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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

SAN ANTONIO DIVISION

DIESEL BARBERSHOP, LLC; 

WILDERNESS OAKS CUTTERS, 

LLC; DIESEL BARBERSHOP 

BANDERA OAKS, LLC; DIESEL 

BARBERSHOP DOMINION, LLC; 

DIESEL BARBERSHOP ALAMO 

RANCH, LLC; AND HENLEY’S 

GENTLEMEN’S GROOMING, LLC, 

 Plaintiffs,

vs.

STATE FARM LLOYDS,

 Defendant.

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No. 5:20–CV–461–DAE

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS

Before the Court is a Motion to Dismiss filed by State Farm Lloyds

(“Defendant” or “State Farm”) on May 8, 2020. (Dkt. # 9.) Plaintiffs Diesel 

Barbershop, LLC; Wilderness Oak Cutters, LLC; Diesel Barbershop Bandera 

Oaks, LLC; Diesel Barbershop Dominion, LLC; Diesel Barbershop Alamo Ranch, 

LLC; and Henley’s Gentlemen’s Grooming, LLC (collectively “Plaintiffs”) 

responded on May 22, 2020 (Dkt. # 14), and Defendant filed a reply on May 29, 

2020 (Dkt. # 17). The Court presided over a virtual hearing on July 29, 2020, 

during which Shannon Loyd, Esq., represented Plaintiffs and Neil Rambin, Esq. 

and Susan Egeland, Esq. represented Defendant. After careful consideration of the 
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memorandum filed in support of and against the motion and after hearing 

arguments from counsel, the Court—for the reasons that follow—GRANTS

Defendant’s Motion to Dismiss.

FACTUAL BACKGROUND

On February 11, 2020, the World Health Organization identified the 

2019 Coronavirus (“COVID-19”) as a disease. Since then, COVID-19 has spread 

across the world, and health organizations, including the Center for Disease 

Control (“CDC”), characterize COVID-19 as a global pandemic. (See Dkt. # 8.) 

The outbreak in the United States is a rapidly evolving situation, and the state of 

Texas saw an exponential increase in COVID-19 cases. To stop “community 

spread” of COVID-19, state and local governments have issued executive orders

that limit the opening of certain businesses and require social distancing. Bexar 

County Judge Nelson Wolff and Texas Governor Greg Abbott have issued 

executive orders throughout this crisis, and below are the relevant orders (the 

“Orders”) for the purposes of this case. 

a. The Bexar County Orders

County Judge Wolff issued multiple executive orders pertaining to the 

“state of local disaster . . . due to imminent threat arising from COVID-19.” (Dkt. 

# 8, Exh. B.) On March 23, 2020, County Judge Wolff issued an order requiring 

“all businesses operating within Bexar County” save for those “exempted” to 
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“cease all activities” at any business located in Bexar County from March 24, 2020 

until April 9, 2020. (Id.) The order defines exempted businesses as those 

pertaining to: (a) healthcare services, (b) government functions, (c) education and 

research, (d) infrastructure, development, operation and construction, 

(e) transportation, (f) IT services, (g) food, household staples, and retail, 

(h) services to economically disadvantaged populations, (i) services necessary to 

maintain residences or support exempt businesses, (j) news media, (k) financial 

institutions and insurance services, (l) childcare services, (m) worship services, 

(n) funeral services, and (o) CISA sectors. (Id.) County Judge Wolff notes that he 

is authorized “to take such actions as are necessary in order to protect the health, 

safety, and welfare of the citizens of Bexar County” and “has determined that 

extraordinary emergency measures must be taken to mitigate the effects of this 

public health emergency and to facilitate a cooperative response” in line with 

Governor Abbott’s “declaration of public health disaster.” (Id.)

