Sweet Berry Café, Inc. v. Soc'y Ins., Inc.

Sweet Berry Café, Inc. v. Soc'y Ins., Inc.

Opinion

JUSTICE JORGENSEN delivered the judgment of the court, with opinion.

Justice Brennan concurred in the judgment and opinion.

Justice [**2]  McLaren specially concurred, with opinion.

OPINION

 [*P1]  In this insurance coverage case, plaintiff, Sweet Berry Café, Inc. (Café), sought a declaration that its commercial property insurance policy with defendant, Society Insurance, Inc. (Society), covered business income losses it suffered due to the COVID-19 pandemic and the Governor's executive orders, which restricted in-person dining, but not carryout or delivery services, at restaurants and similar establishments. The trial court entered judgment on the pleadings (735 ILCS 5/2-615(e) (West 2020)) in Society's favor. Café appeals, arguing that (1) the policy's coverage under the "Business Income" and "Extra Expense" provisions for "direct physical loss of or damage to Covered Property" includes losses due to the pandemic and the orders and (2) the "Ordinance or Law" exclusion does not preclude coverage, because it applies in limited situations and, in any event, proclamations or executive orders are neither laws nor ordinances. We hold that neither the presence of the virus at Café's premises nor the pandemic-triggered executive orders that barred in-person dining at restaurants constitute "direct physical loss of or damage to" Café's property. Given [**3]  that we conclude that there was no coverage, we need not reach Café's argument concerning the ordinance or law exclusion. Affirmed.

 [*P2]  I. BACKGROUND

 [*P3]  A. Complaint Allegations

 [*P4]  On May 27, 2020, Café, located in South Elgin, filed a declaratory-judgment complaint (735 ILCS 5/2-701 (West 2020)), seeking coverage, under a "Businessowners Policy" it purchased from Society, for losses resulting from restricted operations during the pandemic. In a September 18, 2020, first amended complaint, Café sought coverage under the policy's "Business Income" "Extra Expense", and "Civil Authority" provisions. Café alleged that it sustained "direct physical loss of or damage to" property at its premises resulting from the SARS-CoV-2 virus and/or the pandemic and that the virus and the pandemic are "Covered Causes of Loss" under the policy. Further, it alleged that it incurred covered losses resulting from the Governor's orders.

 [*P5]  The complaint noted that, after the World Health Organization characterized the COVID-19 outbreak as a pandemic, the Governor, Jay Robert Pritzker, issued Executive Order 2020-7 on March 16, 2020, whose goal was to slow the spread of the virus by minimizing in-person interaction in an environment [**4]  with "frequently used services in public settings, including bars and restaurants," stating that the reduction of on-premises consumption of food and beverages was warranted. Exec. Order No. 2020-7, 44 Ill. Reg. 5536 (Mar. 16, 2020), https://www.illinois.gov/government/executive-orders/executive-order.executive-order-number-7.2020.html [https://perma.cc/A4AF-T8TT].¹ On March 20, 2020, the Governor issued a closure order (Executive Order 2020-10, the stay-at-home order), requiring Illinois residents to stay at home, except for essential travel for essential work, supplies, and outdoor activities through April 7, 2020. Exec. Order No. 2020-10, 44 Ill. Reg. 5857 (Mar. 20, 2020), https://www.illinois.gov/government/executive-orders/executive-order.executive-order-number-10.2020.html [https://perma.cc/AL3B-TXGW]. The order also reduced the allowable public and private gathering size to no more than 10 people.² Id. The stay-at-home order was subsequently extended to May 29, 2020. Exec. Order No. 2020-33, 44 Ill. Reg. 8425 (Apr. 30, 2020), https://www.illinois.gov/government/executive-orders/executive-order.executive-order-number-33.2020.html [https://perma.cc/D337-TNHC]. The requirements of [**5]  the March 20, 2020, order, including the classification as essential businesses of restaurants and establishments engaged in the retail sale of alcohol, were renewed. Exec. Order No. 2020-32, 44 Ill. Reg. 8409 (Apr. 30, 2020), https://www.illinois.gov/government/executive-orders/executive-order.executive-order-number-32.2020.html [https://perma.cc/5PW8-5DLT].

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