Case Information
*4 Before W ILLIAM P RYOR , Chief Judge, and J ORDAN and A NDERSON , Circuit Judges.
JORDAN, Circuit Judge:
These cases—which we’ve consolidated for decision follow- ing oral argument—present a common question of insurance *5 coverage prompted by the COVID-19 pandemic. The question is whether, under Florida law, all-risk commercial insurance policies providing coverage for “direct physical loss of or damage to” prop- erty or “direct physical loss or damage to” property insure against losses and expenses incurred by businesses as a result of COVID- 19.
The Florida Supreme Court has not addressed the matter. Nor have the Florida intermediate appellate courts. So our analytic endeavor, though informed, is necessarily predictive. Sitting, “in effect, . . . as a state court[,]” Comm’r v. Estate of Bosch, 387 U.S. 456, 465 (1967), we follow the majority view and hold that under Florida law there is no coverage because COVID-19 did not cause a tangible alteration of the insured properties.
I
In March of 2020, in response to the public health crisis caused by the spread of COVID-19, Florida’s Governor issued a se- ries of executive orders restricting on-premises operations of non- essential businesses, including restaurants, bars, and retail stores. Several counties in Florida issued their own emergency stay-at- home or shelter-in-place orders, echoing the restrictions imple- mented by the Governor. These orders immediately impacted businesses throughout the state; many were forced to close their doors, and some never reopened.
All over the country, affected businesses submitted claims under their all-risk insurance policies with the hope of recovering *6 some of the losses and expenses caused by the COVID-19 pan- demic. When the majority of these claims were rejected, a wave of lawsuits ensued in the state and federal courts. The insureds here—SA Palm Beach, LLC, Emerald Coast Restaurants, Inc., Ro- coco Steak, LLC, and R.T.G. Furniture, Corporation—are among the Florida businesses denied coverage.
Each of the insureds seeks coverage under an all-risk insur- ance policy that provides compensation for losses and expenses in- curred in connection with “direct physical loss of or damage to” the covered property or “direct physical loss or damage to” the covered property. Before getting to the merits of the appeals, we set out the particulars of the underlying actions and the coverage provi- sions at issue on appeal. 1
A
SA Palm Beach operated a fine-dining restaurant in Palm Beach, Florida. See SA Palm Beach Amended Complaint at ¶ 16. Like many other similar establishments, it was subject to state and local closure orders. See id. at ¶ 34.
Certain Underwriters at Lloyd’s, London, issued a commer- cial property insurance policy to SA Palm Beach. The policy pro- vides in relevant part that Lloyd’s will “pay for direct physical loss 1 We do not summarize or discuss policy provisions not raised by the insureds on appeal. And because we hold that the Florida Supreme Court would deny coverage under the allegations in the complaints before us, we do not reach the exclusions cited by the insurers.
of or damage to Covered Property . . . caused by or resulting from any Covered Cause of Loss.” See SA Palm Beach Policy, D.E. 24-1, at 46 (emphasis added). As relevant here, the policy defines “Cov- ered Causes of Loss” as “direct physical loss unless the loss is ex- cluded or limited in this policy,” id. at 36 (emphasis added), but it does not define the terms “direct,” “physical,” “loss,” or “damage.”
In its complaint, SA Palm Beach asserted that its policy pro- vides “business interruption coverage” which “would indemnify [it] for lost income and profits in the event that its business was shut down.” See SA Palm Beach Amended Complaint at ¶ 37. Specifi- cally, SA Palm Beach invoked coverage under the Business Income and Extra Expense provisions of the policy. The relevant language of those provisions is as follows.
Business Income: “We will pay for the actual loss of Business Income you sustain due to the necessary ‘suspension’ of your ‘operations’ during the ‘period of restoration.’ The ‘suspension’ must be caused by direct physical loss of or damage to property at [the insured] premises[.]” Extra Expense: “Extra Expense means necessary expenses you incur during the ‘period of restoration’ that you would not have incurred if therе had been no direct physical loss or damage to property caused by or resulting from a Covered Cause of Loss.”
SA Palm Beach Policy at 60 (emphases added).