In a supplemental executive order dated April 17, 2020, County Judge 

Wolff emphasizes that “the continued spread of COVID-19 by pre- and 

asymptomatic individuals is a significant concern in Bexar County and on April 3, 

2020, the [CDC] recommended cloth face coverings be worn by the general public 

to slow the spread of COVID-19 and implementing this measure would assist in 

reducing the transmission of COVID-19 in San Antonio and Bexar County.” (Id.) 
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The goal of the supplemental order was to “reduce the spread of COVID-19 in and 

around Bexar County” and to “continue to protect the health and safety of the 

community and address developing and the rapidly changing circumstances when 

presented by the current public health emergency.” (Id.) 

b. The State of Texas Order

On March 31, 2020, Texas Governor Greg Abbott signed an executive 

order closing all “non-essential” businesses from April 2, 2020 until April 30, 

2020. (Dkt. # 8, Exh. C.) Governor Abbott’s order provides the following: 

NOW, THEREFORE, I, Greg Abbott, Governor of Texas, by virtue of 

the power and authority vested in me by the Constitution and laws of 

the State of Texas, do hereby order the following on a statewide basis 

effective 12:01 a.m. on April 2, 2020, and continuing through April 30, 

2020, subject to extension based on the status of COVID-19 in Texas 

and the recommendations of the CDC and the White House 

Coronavirus Task Force: 

In accordance with guidance from DSHS Commissioner 

Dr. Hellerstedt, and to achieve the goals established by the 

President to reduce the spread of COVID-19, every person 

in Texas shall, except where necessary to provide or obtain 

essential services, minimize social gatherings and 

minimize in-person contact with people who are not in the 

same household. 

“Essential services” shall consist of everything listed by 

the U.S. Department of Homeland Security in its Guidance 

on the Essential Critical Infrastructure Workforce, 

Version 2.0, plus religious services. . . . 

In accordance with the Guidelines from the President and 

the CDC, people shall avoid eating or drinking at bars, 

restaurants, and food courts, or visiting gyms, massage 
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establishments, tattoo studios, piercing studios, or 

cosmetology salons; provided, however, that the use of 

drive-thru, pickup, or delivery options for food and drinks 

is allowed and highly encouraged throughout the limited 

duration of this executive order. 

(Dkt. # 8, Exh. C.) 

c. Plaintiffs’ Insurance Policies

Plaintiffs run barbershop businesses; a type of business deemed nonexempt and non-essential under the Orders. (Dkt. # 8.) State Farm issued 

insurance policies (the “Policies”)1 to Plaintiffs regarding the insured properties 

(the “Properties”) that are subject of this dispute. (See Dkt. # 9, Exhs. A-1–A-6.)

The Policies state, in relevant part, the following: 

When a Limit Of Insurance is shown in the Declarations for that type 

of property as described under Coverage A – Buildings, Coverage B –

Business Personal Property, or both, we will pay for accidental direct 

physical loss to that Covered Property at the premises described in the

Declarations caused by any loss as described under SECTION I —

COVERED CAUSES OF LOSS. 

(Id.) The Policies note in Section I–Covered Causes of Loss that State Farm will

“insure for accidental direct physical loss to Covered Property” unless the loss is 

excluded under Section I–Exclusions or limited in the Property Subject to 

Limitations provision. (Id.) The Policies further contain a “Fungi, Virus, or 

1 Defendant attaches each Plaintiff’s policy and endorsement to the policy to the 

motion to dismiss. (See Dkt. # 9, Exhs. A-1–A-6.) Defendant asserts that “the 

relevant provisions of the policies are identical” (Dkt. # 9), and thus this Court 

shall cite the policies together without analyzing each Plaintiff’s policy separately.
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Bacteria” exclusion (the “Virus Exclusion”), which contains lead-in language and 

states the following:

1. We do not insure under any coverage for any loss which would not 

have occurred in the absence of one or more of the following 

excluded events. We do not insure for such loss regardless of: (a) 

the cause of the excluded event; or (b) other causes of the loss; or 

(c) whether other causes acted concurrently or in any sequence with 

the excluded event to produce the loss; or (d) whether the event 

occurs suddenly or gradually, involves isolated or widespread 

damage, arises from natural or external forces, or occurs as a result 

of any combination of these:

. . .

j. Fungi, Virus Or Bacteria

. . . 

