Court Opinion

ID: 9945820
Source: CourtListenerOpinion
Date Created: 2024-02-28 17:04:05.05322+00
Date Added: 2024-06-11T14:22:16.708996
License: Public Domain

FILED
                                                                        Feb 28 2024, 8:55 am

                                                                            CLERK
                                                                        Indiana Supreme Court
                                                                           Court of Appeals
                                                                             and Tax Court

                                             IN THE

            Court of Appeals of Indiana
                            The Trustees of Purdue University,
                                                Appellant

                                                    v.

                         American Home Assurance Company,
                                                Appellee

                                          February 28, 2024
                                     Court of Appeals Case No.
                                           23A-PL-1413
                              Appeal from the Allen Superior Court
                              The Honorable Craig J. Bobay, Judge
                                        Trial Court Cause No.
                                         02D02-2108-PL-327

                                   Opinion by Judge Bailey
                                 Judges Crone and Pyle concur.

Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024                Page 1 of 20
      Bailey, Judge.

      Case Summary
[1]   The Trustees of Purdue University (“Purdue”) appeal the trial court’s order

      granting summary judgment to American Home Assurance Company

      (“American Home”) upon Purdue’s claim for a declaratory judgment that

      American Home is liable to Purdue, under an all-risks commercial insurance

      policy, for business interruption losses during the COVID-19 pandemic. We

      affirm.

      Issues
[2]   Purdue presents the issue of whether summary judgment was improvidently

      granted because the trial court (1) erroneously construed the policy at issue to

      require a physical alteration of real property for coverage; and (2) the order

      foreclosed Purdue’s opportunity to show that some of its facilities were

      uninhabitable.1

      Facts and Procedural History

      1
       American Home has articulated an additional issue, that is, whether summary judgment may be sustained
      on the alternative basis of a policy exclusion for pollutants and contaminants, inclusive of viruses. Because of
      our disposition of Purdue’s issue, we need not address American Home’s additional argument.

      Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024                              Page 2 of 20
[3]   Purdue is an Indiana public institution of higher education; it has three

      separately accredited campuses and operates two intercollegiate athletics

      programs. American Home is a New York State insurance company doing

      business in Indiana, from whom Purdue purchased a commercial insurance

      policy with an effective date of September 30, 2017 through September 30,

      2020, insuring Purdue’s real and personal property not subject to exclusions

      (“the Policy”).

[4]   On March 6, 2020, Indiana Governor Eric Holcomb issued Executive Order 20-

      02 declaring COVID-19 a disaster emergency for the State of Indiana. On

      March 11, 2020, the World Health Organization declared COVID-19 to be a

      global pandemic. Two days later, the President of the United States declared a

      national emergency. On March 23, Governor Holcomb issued Executive Order

      20-08, which closed all non-essential businesses and ordered persons living in

      Indiana to stay at home through at least April 6, 2020, with some limited

      exceptions. The stay-at-home order was subsequently extended.

[5]   On May 1, 2020, Governor Holcomb issued an executive order with a

      staggered approach to reopening of public entities. Effective May 11,

      educational institutions were permitted to open for purposes of facilitating

      distance learning, conducting critical research, and performing essential

      functions, subject to the requirement of enhanced cleaning. Additionally, local

      health department orders limited food service facilities to 50% capacity or 75%

      capacity, depending upon the reported number of local cases of COVID-19.

      Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024       Page 3 of 20
[6]   On April 6, 2020, Purdue filed a claim with American Home for loss of income

      during a business interruption, identifying its date of loss as March 23, 2020.

      Purdue’s claimed losses included those stemming from cancellation of athletic

      events and conferences, lower rates of housing and campus hotel occupancy,

      and decreased sales of food, retail items, and health services.

[7]   American Home did not pay the claim but rather issued a reservation of rights

      letter, identifying two potential bases for non-payment:

              The insuring agreement for business interruption requires that the
              interruption of your business be the result of direct physical
              damage by a covered cause of loss. There is no claim of direct
              physical damage.

              Additionally, the COVID-19 virus is considered a contaminant
              or pollutant and may be specifically excluded by the policy.