The policy defines “suspension” as “[t]he slowdown or ces- sation of your business activities” or “[t]hat a part or all of the [in- sured] premises is rendered untenantable[.]” See id. at 70. The “period of restoration” is defined as the period of time that:
a. Begins:
(1) 72 hours after the time of direct physical loss or damage for Business Income coverage; or (2) Immediately after the time of direct physical loss or damage for Extra Expense coverage; caused by or resulting from any Covered Cause of Loss at the [insured] premises; and b. Ends on the earlier of:
(1) The date when the property at the [insured] prem- ises should be repaired, rebuilt or replaced with rea- sonable speed and similar quality; or (2) The date when business is resumed at a new per- mаnent location.
Id. at 68 (emphases added).
SA Palm Beach alleged that—in abiding by the closure or- ders—it suffered “a direct physical loss of [its] property because [it was] unable to use the[ ] property for its intended purpose.” SA Palm Beach Amended Complaint at ¶ 44. It further claimed that it suffered direct physical loss “in the form of diminished value, *9 lost business income, and forced physical alterations during a pe- riod of restoration.” Id. at ¶ 45. Notably, SA Palm Beach main- tained that the closure orders were “the sole proximate cause” of its losses and disclaimed any argument that “the virus itself caused damage to [its] . . . property.” Id. at ¶ 54.
Lloyd’s moved for dismissal under Rule 12(b)(6), asserting that SA Palm Beach had failed to sufficiently allege direct physical loss of or damage to the insured property, a necessary predicate for coverage under the Business Income and Extra Expenses provi- siоns of the policy. Additionally, Lloyd’s argued that the words “repair[ ], rebuil[d], and replace[ ]” in the definition of “period of restoration” mean that “loss” under the policy necessarily implies physical damage.
SA Palm Beach responded that it had plausibly alleged direct physical loss because the closure orders “rendered the property non-functional or only partially functional as it was no longer suit- able for its intended purpose of ‘physical’ sit-down, fine dining.” It also asserted that the policy’s use of the disjunctive “or”—rather than a conjunctive connector—in the phrase “direct physical loss of or damage to” demonstrated that loss must mean something dif- ferent than damage.
The district court granted the motion to dismiss. Relying in
part on our unpublished decision in Mama Jo’s Inc. v. Sparta Insur-
ance Co.,
B
Emerald Coast operated a sports bar and restaurant in Des- tin, Florida. See Emerald Coast Amended Complaint at ¶ 15. Like SA Palm Beach, it was subject to state and local closure оrders is- sued during the COVID-19 pandemic. See id. at ¶¶ 65–72.
Aspen Specialty Insurance issued a commercial property in- surance policy to Emerald Coast, and this policy includes Business Income, Extra Expense, and Extended Business Income provisions. The Business Income and Extra Expense provisions in Emerald Coast’s policy are identical to those in SA Palm Beach’s policy, so we do not repeat their language here. In summary, however, these two provisions provide coverage for the necessary suspension of operations during the “period of restoration” if the suspension is caused by “direct physical loss of or damage to” property at the in- sured premises. See Emerald Coast Policy, D.E. 7-1, at 60 (empha- sis added). The policy also contains an Extended Business Income provision, which reads as follows:
Extended Business Income: “If the necessary ‘suspension’ of your ‘operations’ produces a Business Income loss payable under this policy, we will pay for the actual loss of Business Income you incur during the period that: (a) Begins on the date property . . . is actually repaired, rebuilt or replaced and ‘operations’ are resumed; and (b) Ends on the earlier of: (i) The date you could restore your ‘operations’, with reasona- ble speed, to the level which would generate the business income amount that would have existed if no direct physical loss or damage had occurred; or (ii) 60 consecutive days after the date determined in . . . (a) above. . . . Loss of Business Income must be caused by direct physical loss or damage at the [insured] premises caused by or resulting from any Cov- ered Cause of Loss.”
Id. at 62 (emphases added). The policy does not define the phrases “direct physical loss of or damage to” property or “direct physical loss or damage.”
Finally, the policy provides additional coverage—outlined in a special form—for losses associated with spoilage. The Spoilage provision insures against “Covered Causes of Loss” of “perishable stock at the [insured] premises . . . that is in [the insured’s] care, custody or control.” The “Covered Causes of Loss” include:
(a) Breakdown or Contamination by: (1) Change in temperature or humidity resulting from mechani- cal breakdown or failure of refrigerating, cooling *12 or humidity control apparatus or equipment . . . ; and (2) Contamination by the refrigerant.
(b) Power Outage, meaning a change in temperature or humidity resulting from complete or partial in- terruption of electrical power . . . due to condi- tions beyond [the insured’s] control.” Id. at 9–10.