(2) Virus, bacteria or other microorganism that 

induces or is capable of inducing physical distress, 

illness or disease.

(Id.) The Policies also contain an endorsement modifying the businessowners 

coverage form, including a Civil Authority provision which states in relevant part:

When a Covered Cause of Loss causes damage to property other than 

property at the described premises, we will pay for the actual “Loss of 

Income” you sustain and necessary “Extra Expense” caused by action 

of civil authority that prohibits access to the described premises, 

provided that both of the following apply:

1. Access to the area immediately surrounding the damaged 

property is prohibited by civil authority as a result of the damage, 

and the described premises are within that area but are not more

than one mile from the damaged property; and

2. The action of civil authority is taken in response to dangerous 

physical conditions resulting from the damage or continuation of 

the Covered Cause Of Loss that caused the damage, or the action 

is taken to enable a civil authority to have unimpeded access to 

the damaged property.
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(Id.) There are various other exclusions within the Policies including for example,

the “Ordinance or Law,” the “Acts or Decisions” and the “Consequential Loss” 

exclusions. (Dkt. # 9.) 

PROCEDURAL HISTORY

Plaintiffs assert that due to the COVID-19 outbreak and the Orders, 

Plaintiffs “have sustained and will sustain covered losses” under the terms of the 

Policies. (Dkt. # 8.) Plaintiffs filed a claim with State Farm seeking coverage for 

business interruption to the Properties pursuant to the Policies in March 2020. (Id.) 

Without seeking additional documentation or information, and without further 

investigation, State Farm denied Plaintiffs’ claims. (Dkt. # 8, Exh. D.) In the

denial letter, State Farm asserted that Plaintiffs’ claims are not covered as the 

“policy specifically excludes loss caused by enforcement of ordinance or law, 

virus, and consequential losses.” (Id.) State Farm argued that there is a 

requirement “that there be physical damage, within one mile of the described 

property” and “that the damage be the result of a Covered Cause of Loss” which, 

State Farm asserted, a “virus is not.” (Id.)

Plaintiffs sued State Farm in state court on April 8, 2020, after State 

Farm denied Plaintiffs coverage. (Dkt. # 1, Exh. C.) Defendant timely removed 

the action to this Court on April 13, 2020. (Dkt. # 1.) In their second amended 

complaint, Plaintiffs bring claims of breach of contract, noncompliance with the 
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Texas Insurance Code, and breach of the duty of good faith and fair dealing. (Dkt. 

# 8.) Attached to Plaintiffs’ second amended complaint are the Policies, Orders,

and State Farm’s letter denying coverage.

On May 8, 2020, State Farm filed a motion to dismiss for failure to 

state a claim. (Dkt. # 9.) The Court granted the parties’ joint motion to stay 

discovery pending a ruling on the motion to dismiss on May 18, 2020. (Dkt. # 12.) 

Plaintiffs responded to the motion to dismiss on May 22, 2020 (Dkt. # 14), and a 

week later, Defendant filed its reply (Dkt. # 17). Defendant filed a notice of 

supplemental authority on July 14, 2020 (Dkt. # 21), and Plaintiffs filed a notice of 

supplemental authority on July 28, 2020 (Dkt. # 22). The Court held a virtual 

hearing on this matter on July 29, 2020. Defendant filed an additional notice of 

supplemental authority on August 7, 2020 (Dkt. # 25), and Plaintiffs filed another 

notice of supplemental authority on August 12, 2020 (Dkt. # 27). Defendant filed 

its third notice of supplemental authority on August 13, 2020 (Dkt. # 28), notifying 

the Court of the United States Judicial Panel on Multidistrict Litigation’s decision 

to deny the creation of an industry-wide multidistrict litigation. (Id., Exh. A.) 

