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MACMILES, LLC D/B/A GRANT STREET TAVERN IN THE SUPERIOR COURT OF PENNSYLVANIA Appellee

v. ERIE INSURANCE EXCHANGE Appellant No. 1100 WDA 2021 Appeal from the Order Entered May 25 , 2021 In the Court of Common Pleas of Allegheny County Civil Division at No: GD

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- 007753

BEFORE: PANELLA, P.J., BENDER, P.J.E., BOWES, J., LAZARUS, J.,

STABILE, J., KUNSELMAN, J., NICHOLS, J., McLAUGHLIN, J., and KING, J. OPINION BY STABILE, J.: FILED: NOVEMBER 30, 2022 Appellant, Erie Insurance Exchange (“Erie”), appeals from the May 25, 2021 order granting summary judgment in favor of Appellee, MacMiles, LLC d/b/a/ Grant Street Tavern (“MacMiles”) and denying its motion for judgment on the pleadings

. MacMiles owns and operates the Grant Street Tavern in Pittsburgh Pennsylvania. Like many similarly situated parties, MacMiles suffered a significant disruption of its business activity during the Covid

- 19 pandemic. A nd like many similarly situated parties, MacMiles believ ed its economic losses due to the loss of use of its business premises were covered under its commercial property insurance. Erie, like many other insurers who have issued policies with substantially similar terms , denied the claim becauseJ

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MacMiles ’ comme rcial property did not suffer any physical damage. This issue has made its way through many of our nation’s federal and state courts, but it is an issue of first impression for this Court. Upon review, we reach the same result as the near - universal major ity of courts to have addressed this issue: the policy does not cover mere loss of use of commercial property unaccompanied by physical alteration or other condition immanent in the property that renders the property itself unusable or uninhabitable

. We therefore reverse the trial court's grant of summary judgment in favor of MacMiles and direct that judgment on the pleadings be granted in favor of
Erie. The specifics of the case before us are as follows. Erie sold MacMiles a n insurance policy (the “Policy”) covering , among other things, “ physical loss of or damage to Covered Property [....]” Policy, Commercial Property Coverage Part, Section I, Coverages/Insuring Agreement. 1 In relevant part, the covered property in this case is the building wh erein MacMiles operates the Grant Street Tavern. On March 6, 2020, in response to the spread of the Covid

- 19 virus, Governor Tom Wolf issued a Proclamation of Disaster Emergency . The proclamation was followed by a March 19, 2020 executive order directing the temporary closure of non

- essential businesses

. Restaurateurs such as

_________________ __________ ______ ____ _______ 1 The Policy appears in the certified record as Exhibit “A” to Erie’s answer and new matter. All citations to the Policy in this Opinion will refer to sections and paragraphs within the Policy’s co mmercial property coverage part.J

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MacMiles were limited to offering take out , drive

- through, and/or delivery.
Dine

- in service was prohibited

. MacMiles claimed coverage under the Policy for the loss of use of its physical premises due to the Covid

- 19 pandemic and Governor Wolf’s orders

. Erie declined coverage and, on September 29, 2020, MacMiles filed a complaint for breach of contract and declaratory relief. On December 22, 2020, MacMiles filed a motion for summary judgment. Erie filed a cross motion for judgment on the pleadings on March 10, 2021. On May 25, 2021, the trial court entered an interlocutory order 2 grant ing partial summary judgment in favor of MacMiles , finding coverage un der the business income protection portion of the Policy but a triable issue of fact under the civil

_________________ __________ ______ ____ _______ 2 The trial court certified the order for immediate appeal under 42 Pa.C.S.A. § 702(b): (b) Interlocutory appeals by permission. -- When a court or other government unit, in making an interlocutory order in a matter in which its final order would be within the jurisdiction of an appellate court, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the matter, it shall so state in such order. The appellate court may thereupon, in its discretion, permit an appeal to be taken from such interlocutory order. 42 Pa.C.S.A.§ 702(b). This Court has accepted jurisdiction pursuant to § 702(b) and Rules of Appellate Procedure 312 and 1311(a) (1) , governing interlocutory appeals by permission.J

