Ryan Estes v. Cincinnati Ins. Co., 23 F.4th 695

Ryan P. Estes, D.M.D., P.S.C. (Estes) operates two dental offices in Kentucky and was barred from providing nonemergency care for about six weeks in spring 2020 by Kentucky COVID-19 orders; emergency care remained permitted.
Estes held a Cincinnati Insurance commercial property policy that covered losses caused by a “direct ‘loss’” defined as “accidental physical loss or accidental physical damage,” and included Business Income, Extra Expense, Civil Authority, Ingress/Egress, and Dependent Properties provisions tied to such a “direct ‘loss.’”
Estes sought coverage for lost business income and extra expenses arising from the pandemic and shutdown orders; Cincinnati denied coverage and Estes sued for breach of contract and bad-faith denial.
The district court dismissed Estes’s complaint; Estes appealed to the Sixth Circuit, which reviews the policy interpretation de novo under Kentucky law.
The Sixth Circuit held that under Kentucky law the phrase “direct physical loss” requires tangible physical destruction or deprivation of property, not mere economic loss or loss of use; COVID-19 and the shutdown orders caused only economic harms and did not physically damage or deprive Estes of its property.
The court affirmed dismissal, explaining dictionary usage, policy context (e.g., “period of restoration”), and reliance on a broad circuit consensus construing similar policy language.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether COVID-19 pandemic or Kentucky shutdown orders caused a “direct physical loss” under the policy	Estes: “direct physical loss” includes loss of use/economic loss from forced suspension of nonemergency services	Cincinnati: “direct physical loss” unambiguously requires tangible physical damage or deprivation of property	Court: Rejects Estes — term requires tangible destruction or loss of possession; economic loss/temporary inability to use property is not enough

Foreman v. Auto Club Prop.-Cas. Ins. Co., 617 S.W.3d 345 (Ky. 2021) (Kentucky rules on contract interpretation; ordinary meaning controls)
Thiele v. Ky. Growers Ins. Co., 522 S.W.3d 198 (Ky. 2017) (ordinary-meaning approach to insurance terms)
Aetna Cas. & Sur. Co. v. Commonwealth, 179 S.W.3d 830 (Ky. 2005) (use of dictionaries to discern ordinary meaning)
Santo’s Italian Café LLC v. Acuity Ins. Co., 15 F.4th 398 (6th Cir. 2021) ("direct physical loss" requires tangible destruction/deprivation in COVID context)
Mudpie, Inc. v. Travelers Cas. Ins. Co. of Am., 15 F.4th 885 (9th Cir. 2021) (similar rejection of pandemic business-interruption claims)
Sandy Point Dental, P.C. v. Cincinnati Ins. Co., 20 F.4th 327 (7th Cir. 2021) (similar construction of policy language)
Oral Surgeons, P.C. v. Cincinnati Ins. Co., 2 F.4th 1141 (8th Cir. 2021) (similar ruling on physical-loss requirement)
Wilkerson v. Am. Fam. Ins. Co., 997 F.3d 666 (6th Cir. 2021) (standard of review for dismissal)
State Farm Fire & Cas. Ins. Co. v. Aulick, 781 S.W.2d 531 (Ky. Ct. App. 1989) (state appellate case distinguishing tangible property loss by odor contamination)