RECOMMENDED FOR PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 22a0209p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

WILD EGGS HOLDINGS, INC.; WILD EGGS OPERATIONS, 

LLC; WILD EGGS FRANCHISING, LLC,

Plaintiffs-Appellants,

v.

STATE AUTO PROPERTY AND CASUALTY INSURANCE 

COMPANY,

Defendant-Appellee.

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No. 21-5962

Appeal from the United States District Court for the Western District of Kentucky at Louisville.

No. 3:20-cv-00501—Rebecca Grady Jennings, District Judge.

Argued: June 9, 2022

Decided and Filed: September 9, 2022

Before: BOGGS, MOORE, and GRIFFIN, Circuit Judges.

_________________

COUNSEL

ARGUED: Edmund S. Sauer, BRADLEY ARANT BOULT CUMMINGS LLP, Nashville, 

Tennessee, for Appellants. Adam H. Fleischer, BATESCAREY LLP, Chicago, Illinois, for 

Appellee. ON BRIEF: Edmund S. Sauer, BRADLEY ARANT BOULT CUMMINGS LLP, 

Nashville, Tennessee, for Appellants. Adam H. Fleischer, Michael H. Passman, BATESCAREY 

LLP, Chicago, Illinois, for Appellee. Christopher E. Kozak, PLEWS SHADLEY RACHER & 

BRAUN, LLP, Indianapolis, Indiana, Edward M. O’Brien, Andrew-John Bokeno, WILSON 

ELSER MOSKOWITZ EDELMAN & DICKER, LLP, Louisville, Kentucky, for Amici Curiae.

GRIFFIN, J., delivered the opinion of the court in which BOGGS, J., joined. MOORE, J. 

(pp. 12–15), delivered a separate dissenting opinion.

>
No. 21-5962 Wild Eggs Holdings, Inc., et al. v.

State Auto Prop. & Cas. Ins. Co.

Page 2

_________________

OPINION

_________________

GRIFFIN, Circuit Judge.

At the beginning of the COVID-19 pandemic, Indiana, Ohio, and Kentucky suspended 

in-person, “non-essential” business through respective “Stay at Home” orders. So plaintiff Wild 

Eggs1 halted dine-in operations at its restaurants in those states and then sought insurance 

coverage for lost revenue from defendant State Auto Property and Casualty Insurance Company. 

Wild Eggs claims in this lawsuit that State Auto breached the parties’ insurance contract when it 

denied coverage. The district court granted State Auto’s motion to dismiss, concluding that Wild 

Eggs had failed to state a claim upon which relief could be granted. We affirm. 

I.

Wild Eggs owns and operates a chain of breakfast and lunch restaurants. When the 

COVID-19 pandemic began in March 2020, the states in which Wild Eggs does business 

imposed Stay at Home orders for all “non-essential” businesses. Kentucky prohibited “[a]ll inperson retail businesses that are not life-sustaining.” The same was true in Indiana and Ohio. 

The orders dramatically affected Wild Eggs’s operations—it was forced to suspend in-person 

dining and to restrict restaurant use to curbside pickup and delivery.

State Auto has insured Wild Eggs since 2016. Wild Eggs notified State Auto of its claim 

for business losses under two provisions of note. First, it claimed coverage under the Restaurant 

Extension Endorsement (the “Endorsement”), which provides for 30 days of lost business 

income for the suspension of restaurant operations due to the order of a civil authority that 

resulted from an actual or alleged exposure of a restaurant to a disease. Second, it claimed 

coverage for all lost business income resulting from “direct physical loss of or damage to 

property” under the “Business Income Coverage” provision. State Auto denied coverage, and 

Wild Eggs subsequently filed this breach-of-contract suit.

1Although separate entities, we refer to plaintiffs as Wild Eggs singularly for ease. 
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Contending that neither the Business Income Coverage provision nor the Endorsement 

provided coverage, State Auto filed a motion to dismiss. The district court granted the motion, 

agreeing with State Auto that (1) the Endorsement did not apply because the closures of Wild 

Eggs’s restaurants did not result from an exposure to COVID-19 at the restaurants themselves; 

and (2) the Business Income Coverage provision did not apply because Wild Eggs did not suffer 

tangible damage to its property.

