Nashville Underground, LLC v. AMCO Insurance Company

IN THE UNITED STATES DISTRICT COURT FOR THE

MIDDLE DISTRICT OF TENNESSEE

NASHVILLE DIVISION NASHVILLE UNDERGROUND, LLC, )

) Plaintiff, ) NO. 3:20-cv-00426

) v. ) JUDGE RICHARDSON

) AMCO INSURANCE COMPANY, )

) Defendant. )

MEMORANDUM OPINION Pending before the Court is Defendant AMCO Insurance Company’s Motion to Dismiss (Doc. No. 10, “Motion”), supported by an accompanying Memorandum of Law (Doc. No. 11). Plaintiff Nashville Underground, LLC filed a response (Doc. No. 22, “Response”), and Defendant filed a reply (Doc. No. 24, “Reply”). For the reasons stated herein, Defendant’s Motion will be granted.

BACKGROUND1 Plaintiff Nashville Underground, LLC is a nationally acclaimed, seven-story restaurant, bar, night club and live music venue located directly on Broadway, a popular tourist destination, in downtown Nashville, Tennessee. (Doc. No. 1-3 at ¶ 7). Plaintiff generates significant revenue from private events, live music performances, DJ events, food sales and alcohol sales. (Id.). Plaintiff does not derive any revenue from drive-thru, curbside pickup or delivery service. (Id.).

Plaintiff renewed its commercial insurance policy (Policy Number ACP CPAA 30-2- 8529549, “Policy”) with Defendant AMCO Insurance Company on November 22, 2019 for coverage from the date of purchase through November 22, 2020. (Id. at ¶ 8). The Policy provided indemnification for property loss and business income loss. (Id.).

In February 2020, the first case of COVID-19 was reported in the United States. (Id. at ¶ 10). On March 12, 2020, the Governor of Tennessee signed Executive Order No. 14, declaring a state of emergency in order to facilitate a response to the spread and effects of COVID-19. (Id. at ¶ 11). On March 15, 2020, the Nashville-Davidson County Board of Health issued a Declaration, thereby directing the Chief Medical Director to order the closure of certain businesses, including all restaurants and bars which sold more alcohol than food (hereinafter referred to as “limited- service restaurants”, which is the term used to describe such restaurants in Tenn. Code Ann. § 57- 4-102(22)). (Id. at ¶ 12). The Declaration stated that “basic precautions of infection control and prevention, including . . . practicing respiratory and hand hygiene” and that “COVID-19 is a communicable disease with significant morbidity and mortality, and presents a severe danger to public health.” (Id.).

On March 17, 2020, the Chief Medical Director issued an order closing all limited-service restaurants. (Id. at ¶ 13). Plaintiff was in the category of business closed by the Chief Medical Director’s Order; thus, Plaintiff was forced to fully shutter its business, thereby losing all of its business income. (Id. at ¶ 14). On March 22, 2020, Tennessee Governor Bill Lee issued Executive Order No. 17, which effectively closed all restaurants and bars, with the exception of restaurants which served menu items via drive-thru, curbside pickup and/or delivery. (Id. at ¶ 15). Executive Order No. 17 admonished the public to limit the spread of COVID-19 by “practicing good personal hygiene, including washing hands, especially after touching any frequently used item or surface, avoiding touching the face, and disinfecting frequently used items and surfaces as much as possible.” (Id. at ¶ 16). Prior to closure of Plaintiff’s business, one or more of Plaintiff’s employees believed they were in contact with an individual infected with COVID-19 or had been in contact with an individual infected with COVID-19. (Id. at ¶ 17).

On March 16, 2020, Plaintiff gave notice of its losses and damages to Defendant by promptly notifying Defendant pursuant to the Policy by filing a claim. (Id. at ¶ 20). On March 23, 2020, Defendant denied Plaintiff’s claim, asserting that any loss resulting from a virus, as well as any losses related to a closure by civil authority, were excluded. (Id. at ¶ 21). Defendant conveyed this denial verbally over the phone and via a denial letter. (Id.). On March 26, 2020, Plaintiff resubmitted its claim for additional consideration, and on April 1, 2020, Defendant again denied the claim. (Id. at ¶ 22). The adjuster for Defendant denied the claim, in part, because no evidence or report of food contamination was provided. (Id. at ¶ 25).

