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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

McDONALD’S CORPORATION, 

McDONALD’S USA, LLC, LEXI 

MANAGEMENT, LLC, and DAK4 LLC, 

Plaintiffs, 

v.

AUSTIN MUTUAL INSURANCE 

COMPANY,

Defendant. 

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20 C 5057

 Judge Charles P. Kocoras

ORDER 

Before the Court is Defendant Austin Mutual Insurance Company’s (“Austin 

Mutual”) Motion to Dismiss Plaintiffs’ Complaint under Federal Rule of Civil 

Procedure 12(b)(6). For the following reasons, the Court denies Austin Mutual’s 

Motion. 

STATEMENT 

In this insurance coverage dispute, Plaintiffs McDonald’s Corporation, 

McDonald’s USA LLC, and McDonald’s franchise owners Lexi Management LLC and 

DAK4, LLC (collectively, “Plaintiffs”) argue that Austin Mutual has a duty to defend 

Plaintiffs under identical commercial general liability insurance (“CGL”) policies (the 

“Policies”). 

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Plaintiffs argue that Austin Mutual has failed to defend Plaintiffs in the Circuit 

Court of Cook County case Taynarvis Massey, et al. v. McDonald’s Corporation, et al., 

Case No. 2020 CH 04247 (the “Massey suit”). The Massey suit alleges that Plaintiffs 

are liable for public nuisance and negligence in their decision to remain open during the 

COVID-19 pandemic without enhanced health and safety standards. The Massey

plaintiffs specifically seek a mandatory injunction requiring Plaintiffs to, among other 

things: (1) provide their employees with adequate personal protective equipment; (2) 

preclude the reuse of face masks; (3) supply hand sanitizer; (4) require that customers 

wear face masks; (5) monitor employee COVID-19 infections; and (6) provide 

Plaintiffs’ employees with accurate information about COVID-19.

The Policies defining Austin Mutual’s duty provide that Austin Mutual: 

will pay those sums that the insured becomes legally obligated to pay as 

damages because of “bodily injury” ... to which this insurance applies. 

[Austin Mutual] will have the right and duty to defend the insured against 

any “suit” seeking those damages. However, [Austin Mutual] will have 

no duty to defend the insured against any “suit” seeking damages for 

“bodily injury” ... to which this insurance does not apply. 

Dkt. #1-1 at 54; Dkt. #1-2 at 72. (emphasis added). The Policies further provide that 

the “bodily injury” must be caused by an “occurrence” that takes place in the “coverage 

territory.” Id. The Policies define “bodily injury” as “bodily injury, sickness, disease or

mental anguish sustained by a person, including death resulting from any of these at 

any time.” Dkt. #1-1 at 80; Dkt #1-2 at 98. The Policies also define the term 

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“occurrence” as “an accident, including continuous or repeated exposure to 

substantially the same general harmful conditions.” Dkt. #1-1 at 17.

Against this backdrop, Austin Mutual moves to dismiss under Federal Rule of 

Civil Procedure 12(b)(6) because the Massey suit does not seek (1) “damages” (2) 

“because of”; (3) “bodily injury.” Austin Mutual argues that the nature of Plaintiffs’ 

expenditure is not to remedy bodily injury to third-persons. Plaintiffs respond that “but 

for” the Massey plaintiffs contracting COVID-19—an indisputable bodily injury—they 

would not have to expend money as “damages” to comply with the mandatory 

injunction in the Massey lawsuit. They also argue that exposure to the SARS-CoV-2 

virus (the “Virus”) constitutes “bodily injury” and that money spent to comply with the 

mandatory injunction would constitute “damages” “because of” the exposure to the 

Virus. 

In evaluating this dispute, the Court accepts as true all well pled facts in the 

Complaint and draws all reasonable inferences in favor of the Plaintiffs. AnchorBank, 

FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). To prevail on this motion, Plaintiffs’ 

Complaint must state a “short and plain statement of the claim showing that [they are]

entitled to relief.” Fed. R. Civ. P. 8(a)(2).