Wild Eggs now appeals.

II.

We review de novo a district court’s decision on a motion to dismiss. Brown Jug, Inc. v. 

Cincinnati Ins. Co., 27 F.4th 398, 402 (6th Cir. 2022). The complaint is construed in the light 

most favorable to the plaintiffs, but it must contain “enough facts to state a claim to relief that is 

plausible on its face.” Phillips v. DeWine, 841 F.3d 405, 413–14 (6th Cir. 2016) (quoting Bell 

Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

Kentucky law governs this case.2 A court sitting in diversity must apply “the law of the 

state’s highest court.” Brown Jug, 27 F.4th at 402 (citation omitted). “In Kentucky, the proper 

meaning of a disputed contract term presents a legal question for the court.” Estes v. Cincinnati 

Ins. Co., 23 F.4th 695, 699 (6th Cir. 2022) (citing Foreman v. Auto Club Prop.-Cas. Ins. Co., 

617 S.W.3d 345, 349 (Ky. 2021)). Kentucky courts “apply certain rules of construction to 

insurance contracts, including a rule that when the terms of an insurance contract are 

unambiguous and not unreasonable, they will be enforced as written.” Foreman, 617 S.W.3d at 

349. Unambiguous terms are interpreted “in the light of usage and understanding of the average 

person,” while ambiguous terms are “strictly construed against the insurer so as not to defeat the 

policyholder’s reasonable expectation of coverage.” Id. at 349–50 (citation omitted). But the 

rule of strict construction “does not mean that every doubt must be resolved against the insurer 

and does not interfere with the rule that the policy must receive a reasonable interpretation 

2The policy here was issued in Kentucky through a Kentucky broker, and it covers more locations in 

Kentucky than in either Ohio or Indiana. Thus, Kentucky has the “most significant relationship” to the policy. See 

Schnuerle v. Insight Commc’ns Co., 376 S.W.3d 561, 566–67 (Ky. 2012).
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consistent with the plain meaning in the contract.” Id. at 350 (citation omitted). Rather, we 

“consider what could be reasonably expected by the insured from the plain contract language, as 

it is controlling.” Id.

III.

Wild Eggs first argues that it stated a claim for breach of contract under the Endorsement. 

The Endorsement states, in pertinent part:

1. The Causes of Loss applicable to the Business Income Form attached to this 

policy shall also include the following:

a. The “suspension” of your “operations” at the described 

premises due to the order of a civil authority; or adverse public 

communications or media reports, resulting from the actual or 

alleged:

* * *

(2) Exposure of the described premises to a contagious 

or infectious disease.

In the policy, the “described premises” are Wild Eggs’s restaurants. “Suspension” is defined as 

“[t]he slowdown or cessation of your business activities.” “Operations” means Wild Eggs’s 

“business activities occurring at the described premises.” Read together, the Endorsement 

requires a suspension of restaurant operations due to an order of civil authority that results from 

an alleged exposure of the restaurant to a disease.

Because it is undisputed that Wild Eggs’s restaurants were shut due to orders of civil 

authorities, the issue in question is whether Wild Eggs can satisfy the Endorsement’s required 

causal connections, that the suspension “due” to civil authority must “result[] from” an “alleged 

exposure” to a disease. Wild Eggs focuses on the phrase “alleged exposure.” It argues that, 

because the policy explicitly describes that the exposure can be merely “alleged,” it need not 

show an “actual” exposure. Wild Eggs therefore notes that the mere possibility or allegation that 

