purely economic. It did not arise from some physical damage to the dental business’s (or any other) property. Instead, the Executive Order addressed the threat of infection which—while certainly due to a tangible virus—did not and cannot cause direct physical damage to non-living things. For these reasons, the Civil Authority provision plainly does not cover Dr. Scherder’s claim for lost income as pleaded.

IV. Amendment would be futile.

The only question left is whether this case should be dismissed with or without prejudice. Courts should “freely give leave [to amend] when justice so requires.” Fed. R. Civ. P. 15(a)(2). “Although leave to amend shall be freely given when justice so requires, a motion to amend may be denied on numerous grounds such as . . . futility of the amendment.” Maynard v. Bd. of Regents, 342 F. 3d 1281, 1287 (11th Cir. 2003) (citation and internal quotation marks omitted). “Leave to amend would be futile if an amended complaint would still fail at the motion-todismiss or summary-judgment stage.” L.S. ex rel. Hernandez v. Peterson, 982 F. 3d 1323, 1332 (11th Cir. 2020) (citing Cockrell v. Sparks, 510 F. 3d 1307, 1310 (11th Cir. 2007)). Any amendment here would be futile. Dr. Scherder’s claim for lost income arose from an Executive Order which, as previously explained, simply had no relation whatsoever to physical property damage. Nor did the Executive Order place a moratorium on non-emergency dental procedures to prevent the coronavirus from contaminating (and thereby physically damaging) property as one would understand physical damage in ordinary conversation. To the extent one would argue otherwise, the Executive Order assessed any risk of contamination as a hazard to people. Thus, any allegations Dr. Scherder may assert in an amended pleading would still necessarily revolve around how and why that coronavirusbased Executive Order caused direct physical loss or damage to property. And that is not enough to state a claim under the Policy. At bottom, the Court accepts that the coronavirus was the catalyst for Dr. Scherder’s loss of income and loss of access to his practice. Even so, this alone cannot change the inescapable conclusion that the specific Policy here requires that those losses spring from an alteration of a property’s structure; something the coronavirus, like all viruses, just simply cannot do. Last, the Court is mindful and sympathetic to the financial losses Dr. Scherder and his practice sustained. The Court must, however, interpret the insurance Policy as it is written. Although coverage would surely assist Dr. Scherder’s business, the Policy issued by Aspen does not allow for coverage under the facts presented here. Accordingly, itis ORDERED: 1. The Motion for Leave to File Amended Complaint (Doc. 29) is

DENIED.

2. Aspen’s Motion to Dismiss (Doc. 19) is GRANTED.

3. This case is DISMISSED WITH PREJUDICE.

4. The Clerk is DIRECTED to terminate any pending deadlines and motions and close the file. ORDERED at Fort Myers, Florida, on August 11, 2021. / Y F&F Yo bhutfibhere At

JOHN L. BADALAMENTI

UNITED STATES DISTRICT JUDGE