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authority provision (we discuss these in more detail below) and denying Erie’s motion for judgment on the pleadings. This timely appeal followed.
Erie p resents two questions:
1. Did the trial court commit an error of law in granting MacMiles’ motion for summary judgment in part, and denying Erie’s motion for judgment on the pleadings on this record, concluding that MacMiles has shown direct physical loss of or damage to covered property where there was an alleged mere loss of use, absent any harm to the property. 2. Did the trial court commit an error of law in concluding that the Policy’s Ordinance or Law exclusion does not apply to MacMiles’ claims. Erie’s Brief at 3

- 4. Summary judgment is appropriate where there is no genuine issue of fact as to the matter in controversy and the moving party is entitled to judgment as a matter of law. Pa.R.C iv .P. 1035.2 (1); Summers v. Certainteed Corp. , 997 A.2d 1152 , 1 159 (Pa. 2010)

. The pertinent facts a re not in dispute. Indeed, MacMiles filed for summary judgment seeking a declaration that the Policy provides coverage given the undisputed facts. We are therefore called upon to interpret the Policy, a question of law for which

our standard of review is de novo and our scope of review is plenary. Summers , 997 A.2d at 1159

- 60. An insured may invoke the Declaratory Judgments Act, 42 Pa.C.S.A. § 7531, et seq. , to determine whether an insurance contract covers an asserted claim. Genaeya Corp. v. Harco Nat’l Ins. Co. , 991 A.2d 342, 346 (Pa. Super. 2010). Where the language of the policy is clear , this Court mustJ

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give it effect. Indalex Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA , 83 A.3d 418, 420 ( Pa. Super. 2013) , appeal denied , 99 A.3d 926 (Pa. 2014)

.

“ Also, we do not treat the words in the policy as mere surplusage and, if at all possible, we construe the policy in a manner that gives effect to all of the policy ’ s language. ” Id. at 421. We will construe any ambiguity in favor of the insured. Id. at 420

- 21. “Contract lang uage is ambiguous if it is reasonably susceptible to more than one construction and meaning.” Pennsylvania
Nat ’l Mut. Ca s. Ins. Co. v. St. John , 106 A.3d 1, 24 (Pa. 2014). The insured bears the initial burden of establishing that the asserted claim is covered. Erie
Ins. Grp. v. Catania , 95 A.3d 320, 322

– 23 ( Pa. Super. 2014 )

. If the insured is successful, the insurer bear s the burden of establishing the applicability of an exclusion. Id. This dispute arises un der a portion of the policy titled “Ultrapack Plus Commercial Property Coverage Part ”

. The Policy provides: We will pay for direct physical “loss” of or damage to Covered Property at the premises described in the “Declarations” caused by or resulting from a peril insured against

. Policy, Commercial Property Coverage Part, Section I, Coverages/Insuring Agreement

. The Policy’s Property Coverage Part provides coverage for buildings, business personal property and personal property of others, and income pro tection. It also provides additional coverage for losses resulting from certain actions by civil authorities. W e first address t he i ncomeJ

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protection coverage , pursuant to which the trial court granted partial summary judgment in favor of MacMiles

. Income Protection means loss of “income” and/or “rental income” you sustain due to partial or total “interruption of business” resulting directly from “loss” or damage to property on the premises described in “Declarations” from a peril insured against

. Policy, Commercial Property Coverage Part, Section I, Income Protection

– Coverage 3, ¶ A. Section II of the Policy defines perils”

. This policy insures against direct physical “loss”, except “loss” as excluded or limited in this policy. Policy, Comme rcial Property Coverage Part, Section II, Perils Insured Against, Covered Cause of Loss. “Loss” means direct and accidental loss of or damage to covered property. Policy, Commercial Property Coverage Part, Section XI, Definitions. Finally, the followin g terms govern the amount of insurance available for income protection coverage : We will pay the actual income protection loss for only such length of time as would be required to resume normal business operations . We will limit the time period to the s horter of the following periods: 1. The time period required to rebuild , repair, or replace such part of the Building or Business Property that has been damaged or destroyed as a direct result of an insured peril; or 2. Twelve (12) consecutive months from the date of loss. Policy, Commercial Property Coverage Part, Section I, Income Protection