COVID-19 was at the restaurant in March 2020 satisfies the policy’s language. But regardless of 

whether Wild Eggs has sufficiently pleaded an “alleged exposure,” Wild Eggs interpretation still 

falls short by failing to give full effect to the “resulting from” language.
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The suspension first must be “due to” the order of civil authority. Because the policy 

does not define this term, we turn to dictionary definitions to define it (and others, below). See, 

e.g., Aetna Cas. & Sur. Co. v. Commonwealth, 179 S.W.3d 830, 838 (Ky. 2005).3 “Due,” as an 

adjective, is defined as “[t]hat is owed, appropriate, allotted, or attributable to someone or 

something,”4 or “capable of being attributed: ASCRIBABLE.”5 This means that the suspension 

must be owed, ascribed, or attributed to the order. In other words, the only suspensions that may 

be covered are those caused by orders of civil authority.

Next, the subsequent “resulting from” phrase then creates a causal relationship between 

the civil-authority-induced suspension and the alleged exposure. “Result,” as an intransitive 

verb, is defined as “[t]o arise as a consequence, effect, or outcome of some action, process, or 

design; to occur as a result to; to end or conclude in a specified manner,”6 or “to proceed or arise 

as a consequence, effect, or conclusion . . . death resulted from the disease.”7 Thus, the 

suspension must arise as a consequence, effect, outcome, or conclusion from the alleged 

exposure. The context and syntax of the sentence—where “alleged exposure” follows the 

“suspension” and “order”—demonstrates that the “alleged exposure” must cause not only the 

suspension, but also the order producing the suspension. That is, the suspension must be “due 

to,” or attributed to, the order, which must “result[] from,” or be caused by, the exposure. The 

policy contemplates a singular line of causation—the exposure causes the order, which in turn 

causes the suspension. Any other interpretation, such as that advanced by Wild Eggs, would 

incorrectly decouple the causal relationship between the order and the alleged exposure.

3Consulting several dictionaries contemporaneous to or published shortly after the policy language applies 

is a best practice. See A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 417–19 

(Thompson/West 2012). The policy here was entered into in April 2019. For that reason, we use current online 

dictionaries.

4Due, Oxford English Dictionary Online, https://www.oed.com/view/Entry/58238?rskey=XvFtdb&result

=2&isAdvanced=false#eid (last accessed August 3, 2022).

5Due, Merriam-Webster Dictionary Online, https://www.merriam-webster.com/dictionary/due (last 

accessed August 3, 2022).

6Result, Oxford English Dictionary Online, https://www.oed.com/view/Entry/

164062?rskey=tGTcrE&result=2&isAdvanced=false#eid (last visited August 3, 2022).

7Result, Merriam-Webster Dictionary Online, https://www merriam-webster.com/dictionary/resulting (last 

accessed August 3, 2022).
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Because the “alleged exposure” must cause the “suspension . . . due to the order of a civil 

authority,” the alleged COVID-19 exposure must cause both the order and the resulting 

suspension. But here, the proper order is reversed: the States responded to a large-scale threat of 

disease by mandating that restaurants (and other non-essential businesses) close to prevent

exposure. The Stay at Home orders were prophylactic measures intended to curb generally the 

spread of COVID-19 statewide, not to respond to an exposure of Wild Eggs’s restaurants. The 

Kentucky order, for example, cited the national public-health emergency, the general severity of 

the COVID-19 disease, and the need to prepare for a public-health emergency in the state. There 

is no mention of an exposure at Wild Eggs’s restaurants. The same concerns prompted the 

Indiana and Ohio orders. For that reason, no causal relationship exists. Here, the suspension of 

Wild Eggs’s operations was not due to an order that itself arose as an outcome or effect of an 

alleged exposure of a restaurant.

This conclusion does not change even though Wild Eggs alleged actual exposures of 

certain restaurants in the form of positive COVID-19 tests for some employees. In its amended 

complaint, Wild Eggs noted several closures in August 2020 due to employees’ positive COVID19 tests, even after the restaurants opened for limited dine-in operations. But those positive tests 

did not create the Stay at Home orders that caused Wild Eggs to close; and how could they have? 

