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United States Court of Appeals for the Sixth Circuit
September 16, 2021, Argued; September 22, 2021, Decided; September 22, 2021, Filed
File Name: 21a0224p.06
[*399] [***2] SUTTON, Chief Judge. Santosuossos is an Italian restaurant in Medina, Ohio. The COVID-19 pandemic was not good for the restaurant's business or for that matter most hospitality services. First [**2] came an understandable reluctance by patrons to enter enclosed public spaces such as restaurants. Then came the State of Ohio's order to suspend all in-person dining operations at restaurants to slow the spread of the virus. Through it all, Santosuossos lost considerable revenue and understandably blamed the pandemic and shut-down order for its economic [*400] woes. The owner of the restaurant sued its insurer, Acuity Insurance Company, for coverage under its commercial property insurance policy, which covers business interruption "caused by direct physical loss of or damage to property." R.7-7 at 29. The district court granted Acuity's motion to dismiss, reasoning that the policy did not cover this kind of peril. We agree and affirm.
In March 2020, the Governor of Ohio declared a state of emergency in connection with the COVID-19 pandemic. A few days later, the Director of the Ohio Department of Health ordered restaurants across the State to close their doors to in-person diners. The order forced Santosuossos "to halt ordinary operations." R.1-1 at 3. Although the closure order permitted restaurants to offer takeout services, in-person dining generates the "substantial majority of [Santosuossos's] [**3] revenue." Id. The restaurant sustained significant losses and laid off employees as a result of the order.
The owner of the restaurant, Santo's Italian Café LLC, filed a claim with its insurance company, Acuity, seeking recovery under its commercial property insurance policy. After Acuity denied coverage, the owner filed a complaint in Ohio state court, seeking a declaration that required Acuity to reimburse it for the income lost while the closure orders were in place. Acuity removed the lawsuit to federal court and filed a motion to dismiss for failure to state a claim. See Fed. R. Civ. P. 12(b)(6). The district court granted the motion, reasoning that the policy did not cover lost income attributable to the pandemic and any shut-down orders.
[***3] ] Ohio law governs this dispute. An insurance policy amounts to a contract, the meaning of which presents a question of law. Lager v. Miller-Gonzalez, 120 Ohio St. 3d 47, 2008- Ohio 4838, 896 N.E.2d 666, 669 (Ohio 2008). In Ohio, as in all States (we expect), the state courts construe the terms of a contract in accordance with their conventional meaning. Laboy v. Grange Indem. Ins. Co., 144 Ohio St. 3d 234, 2015- Ohio 3308, 41 N.E.3d 1224, 1227 (Ohio 2015).
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
15 F.4th 398 *; 2021 U.S. App. LEXIS 28720 **; 2021 FED App. 0224P (6th Cir.) ***
SANTO'S ITALIAN CAFÉ LLC, Plaintiff-Appellant, v. ACUITY INSURANCE COMPANY, Defendant-Appellee.
Prior History: [**1] Appeal from the United States District Court for the Northern District of Ohio at Cleveland. No. 1:20-cv-01192. Pamela A. Barker, District Judge.
Santo's Italian Caf LLC v. Acuity Ins. Co., 508 F. Supp. 3d 186, 2020 U.S. Dist. LEXIS 239382, 2020 WL 7490095 (N.D. Ohio, Dec. 21, 2020)
restaurant, physical loss, coverage, dining, in-person, shut-down, ambiguous, losses, physical damage, deprivation, suspension, pandemic, orders, terms, insurance contract, insurance policy, covers, repair, virus, words, property insurance, regulations, policies, replaced, canon, commercial property, property damage, indirectly, surplusage, tangible
Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Question of Law, Ambiguous Terms, Unambiguous Terms, Policy Interpretation, Constitutional Law, Separation of Powers, Governments, State & Territorial Governments, Employees & Officials