Title: Verveine Corp. v. Strathmore Insurance Co.
Citation: N/A
Docket Number: SJC-13172
State: Massachusetts
Issuer: Massachusetts Supreme Court
Date: April 21, 2022

NOTICE:  All slip opinions and orders are subject to formal 
revision and are superseded by the advance sheets and bound 
volumes of the Official Reports.  If you find a typographical 
error or other formal error, please notify the Reporter of 
Decisions, Supreme Judicial Court, John Adams Courthouse, 1 
Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
1030; SJCReporter@sjc.state.ma.us 
 
SJC-13172 
 
VERVEINE CORP.1 & others2  vs.  STRATHMORE INSURANCE COMPANY 
& another.3 
 
 
 
Suffolk.     January 7, 2022. - April 21, 2022. 
 
Present:  Budd, C.J., Gaziano, Lowy, Cypher, Kafker, 
& Wendlandt, JJ. 
 
 
Insurance, Business owner's policy, Property damage, "All risk" 
policy, Agent's negligence, Construction of policy, 
Coverage.  Contract, Insurance, Performance and breach.  
Negligence, Insurance agent.  Practice, Civil, Motion to 
dismiss, Judgment on the pleadings.  Words, "Direct 
physical loss of or damage to." 
 
 
 
Civil action commenced in the Superior Court Department on 
June 30, 2020. 
 
Motions to dismiss and for judgment on the pleadings were 
heard by Janet L. Sanders, J. 
 
The Supreme Judicial Court on its own initiative 
transferred the case from the Appeals Court. 
 
 
 
1 Doing business as Coppa. 
 
2 1704 Washington LLC, doing business as Toro; and 
JKFOODGROUP LLC, doing business as Little Donkey. 
 
3 Commercial Insurance Agency, Inc. 
2 
 
Benjamin R. Zimmermann for the plaintiffs. 
Stephen E. Goldman for Strathmore Insurance Company. 
Andrew R. Ferguson for Commercial Insurance Agency, Inc. 
 
The following submitted briefs for amici curiae: 
 
John G. O'Neill & Jessica H. Park for Massachusetts 
Insurance and Reinsurance Bar Association. 
 
Kristin A. Heres & Katharina Kraatz-Dunkel for American 
Property Casualty Insurance Association & others. 
 
Robert J. Gilbert, Timothy J. McLaughlin, & Nathan A. 
Sandals for Amphenol Corporation & another. 
 
Rhonda D. Orin, of New York, & Marshall Gilinsky for United 
Policyholders. 
 
Jonathan T. Merrigan for American Food Systems, Inc. 
 
 
KAFKER, J.  This appeal requires us to determine whether 
various losses stemming from the COVID-19 pandemic constitute 
"direct physical loss of or damage to" properties owned by the 
plaintiffs and insured by the defendants.  The plaintiffs own 
three restaurants, which, like many brick-and-mortar businesses, 
suffered severe reductions in revenues during the pandemic and 
the resulting government restrictions on public gatherings.  And 
like many other businesses, they looked to their property 
insurers to offset these losses, and had their claims denied.  
The plaintiffs sued their insurer for breach of contract and 
their insurance broker for negligently failing to procure 
policies that would have covered damages resulting from the 
COVID-19 virus.  Holding that the insurance policies in question 
unambiguously did not cover the plaintiffs' losses, a Superior 
Court judge granted the motion to dismiss filed by the defendant 
Strathmore Insurance Company (Strathmore) and the motion for 
3 
 
judgment on the pleadings filed by the defendant Commercial 
Insurance Agency, Inc. (Commercial). 
We agree that the plaintiffs' losses were not "direct 
physical loss of or damage to" their property within the meaning 
of the insurance policies, and we therefore affirm.4 
1.  Background.  The following facts are drawn from the 
plaintiffs' complaint and from sources of which this court can 
take judicial notice.  See Jarosz v. Palmer, 436 Mass. 526, 530 
(2002) (motions under Mass. R. Civ. P. 12 [c], 365 Mass. 754 
[1974]); Jackson v. Longcope, 394 Mass. 577, 580 n.2 (1985) 
(motions under Mass. R. Civ. P. 12 [b] [6], 365 Mass. 754 
[1974]).5 
The plaintiffs are three Massachusetts companies that 
operate restaurants in Boston and Cambridge (restaurants).  They 
are Verveine Corporation, which operates Coppa in Boston 
 
4 We acknowledge the amicus briefs submitted by the 
Massachusetts Insurance and Reinsurance Bar Association; by the 
American Property Casualty Insurance Association, the National 
Association of Mutual Insurance Companies, and the Massachusetts 
Insurance Federation; by Amphenol Corporation and Lawrence 
General Hospital; by United Policyholders; and by American Food 
Systems, Inc. 
 
