UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 20-61577-CIV-DIMITROULEAS

DIGITAL AGE MARKETING GROUP, IMC. 

Plaintiff,

vs. 

SENTINEL INSURANCE COMPANY LIMITED, 

d/b/a THE HARTFORD, 

Defendant. 

________________________________________/ 

ORDER GRANTING MOTION TO DISMISS

THIS CAUSE is before the Court on Defendant Sentinel Insurance Company Limited 

d/b/a The Hartford (“Sentinel”)’s August 11, 2020 Motion to Dismiss [DE-5] (“Motion”). The 

Court has considered the Motion, Plaintiff’s September 24, 2020 Response [DE-26], Defendant’s 

October 1, 2020 Reply [DE-32] and Notices of Supplemental Authority [DE-35, 38] and is 

otherwise fully advised in the premises. 

I. FACTUAL AND PROCEDURAL BACKGROUND

This is an action regarding insurance coverage for business income loss arising from 

local and state stay-at-home and shelter-in-place orders intended to stop or slow the spread of the 

novel coronavirus that causes the disease COVID-19. Compl. [DE-1-2, pp. 37-46] ¶¶ 11–16. On 

May 15, 2020, Plaintiff brought this action against Sentinel in the Seventeenth Judicial Circuit, 

in and for Broward County, Florida arising out of the policy of insurance (“Policy”) between 

Sentinel and Plaintiff. Compl. ¶ 3. Plaintiff is seeking a declaratory judgment, damages for 

breach of contract, interest, costs and attorney’s fees pursuant to Fla. Stat. § 627.428. Compl. ¶¶ 

31, 33, 35, 46. Plaintiff’s complaint seeks coverage under the policy for “property damage, 

suspension of business operations, sustained losses of business income, extended loss of business 

Case 0:20-cv-61577-WPD Document 39 Entered on FLSD Docket 01/08/2021 Page 1 of 11
income, business income dependent properties, and incurred extra expenses.” Compl. ¶ 31.

Plaintiff also invoked the Business Income, Extra Expense, Extended Business Income, and Civil 

Authority provisions of the Policy in its Complaint. Compl. ¶¶ 4–8. 

On August 4, 2020, Sentinel removed this case from the Circuit Court of the Seventeenth 

Judicial Circuit, Broward County. [DE-1]. On December 1, 2020, this Court denied Plaintiff’s

Amended Motion to Remand. [DE-36].

The Complaint alleges several types of coverage provided by the Policy for loss of 

business income (often called business interruption insurance), for which an additional premium 

was charged. This coverage is specifically provided for in a section of the Spectrum 

Business Owner’s Policy titled “5. Additional coverages... o. Business Income Coverage”. 

Pursuant to this coverage, Defendants promised to pay for “Loss of Business Income” caused by 

a covered cause of loss. The particular covered loss in play is “direct physical loss or physical 

damage to” the Plaintiff’s property. 

The Complaint also alleges that there are additional coverages for other damages that 

may be in play for this loss including “Extra Expense” and “Extended Business Interruption”. 

The Complaint also alleges that there was a whole different type of coverage titled “5. Additional 

coverages... q. Civil Authority” coverage that has been triggered by the various actions of the 

State of Florida and Broward County due to the effect of the pandemic, which resulted in the 

closure and limitation or reduction of the Plaintiff’s business. Civil Authority coverage also 

provides payment for the various elements of damages including but not limited to Loss of 

Business Income, and Extra Expense. In addition to all these coverages, the Complaint alleges 

the policy provides a special endorsement which provides coverage, including but not limited to 

Case 0:20-cv-61577-WPD Document 39 Entered on FLSD Docket 01/08/2021 Page 2 of 11
Business Interruption Coverage, Extended Business Interruption and Extra Expense Coverage, 

for loss or damage caused by “fungi”, wet rot, dry rot, bacteria or virus. 

The Complaint alleges that the Defendant has denied coverage under the policy in its 

entirety on the various purported grounds set forth in its denial letter. [DE-1-2, pp. 246-251]. 