Here, the “parties agree that the substantive law of Illinois governs. Under 

Illinois law, an insurer's duty to defend is broader than its duty to indemnify. To 

determine whether an insurer has a duty to defend, a court compares the underlying 

complaint's allegations (liberally construed in the insured's favor) to the policy's 

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language. If the underlying complaint alleges facts within or potentially within policy 

coverage, an insurer is obligated to defend its insured even if the allegations are 

groundless, false or fraudulent. An insurer can only refuse to defend if the allegations 

of the underlying complaint preclude any possibility of coverage. Any doubts about the 

duty to defend are resolved in favor of the insured.” Federated Mut. Ins. Co. v. Coyle 

Mech. Supply Inc., 983 F.3d 307, 314 (7th Cir. 2020) (cleaned up and emphasis added).

This case raises an admittedly novel question of whether costs incurred to 

comply with a mandatory injunction due to COVID-19 and the Virus constitute 

“damages” “because of” “bodily injury.” Kenneth S. Abraham, a Professor at the 

University of Virginia School of Law and a leading national insurance scholar, observes

that the phrase “because of bodily injury” is usually subject to “only one reasonable 

interpretation.” Kenneth S. Abraham, Plain Meaning, Extrinsic Evidence, and 

Ambiguity: Myth and Reality in Insurance Policy Interpretation, 25 Conn. Ins. L.J. 329, 

349-50 (2019). “However, when a claim for coverage of an unconventional form of 

liability arises - for example, when the party seeking to recover damages from the 

policyholder that are the consequence of bodily injury is not the same party who 

suffered bodily injury - then the courts must become more explicit what these words 

mean.” Id. at 350. 

In line with Professor Abraham’s suggestion that we be as explicit as possible 

about each part of the phrase, the Court will now addressthe terms “damages,” “because 

of,” and “bodily injury” in turn. While this case is a very close call in the ivory tower 

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of academia, it is much less close as a purely legal matter because Plaintiffs’ at this 

stage only need to allege facts “potentially” within the Policies’ coverage. See

Federated Mut. Ins. Co., 983 F.3d at 314. Under this approach, Austin Mutual can only 

win if the underlying Complaint precludes “any possibility” of coverage. Id. Part of 

the reasoning for this standard is that “the question of coverage should not hinge on the 

draftsmanship skills or whims of the plaintiff in the underlying action.” Int'l Ins. Co. v. 

Rollprint Packaging Prod., Inc., 312 Ill. App. 3d 998, 1007 (2000). Another reason is 

that the “state has an interest in having an insured adequately represented in the 

underlying litigation.” Cincinnati Companies v. W. Am. Ins. Co., 183 Ill. 2d 317, 329 

(1998). In line with these principles and for the following reasons, the Court concludes 

that the Complaint potentially gives rise to coverage, which requires Austin Mutual to 

defend Plaintiffs. 

1. “Damages”

In assessing whether the phrase “because of bodily injury” applies here, the Court 

finds Judge Hart’s thorough opinion in Ace Am. Ins. Co. v. RC2 Corp. persuasive. There

too, was a duty-to-defend case about the phrase “damages” “because of” “bodily 

injury.” 568 F. Supp. 2d 946, 949 (N.D. Ill. 2008) (emphasis added), rev’d and 

remanded on other grounds, 600 F.3d 763 (7th Cir. 2010).1 Instead of exposure to the

Virus, the dispute there dealt with lead exposure. 

 1 Although the Seventh Circuit ultimately reversed Judge Hart’s decision, it did so because the occurrence 

did not take place within the coverage territory of the policy. See Medmarc Cas. Ins. Co. v. Avent Am., 

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In RC2, Judge Hart concluded that the term “damages” in Illinois does not just 

mean money but can also include the cost to comply with a mandatory injunction. Id.