Plaintiff initially filed this lawsuit in the Circuit Court for Davidson County, Tennessee, asserting various claims based on Defendant’s denial of Plaintiff’s above-described claim for insurance coverage. (Doc. No. 1-1). Plaintiff thereafter filed an amended complaint in that court asserting two claims: breach of contract and a request for a declaratory judgment stating that Plaintiff’s losses were covered losses under the Policy. (Doc. No. 1-3, “Amended Complaint”). On May 19, 2020, Defendant removed the case to this Court. (Doc. No. 1). On June 9, 2020, Defendant filed the instant Motion, arguing that both of Plaintiff’s claims should be dismissed because (according to Defendant) under the plain language of the Policy, Plaintiff’s alleged losses are not covered. (Doc. No. 10; Doc. No. 11 at 1). The Motion is now ripe for decision.

LEGAL STANDARD For purposes of a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the Court must take all of the factual allegations in the complaint as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Id. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id. When there are well- pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Id. at 1950. A legal conclusion, including one couched as a factual allegation, need not be accepted as true on a motion to dismiss, nor are mere recitations of the elements of a cause of action sufficient. Id.; Fritz v. Charter Township of Comstock, 592 F.3d 718, 722 (6th Cir. 2010), cited in Abriq v. Hall, 295 F. Supp. 3d 874, 877 (M.D. Tenn. 2018). Moreover, factual allegations that are merely consistent with the defendant’s liability do not satisfy the claimant’s burden, as mere consistency does not establish plausibility of entitlement to relief even if it supports the possibility of relief. Iqbal, 556 U.S. at 678.

In determining whether a complaint is sufficient under the standards of Iqbal and its predecessor and complementary case, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), it may be appropriate to “begin [the] analysis by identifying the allegations in the complaint that are not entitled to the assumption of truth.” Iqbal, 556 U.S. at 680. This can be crucial, as no such allegations count toward the plaintiff’s goal of reaching plausibility of relief. To reiterate, such allegations include “bare assertions,” formulaic recitation of the elements, and “conclusory” or “bold” allegations. Id. at 681. The question is whether the remaining allegations – factual allegations, i.e., allegations of factual matter – plausibly suggest an entitlement to relief. Id. If not, the pleading fails to meet the standard of Federal Rule of Civil Procedure 8 and thus must be dismissed pursuant to Rule 12(b)(6). Id. at 683.

As a general rule, matters outside the pleadings may not be considered in ruling on a motion to dismiss under Rule 12(b)(6) unless the motion is converted to one for summary judgment under Rule 56. Fed. R. Civ. P. 12(d). When a document is referred to in the pleadings and is integral to the claims, it may be considered without converting a motion to dismiss into one for summary judgment. Doe v. Ohio State Univ., 219 F.Supp.3d 645, 652-53 (S.D. Ohio 2016); Blanch v. Trans Union, LLC, 333 F. Supp. 3d 789, 791-92 (M.D. Tenn. 2018).

On a Rule 12(b)(6) motion to dismiss, “[t]he moving party has the burden of proving that no claim exists.” Total Benefits Planning Agency, Inc. v. Anthem Blue Cross and Blue Shield, 552 F.3d 430, 433 (6th Cir. 2008). That is not to say that the movant has some evidentiary burden; as should be clear from the discussion above, evidence (as opposed to allegations as construed in light of any allowable matters outside the pleadings) is not involved on a Rule 12(b)(6) motion. The movant’s burden, rather, is a burden of explanation; since the movant is the one seeking dismissal, it is the one that bears the burden of explaining—with whatever degree of thoroughness is required under the circumstances—why dismissal is appropriate for failure to state a claim.