      (App. Vol. II, pg. 77.)

[8]   On August 17, 2021, Purdue filed a complaint for a declaratory judgment

      against American Home, which American Home moved to dismiss. On

      November 1, 2021, Purdue filed its First Amended Complaint, seeking a

      declaration that Purdue’s losses are covered under the terms of the Policy and

      requesting an order for the payment of such losses. A temporary stay of

      discovery was imposed, pending American Home’s submission of an amended

      motion to dismiss. In April of 2022, Purdue was granted a partial lifting of the

      discovery stay in order to conduct discovery into extrinsic evidence relative to

      the meaning of various Policy provisions, and Purdue served requests for the

      Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024    Page 4 of 20
       production of documents on American Home and non-parties. On November

       23, American Home filed its motion to dismiss the amended complaint. On

       January 20, 2023, Purdue filed a response to American Home’s motion to

       dismiss, attaching exhibits. Collectively, the parties submitted hundreds of

       pages of designated materials.

[9]    On April 24, 2023, the trial court conducted a hearing on the pending motion to

       dismiss and advised the parties that the motion would be treated as a motion for

       summary judgment due to the filing of materials outside the pleadings. The

       trial court afforded Purdue the opportunity to request additional discovery, and

       Purdue declined to make any additional discovery requests.

[10]   The parties then presented argument to the trial court, primarily focused upon

       two of this Court’s decisions regarding claimed business-income insurance

       coverage for COVID-19 related losses: Ind. Repertory Theatre v. Cincinnati Cas.,

       180 N.E.3d 403 (Ind. Ct. App. 2022), trans. denied, (“IRT I”) and Ind. Repertory

       Theatre v. Cincinnati Cas., 203 N.E.3d 555 (Ind. Ct. App. 2023), trans. denied,

       (“IRT II”). American Home argued that IRT I (holding that the policy under

       review unambiguously contemplated a physical loss or physical damage to

       trigger recovery) and IRT II (holding that the COVID-19 virus – which dies off

       – did not physically alter IRT’s theatre) were dispositive of Purdue’s claim.

       Purdue argued that the Policy materially differs from the policy at issue in IRT I

       and IRT II, in that Purdue was insured against the “risk” of physical loss or

       damage and the Policy “doesn’t require property to [be] repaired, rebuilt, [or]

       replaced.” (Tr. Vol. II, pg. 20.) Purdue asserted that the Policy language is

       Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024     Page 5 of 20
       ambiguous such that “IRT II’s requirement that the virus doesn’t cause damage

       doesn’t matter,” and “IRT I compels an ambiguity determination here that loss

       of use would be enough because [the Policy] has ‘risk of’ language.” (Id. at 24,

       26.) Purdue also argued that the Policy exclusion for damages from a “virus”

       lacked adequate specificity.

[11]   On May 23, 2023, the trial court issued its summary judgment order in favor of

       American Home, concluding that: the Policy language at issue is

       unambiguous; absent ambiguity, the trial court need not consider extrinsic

       materials provided as attachments; the reasoning of IRT I and IRT II applied to

       the Policy, which likewise limited recovery to “some type of risk of direct and

       physical loss or damage”; and, because “Covid particles do not create direct

       and physical loss or damage to property, then there is also no ‘risk of’ direct and

       physical loss or damage.” (Appealed Order at 17, 19). Purdue now appeals.

       Discussion and Decision
       Standard of Review
[12]   We review a grant of summary judgment de novo. Williams v. Tharp, 914

       N.E.2d 756, 761 (Ind. 2009). Drawing all reasonable inferences in favor of the

       non-moving parties, summary judgment is appropriate “if the designated

       evidentiary matter shows that there is no genuine issue as to any material fact

       and that the moving party is entitled to judgment as a matter of law.” Id. (citing

       Ind. Trial Rule 56(C)). A fact is “material” if its resolution would affect the

       outcome of the case, and an issue is “genuine” if a trier of fact is required to
       Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024      Page 6 of 20
       resolve the parties’ differing accounts of the truth, or if the undisputed material

       facts support conflicting reasonable inferences. Id. A trial court’s judgment

       arrives on appeal “clothed with a presumption of validity,” and, accordingly,

       the challenging party “bears the burden of proving that the trial court erred in

       determining that there are no genuine issues of material fact and that the

       moving party was entitled to judgment as a matter of law.” Id. at 762.