Emerald Coast alleged that thе “presence of any COVID-19 particles on physical property impair[ed] its value, usefulness and/or normal function.” Emerald Coast Amended Complaint at ¶ 56. It tied the alleged “direct physical loss” to the closure orders, noting that they “prohibited access to and use of ” the property “in response to dangerous physical conditions” caused by COVID-19. See id. at ¶ 82.
Aspen filed a Rule 12(b)(6) motion to dismiss, arguing that Emerald Coast had failed to allege that it sustained losses as a result of direct physical loss or damage to the insured property. Emerald Coast, said Aspen, had only alleged lost income due to the COVID- 19 pandemic and the resulting government closure orders, which temporarily prevented it from using its property as it was intended. According to Aspen, the policy provisions require more than tem- porary loss of use; the phrase “direct physical loss оf or damage to” requires “some discernible tangible impact to the covered prop- erty.”
In response, Emerald Coast asserted that nothing in the pol- icy requires physical “alteration” of the property as a prerequisite for coverage. Like SA Palm Beach, Emerald Coast argued that the policy’s use of the disjunctive “or” in the coverage provision indi- cates that “physical loss” is something separate and apart from “physical damage”—either of which would satisfy the policy.
The district court agreed with Aspen and granted its motion to dismiss. It held that the triggering language in the Business In- come, Extra Expense, and Extended Business Income provisions “clearly and unambiguously require[d] actual physical damage to the property.” 2
C
Rococo Steak, LLC, operated a steakhouse in St. Petersburg, Florida. See Rococo Complaint аt ¶ 1. It too was subject to state and local closure orders issued as a result of the COVID-19 pan- demic. See id. at ¶¶ 40–42. 3
Aspen Specialty Insurance issued a commercial property in- surance policy to Rococo. The policy contains Business Income and Extra Expense provisions, which are identical to those in the 2 As we discuss in Part IV, the district court did not consider whether Emerald Coast sufficiently alleged coverage under the Spoilage provision of the policy. 3 Because the complaint was originally filed in state court, some of Rococo’s filings were combined as an attachment to Aspen’s notice of removal. See D.E. 1-2 (including both Rococo’s complaint and the insurance policy). *14 policies issued to SA Palm Beach (by Lloyd’s) and to Emerald Coast (by Aspen), so we don’t repeat their language here. As a reminder, however, both provisions insure against the necessary suspension of operations during the “period of restoration” if caused by “direct physical loss of or damage to” property at the insured premises. See Rococo Policy, D.E. 1-2, at 90–91 (emphasis added). The Ro- coco policy does not define the terms “direct,” “physical,” “loss,” or “damage.”
In its complaint, Rococo alleged that it was “forced to sus- pend business operations . . . as a result of damage sustained due to the COVID-19 pandemic.” See Rococo Complaint at ¶ 9 (emphasis added). Specifically, Rococo claimed that:
The presence of COVID-19 caused direct physical loss of and/or damage to the covered premises under the Policy by, among other things, damaging the prop- erty, denying access to the property, preventing cus- tomеrs from physically occupying the property, caus- ing the property to be physically uninhabitable by customers, causing its function to be nearly elimi- nated or destroyed, and/or causing a suspension of business operations on the premises.
Id. at ¶ 44 (emphases added). Rococo further asserted that “[r]elated actions of civil authorities also prohibited access to and occupancy/operation of the Restaurant, as a result of damage sus- tained due to the COVID-19 pandemic.” Id. at ¶ 9 (emphasis added). Rococo added that the actions taken by civil authorities *15 “were issued in response to dangerous physical conditions and damage” and “caused a suspension of business operations” at the restaurant. Id. at ¶ 45.
Aspen moved to dismiss under Rule 12(b)(6), arguing that Rococo had failed to allege any losses covered under the рolicy. It relied on state court decisions interpreting the relevant trigger lan- guage. It also pointed to other language in the policy, like the Pe- riod of Restoration provision, which it argued implied the necessity of tangible harm for coverage.
In response, Rococo argued that it had sufficiently alleged “direct physical loss of or damage to” the premises caused by COVID-19 because, contrary to Aspen’s contention, that phrase does not require structural alteration of the premises. Rococo also asserted in the alternative that viruses like COVID-19 “infest prop- erty and stick to its surfaces” and such infestation does cause the kind of structural alteration that comes within the purview of the term “direct physical loss of or damage to” the covered premises. Finally, Rococo maintained that the impairment of functionality and habitability of the restaurant demonstrated that the property had sustained direct physical loss or damage.