ANALYSIS I. Choice of Law In a diversity action, the choice-of-law rules of the forum state apply. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941); Montgomery v. Wyeth, 580 F.3d 455, 459 (6th Cir. 2009). Here, the forum state is Tennessee. “In Tennessee, absent a valid choice of law provision, the rights and obligations under an insurance policy are governed by the law of the state where the insurance policy was ‘made and delivered.’” Charles Hampton’s A-1 Signs, Inc. v. Am. States Ins. Co., 225 S.W.3d 482, 485 n.1 (Tenn. Ct. App. 2006) (quoting Ohio Cas. Ins. Co. v. Travelers Indem. Co., 493 S.W.2d 465, 467 (Tenn. 1973)); see also Onebeacon Am. Ins. Co. v. Jaco Airfield Constr., Inc., Nos. 04-2432 B, 03-2649 B, 2007 WL 1039355, at *3 (W.D. Tenn. Apr. 2, 2007) (“In the absence of an enforceable choice of law clause in an insurance policy, Tennessee courts apply the substantive law of the state in which the policy was issued and delivered”).

Here, Defendant issued the Policy to Plaintiff—a business with its sole location in Nashville, Tennessee. (Doc. No. 1-3 at ¶ 2; Doc. No. 10-2 at 2).2 Thus, the Policy was issued and delivered in Tennessee, and Tennessee law governs the interpretation of the Policy absent an enforceable choice-of-law clause specifying the law of some other state. Charles Hampton’s A-1 Signs, Inc., 225 S.W.3d at 485 n.1. The parties do not point out a choice-of-law clause in the Policy, and the Court’s own review of the Policy does not reveal one. Additionally, the parties appear to be in agreement that Tennessee law applies to the interpretation of the Policy, as both parties cite and rely upon Tennessee law in their filings related to the Motion. Therefore, the Court concludes that Tennessee substantive law governs the Policy.

II. Tennessee Contract Law Under Tennessee law, “[a]n insurance policy is a contract, and as such, [the court’s] analysis must be grounded in principles of contract law.” Christenberry v. Tipton, 160 S.W.3d 487, 492 (Tenn. 2005); see also Allstate Ins. Co. v. Tarrant, 363 S.W.3d 508, 527 (Tenn. 2012) (Koch, J., dissenting) (“Insurance policies are, at their core, contracts.”). Thus, the terms of an insurance policy “should be given their plain and ordinary meaning, for the primary rule of contract interpretation is to ascertain and give effect to the intent of the parties.” Garrison v. Bickford, 377

When a contract is unambiguous, a court may determine the interpretation on a motion to dismiss as a matter of law, but when a contract is ambiguous, a court should not interpret the contract at the motion to dismiss stage. E.g., McKee Foods Corp. v. Pitney Bowes, Inc., No. 1:06- CV-80, 2007 WL 896153, at *3 (E.D. Tenn. Mar. 22, 2007) (“Where the language of the contract is clear and unambiguous, its literal meaning controls the outcome of contract disputes. In such a situation, contractual interpretation is a matter of law and may be addressed on a motion under Rule 12. When a contract’s terms are ambiguous, however, interpretation is a question of fact and is not appropriately decided in the context of Rule 12.” (internal citations omitted)); Griggs v. LF Prod. PTE Ltd., No. 1:12-CV-00193, 2013 WL 4499131, at *4 (M.D. Tenn. Aug. 16, 2013) (“Resolution of contractual claims on a motion to dismiss is proper if the terms of the contract are unambiguous.” (quotation omitted)); Ajuba Int’l, L.L.C. v. Saharia, 871 F. Supp. 2d 671, 689 (E.D. Mich. 2012) (“In reviewing a Rule 12(b)(6) motion to dismiss, the Court may resolve issues of contract interpretation when the contract is properly before the Court, but must resolve all ambiguities in the contract in Plaintiffs’ favor. A contract is ambiguous if its words may reasonably be understood in different ways. A court should not choose between reasonable interpretations of ambiguous contract provisions when considering a motion to dismiss under Rule 12(b)(6). In other words, the construction of ambiguous contract provisions is a factual determination that precludes dismissal on a motion for failure to state a claim.” (internal citations omitted and cleaned up)); BorgWarner Ithaca LLC v. Principal Mfg. Corp., No. 18-CV-13970, 2019 WL 1952858, at *3 (E.D. Mich. May 2, 2019) (applying Ajuba); cf. Perry v. Allstate Indem. Co., 953 F.3d 417, 432 (6th Cir. 2020) (Readler, J. concurring in part and dissenting in part) (“While it may be the majority view, we cannot say at this threshold stage, as did the district court, that [Defendant’s] view is the only potentially reasonable interpretation of the policy language. True, as [Defendant] notes, one court’s aberrant decision cannot unsettle the meaning of well-defined legal terms. But that is not what we have here. Both [Defendant] and [Plaintiff’s] views have ample support. All things considered, including the somewhat detailed discussion necessary to explain these competing views, we find that, at this stage, both views are reasonable. Under Ohio law, [Plaintiff’s] claim therefore survives [Defendant’s] Rule 12(b)(6) motion.”).

