Court Opinion

ID: 6060760
Source: CourtListenerOpinion
Date Created: 2022-01-13 16:00:32.117309+00
Date Added: 2024-06-11T08:51:52.866973
License: Public Domain

21-1323-cv
    Rye Ridge Corp., Haromar Inc. v. Cincinnati Insurance Co.

                                     UNITED STATES COURT OF APPEALS
                                         FOR THE SECOND CIRCUIT

                                                   SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

            At a stated term of the United States Court of Appeals for the Second Circuit, held at the
    Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
    13th day of January, two thousand twenty-two.

    PRESENT:    DENNIS JACOBS,
                REENA RAGGI,
                WILLIAM J. NARDINI,
                      Circuit Judges.
    _____________________________________

    RYE RIDGE CORP., a New York corporation, on
    behalf of themselves and all others similarly
    situated, DBA Rye Ridge Deli, HAROMAR, INC.,
    a Connecticut corporation, on behalf of themselves
    and all others similarly situated, DBA Rye Ridge
    Deli,

                                Plaintiffs-Appellants,

                       v.                                                                21-1323-cv

    CINCINNATI INSURANCE COMPANY, an Ohio
    corporation,

                                Defendant-Appellee.

    _____________________________________

    For Plaintiffs-Appellants:                                  GABRIEL A. PANEK (Robert J. Nelson, Jacob H.
                                                                Polin, on the brief), Lieff Cabraser Heimann &
                                                                Bernstein, LLP, San Francisco, CA, and New
                                                                York, NY.
For Defendant-Appellee:                            DANIEL G. LITCHFIELD (Alan I. Becker,
                                                   Laurence J.W. Tooth, Edward Fogarty, Jr., on
                                                   the brief), Litchfield Cavo, LLP, Chicago, IL,
                                                   and New York, NY.

       On appeal from the United States District Court for the Southern District of New York
(Lorna G. Schofield, J.).

    UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the order of the district court entered on April 23, 2021, is AFFIRMED.

         Plaintiffs-Appellants Rye Ridge Corp. and Haromar, Inc. (the “Delis”) brought an action
against Defendant-Appellee Cincinnati Insurance Company (“Cincinnati”), asserting claims for
breach of contract, breach of the covenant of good faith and fair dealing, deceptive business
practices under N.Y. Gen. Bus. Law § 349 et seq., unfair trade practices under Conn. Gen. Stat.
§ 42-110a et seq., and declaratory relief. The Delis’ complaint is premised on Cincinnati’s
allegedly improper denial of insurance coverage for certain business losses resulting from COVID-
19 and related government restrictions. The district court dismissed the complaint for failure to
state a claim under Federal Rule of Civil Procedure 12(b)(6). The Delis now appeal. We assume
the reader’s familiarity with the record. We review de novo a district court’s dismissal under Rule
12(b)(6). Biro v. Condé Nast, 807 F.3d 541, 544 (2d Cir. 2015).

         The sole issue on appeal is whether under New York law (which the parties agree governs
here), the Delis experienced a “direct physical loss” within the meaning of their insurance policy
with Cincinnati when the governors of New York and Connecticut issued executive orders limiting
the Delis’ use of their insured premises for dine-in service. Insofar as the district court concluded
that they had not, the Delis ask us to reverse the dismissal of their complaint or, alternatively, to
certify this question to the New York Court of Appeals. Both arguments are foreclosed by this
Court’s recent decision in 10012 Holdings, Inc. v. Sentinel Insurance Co., No. 21-80-CV, 2021
WL 6109961 (2d Cir. Dec. 27, 2021).

        In 10012 Holdings, the Court considered whether an art gallery was entitled to coverage
under an insurance policy—materially identical to the one at issue here and also governed by New
York law—for alleged business losses that resulted from the COVID-19 pandemic and related
government restrictions. Id. at *1. Relying on the First Department’s decision in Roundabout
Theatre Co. v. Continental Casualty Co., 751 N.Y.S.2d 4 (1st Dep’t 2002), this Court held that,
under New York law, the term “direct physical loss” in the insurance policy “do[es] not extend to
mere loss of use of a premises, where there has been no physical damage to such premises”;
instead, “direct physical loss” and “physical damage” “require actual physical loss of or damage
to the insured’s property.” 10012 Holdings, Inc., 2021 WL 6109961, at *4. Accordingly,
because the plaintiff alleged nothing more than the loss of use of its premises, the Court affirmed
the district court’s dismissal of the complaint for failing to allege any physical damage to plaintiff’s

                                                   2
property. See id. at *1. Having found resolution of this issue to be clearly discernible from
existing New York law, the Court also rejected the plaintiff’s request to certify the issue to the
New York Court of Appeals. See id. at *6.

        Here, as in 10012 Holdings, the Delis do not allege any physical damage to their insured
premises, and the relevant terms of their insurance policy with Cincinnati are not materially
different from those at issue in 10012 Holdings. Indeed, the Delis concede that 10012 Holdings
“speaks directly to both issues in the appeal in this case” and thus is controlling. We therefore
hold that the district court correctly dismissed the complaint, and, as we did in 10012 Holdings,
2021 WL 6109961, at *5–6, we decline to certify the question to the New York Court of Appeals. 1

      We have considered Appellants’ remaining arguments and find them to be without merit.
Accordingly, we AFFIRM the April 23, 2021, order of the district court.

                                                      FOR THE COURT:
                                                      Catherine O’Hagan Wolfe, Clerk of Court

         1
           Plaintiffs’ request to hold this appeal in abeyance pending further development of the issue in the New York
courts, or pending appellants in 10012 Holdings seeking rehearing or further appellate review, is thus denied.

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