– Coverage 3, ¶ D

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As set forth above, MacMiles alleges loss of use of its covered property (the building housing the Grant Street Tavern) due to the Covid

- 19 pandemic and the resulting orders from Governor Wolf. Erie denied coverage claiming that the Policy provides coverage in the event of total physical destruction (loss) of property or parti al damage to property. According to Erie, l oss of use unaccompanied by physical property damage does not tri gger coverage . The trial court, construing the phrase “direct physical loss of or damage
to Covered Property” , reasoned that the disjunctive “or” between “ direct physical loss of” and “damage to Covered Property ” supports a reasonable reading of the Policy whereby a “direct physical loss” need not necessarily result from physical or structural damage.

The spread of COVID

- 19, and a desired limitat ion of the same, had a close logical, causal, and/or consequential relationship to the ways in which [MacMiles] materially used its property and physical space. Indeed, the spread of COVID

- 19 and social distancing measures (with or without the Governor’s orders) caused [MacMiles], and many other businesses, to physically limit the use of property and the number of people that could inhabit physical buildings at any given time, if at all. Thus, the spread of Covid

- 19 did not , as [Erie] contends, merely imp ose economic limitations. Any economic losses were secondary to the businesses’ physical losses. Trial Court Opinion, 5/25/21, at 14

- 15 ( emphasis in original; citation omitted). Regarding the amount of insurance provision, the trial court reasoned that it “merely imposes a time limit on available coverage, which ends whenever any required building, repairs, or replac ements are completed to any damaged or destroyed property that mi ght exist, or twelve (12) monthsJ

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after the initial date of the loss.” Id. at 17. Because it merely imposes a time limit, the trial court found that the amount of insurance provision did not alter its interpretation of “physical loss or damage.” Id. In essence , t he trial court concluded that MacMiles’ claim is covered b ecause MacMiles’ proposed reading of the Policy is a reasonable one. 3 We turn now to the judicial precedent on this question , of which there is none from the appellate courts of this Co mmonwealth. But many parties similarly situated to MacMiles have claimed coverage for loss of income during the Covid

- 19 pandemic and the resulting economic shutdown under insurance
contracts substantially similar or identical to the Policy. Court decisions from across the country overwhelmingly and persuasively support a conclusion that MacMiles ’ loss of income claim is not covered. First, and most fundamentally, we observe that MacMiles ’ c laim arises under commercial property insurance coverage . Nearly all courts addressing

_________________ __________ ______ ____ _______ 3 The trial court relied in part on a dictionary definition of loss: “loss is defined as DESTRUCTION, RUIN, ... [and/or] the act of losing possession [and/or] DEPRIVATION ...” Trial Court Opinion, 8/2/21, at 12 (pagination ours) ( citing https://www.merriam

- w ebster.com/dictionary/loss ). Given the disjunctive “or” between “loss” and “damage” in the Policy language , the trial court concluded that loss must mean something other than destruction. Therefore , the trial court relied on the portion of the definition defining loss as “the act of losing possession [and/or] DEPRIVATION.” Id. W e are unable to confirm the accuracy of the trial court’s citation. Merriam Webster ’s online dictionary contains seven entries under “loss.” The first entry , ”DESTRUCTION, RUIN ” appears exactly as quoted in the trial court’s opinion. https://www.merriam

webster.com/dictionary/loss (last visited June 9, 2022). The remainder of the definition as quoted and relied on by the trial court (“the act of losing possession [and/or] DEPR IVATION”) appears nowhere

. Id.J

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this issue have held that economic loss unaccompanied by a physical alteration to the property does not trigger coverage under a commercial property insurance policy. For example, i n Delaware Valley Mgmt., LLC v. Continental Cas. Co. , ___ F.Supp.3d ___ 2021 WL 5235277 (E.D.Pa. November 10, 2021) , the plaintiff medical providers were prohibited to offer elective surgeries due to the Covid