There is also some case law that indicates (without distinguishing between ambiguous and unambiguous contracts) that it is generally inappropriate to interpret a contract on a motion to dismiss. DeNune v. Consol. Capital of N. Am., Inc., No. 3:02CV7241, 2004 WL 1474653, at *2 (N.D. Ohio May 21, 2004) (“Contract interpretation is inappropriate for a motion to dismiss.”); In re Nat’l Century Fin. Enterprises, Inc., Inv. Litig., No. 2:03-MD-1565, 2006 WL 2849784, at *7 (S.D. Ohio Oct. 3, 2006) (“The Court, though, will not resolve a conflict in contract interpretation on a motion to dismiss.”); Exact Software N. Am., Inc. v. Infocon Sys., Inc., No. 3:03CV7183, 2004 WL 952876, at *5 (N.D. Ohio Apr. 16, 2004) (same). Taking a somewhat contrary position, the Court believes that it is appropriate to interpret a contract on a motion to dismiss—but only if the contract is unambiguous.

III. Analysis In its Response to Defendant’s Motion, Plaintiff clarifies that it seeks coverage under only the Food Contamination provision of the Policy.3 That provision provides:

Food Contamination Endorsement A. The following is added to Additional Coverages:

Food Contamination 1. If the business described in the Schedule is ordered closed by the Board of Health or any other governmental authority as a result of the discovery or suspicion of “food contamination”, we will pay:

a. Your expense to clean your equipment as required by the Board of Health or any other governmental authority; b. Your cost to replace the food which is, or is suspected to be, contaminated; c. Your expense to provide necessary medical tests or vaccinations for your employees (including temporary and leased employees) who are potentially infected by the "food contamination". However, we will not pay for any expense that is otherwise covered under a Workers' Compensation Policy; d. The loss of Business Income you sustain due to the necessary "suspension" of your "operations" as a result of the "food contamination". The coverage for Business Income will begin 24 hours after you receive notice of closing from the Board of Health or any other governmental authority; . . . .

B. For the purposes of this endorsement, "food contamination" means an outbreak of food poisoning or food-related illness of one or more persons arising out of:

1. Tainted food you distributed or purchased; 2. Food which has been improperly processed, stored, handled or prepared in the course of your business operations; or 3. Food which has been contaminated by virus or bacteria transmitted through one or more of your employees, including temporary and leased employees.

Policy, Plaintiff concedes that the Bacteria and Virus exclusion, at least under the current state of the law, precludes coverage from other provisions found in the policy.” (Doc. No. 22 at 3). (Doc. No. 10-2 at 73). Notably, it is the third of these alternative definitions of food contamination on which Plaintiff relies; the Amended Complaint, and Plaintiff’s Response, do not suggest in any way that this case involves anything that could be deemed tainted or improperly handled food, except to the extent that the food is “contaminated by virus . . . transmitted through” employees. The Court’s analysis thus will focus on the third alternative notion of “food contamination.”