5 We take judicial notice of content of the Governor's 
COVID-19 orders, referenced in the complaint, because they are 
"a subject of generalized knowledge readily ascertainable from 
authoritative sources."  Commonwealth v. Green, 408 Mass. 48, 50 
n.2 (1990).  We do so only for clarity as to the exact 
requirements of the orders, and note that neither the orders 
themselves nor their summary description in the complaint would 
establish that the plaintiffs are entitled to relief. 
4 
 
(Coppa); 1704 Washington LLC, which operates Toro in Boston 
(Toro); and JKFOODGROUP LLC, which operates Little Donkey in 
Cambridge (Little Donkey).  All three have common ownership and 
management. 
The restaurants engaged Commercial to advise them on their 
insurance needs and to procure the necessary insurance policies 
for their businesses.  For many years, Commercial arranged for 
the plaintiffs to purchase coverage from Strathmore, a wholly 
owned subsidiary of Greater New York Mutual Insurance Company. 
When the pandemic began, the restaurants were covered by 
two Strathmore property and liability policies -- one covering 
both Toro and Coppa and the other covering Little Donkey.  
Commercial represented to the plaintiffs that the coverage under 
the policies was the same, but Little Donkey's policy contained 
an exclusion for "loss or damage caused by or resulting from any 
virus, bacterium or other microorganism that induces or is 
capable of inducing physical distress, illness or disease," 
which was not contained in the policy covering Coppa and Toro.6  
The addition of the virus exclusion to the Little Donkey policy 
did not result in a premium reduction. 
 
6 The policy covering Coppa and Toro contained an exclusion 
that was limited to "loss or damage caused directly or 
indirectly by 'fungus', wet rot, dry rot and bacteria" and did 
not mention viruses. 
5 
 
In spring 2020, the novel coronavirus that causes the 
COVID-19 respiratory illness (virus or COVID-19 virus) spread 
around the globe, eventually arriving in Massachusetts.7  In 
order to slow the spread of the virus, State and local 
authorities began issuing "stay-at-home" orders and other 
restrictions on businesses and public activities.  On March 15, 
2020, four days after the World Health Organization announced 
that the COVID-19 outbreak had become a "pandemic," Governor 
Charles D. Baker issued an emergency order prohibiting in-person 
dining at all restaurants and bars.  However, as "COVID-19 
Essential Services," restaurants were exempt from the order 
shutting down all nonessential businesses, and were allowed, and 
even encouraged, to remain open to offer takeout and delivery 
services, provided they complied with social distancing 
requirements.  Toro and Coppa complied with the order, resulting 
in a steep decline in their revenues from the loss of in-person 
dining services.  Because of its location, Little Donkey's 
 
7 In ruling on the motion to dismiss, the judge noted that 
the complaint did not allege that the virus was physically 
present at the restaurants.  The question whether the complaint 
contained such allegations would not affect the outcome of this 
appeal, but based on the other allegations of the complaint, it 
is reasonable to infer that the virus was present at some point 
in the air and on surfaces at the restaurants, or would have 
been had the restaurants not been closed to the public for in-
person dining.  As suggested at oral argument, an interpretation 
rejecting such an inference would simply result in an amendment 
of the complaint and a return of the issue to the court for 
resolution. 
6 
 
management determined that it was not feasible to remain open 
only for takeout and delivery, and therefore the restaurant 
suspended operations completely, although its kitchen was used 
to prepare meals for frontline workers.  In June 2020, the stay-
at-home orders were amended to allow limited in-person dining at 
reduced capacities.  The restaurants were able to resume these 
operations, but continued to lose revenue from the restrictions. 
Given these losses and expected continued losses, the 
restaurants filed a claim for lost business income with 
Strathmore.  Strathmore denied the claims under both policies, 
citing the lack of any "physical loss of or damage to" the 
properties and the virus exclusion to Little Donkey's policy. 
In June 2020, the restaurants brought a declaratory 
judgment action to determine the scope of their policies, 
asserting claims for breach of contract and under G. L. c. 93A 
and G. L. c. 176D for unfair and deceptive practices against 
Strathmore.8  Little Donkey also brought a commercial negligence 
claim against Commercial for failing to procure a policy without 
a virus exclusion.  Commercial answered the complaint and filed 
a motion for judgment on the pleadings under Mass. R. Civ. P. 
12 (c).  Strathmore filed a motion to dismiss for failure to 
state a claim under Mass. R. Civ. P. 12 (b) (6).  Finding that 
 