- 19 pandemic

. The y alleged that their properties became contamination zones and that their ability to conduct business was significantly limited. Id. at *2. Plaintiffs argued , as MacMiles did here, that “physical loss of or damage to Covered P roperty” was reasonably susceptible of more than one meaning and therefore ambiguous. The District C ourt disagreed:

Here, not only was there no physical alteration to the Covered Properties, but there was also no loss of utility of the buildings. Indeed, Plaintiffs admit that they “could remain open, but only for essential surgeries, not elective.” (Am. Compl. at ¶ 77.) And Plaintiffs’ loss of their ability to perform elective surgeries does not render the building “uninhabitable.” Rather, their ability to conduct business was limited, which resulted in purely economic losses. Id. at *5. Likewise, damage to property exists where there is “actual structural damage” or where damage “ unnoticeable to the naked eye render[s] the property entirely us eless and uninhabitable.” Id. at *6. The Delaware Valley Court noted that the amount of insurance was tied to the period of physical restoration, and that the period of restoration portion of the policy made no sense unless the damage in question was phy sical damage. Id. at *7.J

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Similarly, the Third Circuit Court of Appeals , applying the law of New York and New Jersey, held that the presence of asbestos does not constitute “physical loss or damage” unless it is present in the air in quantities sufficient to render the building “uninhabitable and unusable.” Port Auth ority of New York and New Jersey v. Affiliated FM Ins. Co. , 311 F.3d 226, 236 (3d Cir. 2002) . In Port Authority , the mere presence of asbestos in the insured building was not sufficient to trigger coverage:

In the case before us, the policies cover “physical lo ss,” as well as damage. When the presence of large quantities of asbestos in the air of a building is such as to make the structure uninhabitable and unusable, then there has been a distinct loss to its owner. However, if asbestos is present in components of a structure, but is not in such form or quantity as to make the building unusable, the owner has not suffered a loss. The structure continues to function

— it has not lost its utility. The fact that the owner may choose to seal the asbestos or replace it with some other substance as part of routine maintenance does not bring the expense within first

- party coverage. Id. at 236

. (Footnote omitted). The Court of Common Pleas in Spector Gadon Rosen Vinci P.C. v. Valley Forge Ins. Co. , 2021 Phila. Ct. Com. P l. LEXIS 16 (June 16, 2021) , reached the same conclusion. There , the trial court found that the plaintiff law firm’s loss of use of its office space pursuant to Governor Wolf’s orders did not trigger coverage under a policy covering direct physical loss of or damage to its commercial property. Applying Port A uthority , the trial court found that physical damage to the insured property is necessary , especially in lightJ

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of language in the policy contemplating a period of restoration during which physical repairs take place. Id. at *10. C ourts outside of Pennsylvania considering similar policy language have concluded that the loss of use of a business during the Covid

- 19 pandemic was not covered under policies insuring against physical loss of or damage to commercial property. In Terry Black’s Barbecue, L.L.C. v. Stat e Auto. Mut. Ins. Co. , 22 F.4 th 45 0 (5 th Cir. 2022) the Court held that the plaintiff’s inability to provide dine

- in services was an economic loss unrelated to the insured’s property :

TBB has failed to allege any tangible alteration or deprivation of its property. Nothing physical or tangible happened to TBB ’ s restaurants at all. In fact, TBB had ownership of, access to, and ability to use all physical parts of its restaurants at all times. And importantly, the prohibition on dine

- in services did nothing to physically deprive TBB of any property at its restaurants. Id. at 456; see also , Santo’s Italian Café LLC v. Acuity Ins. Co. , 15 F.4th 398, 402 ( 6th Cr. 2021) (noting that direct physical loss and direct physical damage are the “North Star of this property insurance policy from start to finish ” ); Real Hosp. , LLC v. Travelers Cas. Ins. Co. of Am., 499 F. Supp.3d 288 (S.D. Miss. 2020 ) (holding that insurance against physical loss of orJ

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damage to commercial property covers damage to the insured’s building and personal property but not the operations)

. 4 Instantly, the trial court relied on In re Soc’y Ins. Co. Covid - 19 Bus. Interrupt

ion Prot. Ins. Litig. , 521 F.Supp.3d 729 (N.D. Ill. 2021). There, the Federal District Court found a factual issue as to whether the insured restaurant and hospitality businesses suffered a direct physical loss of their property as a re sult of the loss of in

- person dining during the Covid

- 19 pandemic. The insureds argued that the presence of Covid

- 19 on their premises was physical damage that created the loss. Id. at 732. The District Court reasoned that the policy in question did not contain a virus exclusion.