According to Judge Hart, the term is given a “broad, nontechnical meaning that is not 

limited to compensatory damages and can include equitable relief.” Id. at 955. Judge 

Hart’s analysis was spot-on because not one, but two, Illinois Supreme Court decisions 

confirm that the cost to comply with a mandatory injunction is a “damage” for the 

purpose of an insurance policy like this one. See Cent. Ill. Light Co. v. Home Ins. Co., 

213 Ill. 2d 141, 160 (2004); Outboard Marine Corp. v. Liberty Mut. Ins. Co., 154 Ill. 

2d 90, 116 (1992). Applying these cases, Judge Hart concluded that where the 

underlying lawsuit sought medical monitoring costs related to lead exposure, those 

costs were “damages” because the Defendant was required to expend “funds to 

remediate bodily injury in the form of exposure to lead.” RC2, 568 F. Supp. 2d at 956

(emphasis added). 

Applying Judge Hart’s reasoning here, the mandatory injunction sought by the 

Massey plaintiffs is also a “damage” because it would require Plaintiffs to expend 

money to remediate the continuous and ongoing exposure to the Virus.

2. “Because of” 

Having concluded that the Massey lawsuit involves “damages,” we turn to 

whether the damages are “because of” “bodily injury.” Like the word “damages,”

 

Inc., 612 F.3d 607, 616 n.3 (7th Cir. 2010) (citing Ace American Ins. Co. v. RC2 Corp., Inc., et al., 600 

F.3d 763 (7th Cir.2010)).

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Illinois law in this context also accords the phrase “because of” a broad, non-technical 

meaning. See Travelers Ins. Companies v. Penda Corp., 974 F.2d 823, 830-831 (7th 

Cir. 1992). The Policies do not say “proximately because of”—they merely say 

“because of,” so simple “but for” causation is enough. See Auto-Owners Ins. Co. v. Se. 

Car Wash Sys., 184 F. Supp. 3d 625, 631 n.5 (E.D. Tenn. 2016). As applied here, 

Plaintiffs have adequately alleged “but for” causation because “but for” the Massey

plaintiffs’ actual contraction of COVID-19, the Plaintiffs would not have to incur 

“damages” to comply with a mandatory injunction. 

Austin Mutual responds that policies like this one are meant to cover damages 

paid to a third-party—not damages to the insured. But here this argument is “untethered 

to any language in the policy” and is foreclosed by Seventh Circuit precedent. See

Cincinnati Ins. Co. v. H.D. Smith, L.L.C., 829 F.3d 771, 774 (7th Cir. 2016). In 

Cincinnati Ins. Co., the Seventh Circuit held that the state of West Virginia’s costs to 

address the opioid epidemic were “because of” bodily injury even though the state of 

West Virginia itself suffered no bodily injury. 829 F.3d 771, 774-45 (7th Cir. 2017). 

To support this conclusion, the Seventh Circuit reasoned that “suits seeking damages 

‘because of bodily injury’ . . . provide[] broader coverage than one that covers only 

damages ‘for bodily injury.’” Id. at 774 (emphasis in original). The Seventh Circuit

also distinguished other cases where there was “no claim of bodily injury in any form.” 

Id. at 775 (citing Medmarc Cas. Ins. Co., 612 F.3d at 616). Notably, there are at least 

two forms of claimed bodily injury here, in that the Massey plaintiffs contracted

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COVID-19, and third-persons like McDonald’s customers are continuously exposed to 

the Virus. 

In sum, Plaintiffs have met their burden of alleging that they might be on the 

hook for “damages” “because of” or “but for” Plaintiffs’ employees contracting 

COVID-19. That is a plausible interpretation of the Policies and creates the potential 

for coverage.

3. “Bodily Injury” 

In analyzing “bodily injury” the Court observes that three of the Massey

plaintiffs—Taynarvis Massey, Sujey Figueroa, and Truvon Turner—contracted 

COVID-19 or fell ill and experienced symptoms consistent with COVID-19. No one 

disputes—or even could dispute—that this is a “bodily injury.” And as the phrase 

“because of” is accorded such a broad meaning, the Court’s analysis could end here.