8 The restaurants do not separately dispute the dismissal of 
their statutory claims on appeal. 
7 
 
there was no "direct physical loss or damage" resulting from the 
COVID-19 virus, a judge in the Superior Court granted 
Strathmore's motion.  Because coverage would be denied with or 
without the virus exclusion, she also granted Commercial's 
motion dismissing the negligence claim related to Little 
Donkey's policy.  The restaurants appealed, and this court 
transferred the case from the Appeals Court sua sponte. 
2.  Discussion.  a.  Standard of review.  "We review the 
allowance of a motion to dismiss de novo."  Meehan v. Medical 
Info. Tech., Inc., 488 Mass. 730, 732 (2021), quoting Magliacane 
v. Gardner, 483 Mass. 842, 848 (2020).  A motion to dismiss will 
be granted unless the factual allegations in the complaint are 
"enough to raise a right to relief above the speculative level 
based on the assumption that all the allegations in the 
complaint are true (even if doubtful in fact)" (alterations 
omitted).  Sudbury v. Massachusetts Bay Trans. Auth., 485 Mass. 
774, 779 (2020), quoting Iannacchino v. Ford Motor Co., 451 
Mass. 623, 636 (2008).  However, "[w]e do not regard as 'true' 
legal conclusions cast in the form of factual allegations."  
Sudbury, supra at 778-779, quoting Leavitt v. Brockton Hosp., 
Inc., 454 Mass. 37, 39 n.6 (2009).  "A [defendant's] motion for 
judgment on the pleadings under Mass. R. Civ. P. 12 (c) is 
actually a motion to dismiss that argues that the complaint 
fails to state a claim upon which relief can be granted" 
8 
 
(quotation and alterations omitted).  Mullins v. Corcoran, 488 
Mass. 275, 281 (2021), quoting Jarosz, 436 Mass. at 529.  
Therefore, we review Commercial's motion under the same standard 
as Strathmore's. 
b.  The restaurants' insurance policies.  The question 
whether the Strathmore policies covered the restaurants' claimed 
losses is a question of contractual interpretation.  
"Interpretation of language in an insurance contract is no 
different from the interpretation of any other contract" 
(quotation and alteration omitted).  Metropolitan Life Ins. Co. 
v. Cotter, 464 Mass. 623, 634-635 (2013), quoting Metropolitan 
Prop. & Cas. Ins. Co. v. Morrison, 460 Mass. 352, 362 (2011).  
This requires the court to determine "the fair meaning of the 
language used, as applied to the subject matter."  Gordon v. 
Safety Ins. Co., 417 Mass. 687, 689 (1994), quoting Manning v. 
Fireman's Fund Am. Ins. Cos., 397 Mass. 38, 40 (1986).  The 
court must also "assume that every word in an insurance contract 
serves a purpose, and must be given meaning and effect whenever 
practicable" (citation and quotation omitted).  Dorchester Mut. 
Ins. Co. v. Krussell, 485 Mass. 431, 437 (2020). 
When a policy term is unambiguous, we "construe the words 
of the policy in their usual and ordinary sense."  Citation Ins. 
Co. v. Gomez, 426 Mass. 379, 381 (1998), quoting Hakim v. 
Massachusetts Insurers' Insolvency Fund, 424 Mass. 275, 280 
9 
 
(1997).  See Given v. Commerce Ins. Co., 440 Mass. 207, 209 
(2003) (insurance contracts to be interpreted "in light of their 
plain meaning, giving full effect to the document as a whole" 
[citation omitted]).  If at all unclear or in doubt, we inquire 
into "what an objectively reasonable insured, reading the 
relevant policy language, would expect to be covered."  
Dorchester Mut. Ins. Co., 485 Mass. at 437, quoting Metropolitan 
Prop. & Cas. Ins. Co., 460 Mass. at 362.  "Any ambiguities in 
the language of an insurance contract . . . are interpreted 
against the insurer who used them and in favor of the insured" 
(citation omitted).  Dorchester Mut. Ins. Co., supra. 
"[A] term is ambiguous where it is susceptible of more than 
one meaning and reasonably intelligent persons would differ as 
to which meaning is the proper one" (quotation omitted).9  
Dorchester Mut. Ins. Co., 485 Mass. at 437, quoting Citation 
 
