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United States Court of Appeals for the Eighth Circuit
April 14, 2021, Submitted; July 2, 2021, Filed
WOLLMAN, Circuit Judge.
Oral Surgeons, P.C., offers oral and maxillofacial surgery services at its four offices in the Des Moines, Iowa, area. Oral Surgeons stopped performing non-emergency procedures in late March 2020, after [*2] the governor of Iowa declared a state of emergency and imposed restrictions on dental practices because of the COVID-19 pandemic. Oral Surgeons resumed procedures in May 2020 as the restrictions were lifted, adhering to guidance from the Iowa Dental Board.
Oral Surgeons submitted a claim to The Cincinnati Insurance Company (Cincinnati) for losses it suffered as a result of the suspension of non-emergency procedures. The policy insured Oral Surgeons against lost business income and certain extra expense sustained due to the suspension of operations "caused by direct 'loss' to property." The policy defines "loss" as "accidental physical loss or accidental physical damage." Cincinnati responded that the policy did not afford coverage because there was no direct physical loss or physical damage to Oral Surgeons's property. This lawsuit followed. The district court1 granted Cincinnati's motion to dismiss, concluding that Oral Surgeons was not entitled to declaratory judgment and that it had failed to state claims for breach of contract and bad faith. Reviewing de novo and applying Iowa law in this diversity action, we affirm. See Sletten & Brettin Orthodontics, LLC v. Cont'l Cas. Co., 782 F.3d 931, 934 (8th Cir. 2015) (standard of review).
Oral Surgeons maintains that the COVID-19 [*3] pandemic and the related government-imposed restrictions on performing non-emergency dental procedures constituted a "direct 'loss' to property" because Oral Surgeons was unable to fully use its offices. Oral Surgeons argues that the policy's disjunctive definition of "loss" as "physical loss" or "physical damage" creates an ambiguity that must be construed against Cincinnati. To give the terms separate meanings, Oral Surgeons suggests defining physical loss to include "lost operations or inability to use the business" and defining physical damage as a physical alteration to property. Appellant's Br. 41. Amicus Restaurant Law Center contends that "physical loss" occurs whenever the insured is physically deprived of the insured property.
] We must construe the policy to give effect to the intent of the parties. Boelman v. Grinnell Mut. Reinsurance Co., 826 N.W.2d 494, 501 (Iowa 2013). Intent is determined by the language of the policy itself, unless there is ambiguity. Id. Ambiguity exists "[o]nly when policy language is subject to two reasonable interpretations." T.H.E. Ins. Co. v. Glen, 944 N.W.2d 655, 662 (Iowa 2020); see Cairns v. Grinnell Mut. Reinsurance Co., 398 N.W.2d 821, 824 (Iowa 1987) ("Ambiguity exists if, after the application of pertinent rules of interpretation to the face of the instrument, a genuine uncertainty results as to which one of two or more meanings is the [*4] proper one." (cleaned up)). "Generally speaking, the plain meaning of the insurance contract prevails." Glen, 944 N.W.2d at 662.
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2021 U.S. App. LEXIS 19775 *; __ F.4th __; 2021 WL 2753874
Oral Surgeons, P.C., Plaintiff - Appellant v. The Cincinnati Insurance Company, Defendant - Appellee;The Restaurant Law Center, Amicus on Behalf of Appellant(s) American Property Casualty Insurance Association; National Association of Mutual Insurance Companies, Amici on Behalf of Appellee(s)
Prior History: [*1] Appeal from United States District Court for the Southern District of Iowa - Central.
physical loss, physical damage, loss of use, coverage, insured, non-emergency, alteration, ambiguity, Food
Contracts Law, Contract Interpretation, Intent, Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Ambiguous Terms, Plain Language, Business Insurance, Commercial General Liability Insurance, Property Claims, Property Insurance, Coverage, Property Damage, Ambiguous Terms, Unambiguous Terms