See Cincinnati Ins. Co. v. E. Atl. Ins. Co., 260 F.3d 742, 745 (7th Cir. 2001) (observing 

that plaintiffs must only make a coverage argument “at least arguably within one or 

more of the categories of wrongdoing that the policy covers.”) (emphasis added). 

Indeed, “but for” the Massey plaintiffs’ demonstrable sickness, Plaintiffs would not 

have to expend “damages” to comply with the mandatory injunction.

The more vexing and intellectually abstract question is what the mandatory 

injunction would do to help or remediate the injuries to Taynarvis Massey, Sujey 

Figueroa, Truvon Turner, and other McDonald’s workers and employees. After all, 

don’t those people already have COVID-19? This argument has some support in 

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Illinois in that “damages” generally must have a remedial purpose. See Cent. Ill. Light 

Co., 213 Ill. 2d at 160. 

This part is where Plaintiffs’ case may be weakest, but Plaintiffs have at least 

alleged that the Policies potentially cover exposure to the Virus in addition to the 

contraction of COVID-19. According to the Seventh Circuit, this exposure-contraction 

distinction is “exactly the distinction” that district courts should focus on—just as Judge 

Hart did in RC2. Medmarc Cas. Ins. Co., 612 F.3d at 616. This is because under Illinois 

law, “exposure to potentially harmful contaminants [can] constitute[] bodily injury even 

without manifestations of sickness or disease.” RC2, 568 F. Supp. 2d at 955 (citing

Zurich Ins. Co. v. Raymark Indus., Inc., 118 Ill.2d 23 (1987)); see also Baughman v. 

United States Liab. Ins. Co., 662 F. Supp. 2d 386, 395-96 (D.N.J. 2009). 

Applied here, if the Massey plaintiffs prevail and win entry of a mandatory 

injunction in state court, Plaintiffs would have to spend money to prevent the Virus

from entering the restaurants, and to eliminate or mitigate its presence in the restaurants. 

Those strategies would decrease the risk of bodily injury from exposure to the Virus

and from the possibility of reinfection. For example, the increased deployment of hand 

sanitizer quite literally kills the Virus. Increased training on handwashing likewise 

would result in the Virus being incrementally removed from the premises. And other 

measures, like supplying face masks, prevent the spread of and exposure to the Virus.

One additional point: The Court is also convinced by Plaintiffs’ argument that 

Austin Mutual could have explicitly included a virus exclusion had it intended to not 

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provide coverage for “bodily injury” caused by a virus. See Dkt. #28 at 10-12. After 

all, other insurance companies have done so. Id. But, absent such an exclusion, Austin 

Mutual has not established that an otherwise broad CGL policy like this one does not 

foreseeably cover the business liability at issue here.

Putting it all together, if the Massey plaintiffs prevail and win the entry of a 

mandatory injunction, that will only be “because of” the Massey plaintiffs’ contraction 

of COVID-19—an indisputable bodily injury. Alternatively, another potential avenue 

for coverage is that exposure to the Virus is itself a “bodily injury” that Plaintiffs would 

be forced to expend “damages” to remedy. Either argument may not wow everyone

with its brilliance, and Austin Mutual might even have the better interpretation. But

this is not a dispute about the better interpretation: it is a dispute about a potential and 

legally defensible interpretation. Given the discussion above, no one can credibly 

dispute that Plaintiffs’ Complaint raises a potential argument for coverage. The Court 

therefore denies Austin Mutual’s Motion accordingly.2

CONCLUSION

For the foregoing reasons, the Court denies Austin Mutual’s Motion to Dismiss. 

Telephonic Status is set for 3/2/2021 at 10:00a.m. It is so ordered.

Dated: 2/22/21

 2 In response to the Court’s request for supplemental briefing, Austin Mutual makes brand-new arguments 

about the Policies’ Worker’s Compensation Exclusion and Employer’s Liability Exclusion. But Austin 

Mutual waived these arguments by not making them in its original, limited Motion to Dismiss. See Pursley 

v. City of Rockford, 2019 WL 4918139, at *5 (N.D. Ill. 2019). 

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_________________________

Charles P. Kocoras

United States District Judge

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