9 The plaintiffs and amicus American Food Systems, Inc., 
contend that terms are strictly construed against the insurer if 
they are not defined, relying on Interstate Gourmet Coffee 
Roasters, Inc. v. Seaco Ins. Co., 59 Mass. App. Ct. 78, 84-85 
(2003), citing Preferred Mut. Ins. Co. v. Gamache, 426 Mass. 93, 
94 (1997).  In that case, the Appeals Court had to construe a 
term that was both undefined and ambiguous, and therefore the 
distinction between the two was not relevant.  See Interstate 
Gourmet Coffee Roasters, Inc., supra at 83-84.  See also 
Preferred Mut. Ins. Co., supra ("ambiguities in a policy are to 
be strictly construed against an insurer" [emphasis added]).  We 
clarify that a term is not ambiguous or construed against the 
insurer merely because it is not explicitly defined in an 
insurance policy.  Undefined terms may still be unambiguous, 
just as a term may remain ambiguous despite the insurer's 
attempt to define it. 
10 
 
Ins. Co., 426 Mass. at 381.  Ambiguity is not created by "the 
fact that the parties disagree as to its meaning," Dorchester 
Mut. Ins. Co., supra, or "the mere existence of multiple 
dictionary definitions of a word, . . . for most words have 
multiple definitions," Citation Ins. Co. supra. 
With these principles in mind, we turn to the language of 
the policies themselves.  The restaurants' insurance policies 
consist of a selection of standardized forms.  The policies 
define "Covered Causes of Loss" as "Risks of Direct Physical 
Loss," subject to certain exclusions and limitations not 
relevant here.  Although Strathmore's policies do not include 
the term,10 this type of policy is somewhat inaccurately referred 
to as an "all-risk" property insurance policy, meaning the 
insured does not need to demonstrate the losses or damage 
stemmed from a particular risk, such as fire or flood.  See 
Intermetal Mexicana, S.A. v. Insurance Co. of N. Am., 866 F.2d 
71, 74 (3d Cir. 1989); Aetna Cas. & Sur. Co. v. Yates, 344 F.2d 
939, 940 (5th Cir. 1965) (Friendly, J.) ("The description of the 
policy as 'All Risk' is rather a misnomer . . .").  However, the 
 
10 The plaintiffs allege that the policies were "marketed 
and sold" as all-risk policies.  But the relevant question is 
what the terms of the policies themselves say.  Even if we were 
to inquire into the expectations of the insured, the focus is on 
what an insured "reading the relevant policy language, would 
expect to be covered," not the insured's more general 
perceptions of the policy.  Dorchester Mut. Ins. Co., 485 Mass. 
at 437. 
11 
 
burden remains on the insured to demonstrate that such loss or 
damage, within the meaning of the policy, actually occurred.  
Boazova v. Safe Ins. Co., 462 Mass. 346, 351 (2012). 
The "Building and Personal Property Coverage Form" in both 
policies provides:  "[Strathmore] will pay for direct physical 
loss of or damage to Covered Property at the [insured] premises 
. . . caused by or resulting from any Covered Cause of Loss" 
(emphasis added).  "Covered Property" includes the "building or 
structure" identified in each policy and personal property 
"[l]ocated in or on the building described in the Declarations 
or in the open (or in a vehicle) within [one hundred] feet of 
the described premises," subject to certain exclusions. 
Importantly, in the context of the restaurants' property 
coverage forms, "direct physical loss of or damage to Covered 
Property" characterizes what effects the covered causes must 
have on the property to trigger coverage, not the causes 
themselves. 
The "Business Income (and Extra Expense) Coverage Form" in 
both policies states, "[Strathmore] 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 [the insured premises]. . . .  The loss or damage 
must be caused by or result from a Covered Cause of Loss" 
12 
 
(emphasis added).  Likewise, the extra expense provision covers 
"necessary expenses you incur during the 'period of restoration' 
that you would not have incurred if there had been no direct 
physical loss or damage to property caused by or resulting from 
a Covered Cause of Loss" (emphasis added). 
Here, "direct physical loss of or damage to property" moves 
from effect to cause, but does not change in meaning.  The 
covered losses are the actual loss of income and certain extra 
expenses incurred during a defined suspension period, provided 
the suspension was caused by the kind of loss or damage covered 
by the property coverage forms, which must in turn be caused by 
a nonexcluded risk.11  These losses would normally not be 
recoverable under the property coverage forms because they are 
neither "direct" nor "physical," hence the need for separate 
coverage forms specifically addressing them.  What is 
recoverable changes, but not the trigger for coverage. 
 