Wild Eggs alleges that those positive tests occurred after the original Stay at Home orders were 

lifted or modified to provide limited in-person dining. Positive tests in August 2020 could not 

have been the cause of the Stay at Home orders issued in March 2020. At most, those positive 

tests were the effect that the orders were intended to prevent. And those exposure-induced 

closures could not have given rise to coverage under this policy because they occurred after the 

policy expired in April 2020. See 14 Steven Plitt et al., Couch on Insurance § 201:4 (3d ed. Dec. 

2021 update) (“[W]here the claims made against an insured fall outside the policy’s period, the 

insurer should not be called to foot the bill for ex-policyholders in their attempt to extend 

coverage.”).

Kentucky courts would reach this same conclusion. They would rely on close readings of 

dictionary definitions, and those definitions here support State Auto’s interpretation that the 

suspension did not arise from an alleged exposure. See, e.g., Aetna Cas. & Sur. Co., 179 S.W.3d 
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at 838. Additionally, in certain circumstances, Kentucky courts have also looked to the treatise 

Couch on Insurance. See, e.g., Wehr Constructors, Inc. v. Assurance Co. of Am., 384 S.W.3d 

680, 683 (Ky. 2012). Couch notes that “resulting from” language in an insurance policy 

generally means “flowing from” or “having its origin in” something. 7 Couch on Insurance 

§ 101:52. Though this phrase “does not require a direct proximate causal connection,” it does 

necessitate “some causal relation or connection.” Id. Application of this treatise provision here 

supports our conclusion that the policy requires a causal connection between the suspension, 

order, and exposure, and that no such connection exists. The civil authority orders and 

suspension did not “hav[e] [their] origin in” an exposure at Wild Eggs’s restaurants but in a 

general statewide concern for the spread of COVID-19.

Our conclusion does not stand alone. In Terry Black’s Barbecue, L.L.C. v. State 

Automobile Mutual Insurance Co., the Fifth Circuit, interpreting identical language, held that the 

civil-authority orders did not result from a restaurant’s exposure to COVID-19 and, thus, there 

was no coverage. 22 F.4th 450, 458 (5th Cir. 2022). “Resulting from” requires causation, and, 

in Terry Black’s Barbecue, the insured “failed to allege even a remote causal relationship 

between the civil authority orders and its restaurants’ alleged or actual exposure to COVID-19.” 

Id. This was true from a “common sense” perspective of the pandemic: “The civil authority 

orders ‘resulted from’ the global pandemic and the need to take measures to contain and prevent 

the spread of COVID-19. The language in the orders indicates that they were enacted to avoid

exposure to COVID-19, not because of exposure to COVID-19.” Id. at 458–59. The same is 

true here, and Kentucky courts would find this on-point analysis persuasive. See, e.g., Wehr, 384 

S.W.3d at 683–87 (considering out-of-state caselaw).

Wild Eggs argues it should still prevail because the policy is ambiguous and, thus, should 

be construed against State Auto in Wild Eggs’s favor. But for the reasons discussed above, the 

policy language is not ambiguous, and Wild Eggs’s interpretation is unmoored from the plain 

language of the policy. This too renders inapplicable the doctrine of contra proferentem, i.e., 

that an agreement is construed against the drafter. See Bituminous Cas. Corp. v. Kenway 

Contracting, Inc., 240 S.W.3d 633, 638 (Ky. 2007) (“[A]n ambiguous policy is to be construed 

against the drafter, and so as to effectuate the policy of indemnity.” (emphasis added)). Because 
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Page 8

there is no ambiguity, we cannot construe the material phrase against State Auto (the drafter), 

and instead must look only to its plain and ordinary meaning. See Foreman, 617 S.W.3d at 350.