II. STANDARD OF LAW

Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a claim for failure 

to state a claim upon which relief can be granted. “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, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. 

Twombly, 550 U.S. 544, 570 (2007)). Conclusory statements, assertions or labels will not survive 

a 12(b)(6) motion to dismiss. Id. “A claim has facial plausibility when the plaintiff pleads factual

content that allows the court to draw the reasonable inference that the defendant is liable for the 

misconduct alleged.” Id.; see also Edwards v. Prime, Inc., 602 F.3d 1276, 1291 (11th Cir. 2010) 

(setting forth the plausibility standard). “Factual allegations must be enough to raise a right to 

relief above the speculative level[.]” Twombly, 550 U.S. at 555 (citation omitted). 

Additionally, although it must accept well-pled facts as true, the court is not required to 

accept a plaintiff's legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (noting “the 

tenet that a court must accept as true all of the allegations contained in a complaint is 

inapplicable to legal conclusions”). In evaluating the sufficiency of a plaintiff's pleadings, we 

make reasonable inferences in Plaintiff's favor, “but we are not required to draw plaintiff’s 

inference.” Aldana v. Del Monte Fresh Produce, N.A., Inc., 416 F.3d 1242, 1248 (11th Cir. 

2005). Similarly, “unwarranted deductions of fact” in a complaint are not admitted as true for the 

purpose of testing the sufficiency of plaintiff's allegations. Id.; see also Iqbal, 556 U.S. at 681 

Case 0:20-cv-61577-WPD Document 39 Entered on FLSD Docket 01/08/2021 Page 3 of 11
(stating conclusory allegations are “not entitled to be assumed true”). Sinaltrainal v. Coca-Cola, 

578 F.3d 1252, 1260 (11th Cir. 2009), abrogated on other grounds by Mohamad v. Palestinian 

Auth., 566 U.S. 449, 453 n.2, (2012). The Eleventh Circuit has endorsed “a ‘two-pronged 

approach’ in applying these principles: 1) eliminate any allegations in the complaint that are 

merely legal conclusions; and 2) where there are well-pleaded factual allegations, ‘assume their 

veracity and then determine whether they plausibly give rise to an entitlement to relief.’” 

American Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 

556 U.S. at 679).

III. DISCUSSION

The Defendant has moved to dismiss Plaintiff’s State Court Complaint [DE-1-2, pp. 37-

46] with prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a 

claim upon which relief can be granted. 

Defendant claims that Plaintiff’s claims fail for a number of reasons and that the virus 

exclusion in the Policy bars any recovery. Defendant contends that the plain terms of the policy 

exclude from coverage losses caused directly or indirectly by a virus. Plaintiff’s claims, as 

characterized by Defendant, are both premised on the policy providing coverage for its alleged 

virus-related business losses; as such, Defendant argues that Plaintiff cannot state a claim for 

relief. 

When interpreting insurances contracts, under Florida law, the contract is construed 

according to its “plain meaning.” Mills v. Foremost Ins. Co., 511 F.3d 1300, 1304 (11th Cir. 

2008). The insurance contract is ambiguous if its language lends itself to more than one 

interpretation. Id. “Ambiguous policy provisions ... should be construed liberally in favor of 

coverage of the insured and strictly against the insurer.” Dickson v. Econ. Premier Assur. Co., 36 

Case 0:20-cv-61577-WPD Document 39 Entered on FLSD Docket 01/08/2021 Page 4 of 11
So. 3d 789, 790 (Fla. 5th DCA 2010). Ambiguous “exclusionary clauses are construed even 

more strictly against the insurer than coverage clauses.” Auto-Owners Ins. Co. v. Anderson, 756 

So. 2d 29, 34 (Fla. 2000). However, “strict construction does not mean...that clear words may be 

tortured into uncertainty so that new meanings can be added. State Farm Fire & Cas. Ins. Co. v. 

