Three Won Three, Corp. v. Property-Owners Ins. Co.

Three Won Three, Corp. v. Property-Owners Ins. Co.

Opinion

Per Curiam.

Plaintiffs appeal as of right the trial court's order granting summary disposition in favor of defendant under MCR 2.116(C)(8). We affirm.

I. BACKGROUND

Plaintiffs operate restaurants in Wayne County. In early March 2020, the Department of Health and Human Services identified the first two presumptive cases of severe acute respiratory syndrome coronavirus-2, otherwise known as SARS-CoV-2 (the virus), in Michigan. The virus causes the disease commonly known as COVID-19. The Governor later issued Executive Order 2020-21, which required nonessential workers to remain at home and placed restrictions on in-person businesses. The Governor subsequently issued additional orders that modified the restrictions and extended their duration. According to the complaint, plaintiffs' restaurants were deemed essential businesses under Executive Order 2020-21 and remained open for carryout and delivery services, but were prohibited from offering [*2]  dine-in services.

Plaintiffs had each purchased a commercial insurance policy from defendant that included business-interruption coverage. The relevant terms of the three policies are identical. Thus, for convenience, we collectively refer to the insurance policies as "the policy."

In September 2020, plaintiffs filed a complaint seeking a declaratory judgment that their losses were covered under the insurance policy, and also alleged breach of contract. Plaintiffs sought coverage under the policy's business-income and civil-authority provisions. In support of both claims, plaintiffs alleged that the pertinent executive orders prevented customers from entering their restaurants for dine-in services, and thus caused adverse physical and tangible changes to their restaurants. Defendant moved for summary disposition as its first responsive filing, primarily arguing that the complaint should be dismissed because plaintiffs could not show that their business-income losses were caused by physical damage to their restaurants. The trial court agreed and granted defendant's motion. This appeal followed.¹

II. DIRECT PHYSICAL LOSS OF, OR DAMAGE TO, PROPERTY

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