The district court granted Aspen’s motion to dismiss. Citing
our decision in Mama Jo’s,
D
Rooms-To-Go (“RTG”) is a furniture retailer operating more than 150 stores in several states. Its principal place of business is in Seffner, Florida. See RTG Complaint at ¶ 2, 7. RTG, like many businesses, was subject to state and local closure оrders and sus- tained financial losses during the COVID-19 pandemic. See id. at ¶ 42–50.
Given the nature of its operations, RTG secured 14 commer- cial property insurance policies in the form of an insurance tower, which spreads the risk across multiple insurers. The insurers in- cluded Aspen Specialty Insurance, Crum & Forster Specialty Insur- ance, Evanston Insurance, Everest Indemnity Insurance, Hallmark Specialty Insurance, Homeland Insurance, Maxum Indemnity, and Ironshore Specialty Insurance. The relevant terms in each of the policies RTG obtained are substantively the same.
All of the policies contain Business Interruption, Extra Ex- pense, Contingent Business Interruption, Civil Authority, In- gress/Egress, and Loss Adjustment Expenses provisions. See id. at ¶ 68. With the exception of the Loss Adjustment Expenses provi- sion, all of these provisions refer to the “Perils Insured Against” clause in the policy to determine whether cоverage exists. See RTG *17 Policy, D.E. 1-1, at 16–17, 20–21. The “Perils Insured Against” clause states:
This policy Insures against all risks of direct physical loss of or damage to property described herein includ- ing general average, salvage, and all other charges on shipments covered hereunder; except as hereafter ex- cluded.
Id. at 24 (emphasis added).
The Loss Adjustment Expenses provision reads: This policy is extended to include expenses incurred by the Insured, or by the Insured's representatives for preparing and certifying details of a claim resulting from a loss which would be payable under this policy. These expenses include fees of professionals engaged to assist the Insured in determining the cause and origin of the loss, the amount of loss sustained, and the amount of loss payable under this policy. This pol- icy shall not cover the expenses of a public adjuster and cost of attornеys.
Id. at 31 (emphasis added). RTG does not contend that this provi- sion—though missing the exact triggering language included in the other provisions—should be analyzed under a different frame- work. The common interpretative fight, RTG seems to contend, is over what constitutes a “direct physical loss of or damage to” property.
Like SA Palm Beach, Emerald Coast, and Rococo, RTG al- leged that the COVID-19 closure orders prohibited access to its properties, causing its stores to lose their use and normal function. See RTG Complaint at ¶¶ 45–50. RTG claimed that its inability to use or access its properties constituted direct physical loss under the policy. See id. at ¶ 45.
In addition to alleging loss of use, RTG also asserted that COVID-19 itself damaged its properties. Though it did not articu- late a “damage theory” in its complaint, RTG alleged—in contrast to its assertion that the closure orders constituted a covered peril under the policies—that the “presence of coronavirus particles” which were “detectable on various types of surfaces” caused “direct physical damage” to its properties. See id. at ¶ 30, 33.
Invoking Rule 12(b)(6), RTG’s insurers filed a motion to dis- miss. They argued that RTG had only asserted legal conclusions and failed to plead facts that would constitute direct physical loss or damage under the policies.
RTG responded that the closure orders did in fact cause a loss of use of the property within the meaning of the coverage pro- visions. It also noted that it had expressly alleged the presence of COVID-19 on its properties, which would constitute direct physi- cal loss of or damage triggering coverage under the policy.
The district court was unpersuaded by RTG’s arguments and granted the insurers’ motion to dismiss. Adopting much of thе reasoning of Infinity Exhibits, Inc. v. Certain Underwriters at *19 Lloyd’s London Known as Syndicate PEM 4000, 489 F. Supp. 3d 1303 (M.D. Fla. 2020), the court concluded that economic losses associated with RTG’s shutdown due to COVID-19 closure orders did not constitute “physical loss” under Florida law. With regard to RTG’s allegation that the properties were damaged by the virus itself, the court concluded—based in part on “common sense”— that “COVID-19 is incapable of causing a tangible injury to prop- erty” because it is a “virus that harms people, not structures.”
