Estes v. Cincinnati Ins. Co.

Estes v. Cincinnati Ins. Co.

Opinion

 [*697]  MURPHY, Circuit Judge. Ryan Estes, a dentist, conducts his dental practice through a professional services corporation named Ryan P. Estes, D.M.D., M.S., P.S.C. This corporation, which we will call "Estes," operates two dental offices in Kentucky. In response to the COVID-19 pandemic, Kentucky temporarily barred healthcare corporations like Estes from providing  [***2]  nonemergency care. Estes lost substantial income as a result. The company sought to recover this money under a property insurance policy it had purchased from Cincinnati Insurance Company. The policy required Cincinnati [**2]  Insurance to pay Estes for lost business income that results from a "direct" "physical loss" to its dental offices. Policy, R.23-4, PageID 763, 783. This appeal requires us to consider whether the COVID-19 pandemic or the Kentucky shutdown orders caused such a physical loss to Estes's offices so as to allow it to recover its lost income. We and other circuit courts have uniformly interpreted this "physical loss" language not to cover similar pandemic-related claims under the laws of many other states. Because we believe Kentucky's highest court would agree with these decisions, we affirm the dismissal of Estes's complaint.

Estes owns and operates two northern Kentucky dental offices, one in Florence  [*698]  and the other in Fort Thomas. Like many Kentucky businesses, Estes has unfortunately suffered significant business losses from the combined effects of the COVID-19 pandemic and follow-on government shutdown orders that restricted normal business activities. In mid-March 2020, Kentucky's state government prohibited healthcare professionals from performing nonemergency procedures. This order barred Estes from providing routine dental care for about six weeks until late April. Estes could, [**3]  however, continue to provide emergency services during this time.

Before the pandemic, Estes purchased a policy from Cincinnati Insurance to insure its business property. This policy indicates that Cincinnati Insurance "will pay for direct 'loss'" to Estes's "Covered Property" (including its dental offices and the property within the offices) if that loss results from a "Covered Cause of Loss." Policy, R.23-4, PageID 748. The policy defines "Covered Causes of Loss" to mean any "direct 'loss'" except losses originating from expressly excluded sources, such as earthquakes or government seizures. Id., PageID 750-58. Critically, moreover, the policy defines the ubiquitous word "loss" to mean "accidental physical loss or accidental physical damage." Id., PageID 783.

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