TEXAS CONTRACT-INTERPRETATION STANDARDS

“Insurance policies are contracts and are governed by the principles of 

interpretation applicable to contracts.” Amica Mut. Ins. Co. v. Moak, 55 F.3d 

1093, 1095 (5th Cir. 1995). Under Texas contract-interpretation standards, the 
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“paramount rule is that courts enforce unambiguous policies as written” such that 

court must “honor plain language, reviewing policies as drafted, not revising them 

as desired.” Pan Am Equities, Inc. v. Lexington Ins. Co., 959 F.3d 671, 674 (5th 

Cir. 2020). Importantly, an “ambiguity” is “more than lack of clarity”; a court 

should find an insurance contract ambiguous only if “giving effect to all 

provisions, its language is subject to two or more reasonable interpretations.” Id.

(internal quotation marks and citation omitted). To determine ambiguity, which is 

a question of law, a court must “examine the entire contract in order to harmonize 

and give effect to all provisions so that none will be meaningless.” Id. (internal 

quotation marks and citation omitted); see also Provident Life & Acc. Ins. Co. v. 

Knott, 128 S.W.3d 211, 216 (Tex. 2003) (“In interpreting these insurance policies 

as any other contract, we must read all parts of each policy together and exercise 

caution not to isolate particular sections or provisions from the contract as a 

whole.”); State Farm Lloyds v. Page, 315 S.W.3d 525, 527 (Tex. 2010) (“The fact 

that the parties may disagree about the policy’s meaning does not create an 

ambiguity.” (citations and internal quotation marks omitted)). “The goal in 

interpreting . . . [language within the contract] is to ascertain the true intentions of 

the parties as expressed in the writing itself.” Richards v. State Farm Lloyds, No. 

19-0802, 2020 WL 1313782, at *5 (Tex. Mar. 20, 2020) (citation and internal 

quotation marks omitted). 
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RULE 12(b)(6) LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a

complaint for “failure to state a claim upon which relief can be granted.” To

survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead “enough facts to 

state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 

550 U.S. 544, 570 (2007). “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.” Ashcroft v. Iqbal, 556 U.S. 

662, 678 (2009). 

In analyzing whether to grant a Rule 12(b)(6) motion, a court accepts 

as true “all well-pleaded facts” and views those facts “in the light most favorable to 

the plaintiff.” United States ex rel. Vavra v. Kellogg Brown & Root, Inc., 727 

F.3d 343, 346 (5th Cir. 2013) (citation omitted). A court need not “accept as true a 

legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678. 

Furthermore, in assessing a motion to dismiss under Rule 12(b)(6), a court’s 

review is generally limited to the complaint, documents attached to the complaint,

and any documents attached to the motion to dismiss that are referred to in the 

complaint and are central to the plaintiff’s claims. Tellabs, Inc. v. Makor Issues & 

Rights, Ltd., 551 U.S. 308, 322 (2007); see also Lone Star Fund V (U.S.), L.P. v. 

Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010).
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DISCUSSION

State Farm argues that for business income coverage to apply, the 

Policies explicitly require (1) an accidental direct physical loss to the insured 

property and (2) that the loss is not excluded. (Dkt. # 9.) Defendant asserts that 

Plaintiffs fail to properly plead direct physical loss to the Properties as Plaintiffs 

argue that the Orders are the reason for the business interruption claim and fail to 

show that the Properties have been tangibly “damaged” per se. (Dkts. ## 9, 17.) 

Defendant also argues that regardless, Plaintiffs fail to overcome the Virus 

Exclusion hurdle that is unambiguously within the Policies and was added to these 

Policies in response to the SARS pandemic in the early 2000s. (Id.)