11 While the term "direct physical loss of or damage to" 
should be construed consistently between the two forms, that 
does not mean that the business interruption coverage forms are 
subsidiary to or dependent upon the property coverage forms.  An 
insured need not file a claim or be entitled to recover under a 
property policy to recover for business interruption.  5 J.E. 
Thomas, New Appleman on Insurance Law Library Edition § 46.03[5] 
(2021).  In particular, we note that the restaurants' property 
coverage forms are limited to loss of or damage to "Covered 
Property," which is expressly defined by a detailed list of 
inclusions and exclusions, whereas the business interruption 
coverage forms only require loss of or damage to "property" at 
the insured premises. 
13 
 
Therefore, the question is whether there was any "direct 
physical loss of or damage to property" at the restaurants.  We 
conclude that no reasonable interpretation of direct physical 
loss of or damage to property supports the plaintiffs' claims. 
c.  Direct physical loss of or damage to property.  Such 
language, or similar language, is commonly used to define the 
scope of coverage under all-risk property policies, and 
therefore courts in both Massachusetts and other jurisdictions 
have frequently been called upon to resolve disputes over its 
meaning, both before and after the COVID-19 pandemic.  See 10A 
S. Plitt, D. Maldonado, J.D. Rogers, & J.R. Plitt, Couch on 
Insurance 3d § 148:46 (rev. ed. 2016) (Couch on Insurance).  In 
particular, the lower court relied on HRG Dev. Corp. v. Graphic 
Arts Mut. Ins. Co., 26 Mass. App. Ct. 374, 376 (1988), and cases 
following it.  In that case, the Appeals Court concluded for a 
variety of reasons that an all-risk insurance policy did not 
cover the "loss" of certain equipment owned by the insured due 
to a title defect after the rightful owner reclaimed it.  Id. at 
375-376.  In defining the scope of "physical loss or damage," 
the Appeals Court reasoned that the term could not "fairly . . . 
be construed to mean physical loss in the absence of physical 
damage."  Id. at 377.  See Pirie v. Federal Ins. Co., 45 Mass. 
App. Ct. 907, 908 (1998) (government order to abate existing 
lead in apartment not "physical loss").  Although we note that 
14 
 
the phrasing requires clarification, the principle is correctly 
identified.12 
The plaintiffs argue that HRG Dev. Corp. cannot apply to 
their claims because the cause of the loss in that case was 
purely legal, as opposed to the virus, which is physical and has 
physical effects.  Merriam-Webster Online Dictionary, 
https://www.merriam-webster.com/dictionary/physical 
[https://perma.cc/4GUL-KCFT] (defining "physical" as "having 
material existence:  perceptible especially through the senses 
and subject to the laws of nature" and "of or relating to 
material things").  See Matzner vs. Seaco Ins. Co., Mass. Super. 
Ct., No. CIV A. 96-0498B (Suffolk County Aug. 12, 1998) (holding 
blocked chimney filling apartment building with carbon monoxide 
was "direct physical loss of or damage to" property).  However, 
as explained above, the question is not whether the virus is 
physical, but rather if it has direct physical effect on 
property that can be fairly characterized as "loss or damage."  
Therefore, the proper interpretation of the rule from HRG Dev. 
Corp. is that coverage was excluded not because the cause was 
purely legal, but rather because the effect -- loss of legal 
 
12 There can of course be "physical loss of" property 
without damage, especially personal property such as the 
equipment in HRG Dev. Corp., if it is stolen or otherwise 
disappears.  Indeed, at a number of points, the Strathmore 
policy expressly includes "theft" and "disappearance" within 
"physical loss of or damage to" property. 
15 
 
ownership -- was not direct physical loss or damage, even if it 
indirectly resulted in loss of possession to the rival claimant 
or interruption to the insured's business. 
We conclude that "direct physical loss of or damage to" 
property requires some "distinct, demonstrable, physical 
alteration of the property."13  Couch on Insurance, supra at 
§ 148.46.  Every appellate court that has been asked to review 
COVID-19 insurance claims has agreed with this definition for 
this language or its equivalent.  See Uncork & Create LLC v. 
Cincinnati Ins. Co., 27 F.4th 926, 930-932 (4th Cir. 2022); 
Terry Black's Barbecue Dallas, L.L.C. v. State Auto. Mut. Ins. 
Co., 22 F.4th 450, 456-458 (5th Cir. 2022); 10012 Holdings, Inc. 
v. Sentinel Ins. Co., 21 F.4th 216, 221-222 (2d Cir. 2021); 
Goodwill Indus. of Cent. Okla., Inc. v. Philadelphia Indem. Ins. 
Co., 21 F.4th 704, 710-712 (10th Cir. 2021); Sandy Point Dental, 
P.C. v. Cincinnati Ins. Co., 20 F.4th 327, 331-334 (7th Cir. 
2021); Mudpie, Inc. v. Travelers Cas. Ins. Co. of Am., 15 F.4th 
885, 890-893 (9th Cir. 2021); Santo's Italian Café LLC v. Acuity 
Ins. Co., 15 F.4th 398, 401-406 (6th Cir. 2021); Gilreath Family 
& Cosmetic Dentistry, Inc. vs. Cincinnati Ins. Co., U.S. Ct. 
App., No. 21-11046 (11th Cir. Aug. 31, 2021); Oral Surgeons, 
P.C. v. Cincinnati Ins. Co., 2 F.4th 1141, 1143-1144 (8th Cir. 
 