Defendant argues that the Food Contamination Endorsement does not provide coverage for Plaintiff’s alleged losses. Defendant asserts that as a condition of coverage, this endorsement unambiguously requires, among other things, that (1) the insured premises is ordered closed by the applicable governmental authority (i.e., the Board of Health); and (2) the closure is the result of the discovery or suspicion of “food contamination,” i.e., food poisoning or food related illness. (Doc. No. 11 at 14). Defendant argues that the First Amended Complaint does not contain any allegations of closure due to discovered or suspected food contamination at Plaintiff’s premises as would be necessary to plausibly allege the existence of coverage under the Food Contamination Endorsement. (Id.).

In response, Plaintiff argues that “coverage is provided if there is a ‘suspicion’ that food was ‘contaminated by virus . . . transmitted through’ an employee. That is precisely the scenario which led to the closure of Plaintiff’s establishment, at least in part.” (Doc. No. 22 at 6). Plaintiff argues that it sufficiently pled that it was required to close due to “suspicion” of food contamination when it alleged the following: “Nashville Underground is in the category of business closed by Chief Medical Director’s Order, and, thus, Nashville Underground was forced to fully shutter its business, thereby losing all of its business income” and “Upon information and belief, restaurants and bars were closed, in part, because the Board of Health and Chief Medical Director were attempting to limit the spread of Coronavirus through contamination of food, the conveyance of food, contamination of employees and the contamination of the interior, structure, furnishings, fixtures and equipment of the restaurants and bars.” (Id. at 4 (citing Doc. No. 1 at ¶¶ 11, 14)). In short, Plaintiff’s primary theory is that the general category of businesses into which it falls (limited-service restaurants) were closed as the result of suspicion of “food contamination” within the meaning of the Policy; thus, Plaintiff contends that it (like all limited-service-restaurants) was closed as a result of suspicion of food contamination and therefore is entitled to coverage.

Plaintiff seems to suggest (albeit rather tentatively) a second theory applicable to itself in particular as opposed to limited-services restaurants generally; construed most strongly in Plaintiff’s favor, one paragraph of the Complaint alleges (on “information and belief” only) that one or more of Plaintiff’s employees were in contact with someone actually infected by COVID- 19. (Id. at ¶ 18). Erring on the side of caution in Plaintiff’s favor, the Court construes this as an attempt to allege that there were circumstances at Plaintiff’s establishment in particular that created a “suspicion” of food contamination.

In its Reply, Defendant argues that Plaintiff’s interpretation of the Food Contamination Endorsement “is very strained and unworkable construction that does not comport with the long- standing principles governing contract interpretation.” (Doc. No. 24 at 2). Defendant asserts that Plaintiff’s alleged losses are not covered under the Food Contamination Policy because Plaintiff was not ordered to close. According to Defendant, the governmental orders mentioned in the Complaint did not require the closures of all business and, in fact, restaurants were allowed to stay open for food delivery and take out. Additionally, Defendant contends that Plaintiff fails to allege coverage under the Food Contamination Endorsement because the restrictions placed on restaurants were not the result of the suspicion of “food contamination” as that term is defined by the policy—i.e., “an outbreak of food poisoning or food-related illness.”

The Court agrees with Defendant that Plaintiff fails to plausibly allege coverage under the Food Contamination Endorsement, for three separate reasons: (1) Plaintiff has not plausibly alleged circumstances involving any suspicion of “food contamination,” i.e., suspicion of “an outbreak of . . . food-related illness of one or more persons arising out of . . [f]ood which has been contaminated by virus or bacteria transmitted through one or more of your employees,”;4 (2) even if Plaintiff had plausibly alleged circumstances involving suspicion of “food contamination,” Plaintiff has not plausibly alleged that the governmental orders required limited service restaurants as a group to close because of suspicion of food contamination, and (3) Plaintiff has not plausibly alleged that it was the object of suspicion of “an outbreak of . . . food-related illness” at its establishment.