In response, Plaintiffs assert that the language in the Policies does not 

require a tangible and complete physical loss to the Properties, but rather allows

for a partial loss to the Properties, which includes the loss of use of the Properties 

due to the Orders restricting usage of the Properties. (Dkt. # 14.) Plaintiffs also 

argue that it is not COVID-19 within Plaintiffs’ Properties that caused the loss 

directly, but rather that it was the Orders that caused the direct physical loss and 

thus the Virus Exclusion should not apply. (Id.) Plaintiffs also argue that the 

Orders were issued to protect public health and welfare, and that Plaintiffs claims 

thus fall under the Civil Authority provision within the Policies. (Id.) 
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Based on the parties’ filings, plain language of the Policies in 

question, and argument at the hearing, as much as the Court sympathizes with 

Plaintiffs’ situation, the Court determines that the motion to dismiss must be 

granted for the following reasons. 

a. Accidental Direct Physical Loss

This Court is mandated to “honor plain language, reviewing policies 

as drafted, not revising them as desired.” Pan Am Equities, 959 F.3d at 674. The 

Court looks at the coverage provided by the Policies as a whole in order to 

determine the plain language. Id. Here, the Policies are explicit that there has to 

be an accidental, direct physical loss to the property in question. The Court agrees 

with Plaintiffs that some courts have found physical loss even without tangible 

destruction to the covered property. See e.g., TRAVCO Ins. Co. v. Ward, 715 F. 

Supp. 2d 699, 708 (E.D. Va. 2010), aff’d, 504 F. App’x 251 (4th Cir. 2013) (noting 

that “physical damage to the property is not necessary, at least where the building 

in question has been rendered unusable by physical forces”); Murray v. State Farm 

Fire & Cas. Co., 203 W. Va. 477, 493 (1998) (“‘Direct physical loss’ provisions 

require only that a covered property be injured, not destroyed. Direct physical loss 

also may exist in the absence of structural damage to the insured property.” 

(citation omitted)). The Court also agrees that a virus like COVID-19 is not like a 

hurricane or a hailstorm, but rather more like ammonia, E. coli, and/or carbon 
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monoxide (i.e. cases in which the loss is caused by something invisible to the 

naked eye), and in such cases, some courts have found direct physical loss despite 

the lack of physical damage. See e.g., Port Auth. of New York & New Jersey v. 

Affiliated FM Ins. Co., 311 F.3d 226, 236 (3d Cir. 2002) (holding that while mere 

installation of asbestos was not loss or damage, the presence or imminent threat of 

a release of asbestos would “eliminate[] or destroy[]” the function of the structure, 

thereby making the building “useless or uninhabitable”); Lambrecht & Assocs., 

Inc. v. State Farm Lloyds, 119 S.W.3d 16, 24–26 (Tex. App. 2003) (noting that 

while State Farm argued that the losses were not “physical” as they were not 

“tangible,” the court found that under the “direct language” of the policy allowed 

for coverage to “electronic media and records” and the “data stored on such media” 

as “such property is capable of sustaining a ‘physical’ loss”); Essex Ins. Co. v. 

BloomSouth Flooring Corp., 562 F.3d 399, 406 (1st Cir. 2009) (“We are persuaded 

both that odor can constitute physical injury to property . . . and also that 

allegations that an unwanted odor permeated the building and resulted in a loss of 

use of the building are reasonably susceptible to an interpretation that physical 

injury to property has been claimed.”). 

Even so, the Court finds that the line of cases requiring tangible injury 

to property are more persuasive here and that the other cases are distinguishable. 

See Dickie Brennan & Co. v. Lexington Ins. Co., 636 F.3d 683, 686 (5th Cir. 
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2011) (affirming summary judgment and holding that there was no coverage under 

the civil authority provision of the policy as plaintiffs “failed to demonstrate a 

nexus between any prior property damage and the evacuation order” when the city 

issued a mandatory evacuation order prior to the arrival of a hurricane and 

plaintiffs allegedly suffered business interruption losses); United Air Lines, Inc. v. 

