Opinion ID: 6325653
Heading Depth: 2
Heading Rank: 2

Heading: Civil Authority Extension

Text: The Civil Authority Extension does not cover Q Clothier’s losses either. Although the civil authority orders directed Q Clothier to close its 11 Case: 21-30278 Document: 00516248556 Page: 12 Date Filed: 03/22/2022 No. 21-30278 stores, Q Clothier has not plausibly alleged they were issued as a “direct result of” a covered cause of loss to property in the immediate area of its stores. The Civil Authority Extension applies “to the actual loss of Business Income [Q Clothier] sustain[s] when access to [the] ‘scheduled premises’ is specifically prohibited by order of a civil authority as the direct result of a Covered Cause of Loss to property in the immediate area of [the] ‘scheduled premises.’” (emphasis added). In interpreting a similar civil authority provision, we concluded the provision requires a nexus between the civil authority order and property damage or losses near the insured premises. See Dickie Brennan & Co. v. Lexington Ins. Co., 636 F.3d 683, 686 (5th Cir. 2011) (interpreting provision using “due to” as requiring a nexus under Louisiana law). So too here, the phrase “direct result of” requires Q Clothier to plausibly allege some causal relationship between the “order of a civil authority,” i.e., the Governor and Mayor’s orders, and damage or loss to property near Q Clothier’s stores. Although Q Clothier alleges the civil authority orders were issued because of damage or covered losses to property near Q Clothier’s stores, that allegation is implausible. The Governor’s orders, for example, cited the need to mitigate the spread and impact of COVID-19 in the state. Insofar as there was a possibility of physical contamination of properties in the state, the orders called for preventative measures to avoid damage and contamination from COVID-19. The civil authority orders were a “direct result of” “the global pandemic and the need to take measures to contain and prevent the spread of COVID-19.” Terry Black’s, 22 F.4th at 458–59. There is no plausible nexus between the orders and any loss to property nearby 12 Case: 21-30278 Document: 00516248556 Page: 13 Date Filed: 03/22/2022 No. 21-30278 Q Clothier’s stores. 4 Cf. Dickie Brennan & Co., 636 F.3d at 686 (noting that a closure that occurs before damage occurs, based on fear of damage and not prior damage, does not establish the necessary causal link for civil authority coverage); S. Tex. Med. Clinics, P.A. v. CNA Fin. Corp., No. 06-4041, 2008 WL 450012, at  (S.D. Tex. Feb. 15, 2008) (concluding there was no civil authority coverage when order was issued based on an “anticipated threat of damage” not actual damage to nearby property). The coverage in the Civil Authority Extension requires a causal connection between loss or damage to property near Q Clothier’s stores and the civil authority orders prohibiting access to its stores. Q Clothier has failed to plausibly allege that causal connection.