First, the Court finds that the Amended Complaint does not plausibly allege any suspicion of “food contamination,” whether at limited-service restaurants generally or at Plaintiff’s limited- service restaurant in particular. That is, properly construed, the term unambiguously does not apply to the circumstances alleged in the Amended Complaint, which simply does not allege a suspicion of the kind of “food contamination” alleged by Plaintiff, i.e., “outbreak of . . . food-related illness of one or more persons arising out of . . . food which has been contaminated by virus or bacteria transmitted through” limited-service restaurant employees. (Doc. No. 10-2 at 73). At the very most the Amended Complaint alleges that government officials suspected that this kind of outbreak could occur at limited-services restaurants. But in the Court’s view, the policy is unambiguous: “food contamination,” including of the particular type Plaintiff claims was the object of suspicion,

The Amended Complaint refers only to the latter, i.e., concerns that an outbreak of food- related illness could occur. Its main allegations about the health orders at issue is stated in back- to-back paragraphs as follows:

On or about March 15, 2020, in response to the fear of the spread of the Coronavirus, the Nashville-Davidson County Board of Health issued a Declaration thereby directing the Chief Medical Director to order the closure of certain businesses, including, all restaurants and bars which sold more alcohol than food. Within this resolution, the Board of Health stated that the basis of its Declaration was, inter alia, to implement “basic precautions of infection control and prevention, including . . . practicing respiratory and hand hygiene” and that “COVID-19 is a communicable disease with significant morbidity and mortality, and presents a severe danger to the public health.”

Upon information and belief, restaurant and bars were closed, in part, because the Board of Health and the Chief Medical Director were attempting to limit the spread of the Coronavirus through contamination of food, the conveyances of food, contamination of employees and the contamination of the interior, structure, furnishings, fixtures and equipment of the restaurants and bars.

(Doc. No. 1-3 at ¶¶ 12, 13). And along the same lines, The Amended Complaint further alleges:

On or about March 22, 2020, Tennessee Governor Bill Lee issued Executive Order No. 17, which effectively closed all restaurants and bars, with the exception of restaurants which served menu items via drive-thru, curbside pickup and/or delivery. Nashville Underground’s business model does not include providing menu items via drive-thru, curb side pickup and/or delivery services.

The aforementioned Executive Order additionally admonished the public to limit the spread of the Coronavirus by “practicing good personal hygiene, including washing hands, especially after touching any frequently used item or surface, avoiding touching the face, and disinfecting frequently used items and surfaces as much as possible.”

(Id. ¶¶ 15-16). The allegations reflect only governmental concern that, absent appropriate COVID- 19 countermeasures (including the relevant closure of limited-service restaurants) going forward, COVID-19 could spread. The cited portions of these governmental orders in no way reflect governmental suspicion about what had happened in the past; they do not suggest that COVID-19 had spread in any particular way in the past, and still less do they express any suspicion that food previously had been contaminated with the coronavirus through employees of limited-service restaurants. In short, even if the challenged orders could be construed to have been prompted in part by what had happened in the past—and not solely by what may happen in the present and in the future—they were not (and perhaps could not reasonably have been) alleged to have been prompted by past food contamination.

As noted above, generously construed, the Amended Complaint does allege that one or more of Plaintiff’s employees at some point were in contact with someone actually infected by COVID-19 on or before the closure of Plaintiff’s business. It does not allege, however, what it needs to; it does not allege that anyone at all (be it government officials, Plaintiff’s employees or management or anyone else) had a suspicion that some of Plaintiff’s food contacted by these employees was contaminated by the coronavirus that causes COVID-19. Less directly relevant, but also noteworthy, is the fact that Plaintiff does not allege that some of its food was contaminated by the coronavirus.