_________________ __________ ______ ____ _______ 4 As noted in the main text, nearly all courts addressing commercial property insurance policies similar to the one at issue have found that a physical alteration to the subject property is necessary to trigger coverage

. For representative federal cases, See, e .g. , 10012 Hold ings, Inc. v. Sentinel Ins. , 21 F.4 th 216 (2d Cir. 2021); Crescent Plaza Hotel Owner, L.P. v. Zurich Am. Ins. Co. , 20 F.4th 303 (7th Cir. 2021); Sandy Point Dental, P.C. v. Cincinnati Ins. Co. , 20 F.4th 327 (7th Cir. 2021) ; Oral Surgeons, P.C. v. C

incinnati Ins. Co. , 2 F.4 th 1141 (8th Cir. 2021) ; Mudpie, Inc. v. Travelers Cas. Ins. Co. of Am. , 15 F. 4th 885 (9th Cir. 2021); Goodwill Indus. of Cent. Okla. , 21 F.4th 704 (10th Cir. 2021 ). For repre sentative state court cases, See, e.g. , Inns by the Sea v. California Mut. Ins. Co. , 71 Cal.App.5th 688 ( Cal. Ct. App. 2021 ); Indiana Repertory Theatre v. Cincinnati Cas. Co. , 180 N.E.3d 403 (Ind. Ct. App. 2022); Wakonda Club v. Selective Ins. Co. of Am. , 973 N.W.2d 545 (Iowa 2022); Verveine Co. v. Strathmore Ins. Co. , 184 N.E.3d 1266 ( Mass. 2022); Gavrilides Mgmt. Co., LLC v. Michigan Ins. Co. , ___ N.W. ___ 2022 WL 301555 (Mich. Ct. App. Feb. 1, 2022); MAC Prop. Grp. v. Selective Fire and Cas. Ins. Co . , ___ A.3d ___ ( N.J. App. Div. June 20, 2022); Nail Nook, Inc. v. Hiscox Ins. Co. I nc. , 182 N.E.3d 356 (Ohio Ct. App. 2021) ; Collectivo Coffee Roasters Inc. v . Society Ins. , 974 N.W.2d 442 ( Wis. 2022)

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Id. at 735. Also, like the trial court instantly, the Northern District of Illinois relied on the disjunctive “or” in “direct physical loss of or damage to Covered Property ” to support an interpr etation of the policy language whereby physical loss meant something different from physical damage. Id. at 741. In any event , the weight of authority is to the contrary and t he Seventh Circuit implicitly overruled In re Soc’y , concluding that commercia l property policies do not provide coverage for business interruptions due to Covid

- 19. Sandy Point Dental , 20 F.4th 327 (7th Cir. 2021). Likewise, i n Hair Studio 1208 , LLC v. Hartford Underwriter’s Ins. Co. , 539 F.Supp.3d 409 (E.D.Pa. 2021), the Federal District C ourt cited Port Authority for the proposition that physical loss exists when a structure is “uninhabitable and unusable .” Id. at 417. Pure economic loss is not property damage. Id. Said another way, policy language covering “direct physical loss or damage” unambiguously requires that the “claimed loss or damage must be physical in nature.” Id. at 418 (quoting Philadelphia Parking Auth. v. Fed. Ins. Co. , 385 F.Supp.2d 280, 289 ( S.D.N.Y. 2005))

. 5
Cases cit ed by Appellee and various amici do not refute this point. In Motorists Mut. Ins. Co. v. Hardinger , 131 Fed. App ’x 823 , 826 (3d Cir. 2005), for example, the Third Circuit found a question of fact as to whether