Finally, Wild Eggs argues (and the dissent accepts) that the reasonable-expectations 

doctrine triggers coverage. In Kentucky, “courts are nevertheless bound to look at an insured’s 

reasonable expectations in deciding whether the insurance contract is ambiguous and what the 

contract means.” Ky. Emps.’ Mut. Ins. v. Ellington, 459 S.W.3d 876, 883 (Ky. 2015). Wild 

Eggs argues that this description from Ellington requires us to consider reasonable expectations 

before a finding of ambiguity, but Ellington did not hold as such. Rather, it reaffirmed the 

longstanding Kentucky rule that “the ‘reasonable expectations doctrine’ resolves an insurance 

policy ambiguity in favor of the insured’s reasonable expectations.” Id. (emphasis added) 

(quoting Aetna Cas. & Sur. Co., 179 S.W.3d at 837). See also True v. Raines, 99 S.W.3d 439, 

443 (Ky. 2003) (noting that the reasonable expectations doctrine “applies only to policies with 

ambiguous terms”). Ellington also clarified that, while unequivocal language may exclude 

coverage, the opposite finding, i.e., an ambiguity in a policy, is not enough by itself to provide 

coverage—rather, the doctrine considers the underlying facts and “looks to the reasonableness of 

what an insured may believe about coverage.” Ellington, 459 S.W.3d at 883. Applying this test, 

Ellington noted that an ambiguity existed in the policy at issue but that the insured still could not 

have reasonably expected coverage given the surrounding facts. Id. at 883–84. Ellington 

demonstrates that here, contrary to Wild Eggs’s and the dissent’s arguments, the reasonableexpectations doctrine does not provide coverage. No ambiguity exists, meaning that it would not 

be reasonable for Wild Eggs to expect coverage under the policy here.8 The suspension was not 

due to an order that resulted from an alleged exposure.

For these reasons, no coverage exists under the Endorsement. It does not provide 

coverage for general preventative measures that impacted Wild Eggs’s operations, but for orders 

that responded to alleged exposures of Wild Eggs’s restaurants. No exposure caused the orders, 

8While we recognize that the reasonable expectations doctrine requires an “unequivocally conspicuous,

plain and clear manifestation of the company’s intent to exclude coverage” to defeat a reasonable expectation, see 

Ellington, 459 S.W.3d at 883, we emphasize that this case involves a coverage provision, not one excluding 

coverage. We conclude that such an unequivocal intent exists here given the lack of ambiguity in the Endorsement.
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meaning that the Endorsement does not apply. Therefore, Wild Eggs is not entitled to coverage, 

and its complaint stating otherwise failed to state a claim upon which relief could be granted.

IV.

Wild Eggs argues that, even if it does not prevail on its Endorsement contention, it could 

still recover under the Business Income Coverage provision. That provision states:

We will pay for the actual loss of Business Income you sustain due to the 

necessary “suspension” of your “operations” during the “period of restoration.” 

The suspension must be caused by direct physical loss of or damage to property at 

premises which are described in the Declarations and for which a Business 

Income Limit Of Insurance is shown in the Declarations. The loss or damage must 

be caused by or result from a Covered Cause of Loss.

The definitions of suspension and operations are the same as for the Endorsement. The “period 

of restoration” is the time that begins “72 hours after the time of direct physical loss or damage 

for Business Income Coverage” or “[i]mmediately after the time of direct physical loss or 

damage for Extra Expense Coverage . . . caused by or resulting from any Covered Cause of Loss 

at the described premises.” That period ends when either the property should be “repaired, 

rebuilt or replaced with reasonable speed and similar quality” or when “business is resumed at a 

new permanent location.”

We have already addressed how Kentucky courts have interpreted the phrase “direct 

physical loss” in the context of COVID-19 Stay at Home orders, holding that business-income 

losses resulting from those orders did not constitute such a loss. Estes, 23 F.4th at 699–700. 

“The phrase ‘physical loss’ would convey to the ‘average person’ that a property owner has been 

tangibly deprived of the property or that the property has been tangibly destroyed.” Id. at 700 

(citation omitted). Thus, because “neither the pandemic nor the government shutdown orders 

caused a ‘direct’ ‘physical loss’” to the insured’s property, the policy did not provide coverage. 