Deni Assocs. of Fla., Inc., 678 So. 2d 397, 401 (Fla. 4th DCA 1996), on reh'g (Aug. 20, 1996), 

approved, 711 So. 2d 1135 (Fla. 1998). “Only when a genuine inconsistency, uncertainty, or 

ambiguity in meaning remains after resort to the ordinary rules of construction is the rule 

apposite.” Excelsior Ins. Co. v. Pomona Park Bar & Package Store, 369 So. 2d 938, 942 (Fla. 

1979).

A. Virus Endorsement and Virus Exclusion Policy Provisions

Defendant’s primary argument is that the virus exclusion provision in the Policy bars all 

recovery in the present case. Defendant argues that there is no coverage under the Policy for 

Plaintiff’s losses, despite the existence of a specific virus endorsement, due to the virus exclusion

provision. In response, Plaintiff contends that the very existence of a virus endorsement with a 

virus exclusion would appear to create ambiguity in the Policy on its face, especially in reference 

to this fairly unusual endorsement which would also appear to contain an exception to the 

exclusion. Plaintiff says there is a clear ambiguity, at the very least, in regards to what losses are 

covered when you compare the Policy’s virus exclusion with its virus endorsement, listed under 

“Additional Coverage.”

The endorsement regarding Limited Fungi, Bacteria, or Virus Coverage, which amends 

the Policy adds an exclusion and a limited coverage regarding fungi, bacteria, and viruses. The 

endorsement includes the following provisions regarding coverage of damages directly or 

indirectly cause by viruses: 

Case 0:20-cv-61577-WPD Document 39 Entered on FLSD Docket 01/08/2021 Page 5 of 11
A. Fungi, Bacteria or Virus Exclusions 

*** 

1. ...

2. The following exclusion is added to Paragraph B.1. Exclusions of the Standard 

Property Coverage Form and the Special Property Coverage Form; Paragraph F., 

Additional Exclusions of Computers and Media, form SS 04 41, and to form SS 04 

45, Personal Property of Others: 

i. “Fungi", Wet Rot, Dry Rot, Bacteria And Virus 

We will not pay for loss or damage caused directly or indirectly by 

any of the following. Such loss or damage is excluded regardless 

of any other cause or event that contributes concurrently or in any 

sequence to the loss: 

(1) Presence, growth, proliferation, spread or any 

activity of "fungi", wet rot, dry rot, bacteria or 

virus. 

(2) But if "fungi", wet rot, dry rot, bacteria or virus 

results in a "specified cause of loss" to Covered 

Property, we will pay for the loss or damage caused 

by that "specified cause of loss". 

This exclusion does not apply: 

(1) When "fungi", wet or dry rot, bacteria or virus 

results from fire or lightning; or 

(2) To the extent that coverage is provided in the 

Additional Coverage – Limited Coverage for 

"Fungi", Wet Rot, Dry Rot, Bacteria and Virus with 

respect to loss or damage by a cause of loss other 

than fire or lightning.

[DE 1-2] at 191 (emphasis added).

The endorsement also adds an Additional Coverage provision to paragraph A.4 of the 

Standard Property Coverage Form entitled “Limited Coverage for ‘Fungi’, Wet Rot, Dry 

Rot, Bacteria, and Virus. This provision reads as follows:

B. The following Additional Coverage is added to Paragraph A.4 of the Standard 

Property Coverage Form...

1. Limited Coverage for “Fungi”, Wet Rot, Dry Rot, Bacteria and Virus

a. The coverage described in 1.b. below only applies when the “fungi”, 

wet or dry rot, bacteria, or virus is the result of one or more of the 

following causes that occurs during the policy period and only if all 

reasonable means were used to save and preserve the property from 

further damage at the time of and after that occurrence.

Case 0:20-cv-61577-WPD Document 39 Entered on FLSD Docket 01/08/2021 Page 6 of 11
(1) A ‘specified cause of loss” other than fire or lightning:

(2) Equipment Breakdown Accident occurs to Equipment 

Breakdown Property, if Equipment Breakdown applied to the 

affected premises. 

[DE 1-2] at 192. 

