UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

WEST PALM BEACH DIVISION

CASE NO. 20-81224-CIV-CANNON/Brannon

PF SUNSET VIEW, LLC, et al. 

Plaintiffs,

v.

ATLANTIC SPECIALTY 

INSURANCE COMPANY,

Defendant.

/

POST-HEARING ORDER GRANTING DEFENDANT’S 

MOTION FOR JUDGMENT ON THE PLEADINGS

THIS MATTER comes before the Court upon Defendant’s Motion for Judgment on the 

Pleadings (“Motion”) [ECF No. 28], filed on November 5, 2020. The Court has considered the 

Motion, Plaintiff’s Response in Opposition [ECF No. 34], Defendant’s Reply [ECF No. 39], the 

full record, and is otherwise fully advised. The Court also held a Hearing on the Motion

[ECF No. 55]. For the reasons stated in open court and briefly summarized again below, 

Defendant’s Motion for Judgment on the Pleadings [ECF No. 28] is GRANTED. 

I. Procedural History and Relevant Facts

This case involves claims for insurance coverage arising out of gym closures caused by the 

COVID-19 pandemic. Plaintiffs own and operate four Planet Fitness gyms in Florida.

1

 Plaintiffs 

allege that Defendant, Atlantic Specialty Insurance Company, unlawfully denied coverage for 

1 Although Plaintiffs’ four Planet Fitness locations have separate Atlantic Specialty insurance 

policies, the terms at issue in this dispute are materially identical [ECF No. 1-5, p. 2 n.1]. For the 

sake of clarity, the Court will refer to these Atlantic Specialty policies collectively in the singular 

form (“Policy”) [ECF No. 1-5, pp. 27–866].

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business income losses and extra expenses they incurred as a result of the COVID-19 pandemic 

and government orders that temporarily closed gyms and fitness centers. 

Plaintiffs filed their two-count complaint on May 22, 2020, in the Circuit Court of the 

Fifteenth Judicial Circuit in and for Palm Beach County, Florida, alleging declaratory judgment 

on coverage and damages for breach of contract [ECF No. 1-5] (PF Sunset View, LLC et al. v. 

Atlantic Specialty Ins. Co., Palm Beach County Circuit Court (Case No. 2020-CA-005643)). 

Defendant subsequently removed the action to this court on July 29, 2020 [ECF No. 1]. In the 

complaint, Plaintiffs seek to represent a class of all policyholders in Florida who suffered loss of 

business income or incurred extra expenses due to business suspensions related to COVID-19 and 

for which Defendant denied a claim [ECF No. 1-5, p. 18]

As relevant here, the Policy states that Defendant “will pay for the actual loss of Business 

Income you sustain due to the necessary suspension of your ‘Operations’ during the ‘Period of 

Restoration’” so long as such suspension is caused “by direct physical loss of or damage to” one 

of the covered properties [ECF No. 1-5, pp. 60, 271, 477, 688]. The Policy further states that 

Defendant “will pay necessary Extra Expense you incur during the ‘Period of Restoration’ and the 

Extended Period of Indemnity that you would not have incurred if there had been no direct physical 

loss or damage to” one of the covered properties [ECF No. 1-5, pp. 62, 273, 479, 690]. 

Additionally, the Policy states that Defendant “will pay for the actual loss of Business Income you 

sustain and necessary Extra Expense caused by action of civil authority that prohibits access to the 

described premises due to direct physical loss of or damage to property, other than at the described 

premises . . . . ” [ECF No. 1-5, pp. 63, 274, 480, 691]. Thus, across all categories of coverage, 

Plaintiffs must show as a threshold matter “direct physical loss or damage to property.” 

In the instant Motion, Defendant argues that Plaintiffs’ complaint fails to allege any “direct 

physical loss of or damage to property” as required by the Policy because Plaintiffs’ claims do not 

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allege any physical alteration of the property [ECF No. 28, pp. 13–15]. Defendants argue that the 

weight of authority compels this interpretation. Plaintiffs argue in response that they in fact have 

alleged “direct physical loss” within the meaning of the Policy because, in their view, the term 

“direct physical loss” does not necessarily require physical alteration of the premises 

[ECF No. 34, pp. 12–16]. Plaintiffs further argue that insurance policies, when ambiguous, are 

generally construed against the insurer, such that any doubt about coverage should be resolved in 

their favor [ECF No. 34, pp. 11–12]. 