Id. at 702.

Estes governs our interpretation of the phrase “direct physical loss” under Kentucky law. 

To the extent that this case turns on that phrase, the panel is bound by the prior decision. See 

Salmi v. Sec’y of Health and Hum. Servs., 774 F.2d 685, 689 (6th Cir. 1985). Thus, unless the 
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insurance policy here justifies a departure from Estes, we must follow that case. Cf. Wilkerson v. 

Am. Fam. Ins. Co., 997 F.3d 666, 669–70 (6th Cir. 2021) (noting that different policies may 

interpret terms in different ways). And nothing in the insurance policy justifies a different result 

than in Estes.

For one, the policy language between the two cases is materially identical. The Estes 

policy provided coverage for “direct loss,” defining “loss” as “accidental physical loss or 

accidental physical damage.” 23 F.4th at 698. Though ‘accidental’ is not present in the policy 

here, the language here is otherwise the same. And the context of the two policies confirms that 

the phrase carries the same meaning. Like the policy in Estes, the Business Income Coverage 

provision permits an insured to recover income for business suspensions only during the “period 

of restoration”—a defined period that ends when the property should have been “repaired, rebuilt 

or replaced with reasonable speed and similar quality[.]” The phrase “repaired, rebuilt, or 

replaced” contemplates some tangible or physical problem at the property that requires fixing. 

Without such a physical problem that required a tangible repair, there is no “period of 

restoration.” Cf. Estes, 23 F.4th at 700–01.

Wild Eggs’s other contentions similarly fail to identify anything that would justify a 

different result than in Estes. To get around Estes, Wild Eggs argues that it did not suffer only 

“direct physical loss” as in Estes, but also “direct physical . . . damage.” It states that 

microscopic damage occurred to its restaurants from COVID-19 exposure, thereby closing its 

restaurants. It is true that Estes focused on the “loss” aspect, but much of its analysis turned on 

the requirement that the harm be “physical,” which applied to both “loss” and “damage.” 

Cf. Estes, 23 F.4th at 701 (“Estes’s reading . . . fails to explain how its reading gives any effect to 

the word ‘physical’ in the phrase ‘physical loss.’”). But to the extent Estes’s holding does not 

apply to “damage,” we conclude that Wild Eggs could not have suffered “direct physical . . . 

damage.” “Damage” is defined as “loss or harm resulting from injury to person, property, or 

reputation.”9 Here, it too is modified by “physical,” contemplating some tangible loss, harm, or 

injury. And the policy requires that this physical, tangible damage be to “property.” After the 

9Damage, Merriam-Webster.com, https://www merriam-webster.com/dictionary/damage (last accessed 

August 3, 2022).
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beginning of the pandemic when Wild Eggs lost partial use of its property, Wild Eggs still had 

all its property without any of it being harmed—it simply could not use it as it wished. This is 

neither a physical loss of nor physical damage to property.

The Kentucky cases cited by Wild Eggs—State Farm Fire & Cas. Co. v. Aulick, 

781 S.W.2d 531 (Ky. Ct. App. 1989), and Ashland Hosp. Corp. v. Affiliated FM Ins. Co., No. 11-

16-DLB-EBA, 2013 WL 4400516 (E.D. Ky. Aug. 14, 2013)—do not warrant a different 

conclusion. Both involved tangible losses of property. Aulick addressed odor damage from an 

oil spill, but odor damage is still a tangible property loss. See Estes, 23 F.4th at 702 

(distinguishing Aulick for that reason). And Ashland addressed a data storage network’s loss of 

reliability due to heat exposure, another tangible harm. 2013 WL 4400516, at *4–5. Here, by 

contrast, COVID-19 did not alter or harm the restaurants in a perceptible way; instead, the Stay 

at Home orders caused Wild Eggs to lose in part its ability to use the property.