Plaintiff argues that “the Food Contamination Endorsement does not require an actual report of ‘contamination’, it only requires the ‘suspicion’ of ‘food contamination.’” (Doc. 22 at 4- 5). Although true as far as it goes, this observation does not help Plaintiff, because the requirement of “suspicion” of food contamination is a requirement of suspicion of past food contamination, not a mere concern of food contamination in the present or future.6 Plaintiff simply has failed to allege the former as required to prevail on this Motion; the Amended Complaint refers to no actual or even suspected instances at its own or indeed any limited-service restaurant in which someone sustained an “illness” arising out of food contaminated by the coronavirus, let alone food contaminated by the coronavirus transmitted by an employee of the limited-service restaurant.

Government officials certainly were concerned with individuals being in close proximity with other guests and the staff, but likewise, logically, health officials were concerned about the numerous exchanges of items between employees and guests, to include food and the conveyances of food: forks, knives, plates, bowls, cups, etc. Therefore, the “suspicion” of food contamination certainly was part of the rational for health officials to close Plaintiff’s establishment as such is a reasonable inference from the governmental orders.

(Doc. No. 22 at 7). Plaintiff here equates concerns about the potential consequences of present and future events with suspicion that particular consequences ensued in the past. But the Food Contamination Endorsement unambiguously is concerned with the latter. As for Defendant, it does not expressly rely specifically on the key distinction the Court is making here, but this distinction does go directly to the argument Defendant does make, which is that the Amended Complaint fails to allege as required that closure of Plaintiff’s establishment came after a (past) instance of food contamination.

Plaintiff’s theory of coverage fails for this reason alone, irrespective of the various arguments of the parties regarding the extent to which COVID-19 is a food-related illness and the extent to which the coronavirus can contaminate food. Id.

Second and alternatively, even if “suspicion of . . . food contamination” could be deemed to apply to mere concerns that food could be contaminated by coronavirus transmitted by employees of limited-service restaurants, the Amended Complaint does not plausibly allege that public health orders regulating food-service establishments were implemented due to such concerns.

The Amended Complaint alleges that on March 17, 2020, “the Chief Medical Director issued an order closing all establishments that sold more alcohol than food.” (Doc. No. 1-3 at ¶ 13). As a business categorized as one selling more alcohol than food (i.e., limited-service restaurants), Plaintiff thus was required to close. (Id. at ¶ 14). However, additional language in that same order, of which the Court takes judicial notice,7 allowed businesses whose primary business was food service to remain open with capacity limitations. See Health Director Order 1: Suspending Bars an Limiting Restaurant Capacity, Nashville.gov, https://www.nashville.gov/Metro-Clerk/Legal-Resources/Emergency-Health-Orders/Order- 1.aspx (last accessed Feb. 23, 2021) (“Order 1”). On March 20, 2020, the Chief Medical Director amended Order 1 and suspended in-person dining, but allowed both establishments that sold more alcohol than food and establishments whose primary business was food service to prepare food or

Thus, were it not unambiguously inapplicable as discussed above, the Food Contamination Endorsement conceivably could provide coverage for Plaintiff’s losses because it was actually ordered closed by a governmental authority (the Chief Medical Director) for at least three days. And the Court will assume arguendo that Governor Lee’s Executive Order No. 17 dated March 22, 2020, mentioned in Paragraph 17 of the Amended Complaint could be deemed ambiguous with respect to whether it ordered limited-service restaurants to be “closed.”8 So for purposes of the Motion, Plaintiff has shown that it was “closed” via two different governmental orders.

However, as suggested above, the unambiguous language of the Policy proscribes Plaintiff another hurdle to coverage—the Food Contamination Endorsement provides coverage only if

The Court disagrees with Plaintiff because the Amended Complaint does not plausibly allege that Plaintiff’s business was ordered closed as a result of a suspicion of food contamination at its business, even if it could be said (contrary to the Court’s conclusion above) that Plaintiff has plausibly alleged “suspicion” (on the part of someone, at least) of “food contamination” as those terms are properly construed. If one assumes (contrary to the Court’s conclusion above), that concerns about the possibility of present or future food-related illness caused by coronavirus contamination qualify as “suspicion” of food contamination, Plaintiff still needs to plausibly allege that any order(s) to close resulted from such concerns. And Plaintiff has not done so.