[13]   An insurance policy is a contract, subject to the same rules of construction as

       other contracts. Dunn v. Meridian Mut. Ins. Co., 836 N.E.2d 249, 251 (Ind.

       2005). The interpretation of a contract presents a pure question of law. Id.

       “[B]ecause the interpretation of a contract is a matter of law, cases involving the

       interpretation of insurance contracts are particularly appropriate for summary

       judgment.” Burkett v. Am. Fam. Ins. Grp., 737 N.E.2d 447, 452 (Ind. Ct. App.

       2000).

                Although some “special rules of construction of insurance
                contracts have been developed due to the disparity in bargaining
                power between insurers and insureds, if a contract is clear and
                unambiguous, the language therein must be given its plain
                meaning.” Allstate Ins. Co. v. Boles, 481 N.E.2d 1096, 1101 (Ind.
                1985). On the other hand, “‘[w]here there is ambiguity,
                insurance policies are to be construed strictly against the insurer
                and the policy language is viewed from the standpoint of the
                insured.” Bosecker v. Westfield Ins. Co., 724 N.E.2d 241, 244 (Ind.
                2000) (quoting Am. States Ins. Co. v. Kiger, 662 N.E.2d 945, 947
                (Ind. 1996)). A contract will be found to be ambiguous only if
                reasonable persons would differ as to the meaning of its terms.
                Ind.-Ky. Elec. Corp. v. Green, 476 N.E.2d 141, 145 (Ind. Ct. App.
                1985). In insurance policies, “an ambiguity is not affirmatively
                established simply because controversy exists and one party

       Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024          Page 7 of 20
               asserts an interpretation contrary to that asserted by the opposing
               party.” Auto. Underwriters, Inc. v. Hitch, 169 Ind. App. 453, 457,
               349 N.E.2d 271, 275 (1976).

       Beam v. Wausau Ins. Co., 765 N.E.2d 524, 528 (Ind. 2002).

       Policy Provisions
[14]   The Policy provides, in relevant part:

               SECTION I.A. - INSURING AGREEMENT

               Subject to the terms and conditions of this Policy, we will pay for
               all risks of direct physical loss or damage by a covered cause of
               loss to covered property at a covered location (or within 1000 feet
               thereof) as described in the most recent Statement of Locations
               and Values on file with us.

               ***

               SECTION V - PERILS EXCLUDED

               Except as otherwise provided under the Additional Coverages,
               Additional Time Element Coverages or Global Coverage
               Extensions (and in such event, only to the extent provided
               therein), we do not insure loss or damage caused directly or
               indirectly by any of the following. Such loss or damage is
               excluded regardless of any other cause or event contributing
               concurrently or in any sequence to the loss or damage. The
               following exclusions apply whether or not the loss event results
               in widespread damage or affects a substantial area: . . .

               d. The actual, alleged or threatened release, discharge, escape or
               dispersal of pollutants or contaminants, all whether direct or

       Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024        Page 8 of 20
        indirect, proximate or remote or in whole or in part caused by,
        contributed to or aggravated by any covered cause of loss under
        this Policy.

        However, this exclusion shall not apply to direct physical loss or
        damage to covered property from pollutants or contaminants
        caused by a covered cause of loss at the covered location,
        including the cost to clean-up pollutants or contaminants from
        covered property at the covered location resulting from such loss
        or damage. No coverage is provided for testing or monitoring for
        pollutants or contaminants. For the purpose of the exception to
        this exclusion only, pollutants or contaminants do not include
        radioactive contaminants.

        ***

        SECTION VI - TIME ELEMENT COVERAGES

        A. We will pay the actual business income loss sustained by you
           due to the necessary partial or total interruption of your
           business operations, services or production during the period
           of indemnity as a result of direct physical loss or damage to:
           (1) covered property by a covered cause of loss or (2) property
           of the type insured under this Policy by a covered cause of
           loss which directly affects your use of the covered property,
           provided that you are a lessee or occupant of the premises
           where the direct physical loss or damage occurred.