Wild Eggs concludes its arguments by again raising its ambiguity and reasonable 

expectations position. But, as with the Endorsement, the policy is not ambiguous. It requires 

tangible harm and damage to the property, but no such damage occurred here. Wild Eggs simply 

lost its preferred use of its properties and incurred no property damage. For this reason, the 

policy is not ambiguous, and, thus, reasonable expectations do not apply here either. 

Bituminous, 240 S.W.3d at 638; Ellington, 459 S.W.3d at 883.

In sum, no coverage exists under the Business Income Coverage provision. Wild Eggs 

never incurred “direct physical loss of or damage to [its] property.” Rather, it lost its use of its 

property from Stay at Home orders. Thus, as in Estes, the policy does not provide coverage.

V.

For these reasons, we affirm the judgment of the district court.
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_________________

DISSENT

_________________

KAREN NELSON MOORE, Circuit Judge, dissenting. In March 2020, in response to 

the COVID-19 pandemic, state and local governments across the country issued shutdown orders 

that required nonessential businesses to close. Wild Eggs was among the impacted businesses 

and, due to the public-health orders, it shuttered its restaurants during the early months of the 

pandemic.

Shortly after closing, Wild Eggs filed an insurance claim. Its insurer, State Auto, denied 

the claim. Although the majority holds that State Auto’s denial of the claim was proper, 

I respectfully disagree. Instead, I would hold that the insurance contract covers Wild Eggs’s 

losses.

When determining whether an insurance policy provides coverage, Kentucky law 

provides for a two-step analysis. “First, we determine what the policy says and whether it 

includes any ambiguity.” Ky. Emps. Mut. Ins. v. Ellington, 459 S.W.3d 876, 880 (Ky. 2015). 

“Second, if there is any ambiguity, we must resort to the standard tools of interpretation to 

determine what coverage the policy provides.” Id. Under Kentucky law, “a court will interpret 

the contract’s terms by assigning language its ordinary meaning.” Frear v. P.T.A. Indus., Inc., 

103 S.W.3d 99, 106 (Ky. 2003).

Because this is an insurance contract, the doctrine of reasonable expectations shapes our 

analysis. “[T]he gist of the doctrine is that the insured is entitled to all the coverage he may 

reasonably expect to be provided under the policy. Only an unequivocally conspicuous, plain

and clear manifestation of the company’s intent to exclude coverage will defeat that 

expectation.” Bidwell v. Shelter Mut. Ins. Co., 367 S.W.3d 585, 589 (Ky. 2012) (quoting Simon 

v. Cont’l Ins. Co., 724 S.W.2d 210, 213 (Ky. 1986)). “Where a person has paid a premium for a 

policy, the policy should not be read technically to avoid paying benefits.” Ellington, 459 

S.W.3d at 883. “This test looks to the reasonableness of what an insured may believe about 

coverage, and necessarily relies heavily on the facts.” Id.
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Significantly, the doctrine of reasonable expectations impacts both parts of the two-step 

analysis governing the interpretation of insurance contracts. First, the doctrine of reasonable 

expectations is “[a]n essential tool in deciding whether an insurance policy is ambiguous.” 

Bidwell, 367 S.W.3d at 589 (quoting Simon, 724 S.W.2d at 212). Second, if there is an 

ambiguity: the doctrine “resolves [that] ambiguity in favor of the insured’s reasonable 

expectations.” Aetna Cas. & Sur. Co. v. Commonwealth, 179 S.W.3d 830, 837 (Ky. 2005). This 

latter step is also sometimes called the doctrine of ambiguity: if policy language is ambiguous, 

the construction “most favorable to the insured must be adopted.” Woodson v. Manhattan Life 

Ins. Co. of N.Y., 743 S.W.2d 835, 838–39 (Ky. 1987) (quoting Wolford v. Wolford, 662 S.W.2d 

835, 838 (Ky. 1984)).

The key provision at issue here is the policy’s “Restaurant Extension Endorsement.” 

This provision covers losses due to “[t]he ‘suspension’ of your ‘operations’ at the described 

premises due to the order of a civil authority . . . resulting from the actual or alleged . . . 