_________________ __________ ______ ____ _______ 5 In Philadelphia Parking Auth. , the Southern District of New York held that economic loss stemming from loss of business after the September 11, 2001 terrorist attacks was not covered.J

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a n e coli contamin a tion of well water was a “physical loss” under a home owner’s policy. The family alleged they vacated the house because all of them experienced persistent illnesses and skin problems upon moving in. Id. at 824. Thus, the facts in Hardinger met the test set forth in Port Authority of New York , wher e in the Third Circuit wrote that invisible damage constitutes physical loss where it renders the building unusable or uninhabitable. 311 F.3d at 236 The same is true of cases where buildings became unusable due to the presence of gas or noxious fumes. Se e Essex Ins. Co. v. BloomSouth Flooring Corp. , 562 F.3d 399 (1st Cir. 2009) (holding that the presence of a n unexplained chemical odor sufficiently alleged a physical injury to the insured’s building, thus triggering the insurer’s duty to defend); TRAVCO I ns. Co. v. Ward , 715 F.Supp.2d 699, 707 (E.D.Va. 2010) (holding that a noxious odor emitting from defective drywall constituted a direct physical loss), aff’d , 504 Fed. App’x 251 (4th Cir. 2013) Western Fire Ins. Co. v. First Presbyterian Church , 437 P.2d 52 (Colo. 1968) (holding that the insured suffered a direct physical loss where gasoline accumulated in the soil under and around the insured’s building and gasoline vapors rendered the building uninhabitable) . In cases such as these , the condition that caused the loss , though not a visible physical alteration to the covered property, was physically present in the covered building. Instantly, in contrast, the prohibition on in

- person dining had nothing to do with any condition, visib le or invisible, at the Grant Street Tavern . Rather , the prohibition was meant toJ

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eliminat e the possibility o f infected patrons spreading an airborne illness to uninfected patron s. As MacMiles alleged: "The coronavirus causing COVID

19 is thought to spr ead mainly from person to person, primarily through respiratory droplets produced when an infected person coughs or sneezes.” Complaint, 9/29/20, at ¶ 9. In previous cases wherein an airborne toxin or odor rendered covered property unusable , the toxin or odor was immanent in the property . It was not an airborne illness that people brought in with them. In a case involving the scope of property insurance coverage, this distinction is critical. 6 Ultimat el y , the question before us is not complicated. T he provisions of the Policy at issue here cover commercial property. But MacMiles argues, and the trial court found, that “direct physical loss of or damage to Covered Property ” covers pure economic loss caused by MacMiles’ loss of use because of the disjunctive “or” between loss and damage. Policy, Commercial Property Coverage Part, Section I, Coverages/Insuring Agreement (emphasis added). That reading is reasonable if and only if “ physical loss ” means something distinct from a loss due to a physical alteration or destruction of the property.

_________________ __________ ______ ____ _______ 6 Much has been made of the observation in Couch on Insurance that “physical alteration” is the most common coverage trigger for a policy insuring against “physical loss or damage” to covered property. C OUCH ON I NSURANCE , § 148:46 (3d ed. 2000). Because the analysis in § 148:46 nei ther relied on nor anticipated the present circumstances, we do not find it helpful. In our view, neither side of this debate advances its argument by citing or attacking the conclusions reached in § 148:46.J

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That is, we must conclude it is reasonable to read the Policy as covering mere loss of use even though the Policy never expressly says so ; even though the policy repeatedly uses the word damage ; and even though the amount of insurance provision references the time period necessary to “ repair, replace,

or rebuild ” any part of the covered property that had been “ damaged or destroyed. ” These latter terms make sense only in the context of partial ph ysical damage to or total destruction of the covered property

. They do not make sense in the context of a purely economic loss. See e.g. , Dino Drop, Inc. v. Cincinnati Ins. Co. , 544 F.Supp.3d 789, 798 (E.D.Mich. 2021) (holding that physical loss and dama ge “can only be reasonably be construed as extending to events that impact the physical premises completely (loss) or partially (damage).”)