             ***

        D. ADDITIONAL TIME ELEMENT COVERAGES

        The following Additional Time Element Coverages and any
        Additional Time Element Coverages added to this Subsection by

Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024     Page 9 of 20
        endorsement or through the Special Terms and Conditions are
        subject to the terms and conditions of this Policy. All loss or
        damage, including business income loss and extra expense, for
        which coverage is provided under the Additional Time Element
        Coverages is subject to the sublimits of liability as shown in Item
        7.C. of the Declarations, the sublimits of liability shown
        elsewhere in this Policy and the Policy Limit. All extra expense
        is further limited to the Extra Expense sublimit of liability as
        shown in Item 7.C. of the Declarations.

        The period of indemnity for each Additional Coverage or
        Additional Time Element Coverage shall be the period
        corresponding with Business Income Option #1 (Gross Profits)
        or Business Income Option #2 (Gross Earnings), whichever is
        applicable, unless a different time period is set forth in any of the
        Additional Coverages or Additional Time Element Coverages.

        6. EXTRA EXPENSE

        We will pay loss sustained by you for extra expense during the
        period of indemnity resulting from direct physical loss or damage
        by a covered cause of loss.

        ***

        SECTION X – DEFINITIONS

        ***

        40. Pollutants or contaminants means any solid, liquid, gaseous
        or thermal irritant or contaminant, including smoke, vapor, soot,
        fumes, acids, alkalis, chemicals and waste, which after its release
        can cause or threaten damage to human health or human welfare
        or causes or threatens damage, deterioration, loss of value,

Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024       Page 10 of 20
        marketability or loss of use to property insured hereunder,
        including, but not limited to, bacteria, virus, or hazardous
        substances. Waste includes materials to be recycled,
        reconditioned or reclaimed. Pollutants or contaminants do not
        include fungus, mold or spores.

        ***

        INDIANA STATE MANDATORY ENDORSEMENT

        D. AMENDMENT OF DEFINITION OF POLLUTANTS OR
        CONTAMINANTS

        In this Policy, the definition of pollutants or contaminants is
        deleted and replaced by the following: Pollutants or
        contaminants means any solid, liquid, gaseous or thermal irritant
        or contaminant, including smoke, vapor, soot, fumes, acids,
        alkalis, chemicals and waste, and any substances or materials
        identified in the Schedule, which after its release can cause or
        threaten damage to human health or human welfare or causes or
        threatens damage, deterioration, loss of value, marketability or
        loss of use to property insured hereunder, including, but not
        limited to, bacteria, virus, or hazardous substances. Waste
        includes materials to be recycled, reconditioned or reclaimed.
        Pollutants or contaminants do not include fungus, mold or
        spores. The definition of pollutants or contaminants applies
        whether or not such irritant, pollutant, or contaminant has any
        function in or on your business, operations, premises, site or
        location.

(App. Vol. II, pgs. 101, 121-29, 150, 171.)

Analysis
Physical Alteration Standard.
Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024   Page 11 of 20
[15]   In granting summary judgment to American Home, the trial court relied upon

       IRT I and IRT II. Purdue argues that the Policy is “fundamentally different”

       from that in the IRT decisions, distinguishable in that the Policy promised to

       pay for “all risks” of direct physical loss or damage and “does not have a period

       of restoration.” Appellant’s Brief at 35. According to Purdue, the phrase

       “physical loss or damage” appearing in the Policy is ambiguous and Purdue has

       reasonably understood it to mean that there is coverage for “a physical hazard”

       such as COVID-19, which “either threatens to or actually impairs the safety or

       function of its property.” Id. at 28. Purdue asks that this Court embrace the

       “physical hazard” standard and “not abandon the wisdom of history in favor of

       the exceedingly narrow ‘physical alteration’ rule.” Id. at 37.

