CEDAR RUN ORTHODONTICS, P.A. v. HARTFORD FINANCIAL SERVICES GROUP, INC., 1:20-cv-08156

Cedar Run Orthodontics purchased an “all-risk” commercial property policy (Sentinel) effective Aug 29, 2019–Aug 29, 2020 that included Business Income, Extra Expense, and Civil Authority coverage but also a written "Limited Fungi, Bacteria or Virus Coverage" (Virus Exclusion) excluding loss caused directly or indirectly by a virus.
In March 2020 New Jersey issued COVID-19 emergency/closure orders; Cedar Run suspended operations and submitted a claim for business-income and extra-expense losses arising from the pandemic and closure orders.
Sentinel denied coverage invoking the Virus Exclusion and its anti-concurrent-causation language; Cedar Run sued for breach of contract and sought declaratory relief and alleged regulatory estoppel and public-policy invalidity of the exclusion.
Sentinel moved for judgment on the pleadings under Fed. R. Civ. P. 12(c); the court applied New Jersey law on contract/policy interpretation.
The Court held the Virus Exclusion unambiguous and enforceable, found the anti-concurrent clause bars coverage for losses traceable to COVID-19 (including civil-authority-ordered closures), and rejected regulatory-estoppel and public-policy challenges; judgment granted to Sentinel.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Virus Exclusion bars coverage for COVID-19 losses	Exclusion ambiguous; should be construed for insured	Exclusion clear and unambiguously excludes virus-caused loss	Exclusion is unambiguous and bars coverage
Whether Civil Authority coverage applies despite the virus	Losses resulted from civil-authority orders, not directly from virus	Anti-concurrent clause excludes loss indirectly caused by virus (orders issued because of virus)	Anti-concurrent language forecloses civil-authority recovery because orders were caused by the virus
Regulatory estoppel / public-policy challenge to the exclusion	Industry statements to regulators (ISO/AAIS) and fairness/public policy should estop enforcement	No inconsistency between prior industry filings and insurer’s present interpretation; exclusion not contrary to public policy	Regulatory-estoppel and public-policy arguments fail; no alleged inconsistency or exceptional circumstance
Breach of contract / declaratory relief	Denial of claim breached policy; declaratory relief warranted	Denial justified by unambiguous exclusion; no benefits due	No breach; declaratory relief denied; judgment for insurer

Selective Ins. Co. of Am. v. Hudson E. Pain Mgmt. Osteopathic Med., 210 N.J. 597 (N.J. 2012) (insurance policy interpretation is a question of law)
Zacarias v. Allstate Ins. Co., 168 N.J. 590 (N.J. 2001) (policy words given their plain, ordinary meaning)
Benjamin Moore & Co. v. Aetna Cas. & Sur. Co., 179 N.J. 87 (N.J. 2004) (ambiguities in policies construed for the insured)
Flomerfelt v. Cardiello, 202 N.J. 432 (N.J. 2010) (exclusionary clauses must be specific, plain, clear, and prominent)
Princeton Ins. Co. v. Chunmuang, 151 N.J. 80 (N.J. 1997) (exclusions are narrowly interpreted)
Longobardi v. Chubb Ins. Co., 121 N.J. 530 (N.J. 1990) (avoid strained constructions to create coverage)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must do more than state labels and conclusions)
DiCarlo v. St. Mary Hosp., 530 F.3d 255 (3d Cir. 2008) (standard for judgment on the pleadings)
Wolfington v. Reconstructive Orthopaedic Assocs. II PC, 935 F.3d 187 (3d Cir. 2019) (12(c) evaluated like 12(b)(6))
Delaware Valley Plumbing Supply, Inc. v. Merchants Mut. Ins. Co., 519 F. Supp. 3d 178 (D.N.J. 2021) (rejected regulatory-estoppel challenge to virus exclusion)
N & S Restaurant LLC v. Cumberland Mut. Fire Ins. Co., 499 F. Supp. 3d 74 (D.N.J. 2020) (virus exclusion and anti-concurrent clause bar COVID-related claims)