13 It can also cover cases of theft, as explained in note 
12, supra. 
16 
 
2021); Inns by the Sea v. California Mut. Ins. Co., 71 Cal. App. 
5th 688, 698-699 (2021); Sweet Berry Café, Inc. v. Society Ins., 
Inc. 2022 IL App (2d) 210088, ¶ 39; Indiana Repertory Theatre v. 
Cincinnati Cas. Co., 180 N.E.3d 403, 408-409 (Ind. Ct. App. 
2022); Gavrilides Mgt. Co. vs. Michigan Ins. Co., Mich. Ct. 
App., No. 354418 (Mich. Ct. App. Feb. 1, 2022); Sanzo Enters. 
LLC v. Erie Ins. Exch., 2021-Ohio-4268, ¶¶ 40-43 (Ct. App.). 
In the case of the business interruption coverage forms, 
this interpretation is bolstered by the definition of "period of 
restoration."  Rather than refer simply to the resumption of 
operations on the premises, the coverage forms expressly provide 
that coverage ends on "(1) [t]he date when the property at the 
described premises should be repaired, rebuilt or replaced with 
reasonable speed and similar quality; or (2) [t]he date when 
business is resumed at a new permanent location" (emphasis 
added).  This clearly implies that the property has not 
experienced physical loss or damage in the first place unless 
there needs to be active repair or remediation measures to 
correct the claimed damage or the business must move to a new 
location.14  See Sandy Point Dental, P.C., 20 F.4th at 333. 
 
14 The plaintiffs point out that coverage also ceases when a 
year has passed.  However, this third alternative is better 
understood as an over-all cap on recoverable losses, where, for 
whatever reason, repairing or remediating the premises or 
finding replacement premises takes more than a year. 
17 
 
The allegations in the complaint do not support recovery 
under this definition.  Although caused, in some sense, by the 
physical properties of the virus, the suspension of business at 
the restaurants was not in any way attributable to a direct 
physical effect on the plaintiffs' property that can be 
described as loss or damage.  As demonstrated by the 
restaurants' continuing ability to provide takeout and other 
services, there were not physical effects on the property 
itself.  It is only these effects that would trigger coverage 
under either the property or the business interruption coverage 
forms. 
As the plaintiffs seem to accept, the COVID-19 orders 
standing alone cannot possibly constitute "direct physical loss 
of or damage to" property, for the same reason that loss of 
legal title or other government restrictions cannot themselves 
physically alter property.  See HRG Dev. Corp., 26 Mass. App. 
Ct. at 377; Oral Surgeons, P.C., 2 F.4th at 1145, quoting Source 
Food Tech., Inc. v. United States Fid. & Guar. Co., 465 F.3d 
834, 836 (8th Cir. 2006) (rejecting argument that "impairment of 
function and value of [property] caused by government regulation 
is a direct physical loss to insured property, because to hold 
otherwise would render the word physical meaningless" 
[quotations omitted]). 
18 
 
Even accepting the plaintiffs' premise that the suspension 
of their business was caused by the "presence" of the virus on 
surfaces and in the air at the restaurants (as opposed to the 
danger that the virus would be introduced to the restaurants or 
spread directly from person to person if indoor dining were 
allowed), mere "presence" does not amount to loss or damage to 
the property.  Kim-Chee LLC v. Philadelphia Indem. Ins. Co., 535 
F. Supp. 3d 152, 159 (W.D.N.Y. 2021), aff'd, U.S. Ct. App., No. 
21-1082-cv (2d Cir. Jan. 28, 2022) (summarizing cases explaining 
that "[t]he presence of the COVID-19 virus in the air or on 
surfaces of a covered property does not qualify as damage to the 
property itself").  Evanescent presence of a harmful airborne 
substance that will quickly dissipate on its own, or surface-
level contamination that can be removed by simple cleaning, does 
not physically alter or affect property.  See Santo's Italian 
Café LLC, 15 F.4th at 403-404, citing Mastellone v. Lightning 
Rod Mut. Ins. Co., 175 Ohio App. 3d 23 (2008).  While 
saturation, ingraining, or infiltration of a substance into the 
materials of a building or persistent pollution of a premises 
requiring active remediation efforts is sufficient to constitute 
"direct physical loss of or damage to property," evanescent 
presence is not.  See Kim-Chee LLC, supra at 160-161.  Cf. 
Gregory Packaging, Inc. vs. Travelers Prop. Cas. Co. of Am., 
U.S. Dist. Ct., No. 2:12–cv–04418 (D.N.J. Nov. 25, 2014) 
19 
 