[16]   IRT I was an appeal from the grant of partial summary judgment to Cincinnati

       Casualty, with the trial court having determined that the contract language

       “direct physical loss or direct physical damage” did not encompass IRT’s claim

       for the loss of use of its theatre during the COVID-19 pandemic. 180 N.E.3d at

       404. IRT argued that the dictionary definitions of “loss” and “damage” do not

       require an observable change in the condition of the property and cited to a

       number of pre-pandemic cases for the proposition that “physical loss” includes

       the rendering of property unusable or unsafe for its intended purpose “even

       without tangible alteration or structural damage.” Id. at 409. This Court found

       that line of cases to be “readily distinguishable because they involve policies

       that included language providing protection from ‘risk of’ loss.” Id. (citing, as

       an example, Hampton Foods Inc. v. Aetna Cas. & Sur. Co., 787 F.2d 349 (8th Cir.

       Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024    Page 12 of 20
       1986), where the “imminent danger of collapse” of a grocery store, evidenced

       by falling plaster and owner’s order to vacate, was a covered loss).

[17]   The IRT I Court found instructive Roundabout Theatre Co. v. Cont’l Cas Co., 302

       A.D.2d 1, 751 N.Y.S.2d 4 (N.Y. App. Div. 2002). There, a theatre had been

       forced to close for a month due to a street closure, and the loss of use was not

       covered under policy language requiring “direct physical loss or damage.” The

       IRT I Court observed that the building in Roundabout had been rendered

       “unusable for its intended purpose because of an outside factor,” and

       continued: “The COVID-19 pandemic in the instant case is like the

       construction accident in Roundabout.” 180 N.E.3d at 410.

[18]   The IRT I Court then cited Oral Surgeons, P.C. v. Cincinnati Ins. Co., 2 F.4th 1141,

       1144 (8th Cir. 2021) for the proposition that “there must be some physicality to

       the loss or damage of property” to trigger business interruption and extra

       expense coverage. 180 N.E.3d at 410. Finally, the Court found IRT’s

       interpretation of “physical loss or physical damage” to be unreasonable because

       it was inconsistent with the “period of restoration” provision of the policy at

       issue. Id. That is, [w]ithout physical alteration or impact to IRT’s premises,

       there can be no period of restoration[.]” Id. The Court concluded that the loss

       of use claim was not physical loss or physical damage as defined by the subject

       policy. Id. at 411.

[19]   After the decision in IRT I was handed down, IRT pursued the alternative

       theory that the COVID-19 virus was present in the theatre and “physically

       Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024     Page 13 of 20
       altered the air and surfaces,” relying upon expert declarations from three

       scientists. See IRT II, 203 N.E.3d at 556. The trial court granted Cincinnati

       Casualty summary judgment “on this presence theory,” concluding that, even if

       it were present, the virus “did not physically alter the air or surfaces.” Id. at

       556-57. IRT appealed and Purdue filed an amicus brief.

[20]   The IRT II Court observed that “the trial court’s decision is consistent with the

       great weight of authority from around the country.” Id. at 558.2 The Court

       succinctly articulated its holding: “We now join that majority and hold that the

       COVID virus did not physically alter IRT’s theatre. Id. at 558. The Court

       acknowledged that there were some cases in which coverage had been found, in

       pre-COVID cases, “based on contamination by a gas, substance, or odor even

       though there was no ‘tangible’ or ‘structural’ alteration to the property.” Id.

       (citing Mellin v. N. Sec. Ins. Co., 167 N.H. 544, 115 A.3d 799 (2015) (cat urine

       odor); Sentinel Mgmt. Co. v. N.H. Ins. Co., 563 N.W.2d 296 (Minn. Ct. App.

       1997) (asbestos fibers): Gregory Packaging, Inc. v. Travelers Prop. Cas. Co. of Am.,

       Civ No. 2:12-cv-04418, 2014 WL 6675934 (D.N.J. Nov. 25, 2014) (ammonia);

       and Matzner v. Seaco Ins. Co., No. CIV. A. 96-0498-B, 1998 WL 66658 (Mass.