Elsewhere in the Policy definitions are provided for terms used throughout the Policy. There 

“specified cause of loss” is defined as:

Fire; lightning; explosion, windstorm or hail; smoke; aircraft or vehicles; riot or 

civil commotion; vandalism; leakage from fire extinguishing equipment; sinkhole 

collapse; volcanic action; falling objects; weight of snow, ice, sleet; water damage

[DE 1-2] at 101. 

The unambiguous, reasonable reading of these provisions taken together is that the policy 

does not cover direct or indirect damage caused by a virus unless the virus is the result of 

fire; lightning; explosion, windstorm or hail; smoke; aircraft or vehicles; riot or civil 

commotion; vandalism; leakage from fire extinguishing equipment; sinkhole collapse; 

volcanic action; falling objects; weight of snow, ice, sleet; or water damage. Here, 

Plaintiff’s claims for relief seek coverage caused directly or indirectly by a virus which 

the complaint does not allege was the result of a cause that would bring Plaintiff’s claims 

within the coverage provided by the Policy. The Policy is not ambiguous merely because 

coverage and exclusions related to virus coverage are contained within an endorsement, 

nor because the endorsement contains provisions outlining both limited coverage and 

exclusions from coverage. As indicated above, the Court finds no ambiguity in the policy.

Additionally, Plaintiff argues that it is premature at the motion to dismiss stage for this 

Court to determine whether Plaintiff’s claim comes under either the virus endorsement or the 

virus exclusion. Once again, Plaintiff concludes that these are fact determinations, and that

Plaintiff is not required to set out all possible facts relating to its loss to survive a motion to 

dismiss. However, Plaintiff must allege facts sufficient to raise a plausible claim for relief. 

Case 0:20-cv-61577-WPD Document 39 Entered on FLSD Docket 01/08/2021 Page 7 of 11
Plaintiff fails to allege facts in its Amended Complaint that would the Court to draw a plausible 

inference that the Plaintiff’s damages are covered by a reasonable reading of the Policy; as such, 

both Plaintiff’s claims for breach of contract and a declaratory judgment fail to state a claim 

upon which relief may be granted. 

While the Court need not address the Parties remaining arguments as the Court 

agrees with Defendant that the “‘Fungi’, Wet Rot, Dry Rot, Bacteria And Virus” 

Exclusion bars coverage of Plaintiff’s claims as presently pled, as the Court is providing 

Plaintiff with leave to amend, the Court will briefly address the Parties remaining 

arguments. 

B. Lack of Coverage Due to Physical Loss or Damage

Defendant also argues that there is no coverage in this matter under the Policies various 

provisions, because the COVID-19 virus did not cause “direct physical loss or physical damage

to” the Plaintiff’s property. Plaintiff here cannot demonstrate direct physical loss or damage to 

property. Mere “economic losses – not anything tangible, actual, or physical” do not suffice to 

demonstrate direct physical loss under Florida law. See Malaube, LLC v. Greenwich Ins. Co., 

No. 20-22615, 2020 WL 5051581, at *8 (S.D. Fla. Aug. 26, 2020) (report and recommendation 

to dismiss COVID-19 business interruption claims). 

Plaintiff contends that this is not a legal issue, it is a factual one, which may even be 

subject to expert testimony. Plaintiff supports their position by stating that the Emergency Order 

of the Civil Authority of Broward County, in fact, specifically asserts that “the virus is physically 

causing property damage due to its proclivity to attach to the surfaces for prolonged periods of 

time”, as well as a threat to health, as grounds for mandating nonessential businesses to close, 

Case 0:20-cv-61577-WPD Document 39 Entered on FLSD Docket 01/08/2021 Page 8 of 11
and strongly urging persons to stay at home. As such, plaintiff contends that this fact issue 

cannot be used as the basis of a Motion to Dismiss. 

The Court disagrees. Although Judge Williams has yet to rule on Judge Torres’ Report 

and Recommendation, the Court also finds Judge Torres’ well-reasoned order persuasive. South 

Florida ENT Associates v. Hartford, No. 20-23677-CIV, 2020 WL 6864560 (S.D. Fla. Nov. 13, 

2020). Judge Torres noted that “courts in our district 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.’’ S. Fla. Ent Assocs., Inc. v. Hartford Fire Ins. Co., No. 20-23677-

CIV, 2020 WL 6864560, at *6 (S.D. Fla. Nov. 13, 2020) (quoting Mama Jo's, Inc. v. Sparta Ins. 