II
In these cases, which are premised on diversity jurisdiction,
we must decide whether the district courts correctly forecast and
applied Florida law in dismissing the insureds’ complaints. Our re-
view is therefore plenary. See Salve Regina Coll. v. Russell, 499
U.S. 225, 231 (1991) (“[A] court of appeals should review de novo a
district court’s determination of state law.”); Ellis v. Cartoon Net-
work, Inc.,
“To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to state a claim to relief
that is plausible on its face.” Ashcroft v. Iqbal,
III
Under Florida law, an insurance policy should be read “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.,
Language is not ambiguous merely because the policy fails
to define a term, or because the parties disagree about its meaning.
See Swire Pac. Holdings, Inc. v. Zurich Ins. Co.,
As the Florida Supreme Court has explained, an “all-risk pol-
icy” does not extend coverage to “every conceivable loss.” Sebo v.
Am. Home Assurance Co., Inc.,
A
SA Palm Beach, Emerald Coast, and Rococo seek coverage under the Business Income and Extra Expense provisions of their respective policies. Emerald Coast additionally seeks coverage un- der the Extended Business Income provision of its policy. RTG seeks coverage under the Business Interruption, Extra Expense, Contingent Business Interruption, Civil Authority, Ingress/Egress, and Loss Adjustment Expenses provisions of its policy.
All but one of the provisions referenced above expressly re- quire (on their own or by reference to other policy provisions) that there be “direct physical loss of or damage to” property or “direct physical loss or damage” to property. The one exсeption is the Loss Adjustment Expenses provision of RTG’s policy. But because RTG does not present any distinct arguments about that provision, we consider it together with the other provisions in its policy.
There are no Florida decisions interpreting an all-risk com- mercial insurance policy providing coverage for “direct physical loss of or damage to” property or “direct physical loss or damage to” property in the context of the COVID-19 pandemic. We have *22 not located any such decisions and the parties have not pointed us to any. 4
We therefore “consider whatever might lend [us] insight, in-
cluding relevant state precedents, analogous decisions, considered
dicta, scholarly works, and any other reliable data tending convinc-
ingly to show how the [Florida Supreme Court] would decide the
issue at hand.” Guideone Elite Ins. Co. v. Old Cutler Presbyteriаn
Church, Inc.,
we believe that the Florida Supreme Court would hold that, under the allegations in the complaints before us, there is no coverage.
B
Although there are many different approaches by which fed-
eral courts predict state law, see Michael C. Dorf, Prediction and
the Rule of Law, 42 UCLA L. Rev. 651, 696–715 (1995), some of our
cases employ a presumption to forecast how state courts would de-
cide an unsettled issue. We “presume that [state] courts would
adopt the majority view on a legal issue in the absence of indica-
tions to the contrary.” Bobo v. Tenn. Valley Auth.,
The majority view, as set out in a leading insurance treatise,
is that a phrase like “physical loss of or damage to” requires a tan-
gible alteration to the covered property:
5 The case relied upon by Hensley did not use the term “presumption,” but
merely noted that our view of Mississippi law was “in agreement with the
general body of UCC law[.]” United States v. Southeast Miss. Livestock
Famers Ass’n,
The requirement that the loss be “physical,” given the ordinary definition of that term, is widely held to ex- clude alleged losses that are intangible or incorporeal and, thereby, to precludе any claim against the prop- erty insurer when the insured merely suffers a detri- mental economic impact unaccompanied by a dis- tinct, demonstrable, physical alteration of the prop- erty.
Steven Plitt et al., 10A Couch on Insurance § 148:46 (3rd ed. & Dec. 2021 update) (footnotes omitted).
As far as we can tell, every federal and state appellate court
that has decided the meaning of “physical loss of or damage to”
property (or similar language) in the context of the COVID-19 pan-
demic has come to the same conclusion and held that some tangi-
ble alteration of the property is required. There is therefore no
coverage for loss of use based on intangible and incorporeal harm
to the property due to COVID-19 and the closure orders that were
issued by state and local authorities even though the property was
rendered temporarily unsuitable for its intended use. See Uncork
& Create LLC v. Cincinnati Ins. Co.,
There are no indications suggesting that the Florida Su-
preme Court would reject the majority view. We therefore pre-
sume that Florida would adopt the majority position. See Bobo,
C
As an independent matter, we conclude that the majority
position is legally sound under Florida law. Indeed, the two Florida
cases that shed some light on the phrase “physical loss of or damage
to” property—Homeowners Choice Prop. & Cas. v. Maspons, 211
6 The majority view is not unanimous, as a number of district courts and state
trial courts have held that tangible injury to covered property is not necessary
under policy provisions identical or similar to the ones at issue here. See, e.g.,
In re Soc’y Ins. Co. COVID-19 Bus. Interruption Prot. Ins. Litig., 521 F. Supp.