       Super. Ct. Aug. 12, 1998) (carbon monoxide)). The Court characterized those

       2
         We find it noteworthy that, among those authorities referenced was Circle Block Partners, LLC v. Fireman’s
       Fund Ins. Co., 44 F.4th 1014 (7th Cir. 2022). In Circle Block, the Court applied Indiana law, examined an “all
       risk” insurance policy covering direct physical loss or damage to property, and rejected the argument that the
       virus’s presence on surfaces or in the air could physically alter property. Id. at 1020-21. The “all risk” policy
       covering the insured hotel “included business income and extra expense coverage, civil authority coverage,
       dependent property coverage, communicable disease coverage, and business access coverage.” Id. at 1017.

       Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024                              Page 14 of 20
       as cases in which “the contamination involved … left insured property

       physically unusable or uninhabitable, at least temporarily.” Id. at 559. The

       Court then plainly distinguished those from COVID-based claims: “The

       COVID virus, on the other hand, does not render property unusable or

       uninhabitable. … We agree with the courts that have distinguished the COVID

       virus from the contamination at issue in the pre-COVID cases cited by IRT.”

       Id.

[21]   In summary, the Court stated:

               The issue in this case is not whether IRT lost income because of
               the COVID-19 pandemic. It undoubtedly did, just like countless
               other businesses. The issue is whether that loss is covered by
               IRT’s insurance policy. The answer is no, because the COVID
               virus did not physically alter the theatre or otherwise render it
               physically useless or uninhabitable. We therefore affirm the trial
               court’s grant of summary judgment for Cincinnati.

       Id.

[22]   Purdue claims that it procured an “all risk” policy from American Home not

       excluding COVID-19. An “all risk” policy is one which provides coverage “for

       all fortuitous losses in the absence of fraud or misconduct of the insured, unless

       the policy contains a specific provision expressly excluding the loss from

       coverage.” Associated Aviation Underwriters v. George Koch Sons, Inc., 712 N.E.2d

       1071, 1073 (Ind. Ct. App. 1999), trans. denied. Here, the Policy promises to

       “pay for all risks of direct physical loss or damage by a covered cause of loss,” if

       not excluded. But Purdue experienced no covered loss because COVID-19

       Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024    Page 15 of 20
       does not cause “direct physical loss or damage". The Policy’s inclusion of

       the words “all risk” would not cause reasonable minds to differ as to what

       constitutes “direct physical loss or damage.” Accordingly, the broader

       language does not render the phrase “direct physical loss or damage”

       ambiguous.

[23]   As Purdue has pointed out, the Policy has a period of indemnity clause as

       opposed to a strict period of time in which to restore, repair, or replace. IRT I

       looked to the “restore, repair, or replace” language in the insurance policy

       before it as additional grounds upon which IRT’s interpretation of “physical

       loss or physical damage” was unreasonable. 180 N.E.3d at 410. But the fact

       that the Policy lacks the precise requirement of the IRT policy does not obviate

       the ultimate requirement that there must be “physicality to the loss or damage

       of property.” Id. Here, the trial court was not constrained from applying the

       “physical alteration” standard of IRT I.

[24]   The trial court found no ambiguity in the Policy in accordance with IRT I, and

       applied the reasoning of IRT II in explaining that there is no “risk” that Covid

       particles cause physical damage:

               In accordance with IRT II, the Court concludes that as Covid
               particles do not create direct and physical loss or damage to
               property, then there is also no ‘risk of’ direct and physical loss or
               damage. The Court also concludes that although Purdue’s
               property includes many buildings and structures on multiple
               campuses, as opposed to IRT’s one theater, this is of no
               consequence in the application of IRT II.

       Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024       Page 16 of 20
       Appealed Order at 19. The trial court did not misconstrue the law, as set forth

       in IRT I and IRT II.

[25]   Shortly after IRT II was decided, and before the Indiana Supreme Court denied

       transfer in that case, the Seventh Circuit decided a similar case, applying

       Indiana law. Stant USA Corp. v. Factory Mut. Ins. Co., 61 F.4th 524 (7th Cir.