[e]xposure of the described premises to a contagious or infectious disease. R. 28-1 (Insurance 

Policy at 104–05) (Page ID #1304–05). I agree with the majority that, for the provision to apply, 

a business must shut down “due to” a government order, which, in turn, must have “result[ed] 

from” exposure of the premises to an infectious disease.

“Exposure” has a range of meanings. Its meanings include “the state or fact of being 

subjected, to any external influence,”1and “the condition of being subject to some effect or 

influence.”2 All businesses, including Wild Eggs, were subjected to the external influence of 

COVID-19, a pandemic that raged throughout the country and was transmitted through the air. 

Wild Eggs was thus exposed to COVID-19, regardless of whether any specific individual 

contracted COVID-19 at the facility.

1Exposure, Oxford English Dictionary Online (3d ed. 2021), 

https://www.oed.com/view/Entry/66730?rskey=22IgQ8&result=1&isAdvanced=false#eid (last accessed August 10, 

2022).

2Exposure, Merriam-Webster Dictionary Online, https://www.merriam-webster.com/dictionary/exposure

(last accessed August 10, 2022).
No. 21-5962 Wild Eggs Holdings, Inc., et al. v.

State Auto Prop. & Cas. Ins. Co.

Page 14

Recognizing this meaning of “exposure,” I would apply the doctrine of reasonable 

expectations to hold that the policy’s Restaurant Extension Endorsement provision is ambiguous. 

State Auto argues that this language requires that a specific occurrence at the covered premises 

directly cause the government order that forces the business to shut down. The language could 

bear that meaning. But the provision could also mean something more general, requiring only 

that the civil authority order shuts down businesses because all businesses—including the 

covered establishment—are exposed to a disease. Put differently, the language could apply 

when the government shuts down all businesses—including Wild Eggs—because all 

businesses—including Wild Eggs—are exposed to COVID-19.

The majority emphasizes that the order must “result[] from” the exposure. Maj. Op. at 5. 

The Fifth Circuit focused on this same language in Terry Black’s Barbecue, L.L.C. v. State 

Automobile Mutual Insurance Co., 22 F.4th 450, 458–59 (5th Cir. 2022), a case that analyzed the 

same policy language based on Texas state law. In the view of the majority (and the Fifth 

Circuit), the “resulting from” language requires causation. Id. at 458–59. I agree that causation 

is required. However, the causation requirement does not resolve the fundamental issue in this 

case, which pertains to the degree of specificity required. In other words, must the government 

order have been caused by the fact that this specific premises was exposed to a disease, or may 

the government order have been caused by the fact that all premises—including this one—were 

exposed to a disease? Either reading could be correct.

The majority reasons that because the public health orders were preventative, they could 

not have resulted from exposure to COVID-19. Maj. Op. at 6. But these preventative measures 

stemmed from the COVID-19 exposure that businesses faced. The public-health order reasoned 

that confirmed cases of COVID-19 existed “throughout the United States,” and that COVID-19 

“can easily spread from person to person.” R. 28-2 (Executive Order at 1) (Page ID #1376). 

People and places were exposed to COVID-19, and the public health order intended to prevent 

future infection (and future exposure). In other words, the order’s goal of preventing future 

exposure is entirely consistent with Wild Eggs’s understanding that the order “result[ed] from 

. . . the exposure of” businesses (including Wild Eggs) to COVID-19.
No. 21-5962 Wild Eggs Holdings, Inc., et al. v.

State Auto Prop. & Cas. Ins. Co.

Page 15

Both Wild Eggs and State Auto offer reasonable interpretations of the contract language. 

Wild Eggs prevails unless there is “an unequivocally conspicuous, plain and clear manifestation 

of the company’s intent to exclude coverage.” Bidwell, 367 S.W.3d at 589 (quoting Simon, 

724 S.W.2d at 212). Because I believe that the contract contains no unequivocal, plain, or clear 

manifestation of the intent to exclude coverage, I respectfully dissent.