In the March 17 order upon which Plaintiff relies the Chief Medical Director ordered the closure of businesses that serve more alcohol than food, but he allowed businesses whose primary business was food service to remain open and serve food during this three-day period. Thus, the Chief Medical Director’s order closing limited-service restaurants (i.e., establishments that sold more alcohol than food) was clearly not done because of suspicion of food contamination at these businesses. If the Chief Medical Director had issued the order closing businesses such as Plaintiff’s as a result of suspicion of food contamination via employees’ transmission of the COVID-19 virus, then he undoubtedly would have also ordered the closing of businesses whose primary business

Like Plaintiff’s reliance on the Chief Medical Director’s closure order, Plaintiff’s reliance on Executive Order No. 17 fails because the Order itself suggests unequivocally that the Order was not issued as a result of “suspicion” of food contamination. That Order allows any limited- service restaurant (and indeed all restaurants) to sell food prepared by its employees—as long as the food is not consumed on site. Thus, it is simply not plausible that any closure of restaurants resulted from concern that food would be contaminated with the coronavirus through restaurant employees; if that had been the concern, “drive through, pickup, carry-out, or delivery service for food or drink” would not have been permitted. The fact that those activities were permitted shows almost conclusively that the concern was with patrons being on site, not patrons being exposed to food contaminated with coronavirus by restaurant employees.11

Third and finally, Plaintiff has not plausibly alleged that coverage exists due to suspicion of food contamination at its business in particular. The closest Plaintiff gets is when it alleges that “[o]n or before the closure of Plaintiff’s business, upon information or belief, one or more

For the above-stated reasons, the Court finds that given the relevant terms of the Policy (specifically, the Food Contamination Endorsement) that are unambiguous, the allegations in the Amended Complaint do not plausibly show that Plaintiff is entitled to coverage under the Policy. Thus, Plaintiff’s declaratory judgment claim seeking a declaration that Plaintiff’s losses were covered losses under the Policy is subject to dismissal. Additionally, Plaintiff’s breach of contract claim fails as a matter of law, because there was not a breach of the insurance agreement by Defendant’s refusal to cover Plaintiff's losses, since Plaintiff has not plausibly alleged that it was entitled to coverage under the Policy.'* Accordingly, Defendant’s Motion to Dismiss will be granted.

CONCLUSION Like many Americans, the undersigned can sympathize with Plaintiff and so many of our other small to medium-sized businesses that seem to have borne much of the brunt of the effects of the COVID-19 pandemic. One could understand if Plaintiff (or anyone else) lamented that it simply is not right that this should be the case. But it also is not right, or lawful, for a business’s insurer to be on the hook for coverage it simply did not contractually commit to provide. Presumably like a myriad of other enterprises throughout this nation, Plaintiff in retrospect perhaps would have bargained for broader coverage but simply did not foresee such need before the unprecedented pandemic conditions arose in 2020. Accordingly, Plaintiff was unfortunately left without the coverage it now asks this Court to find in an insurance policy that simply does not provide it.

For the above-stated reasons, Defendant’s Motion to Dismiss (Doc. No. 10) will be GRANTED. An appropriate order will be entered.

Chi Richardson che Reel UNITED STATES DISTRICT JUDGE

'2 Under Tennessee law, the elements for a breach-of-contract claim are: (1) the existence of an enforceable contract; (2) nonperformance amounting to breach of the contract; and (3) damages caused by the breach of contract. Life Care Centers of Am., Inc. v. Charles Town Assoc. Ltd. P’ship, 79 F.3d 496, 514 (6th Cir. 1996); see ARC LifeMed, Inc. v. AMC-Tenn., Inc., 183 S.W.3d 1, 26 (Tenn. Ct. App. 2005).