21

- 1 502 Buffalo Xerographix v. Hartford Fire Ins. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER Rulings by summary order do not have precedential effect. Citation to a summary order filed on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and this court ’ s Local Rule 32.1.1. When citing a summary order in a document filed with this court, a party must cite either the Federal Appendix or an electronic database (with the notation “ summary order ” ). A party citing a s ummary order must serve a copy of it on any party not represented by counsel. At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 15 th d ay of September , two thousand twenty

- two
. PRESENT: Pierre N. Leval , Barrington D. Parker , Steven J. Menashi , Circuit Judges.

________________________________ ____________ BUFFALO XEROGRAPHI X , INC. , SHATKIN F.I.R.S.T. LLC, and TODD E. SHATKIN DDS PLLC, for themselves and on behalf of a class of similarly situated policyholders , Plaintiffs

- Appell ant s ,

v. No. 21

- 1 502 SENTINEL INSURANCE COMPANY, LIMITED, HARTFORD CASUALTY INSURANCE COMPANY,2 HARTFORD INSURANCE COMPANY OF THE MIDWEST, THE HARTFORD INSURANCE GROUP a . k

. a . THE HARTFORD FINANC IAL SERVICES GROUP, INC. , Defendants

- Appellees , HARTFORD FIRE INSURANCE COMPANY, HARTFORD ACCIDENT & INDEMNITY COMPANY, HARTFORD INSURANCE COMPANY OF ILLINOIS, HARTFORD UNDERWRITERS INSURANCE COMPANY, NEW ENGLAND INSURANCE COMPANY, NEW ENGLAND REINSURANCE CORPORATION, PACIFIC INSURANCE COMPANY, LIMITED , PROPERTY AND CASUALTY INSURANCE COMPANY OF HARTFORD, TRUMBULL INSURANCE COMPANY, and TWIN CITY FIRE INSURANCE COMPANY, Defendant s . *

____________________________________________
For Plaintiffs

- Appellants : C HRISTOPHER M. B ERLOTH ( Charles C. Ritter, Jr., Steven W. Klutkowski, and Thomas D. Lyons , on the brief ) , Duke Holzman Photiadis & Gresens LLP, Buffalo, NY

. For Defendant s - Appell ees : A NJALI S. D ALAL , Wiggin & Dana LLP, New York, NY ( Jonathan M. Freiman, Wiggin & Dana LLP, New Haven, CT , and Charles A.

* The Clerk of Court is directed to amend the caption as set forth above.3 Michael, Steptoe & Johnson LLP, New York, NY , on the brief ). Appeal from a judgment of the United States District Court for the Western
District of New York ( Crawford , J.)

. Upon due con sideration, it is hereby ORDERED , ADJUDGED , and
DECREED that the judgment of the district court is AFFIRMED

. The p laintiffs

- a ppellants are New York businesses representing a putative class of similarly situated business es affected by G overnor Andrew Cuomo’s order
of business closures in response to the COVID

- 19 pandemic

. The businesses appeal the district court’s dismissal , for failure to state a claim , of a put ative class
action complaint against various insurers who denied coverage for losses that
resulted from those closures

. In the proceedings before the district court , the
businesses claimed to be entitled to insurance coverage because the closures in
respon se to COVID

- 19 w ere “direct physical loss es ” under the insurers’ policies

. The businesses sought relief for breach of contract and for violation of New York’s General Business Law § 349.
The district court dismissed the complaint in two separate orders

. First , the
district court held that the Hartford Insurance Group (“HIG”) was not responsible4 for insurance policies that its subsidiaries issued to the businesses

. The district court therefore granted the Hartford Insurance Group’s motion to dismiss. Buffalo Xerographix, Inc. v. Hartford Ins. Grp. , 540 F. Supp. 3d 382, 392

- 93 (W.D.N.Y. 2021)

. Second , the district court held that the businesses failed to state a claim against the subsidiary insurers because the state

- mandated closures did not qualify as a “direct physical loss” eligible for insurance coverage.
W e affirm the judgment of the district court. HIG cannot be held liable fo r the insurance polici es issued by its subsidiaries because it was not a signatory to
those policies , and it neither authorize d its subsidiaries to act as its agents in issuing the policies nor created appearances of authority in the subsidiaries to issue policies for it