(ammonia release requiring outside remediation company to reduce 
levels in building low enough for safe occupancy inflicted 
direct physical loss or damage); Western Fire Ins. Co. v. First 
Presbyterian Church, 165 Colo. 34, 36-40 (1968) (gasoline-
infiltrated soil and vapors contaminated foundation, halls, and 
rooms); Farmers Ins. Co. of Ore. v. Trutanich, 123 Or. App. 6, 
10-11 (1993) (persistent odor in residence from methamphetamine 
production constituted physical damage, and therefore cost of 
remediation was recoverable). 
The plaintiffs object that this reading ignores the 
difference between "loss" and "damage."  Because the coverage 
forms provide for "loss or damage," the plaintiffs claim that 
loss must have a different scope that does not rely on physical 
alteration of the property and can include broader concepts, 
such as loss of use or loss of function.  However, any 
distinction between these two terms is not relevant in the 
context of their claims.  As noted above, there may be a "loss 
of" property without damage if it is stolen.  Santo's Italian 
Café LLC, 15 F.4th at 404 ("There is no need to read 'physical 
loss' to include a deprivation of some particular use of a 
property in order to give the phrase independent meaning.  That 
possibility could occur whenever a policy holder is deprived of 
property without any damage to it, say a portable grill or a 
delivery truck stolen without a scratch")  The plaintiffs' 
20 
 
interpretation ignores that the loss itself must be a "direct 
physical" loss, clearly requiring a direct, physical deprivation 
of possession.  The plaintiffs were not deprived of possession 
of their property, and indeed continued to inhabit and use it 
for other purposes.  Although they could not use it for in-
person or indoor dining but rather for takeout services, 
"[w]ithout any physical alteration to accompany it, this partial 
loss of use does not amount to a 'direct physical loss.'"  Sandy 
Point Dental P.C., 20 F.4th at 334.15 
d.  Virus exclusion.  Given our determination that coverage 
did not attach in the first place, we need not reach the 
defendants' alternative arguments that other terms in the 
policies would exclude coverage.  Santo's Italian Café LLC, 15 
F.4th at 406 ("For now, the absence of initial coverage for this 
claim suffices to reject it").  However, we will briefly address 
 
15 One case that the plaintiffs urge us to apply by analogy 
is Murray v. State Farm Fire & Cas. Co., 203 W. Va. 477 (1998).  
In that case, a man-made rock wall above the plaintiffs' house 
(but not on their property) began to crumble, dropping rocks 
onto nearby houses.  Id. at 481.  Although the plaintiffs' 
property itself was not damaged, the fire department ordered 
them to evacuate because further rockfall was likely.  Id.  
Noting that no "rational persons would be content to reside" in 
the plaintiffs' home, the court held there was a "direct 
physical loss" of the property.  Id. at 493.  Even if we were to 
adopt this reasoning, it would not support the plaintiffs' 
claim.  See Uncork & Create LLC, 27 F.4th at 932-933 (applying 
West Virginia law and rejecting application of Murray to similar 
claims).  The risk to the home in Murray made it "unusable and 
uninhabitable," which, as already noted, was not true of the 
restaurants, according to the complaint.  Murray, supra. 
21 
 
the virus exclusion to Little Donkey's policy, not for whether 
it would exclude coverage, but whether, as the plaintiffs claim, 
it creates a clear negative implication that policies that do 
not contain the exclusion should cover claims arising from the 
COVID-19 virus.  We conclude that no such negative implication 
can or should be drawn.  Indeed, we have emphasized the 
importance of not drawing negative implications.  Cf. Halebian 
v. Berv, 457 Mass. 620, 628 (2010), quoting 2A N.J. Singer & 
J.D. Shambie Singer, Sutherland Statutory Construction § 47.25, 
at 429 (7th ed. 2007) ("the maxim of negative implication -- 
that the express inclusion of one thing implies the exclusion of 
another -- 'requires great caution in its application'"). 
We rely instead on basic insurance law principles.  
"[A]bsence of an express exclusion does not operate to create 
coverage."  Given, 440 Mass. at 212.  Rather, "when an 
occurrence is clearly not included within the coverage afforded 
by the insuring clause, it need not also be specifically 
excluded."  Inns by the Sea, 71 Cal. App. 5th at 709, quoting 
Glavinich v. Commonwealth Land Title Ins. Co. 163 Cal. App. 3d 
263, 270 (1984). 
With these principles in mind, we consider the policy 
requirements, the virus exclusion, and COVID-19.  As explained 
supra, the language creating coverage, which requires "direct 
physical loss of or damage to property," plainly does not 
22 
 