Ins. Co. of State of PA, 439 F.3d 128, 134 (2d Cir. 2006) (determining that United 

could not show that its lost earnings resulted from physical damage to its property 

or from physical damage to an adjacent property when the government shut down 

the airport after the 9/11 terrorist attacks). For instance, unlike Essex Ins. Co., 

COVID-19 does not produce a noxious odor that makes a business uninhabitable. 

It appears that within our Circuit, the loss needs to have been a “distinct, 

demonstrable physical alteration of the property.” Hartford Ins. Co. of Midwest v. 

Mississippi Valley Gas Co., 181 F. App’x 465, 470 (5th Cir. 2006) (“The 

requirement that the loss be “physical,” given the ordinary definition of that term is 

widely held to exclude alleged losses that are intangible or incorporeal, and, 

thereby, to preclude any claim against the property insurer when the insured 

merely suffers a detrimental economic impact unaccompanied by a distinct, 

demonstrable, physical alteration of the property.” (citation omitted)); see also

Ross v. Hartford Lloyd Ins. Co., 2019 WL 2929761, at *6–7 (N.D. Tex. July 4, 

2019) (“direct physical loss” requires “a distinct, demonstrable, physical alteration 
15

of the property” (citing 10A Couch on Ins. § 148:46 (3d ed. 2010)).) Thus, the 

Court finds that Plaintiffs fail to plead a direct physical loss.

b. The Virus Exclusion

Even if the Court had found that the language within the Policies was

ambiguous and/or that Plaintiffs properly plead direct physical loss to the 

Properties, the Court finds that the Virus Exclusion bars Plaintiffs’ claims. The 

language in the lead-in of the Virus Exclusion (also called the anti-concurrent 

causation (“ACC”) clause) expressly states that State Farm does not insure for a 

loss regardless of “whether other causes acted concurrently or in any sequence 

within the excluded event to produce the loss.” (See Dkt. # 9, Exhs. A-1–A-6.) 

Here, Plaintiffs allege that the loss of business occurred as a result of the Orders

that mandated non-essential businesses to discontinue operations for a set period of 

time to help staunch community spread of COVID-19. (Dkts. ## 8, 14.) Plaintiffs

also assert that the Court should find that the Virus Exclusion does not apply 

because COVID-19 was not present at the Properties. (Id.)

The Court notes that the parties vehemently dispute how to read the

lead-in language to the Virus Exclusion. Defendant cites Tuepker v. State Farm 

Fire & Cas. Co., 507 F.3d 346 (5th Cir. 2007) in support of the argument that the 

lead-in language to the Virus Exclusion bars Plaintiffs’ claims and that the lead-in 

language is unambiguous and enforceable. Meanwhile, Plaintiffs cite Stewart 
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Enterprises, Inc. v. RSUI Indem. Co., 614 F.3d 117 (5th Cir. 2010) in support of 

their assertion that the lead-in language does not exclude coverage here.

The Court finds the facts in Stewart Enterprises distinguishable from 

the facts here. There, the ACC clause was within a policy provided by Lexington 

Insurance Company and contained different language than the ACC clause in State 

Farm’s Policies here. See Stewart Enterprises, 614 F.3d at 125 (noting in the ACC 

clause that “this policy does not insure against loss or damage caused directly or 

indirectly by any of the excluded perils” as “[s]uch loss or damage is excluded 

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

sequence to the loss”). In addition, the issue in Stewart Enterprises was that the 

insurer was seeking “to use the ACC clause to bar recovery for damage caused by 

two included perils.” Id. at 126 (emphasis added). The Fifth Circuit rightly 

decided there that it would be absurd to “read the policy to force Stewart to prove a 

windless flood.” Id. at 127.

But here, the Court can read the Policies objectively and without 

“creating difficult causation determination where none otherwise exist.” Id. Like 

the Fifth Circuit in Tuepker, the Court finds that here, the State Farm ACC clause

within the Policies is unambiguous and enforceable. See Tuepker, 507 F.3d at 356. 

