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Court of Appeals of Michigan
February 1, 2022, Decided
Plaintiffs, the corporate entities that operate two restaurants in the mid-Michigan area, appeal by right the trial court's order granting summary disposition in favor of defendant, which provided plaintiffs with a commercial insurance policy. We affirm.
The year 2020 saw the outbreak of a global pandemic caused by the SARS-CoV-2 coronavirus, which causes a disease known [*2] as COVID-19. The outcome of infection can range from no symptoms at all to death, and surviving an infection can cause lasting health effects. It is an understatement to say that governments worldwide, national to local, have struggled with how best to address not only the medical fallout from the pandemic, but also the social and economic ramifications. Although the virus remains not fully understood, it is generally believed to be transmissible primarily through airborne viral particles or virus-bearing droplets, but it can also be transmissible through touching contaminated surfaces and then touching the eyes, nose, or mouth. Not surprisingly, one of the more common methods implemented by governments for reducing the spread of the disease has been "social distancing." Very broadly, social distancing generally entails keeping one's distance from others; avoiding large groups, especially in enclosed spaces; and staying home to the extent possible.
Governor Whitmer issued a number of Executive Orders (EOs) in an effort to address and stem the rising tide of COVID-19 in Michigan. Effective March 24, 2020, Governor Whitmer signed EO 2020-21, which, in relevant part, prohibited nonessential [*3] in-person work, generally ordered persons to stay home, and required persons to stay at least six feet away from each other ("social distancing"). Subsequently, EO 2020-42, in relevant part, extended EO 2020-21. As a consequence of those EOs, plaintiffs' restaurants—like many other businesses in Michigan and elsewhere—experienced substantial loss of income. As of the date of plaintiffs' complaint, one of its restaurants remained in operation but limited to carry-out services, and one restaurant had closed entirely.
Defendant issued a commercial insurance policy to plaintiffs. The policy contains a "Business Income (and Extra Expense) Coverage Form," which provides, in relevant part:
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2022 Mich. App. LEXIS 632 *; 2022 WL 301555
GAVRILIDES MANAGEMENT COMPANY, LLC, GAVRILIDES PROPERTY MANAGEMENT, LLC, and GAVRILIDES MANAGEMENT WILLIAMSTON, LLC, Plaintiffs-Appellants, v MICHIGAN INSURANCE COMPANY, Defendant-Appellee.
Notice: THIS OPINION IS UNCORRECTED AND SUBJECT TO REVISION BEFORE PUBLICATION IN THE MICHIGAN COURT OF APPEALS REPORTS.
Subsequent History: Motion granted by Gavrilides Mgmt. Co., LLC v. Mich. Ins. Co., 2022 Mich. LEXIS 974 (Mich., May 18, 2022)
Prior History: [*1] Ingham Circuit Court. LC No. 20-000258-CB.
Gavrilides Mgmt. Co. LLC v. Mich. Ins. Co., 2020 Mich. App. LEXIS 6782 (Mich. Ct. App., Oct. 13, 2020)
virus, plaintiffs', physical loss, coverage, restaurants, premises, business income, executive order, cause of loss, described premises, civil authority, property damage, repair, summary disposition, endorsements, unambiguous, ordinance, insurance policy, public policy, disease, losses, extra expense, restoration, distancing, replaced, parties, amicus
Civil Procedure, Appeals, Standards of Review, De Novo Review, Summary Judgment Review, Standards of Review, Summary Judgment, Entitlement as Matter of Law, Legal Entitlement, Genuine Disputes, Abuse of Discretion, Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Judicial Review, Ambiguous Terms, Construction Against Insurers, Equal Bargaining Power, Business & Corporate Compliance, Contracts Law, Types of Contracts, Rescission, Governments, State & Territorial Governments, Legislatures, Entire Contract, Technical Constructions & Meanings, Ordinary & Usual Meanings, Exclusions, Unambiguous Terms, Federal Government, Executive Offices, Contracts Law, Contract Interpretation, Courts, Authority to Adjudicate, Judicial Precedent, Questions of Fact & Law