Co., No. 17-cv-23362-KMM, 2018 WL 3412974, at *9 (S.D. Fla. June 11, 2018) (quoting MRI 

Healthcare Ctr. of Glendale, Inc. v. State Farm Gen. Ins. Co., 187 Cal. App. 4th 766, 779 (Aug. 

4, 2010)), aff'd, 823 Fed. Appx.868 (11th Cir. 2020)). After extensive analysis of state and 

federal court cases, Judge Torres concluded that a direct physical loss required some actual loss,

or diminution of value. Id. at *12. Plaintiff has failed to allege facts which would permit the 

Court to draw a plausible inference that the virus caused direst physical loss to Plaintiff’s 

property under the terms of the Policy.

C. Potential Coverage Under the Civil Authority Provision

Defendant asserts that the Civil Authority provision in the Policy is not itself a “Covered 

Cause of Loss” and, therefore, cannot trigger coverage under the Policy. Plaintiff contends that 

the Civil Authority provision extends business income coverage when a loss of business income 

is caused by the actions of a civil authority. 

Case 0:20-cv-61577-WPD Document 39 Entered on FLSD Docket 01/08/2021 Page 9 of 11
The Civil Authority Provision, listed under a subsection outlining “Additional 

Coverages” states: 

5. Additional Coverages 

*** 

q. Civil Authority 

(1) This insurance is extended to apply to the actual loss of Business 

Income you sustain when access to your "scheduled premises" is 

specifically prohibited by order of a civil authority as the direct result 

of a Covered Cause of Loss to property in the immediate area of your 

"scheduled premises". 

(2) The coverage for Business Income will begin 72 hours after the order 

of a civil authority and coverage will end at the earlier of: 

a) When access is permitted to your "scheduled premises"; or 

b) 30 consecutive days after the order of the civil authority. 

[DE-1-2] at 87.

The Civil Authority provision, however, clearly states that coverage is extended when 

access to the relevant premises is “prohibited” by order of a civil authority “as the direct result of 

a Covered Cause of Loss to the property”. Plaintiff has not sufficiently alleged that a Covered 

Cause of Loss to property under the Policy, not excluded by the “‘Fungi’, Wet Rot, Dry Rot, 

Bacteria And Virus” Exclusion, directly precipitated the orders of a civil authority upon with 

Plaintiff claims coverage under the Policy was triggered. 

Plaintiff relies on a Western District of Missouri decision in Studio 417 Inc v. Cincinnati 

Ins. Co., 2020 WL 4692385 (W.D. MO. 2020), that rejected arguments similar to those asserted 

by the Defendant in the present case with regard to an insurance policy provision related to civil

authority coverage. The Court is not persuaded by the Plaintiff’s arguments. First, this Court 

must analyze the contract under Florida law and the precedent of the Eleventh Circuit. Second, 

Plaintiff’s arguments still fail to address how its allegations state a claim for coverage under the 

terms of its policy, in particular the “‘Fungi’, Wet Rot, Dry Rot, Bacteria And Virus” Exclusion. 

Case 0:20-cv-61577-WPD Document 39 Entered on FLSD Docket 01/08/2021 Page 10 of 11
This Court agrees with Defendant that the Civil Authority coverage provision provides no 

relief here.

IV. CONCLUSION

Based on the foregoing, it is ORDERED and ADJUDGED that Defendant’s Motion to 

Dismiss [DE-5] is GRANTED. Although it may be futile the Court will grant Plaintiff leave to 

file an amended complaint to be filed on or before January 22, 2021.

DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County, Florida, this 

8th day of January, 2021.

Copies furnished to:

Counsel of Record

Case 0:20-cv-61577-WPD Document 39 Entered on FLSD Docket 01/08/2021 Page 11 of 11