encompass the COVID-19-related losses for which the plaintiffs 
seek coverage.  That the Little Donkey policy contains an 
exclusion for "loss or damage caused by or resulting from any 
virus, bacterium or other microorganism that induces or is 
capable of inducing physical distress, illness or disease" 
cannot create coverage in Coppa and Toro's policy that does not 
otherwise exist under that policy's plain language.  See Given, 
440 Mass. at 212.  Accordingly, the scope of that exclusion is 
irrelevant to coverage under Coppa and Toro's policy. 
This interpretation of "direct physical loss of or damage 
to property" does not render the virus exclusion meaningless or 
surplusage in the Little Donkey policy.  Most obviously, the 
exclusion would have independent significance where, for 
example, personal property, such as food, becomes physically 
contaminated or infected with a virus, requiring its destruction 
or some form of remediation.  See Source Food Tech., Inc., 465 
F.3d at 836-837 (discussing "mad cow" disease infection of 
insured beef); HoneyBaked Foods, Inc. v. Affiliated FM Ins. Co., 
757 F. Supp. 2d 738, 741-745 (N.D. Ohio 2010) (listeria 
contamination of insured turkey and ham).  As discussed above, 
the COVID-19 virus is different:  the contamination is readily 
removeable, returning the property to its uncontaminated state 
and allowing its continued use.  The other appellate courts that 
have considered the same exclusion in the context of COVID-19 
23 
 
claims agree, rejecting its applicability.  See Kim-Chee LLC, 
U.S. Ct. App., No. 21-1082-cv (2d Cir.), supra; Inns by the Sea, 
71 Cal. App. 5th at 709.16 
In short, the exclusion in no way implies that we should 
broaden the scope of coverage. 
e.  Civil authority coverage.  The restaurants' policies 
also provide additional "civil authority" coverage.  This 
provides income and expense coverage "[w]hen a Covered Cause of 
Loss causes damage to property other than property at the 
described premises" and an "action of civil authority . . . 
 
16 The statement from the Insurance Services Office (ISO) 
explaining the rationale behind the exclusion and relied on by 
the plaintiffs is not to the contrary.  It states: 
 
"Although building and personal property could arguably 
become contaminated (often temporarily) by such viruses and 
bacteria, the nature of the property itself would have a 
bearing on whether there is actual property damage" 
(emphasis added). 
 
Indeed, the statement further explains: 
 
"While property policies have not been a source of recovery 
for losses involving contamination by disease-causing 
agents, the specter of pandemic or hitherto unorthodox 
transmission of infectious material raises the concern that 
insurers employing such policies may face claims in which 
there are efforts to expand coverage and to create sources 
of recovery for such losses, contrary to policy intent" 
(emphasis added). 
 
In other words, the ISO accurately predicted that, if there 
were a pandemic, insureds would bring virus-related claims in 
cases where no property damage had occurred, resulting in 
litigation and the risk that at least some courts would 
improperly consider extending coverage to such claims. 
24 
 
prohibits access to the described premises" (emphasis added).  
However, coverage only applies where 
"(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." 
 
The plaintiffs claim that this language covers their losses 
because the COVID-19 orders prohibited public access to their 
restaurants and were the result of damage to properties within 
one mile.  Strathmore contests both of these points, but we only 
need to address the latter.  For the same reasons that the 
presence of the COVID-19 virus at the restaurants themselves did 
not cause damage to property under the business interruption 
coverage forms, the virus did not cause "damage" to the 
properties within one mile of the restaurants.  Sanzo Enters. 
LLC, 2021-Ohio-4268, ¶¶ 59-61.  Furthermore, the term "loss" is 
absent, precluding any argument that coverage can be based on 
the loss of possession or use of the surrounding buildings.  
Therefore, the plaintiffs' claim based on the civil authority 
coverage was also correctly dismissed. 
f.  Claims against Commercial.  We also affirm the 
dismissal of the claims against Commercial.  Little Donkey 
25 
 
failed to recover from Strathmore because coverage did not 
attach in the first place, not because of the virus exclusion.  
Therefore, its negligence claim must be dismissed.  Leavitt, 454 
Mass. at 44-45. 
3.  Conclusion.  We affirm the order granting Strathmore's 
motion to dismiss and Commercial's motion for judgment on the 
pleadings. 
 
 
 
 
 
 
 
So ordered.