3d 729, 738–43 (N.D. Ill. 2021) (Illinois law); Elegant Massage, LLC v. State
Farm Mut. Auto. Ins. Co.,
So. 3d 1067 (Fla. 3d DCA 2017), and Azalea, Ltd. v. Am. States Ins.
Co.,
In Maspons, the insurer appealed a trial court order holding
it responsible for the cost of tearing out and replacing a concrete
slab to make a repair on a broken drain pipe in the insureds’ home.
Sеe
Though it ultimately ruled in favor of the insurer based on other language in the policy, the Third District held in Maspons that the “failure of the drain pipe to perform its function 7 Our own dictionary searches for the words “loss” and “damage” have yielded definitions of a kindred timbre. “Loss” means “[p]erdition, ruin, destruction,” Shorter Oxford English Dictionary 1638 (5th ed. 2002), or “[d]estruction,” American Heritage Dictionary of the English Language 1034 (4th ed. 2009). “Damage” means “[h]arm done to a thing or (less usually . . . ) person: esp. physical injury impairing value or usefulness,” Shorter Oxford English Dic- tionary at 596, or “[h]arm or injury to property or to a person, resulting in loss of value or the impairment of usefulness,” American Heritage Dictionary of the English Language at 458.
constituted a ‘direct’ and ‘physical’ loss to the property within the meaning of the policy.” Id. at 1068–69. But that failure was the result of a physical “break”—tangible harm—which would require “repair” to restore functionality. Id. at 1068.
Though the language in Maspons came from a home- owner’s policy rather than a commercial insurance policy and is not identical to the language in the policies before us, it is suffi- ciently similar to make that case informative. See id. at 1068. And because Maspons explains that direct and physical loss requires that damage be actual, see id. at 1069, it does not help the insureds here. Moreover, Maspons involved tangible harm to the cоvered prop- erty, i.e., a physical break in the drain pipe, and such harm is miss- ing here. See also Vazquez v. Citizens Prop. Ins. Corp., 304 So. 3d 1280, 1284–85 (Fla. 3d DCA 2020) (applying Maspons in a case where water intrusion damaged some ceramic tiles and a kitchen cabinet in the insured’s home).
In Azalea, the insured operated a mobile home park with its
own sewage treatment facility on site. See
The trial court ruled in favor of the insurer, but the First Dis- trict reversed. The “bacteria colony [was] an integral part of the *29 sewage treatment facility” and was “specifically attached to and be- came part of the treatment facility structure.” Id. at 602. As a re- sult, there was a “tangible injury to the physical structure” because the unknown “substance actually covered and adhered to the inte- rior of the structure causing destruction of the bacteria colony which was an integral part of the covered facility.” Id. (emphasis added). The First District emphasized the amount of work that was done to restore the sewage treatment facility back to working order, including “hand chiseling . . . [the] chemical residue” from the structure. See id. at 601.
Azalea, which aligns with the majority view, also does little to help the insureds here. See id. That is because Azalea, like Maspons, dealt with tangible harm to the covered property, i.e., the destruction of the bacteria colony which had physically become part of the sewage treatment facility. See id.
Our unpublished decision in Mama Jo’s , which involved the
application of Florida law, also cuts against the insureds’ argument
that “direct physical loss of or damage to” property does not re-
quire actual, tangible, structural, or concrete harm to property but
merely demands that the property no longer be suitable for its in-
tended use. See
Applying Florida law, and relying on Maspons, we held that
the district court had correctly granted summary judgment to the
insurer on both claims. See id. at 878–79. With respect to the clean-
ing and painting claim, we said that “under Florida law, an item or
structure that merely needs to be cleaned has not suffered a ‘loss’
which is both ‘direct’ and ‘physical.’” Id. at 879 (citing Maspons,
We conclude that Mama Jo’s provides a correct statement of Florida law in accord with the majority view and therefore find it persuasive. Like the dust and debris in Mama Jo’s, COVID-19 did not cause any material alteration of the insureds’ properties. See id. It did require that the properties be cleaned to eliminate the particles of the virus, but as Mama Jo’s explains, that does not con- stitute a “physical loss of or damage to” the properties. See id.