The Policies expressly state that State Farm does not “insure for such loss 

regardless of: (a) the cause of the excluded event; or (b) other causes of the loss; or 
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(c) whether other causes acted concurrently or in any sequence with the excluded 

event to produce the loss; or (d) whether the event occurs suddenly or gradually, 

involves isolated or widespread damage, arises from natural or external forces, or 

occurs as a result of any combination of these[.]” (See Dkt. # 9, Exhs. A-1–A-6.) 

Guided by the plain language of the Policies, the Court finds that Plaintiffs have 

pleaded that COVID-19 is in fact the reason for the Orders being issued and the 

underlying cause of Plaintiffs’ alleged losses. While the Orders technically forced 

the Properties to close to protect public health, the Orders only came about

sequentially as a result of the COVID-19 virus spreading rapidly throughout the 

community. Thus, it was the presence of COVID-19 in Bexar County and in 

Texas that was the primary root cause of Plaintiffs’ businesses temporarily closing. 

Furthermore, while the Virus Exclusion could have been even more specifically 

worded, that alone does not make the exclusion “ambiguous.” See In re Katrina 

Canal Breaches Litig., 495 F.3d 191, 210 (5th Cir. 2007) (“The fact that an 

exclusion could have been worded more explicitly does not necessarily make it 

ambiguous.”). 

Thus, the Court finds that the Policies’ ACC clause excluded coverage 

for the losses Plaintiffs incurred in complying with the Orders. See, e.g., JAW The 

Pointe, L.L.C. v. Lexington Ins. Co., 460 S.W.3d 597, 610 (Tex. 2015) (“Because 

the covered wind losses and excluded flood losses combined to cause the 
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enforcement of the ordinances concurrently or in a sequence, we agree with the 

court of appeals that the policy’s anti-concurrent-causation clause excluded 

coverage for JAW’s losses.”). Thus, even if the Court found direct, physical loss 

to the Properties, the Virus Exclusion applies and bars Plaintiffs’ claims.

c. The Civil Authority Provision

In light of the foregoing, the Court also finds that the Civil Authority 

provision within the Policies is not triggered. Plaintiffs’ recovery remains barred 

due to the unambiguous nature of the events that occurred, causing the Virus 

Exclusion to apply such that Plaintiffs fail to allege a legally cognizable “Covered 

Cause of Loss.” See Dickie Brennan, 636 F.3d at 686–87 (“[C]ivil authority 

coverage is intended to apply to situations where access to an insured’s property is 

prevented or prohibited by an order of civil authority issued as a direct result of 

physical damage to other premises in the proximity of the insured’s property.”).

CONCLUSION

The Court finds merit in Defendant’s arguments and determines that 

Plaintiffs’ breach of contract, Texas Insurance Code,2 and breach of duty of good 

faith and fair dealing claims all fail. While there is no doubt that the COVID-19 

crisis severely affected Plaintiffs’ businesses, State Farm cannot be held liable to 

2 Plaintiffs expressly seek to drop their allegation of misrepresentation pending

further discovery in light of this Court’s ruling in Brasher v. State Farm Lloyds, 

2017 WL 9342367, at *7 (W.D. Tex. Feb. 2, 2017). (Dkt. # 14.)
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pay business interruption insurance on these claims as there was no direct physical 

loss, and even if there were direct physical loss, the Virus Exclusion applies to bar 

Plaintiffs’ claims. Given the plain language of the insurance contract between the 

parties, the Court cannot deviate from this finding without in effect re-writing the 

Policies in question. That this Court may not do. 

For the reasons stated above, the Motion to Dismiss (Dkt. # 9) is 

GRANTED. Because allowing Plaintiffs leave to amend their claims would be 

futile, the Court DISMISSES Plaintiffs’ claims. The Clerk’s office is instructed to 

ENTER JUDGMENT and CLOSE THIS CASE. 

IT IS SO ORDERED. 

 DATE: San Antonio, Texas, August 13, 2020. 

 

David Alan Ezra

Senior United States District Judge