. The trial court’s reading of t he Policy is strained , and

we find that we are constrained to reject that holding

. Further, MacMiles has failed to allege any physical damage. Dine

- in service was prohibited, but preparation of meals for takeout or delivery was permitted

. Thus, MacMiles ’ building was not rendered unusable or uninhabitable. And Covid

- 19, a p rimarily airborne illness , did no physical damage to MacMiles ’ covered property. In

- person dining was prohibited to prevent infected diners from spreading the virus to other s , not because any condition immanent in the Grant Street Tavern rendered the buil ding unusable by diners

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Ultimately, our analysis, aided by persuasive authority from numerous other federal and state jurisdictions , leads us to conclude the trial court erred in finding that MacMiles established a valid claim for coverage under the bus iness income provisions of the Policy. We will therefore reverse the trial court’s order granting summary judgment insofar as it granted summary judgment in favor of MacMiles on this issue. Because the pertinent facts are undisputed and the question befo re us is purely one of law, w e direct the trial court to enter an order granting judgment on the pleadings in favor of Erie on this issue. Next, we consider whether a material issue of fact exists under the civil authority provision of the Policy. Civil Authority coverage is listed under the “Additional Coverages” section of the Policy. It reads in pertinent part as follows:
1. Civil Authority When a peril insured against causes damage to property other than property at the premises described in the “Declarations”, we will pay for the actual loss of “income” and /or “rental income” y ou sustain and necessary “extra expense” caused by action of civil authority that prohibits access to the premises described in the “Declarations” provided that both of th e following apply:

a. Access to the area immediately surrounding the damaged property is prohibited by civil authority as a result of the damage, and the premises described in the “Declarations” are within that area but are not more than one mile from the damaged property; and b. The action of civil authority is taken in response to dangerous physical conditions resulting f rom the damageJ

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- or continuation of the peril insured against that caused the damage, or the action is taken to enable a civil authority to have unimpeded access to the damaged property. Policy, Commercial Property Coverage Part, Section I, Income Protecti on – Coverage 3, ¶ C1

. The trial court concluded that , under the civil authority provision , mere loss of use of a nearby property is not covered

. Given that the Civil Authority provision expressly requires damage to a property other than the insured
pro perty, a showing of physical damage is required. The trial court found that a question of fact existed as to whether the Covid

- 19 virus was physically present at a nearby pr operty and that its presence constituted covered physical damage. MacMiles also w ould have to show that the applicable governor’s orders were taken in response to dangerous physical conditions resulting from damage to a nearby property. Trial Court Opinion, 5/25/21, at 18

- 19. The trial court therefore denied the compet ing motions on this issue. Upon review, we conclude that the trial court erred in finding a triable issue of fact. As discussed above, where the alleged property damage is invisible (as is the possible presence of Covid

- 19 on surfaces ), it does not qualify as physical damage for purpose s of a commercial property insurance policy. The Delaware Valley Court allowed for a possible exception to th is rule where the invisible damage renders a building unusable or uninhabitable, but MacMiles has not alleged that any business within a mile of its premises was rendered unusable or uninhabitable by the presence of Covid

- 19. Thus,J

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the threshold damage requirement is not met, and MacMiles cannot recover under the civil authority provision of the Polic y. The trial court erred in denying Erie’s motion for judgment on the pleadings on this issue. In its second question presented Erie challenges the trial court’s finding that the Policy’s governmental authority exclusion was inapplicable. Because we ha ve concluded that MacMiles has failed to establish the existence of coverage, we need not assess the applicability of any exclusion. For the foregoing reasons, we conclude the trial court erred in granting partial summary judgment in favor of MacMiles an d in denying Erie’s motion for judgment on the pleadings

. On the undisputed facts before us, Erie is entitled to judgment on the pleadings in its favor on the coverage issues. Order reversed. Jurisdiction relinquished. President Judge Emeritus Bender , Judge Bowes, Judge McLaughlin, and Judge King join the opinion. Judge Lazarus, Judge Kunselman, and Judge Nichols concur in the result. President Judge Panella files a concurring statement in which Judge Lazarus, Judge Kunselman, and Judge Nichols join.J

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Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 11/30/2022