II. Legal Standards

“After the pleadings are closed—but early enough not to delay trial—a party may move 

for judgment on the pleadings.” Fed. R. Civ. P. 12(c). “Judgment on the pleadings is appropriate 

where there are no material facts in dispute and the moving party is entitled to judgment as a matter 

of law.” Cannon v. City of W. Palm Beach, 250 F.3d 1299, 1301 (11th Cir. 2001). “A motion for 

judgment on the pleadings is governed by the same standard as a Rule 12(b)(6) motion to dismiss.” 

Guarino v. Wyeth LLC, 823 F. Supp. 2d 1289, 1291 (M.D. Fla. 2011) (citing Hawthorne v. Mac 

Adjustment, Inc., 140 F.3d 1367, 1370 (11th Cir. 1998)). All material facts alleged in the nonmoving party’s pleading are accepted as true and must be viewed in the light most favorable to the 

non-moving party. Perez v. Wells Fargo N.A., 774 F.3d 1329, 1335 (11th Cir. 2014).

III. Discussion 

The question before the Court is whether the Plaintiffs have met their burden to show that 

the plain language of the Policy’s affirmative grant of coverage—“direct physical loss of or 

damage to property”—covers their alleged economic losses as a result of COVID-19 and 

subsequent government shutdown orders. See, e.g., S.O. Beach Corp. v. Great Am. Ins. Co. of 

New York, 305 F. Supp. 3d 1359, 1364 (S.D. Fla. 2018), aff’d, 791 F. App’x 106 (11th Cir. 2019)

(“A plaintiff seeking to recover under an all-risks policy has the burden of proving that a loss 

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occurred to the insured’s property while the policy was in force.”) (citing Egan v. Washington 

Gen. Ins. Corp., 240 So.2d 875, 876 (Fla. Dist. Ct. App. 1970)). 

For the following reasons, Plaintiffs have not satisfied that burden.

First, the plain meaning of the terms “direct physical loss of or damage to property”

unambiguously requires actual, tangible damage to the physical premises itself, not merely 

economic losses unaccompanied by a demonstrable physical alteration to the premises itself. The 

Court incorporates for this point its reasoning in Royal Palm Optical, Inc. v. State Farm Mut. Auto. 

Ins. Co., No. 20-80749-CIV, 2021 WL 1220750 (S.D. Fla. Mar. 30, 2021), which discusses in 

detail the plain language of nearly identical policy terms in the COVID-19 context. 

Second, the context of the Policy as a whole further supports the requirement of actual,

tangible damage to property. The Policy is a commercial property policy that generally covers 

risks associated with the structure of the covered buildings themselves (in this case, gym 

buildings). In other words, the commercial property Policy framework suggests the meaning of 

“direct physical loss” is intended to limit the scope of the Policy’s exposure to risks that imperil 

the physical integrity or structure of the covered buildings. Indeed, the Policy’s Definition section 

lays out five examples of things that constitute “direct physical loss” within the meaning of the 

Policy2

, and all of those examples clearly require an actual alteration to the physical premises itself

[ECF No. 1-5, pp. 98, 309, 515, 726]. Thus, considering the full context of the Policy, it would 

2 “Accident” means: a. Direct physical loss as follows: (1) Mechanical breakdown, including 

rupture or bursting caused by centrifugal force; (2) Artificially generated electrical current, 

including electric arcing, that disturbs electrical devices, appliances or wires; (3) Explosion of 

steam boilers, steam pipes, steam engines or steam turbines owned or leased by you, or operated 

under your control; (4) Loss or damage to steam boilers, steam pipes, steam engines or steam 

turbines caused by or resulting from any condition or event inside such equipment; or (5) Loss or 

damage to hot water boilers or other water heating equipment caused by or resulting from any 

condition or event inside such boilers or equipment.

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strain the plain language beyond its natural meaning to construe “direct physical loss” to 

encompass risks that are not accompanied by such tangible damage to the premises itself.

Third, the Court is guided by the Eleventh Circuit’s decision in Mama Jo’s Inc. v. Sparta 

Ins. Co., 823 F. App’x 868 (11th Cir. 2020), cert. denied, No. 20-998, 2021 WL 1163753 (U.S. 