. The b usinesses also cannot state a claim against the subsidiary
insurers because the cl osures due to COVID

- 19 do not qualify as a direct physic al
loss under the policies. We assume the parties’ familiarity with the remaining facts, procedural history, and arguments on appeal.
I The businesses argue that HIG evinced a n intent to be bound by the insurance policies of its subsidiaries because each of the insurance policies displayed the HIG logo and corporate officers of HIG signed the policies and are5 referen ced throughout the contract

. A s the district court observed, however, the use of a parent company’s logo is not enough to make the parent company a signatory to a contract. The insurance policies define the counterparty as “the Company providing this insur ance,” namely the subsidiary insurers, and the policy language does not contradict that definition. Buffalo Xerographix , 540
F. Supp. 3d at 392

. The businesses also argue that HIG may be liable for the policies under an agency theory. A principal may be bound by the representations of its agent if the principal’s words or conduct addressed to the agent sustain a reasonable express or implied inference “that the principal has consented to the agent’s performance of a particular act” or if the principal cre ates appearances that reasonably cause a third person to believe that “the principal consents to have [an] act done on his behalf by the person purporting to act for him.” Minskoff v. Am. Exp. Travel Related
Servs. Co. , 98 F.3d 703, 708 (2d Cir. 1996)

. As the district court correct ly noted, a reasonable observer would not infer that HIG intended to be bound by the insurance policies issued by its subsidiaries.
The policies clearly indicate that each contract was between the insured party and the subsidiary insurer

. Each subsidiary insurer maintained its own pool of risk, for6 which the other subsidiaries and affiliates were not responsible

. HIG did not , either expressly or impliedly, authorize its subsidiary insurers to issue policies on
its behalf , and it d id not create appearances that would reasonably lead third persons to believe that the subsidiaries were so authorized

. II
The businesses argue that the losses associated with the closure of
businesses due to COVID

- 19 qualify as “direct physical loss” under the insurance policies and therefore should be covered by the subsidiary insurers. The businesses point to a V irus E xclusion C lause and a Virus Lim itation Clause that the subsidiary insurers have included in other policies but did not include the policies at issue here. Those clauses , introduced in response to the SARS epidemic of 2006, limit or exclude coverage for direct physical loss or damage “caused by” a virus. The businesses argue that these clauses indicate that “direct physical loss” may be caused by a virus and that the closures due to COVID

- 19 are such a direct physical loss.
We need not decide whether dire ct physical loss may be caused by viruses in other circumstances. Our court has already held that closures of businesses due to the presence of COVID

- 19 do not qualify as a “direct physical loss.” 100127 Holdings v. Sentinel Ins. Co. , 21 F.4th 216, 220

- 21 ( 2d Cir. 2021). In 10012 Holdings ,

we noted that in Roundabout Theatre Co. v. Cont’l Cas. Co. , the Appellate Division
refused to treat a street closure following a construction accident as a “loss of ... property” under an insurance contract. 302 A.D.2d 1, 5

- 6 (N.Y. App. Div. 1st Dep’t 2002). Although the plaintiff theater company lost access to its building

— and consequently lost income

— there was no direct physical loss or damage eligible for coverage under the contract because the building was not physically affected

. Id

. at 8. Based on the New York case law, we concluded that “under New York law
the terms ‘ direct physical loss ’ and ‘ physical damage ’

... do not extend to mere loss of use of a premises .” 10012 Holdings , 21 F.4th at 222

. Instead, there must be “actual physical loss of or damage to the insured’s property” to qualify for
coverage . Id

. Neither the availability of a Virus Exclusion or Limitation Clause nor the businesses’ allegation that COVID

- 19 was present at their properties leads t o a different conclusion in this case. Even if there are circumstances in which a virus might cause the actual physical loss of or damage to property, the presence of
COVID

- 19 on surfaces at a retail store or office would not cause the store or office
to b e physically lost or damaged. See Kim

- Chee LLC v. Philadelphia Indem. Ins. Co. ,8 No. 21

- 1082

- CV, 2022 WL 258569, at *2 (2d Cir. Jan. 28, 2022). Accordingly, the businesses cannot state a claim, and we affirm the judgment of the district court.

* * *
We hav e considered appellant s’ remaining arguments, which we conclude are without merit. For the foregoing reasons, we AFFIRM the judgment of the
district court.
FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Cou 

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