       2023). Stant filed suit seeking a declaratory judgment that they were entitled to

       recover under an “all risk” commercial insurance policy issued by Factory for

       lost income as a result of “physical loss or damage” at its’ customers’ properties

       caused by the COVID-19 virus. Id. at 525. On appeal of the grant of the

       insurer’s motion to dismiss, the Court first turned to the language of the policy,

       which covered property against “all risks of physical loss or damage, except as

       hereinafter excluded.” Id. at 526.

[26]   The Court observed “we have consistently held that temporary loss of use or

       restrictions on use do not constitute ‘physical’ damage or loss,” id., and cited as

       an example Sandy Point Dental P.C. v. Cincinnati Ins. Co., 20 F.4th 327 (7th Cir.

       2021). In Sandy Point, the Court held that the word ‘physical’ modified both

       damage and loss, and there must be “some physicality to either that loss or

       damage” in order to fall within policy coverage. Id. at 332. Support for the

       interpretation was found with reference to the policy’s stated period of

       restoration, which contemplated “the date by which the property should be

       repaired, rebuilt or replaced.” Id. at 333. That is, without a physical alteration,

       there would be no need for repair, rebuilding, or replacement. Id. Sandy

       Point’s allegations – that the continuous presence of the virus on and around

       Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024      Page 17 of 20
       the premises rendered the premises unsafe and unfit for the intended use, and

       thus caused physical damage – were not sufficient to allege direct physical loss.

       Id. at 335. They were addressed to a loss of the property’s intended or preferred

       use but did not describe how the presence of the virus or the resulting closure

       order physically altered its property. Id.

[27]   The Stant Court concluded that, although there was some difference between

       the language of Stant’s commercial policy and the Sandy Point policy because

       the latter included the word “direct” as a qualifier, the same “essential

       requirement” was imposed by the policy. Stant, 61 F.4th at 527. “The

       requirement that the property loss or damage must be ‘physical’ was the

       limitation that mandated a physical alteration to the property.” Id. Observing

       that the “technical difference in language does not portend a different result,”

       the Court held that Stant’s claim did not fall within the coverage of the policy

       for physical property loss or damage. Id. Here, the trial court likewise properly

       acknowledged the essential requirement of a physical alteration.

       Uninhabitability.

[28]   Purdue also contends that it was deprived of the opportunity to show that some

       of its buildings were uninhabitable. It suggests that it could have recovered

       under the Policy with sufficient factual development. However, the relevant

       allegations of Purdue’s complaint consist of plain assertions that the presence of

       COVID-19 was the causation of any such uninhabitability. Although the IRT

       II panel recognized that insurance coverage might exist for uninhabitability in

       Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024       Page 18 of 20
       certain circumstances, the decision plainly rejected the idea that COVID could

       independently render a structure uninhabitable: “The COVID virus, on the

       other hand, does not render property unusable or uninhabitable.” 203 N.E.3d

       at 559.

[29]   The Policy is not ambiguous, and the trial court did not err in applying the law

       to the claim for a declaratory judgment. Because Purdue’s claim does not fall

       within the coverage of the Policy for physical property loss or damage, we need

       not address the alternative argument that the claim would fall within the

       pollution and contamination exclusion of the Policy.

       Conclusion
[30]   American Home has shown the absence of a genuine issue of material fact and

       demonstrated its entitlement to judgment as a matter of law regarding coverage

       under the Policy. Accordingly, the trial court did not err in granting summary

       judgment in favor of American Home.

[31]   Affirmed.

       Crone, J., and Pyle, J., concur.

       Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024   Page 19 of 20
ATTORNEYS FOR APPELLANT
George M. Plews
Gregory M. Gotwald
Joanne R. Sommers
Christopher E. Kozak
Plews Shadley Racher & Braun LLP
Indianapolis, Indiana

ATTORNEYS FOR APPELLEE
James M. Hinshaw
Margaret M. Christensen
Dentons Bingham Greenebaum LLP
Indianapolis, Indiana
Keith Moskowitz
Dentons US LLP
Chicago, Illinois
Erin Bradham
Doug Janicik
Dentons US LLP
Phoenix, Arizona

Court of Appeals of Indiana | Opinion 23A-PL-1413 | February 28, 2024   Page 20 of 20