Mar. 29, 2021), which provides helpful guidance in the context of the same critical policy 

language. Applying Florida law, the Eleventh Circuit affirmed the district court’s conclusion that 

dust and debris that physically intruded into plaintiff’s restaurant requiring temporary closures to 

clean the restaurant on a daily basis did not constitute “direct physical loss of or damage to Covered 

Property” within the meaning of identical policy language. Id. at 879. In so holding, the Eleventh 

Circuit reasoned 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. (citing Homeowners Choice Prop. 

& Cas. v. Miguel Maspons, 211 So. 3d 1067, 1069 (Fla. Dist. Ct. App. 2017). In other words, 

analyzing identical policy language under Florida law, the Eleventh Circuit found that a condition 

affecting a building, even if it is a physical condition, still does not constitute “direct physical loss

of or damage to covered property” if it merely requires cleaning rather than something more 

significant like removal or replacement. Id. at 879. That reasoning counsels heavily in favor of 

the same result here; Plaintiffs are alleging, at most, that COVID-19 particles could have been 

present in the gyms themselves [ECF No. 1-5 ¶¶54–57, 61–62], but even if that were so, the 

presence of such undetected particles without any accompanying physical alteration of the 

premises does not trigger coverage under the policy. 

Plaintiffs minimize Mama Jo’s, arguing, for example, that its reasoning rested more on the 

fact that the restaurant did not have to suspend operations than on the actual meaning of the terms 

“direct physical loss of or damage to coverage property.” This distinction is unavailing. The Court 

addressed the plain meaning of the same terms at issue here and concluded that an item that merely 

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needs to be cleaned has not suffered a “loss” which is both “direct” and “physical.” Id. That 

reasoning applies equally here. Id. at 879. True, the Eleventh Circuit went on to consider whether 

the district court potentially erred in concluding that the restaurant had not suspended its 

operations. But the Eleventh Circuit was clear in its assessment that—suspension or not—

plaintiffs still could not prevail because they had not shown direct physical loss. Id. at 880 

(“[E]ven if [plaintiff] is correct that the district court got [the suspension of operations] part of the 

analysis wrong, [defendant] was still entitled to summary judgment on the Business Income Claim 

because any ‘suspension’ must be caused by direct physical loss of or damage to property.”). 

Similarly here, the fact that Plaintiffs had to suspend operations for a period of time does not 

alleviate Plaintiffs’ burden to show such direct physical loss, and they have not. At most, Plaintiffs 

allege the possible undetected presence of COVID-19 in Plaintiffs’ facilities, but that again does 

not allege any physical loss or damage to the property itself. 

Fourth, the Court is persuaded by the dozens of district court decisions across the country, 

including in Florida, dismissing nearly identical claims for insurance coverage due to COVID-19 

related business income losses. See, e.g., Malaube, LLC v. Greenwich Ins. Co., No. 20-22615-

CIV, 2020 WL 5051581, at *8 (S.D. Fla. Aug. 26, 2020); Raymond H. Nahmad DDS PA v. 

Hartford Cas. Ins. Co., No. 1:20-CV-22833, 2020 WL 6392841, at *6 (S.D. Fla. Nov. 2, 2020); 

El Novillo Rest. v. Certain Underwriters at Lloyd’s, London, No. 1:20-CV-21525-UU, 2020 WL 

7251362, at *6 (S.D. Fla. Dec. 7, 2020) (collecting cases where “federal district courts throughout 

the country have dismissed substantially similar COVID-19-related lawsuits for failing to state a 

claim for business income coverage”). Although the Plaintiffs cite to a few federal and state court 

victories by insureds in similar cases, the overwhelming weight of authority favors dismissal for 

claims against insurers for economic losses unaccompanied by an actual, physical alteration to the 

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premises itself. In sum, under the plain language of the Policy, Plaintiffs must allege actual, 

physical damage to the premises themselves and have not done so here. 

For these reasons, and for the reasons stated in open Court, Defendant’s Motion for 

Judgment on the Pleadings [ECF No. 28] is GRANTED. Judgment in favor of Defendants will 

be entered by separate order. 

DONE AND ORDERED in Fort Pierce, Florida this 9th day of April 2021.

_________________________________

AILEEN M. CANNON

UNITED STATES DISTRICT JUDGE

cc: counsel of record

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