D
The Business Income, Business Interruption, and/or Extra Expense provisions of the SA Palm Beach, Emerald Coast, Rococo, *31 and RTG policies, and the Extended Business Income provision of the Rococo policy, all require that there be a “suspension” or “in- terruption” of operations and cover certain expenses and losses during the period in which the coverеd property is “repaired,” “re- built,” or “replaced.” See SA Palm Beach Policy at 68; Emerald Coast Policy at 68; Rococo Policy at 98; RTG Policy at 20. With regards to the provisions containing such language, there is an- other reason why coverage does not exist for losses caused by COVID-19.
Here’s how the Fourth Circuit put it in a similar case: The need to repair, rebuild, replace, or expend time securing a new, permanent property is a pre-condi- tion for coverage of lost business income and other expenses. Any alternative meaning of the terms “physical loss” or “physical damage” that does not re- quire a material alteration to the property would ren- der meaningless this pre-condition to coverage for business income loss. [ . . . ] Here, neither the closure order nor the COVID-19 virus caused present or im- pending material dеstruction or material harm that physically altered the covered property requiring re- pairs or replacement so that they could be used as in- tended. Thus, . . . the policy’s coverage for business income loss and other expenses does not apply to [an insured’s] claim for financial losses in the absence of any material destruction or material harm to its cov- ered premises.
Uncork & Create,
E
RTG and Rococo also argue that their complaints alleged that COVID-19 itself actually damaged their properties. RTG al- leged that “the presence of coronavirus particles caused . . . direct physical damage” to its property. See RTG Complaint at ¶ 33. Ro- coco alleged more generally that the “presence of COVID-19 caused direct physical . . . damage to the covered premises” and “damage[ed] the property.” See Rococo Complaint at ¶ 44. Be- cause they affirmatively pled that COVID-19 damaged their prop- erties, RTG and Rococo maintain that—even under the majority view—their claims should survive a motion to dismiss.
For its part, RTG did in fact assert that COVID-19 damaged
its property, but it also set out more specific details concerning this
general claim. It alleged that “coronavirus particles” caused the
damage, and that those particles were “detectable on various types
of surfaces.” RTG Complaint at ¶ 30, 33. These specific allegations
of what the “physical damage” consisted of govern over the general
*33
allegation that there was “physical damage.” As we have ex-
plained, taking the allegations of a “complaint as true does not re-
quire us to ignore specific factual details of the pleading in favor of
general or conclusory allegations[.]” Griffin Indus., Inc. v. Irvin,
We know from Mama Jo’s, which we find persuasive, that
under Florida law “an item or structure that merely needs to be
cleaned has not suffered a ‘loss’ which is both ‘direct’ and ‘physi-
cal.’”
In its brief, Rococo argues that “the particles of COVID-19
structurally alter property surfaces and ambient air in a manner
that causes loss and damage by rendering affected premises danger-
ous to human health.” Rococo Br. at 31. But this allegation ap-
pears nowhere in its complaint. In fact, the complaint does not
even distinguish between loss and damage, and instead generally
alleges that COVID-19 “caused direct physical loss of and/or dam-
age to the covered premises” without providing any details. See
Rococo Complaint at ¶ 44. A plaintiff must “provide the grounds
of his entitlement to relief” in order to give the defendant fair no-
tice of its claim, see Bell Atl. Corp. v. Twombly,
IV
We now turn to one claim based on a policy provision which does not contain the language “direct physical loss of or damage to” property or “direct physical loss or damage to” property. That claim is the Spoilage provision claim made by Emerald Coast.
As the parties correctly note, the district court did not ad- dress this claim in its order of dismissal. We believe the best course of action is to remand the case so that the district court can decide, in the first instance, whether this claim survives Aspen’s motion to dismiss. See, e.g., F.D.I.C. v. N. Savannah Props., LLC, 686 F.3d 1254, 1261 (11th Cir. 2012). We therefore vacate in part the dismis- sal of Emerald Coast’s complaint and send the case back for a ruling on the claim under the Spoilage provision.
V
We affirm the dismissal of the complaints filed by SA Palm Beach, Rococo, and RTG. We affirm in part and vacate in part the dismissal of the complaint filed by Emerald Coast, and remand that case for further proceedings consistent with this opinion. AFFIRMED IN CASE NOs. 20-14812, 21-10672, & 21-10490; AFFIRMED IN PART AND VACATED IN PART IN CASE NO. 21-10190.