`
`UNITED STATES DISTRICT COURT
`DISTRICT OF MINNESOTA
`
`
`KENNETH SEIFERT d/b/a THE HAIR PLACE
`and HARMAR BARBERS, INC., individually
`and on behalf of all others similarly
`situated,
`
`
`
`
`
`
`
`
`
`
`Civil No. 20-1102 (JRT/DTS)
`
`
`
`MEMORANDUM OPINION AND ORDER
`DENYING IN PART AND GRANTING IN
`PART DEFENDANT’S MOTION TO
`DISMISS
`
`
` Plaintiffs,
`
`v.
`
`IMT INSURANCE COMPANY,
`
`
`
`
` Defendant.
`
`
`
`
`
`
`Amanda M. Williams and Daniel E. Gustafson, GUSTAFSON GLUEK PLLC, 120
`South Sixth Street, Suite 2600, Minneapolis, MN 55402; and Yvonne M.
`Flaherty, LOCKRIDGE GRINDAL NAUEN PLLP, 100 Washington Avenue
`South, Suite 2200, Minneapolis, MN 55401, for plaintiffs.
`
`Shayne M. Hamann, ARTHUR, CHAPMAN, KETTERING, SMETAK & PIKALA
`PA, 81 South Ninth Street, Suite 500, Minneapolis, MN 55402, for
`defendant.
`
`
`Plaintiff Kenneth Seifert filed this action to collect lost business income after
`
`executive orders mandated the closure of his hair salon and barbershop due to the rising
`
`number of COVID-19 cases in Minnesota, lost income alleged to be covered under the
`
`insurance policies he purchased from Defendant IMT Insurance Co. (“IMT”). IMT has filed
`
`a Motion to Dismiss, claiming that the policies do not cover Seifert’s losses and that, even
`
`if they did, the virus exclusion contained in the policies would preclude recovery.
`
`
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 2 of 15
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`Because the business income provision of the policies insures against a direct
`
`physical loss of property, as when government mandates deprive a business owner of
`
`legally occupying or using the premises and property as intended, Seifert plausibly alleges
`
`that he is entitled to coverage. Additionally, because the virus exclusion is only triggered
`
`by a direct or indirect contamination of the covered premises, the exclusion has no effect
`
`with respect to Seifert’s alleged losses. However, coverage under the civil authority
`
`provision of the policies is unavailable and the doctrine of regulatory estoppel is
`
`inapplicable. Thus, the Court will grant in part and deny in part IMT’s Motion to Dismiss.
`
`I. FACTUAL BACKGROUND
`
`BACKGROUND
`
`In an earlier decision, the Court laid out the relevant facts in detail. See Seifert v.
`
`IMT Ins. Co., 495 F. Supp. 3d 747, 749–50 (D. Minn. 2020). As Seifert has not alleged any
`
`new facts in the Amended Complaint, the Court will briefly summarize them here.
`
`Seifert’s businesses, The Hair Place and Harmar Barbers, Inc., were ordered to
`
`close by two executive orders issued in response to the growing number of COVID-19
`
`cases in Minnesota.1 (Am. Compl. ¶¶ 1–2, 4, 27–28, Nov. 10, 2020, Docket No. 36.) As a
`
`20-08
`
`(Mar.
`
`18,
`
`2020),
`
`
`1 Minn.
`Exec. Order No.
`Emergency
`https://mn.gov/governor/assets/Filed%20EO-20-
`see also Minn.
`08_Clarifying%20Public%20Accommodations_tcm1055-423784.pdf;
`16,
`2020),
`Emergency
`Exec.
`Order
`No.
`20-04
`(Mar.
`https://mn.gov/governor/assets/2020_03_16_EO_20_04_Bars_Restaurants_tcm1055-
`423380.pdf.
`
`
`
`
`-2-
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 3 of 15
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`result, Seifert contacted an authorized IMT agent to file a claim for lost business income.
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`(Id. ¶ 35.) Seifert was advised that his losses were not covered. (Id. ¶¶ 5, 35.)
`
`The policies at issue contain a business income provision, which protects against
`
`the actual loss of business income sustained due to a “suspension of your ‘operations’
`
`during the ‘period of restoration’ . . . caused by direct physical loss of or damage to
`
`property . . . caused by or result[ing] from a Covered Cause of Loss.” (Aff. of Shayne M.
`
`Hamman ¶ 3, Ex. A (“Policy”) at 82, May 29, 2020, Docket No. 13-1.2) “Covered Cause[]
`
`of Loss” is defined as a “[d]irect physical loss unless the loss is excluded.” (Policy at 78.)
`
`“Operations” is defined as “business activities occurring at the described premises.” (Id.
`
`at 109.) And “period of restoration” is the period of time beginning “after the time of
`
`direct physical loss or damage” and ending on the date when “the property at the
`
`described premises should be repaired, rebuilt or replaced” or when “business is resumed
`
`at a new permanent location.” (Id. at 109–10.)
`
`The policies also contain a civil authority provision, which protects against the
`
`actual loss of business income when “a Covered Cause of Loss causes damage to
`
`property” other than the insured property and, as a consequence, “[a]ccess to the area
`
`immediately surrounding the damaged property is prohibited by civil authority as a result
`
`of the damage” and the civil authority has acted either in response to dangerous physical
`
`
`2 The four policies issued to Seifert are identical. As such, the Court will simply cite
`to Exhibit A instead of all four exhibits.
`
`
`
`
`-3-
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 4 of 15
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`conditions from the damage or to have unimpeded access to the damaged property. (Id.
`
`at 85.)
`
`Finally, the policies contain a virus exclusion, which precludes coverage for loss or
`
`damage caused by a “virus, bacterium or other microorganism that induces or is capable
`
`of inducing physical distress, illness or disease.” (Id. at 96.) Such loss or damage, whether
`
`caused directly or indirectly, is excluded “regardless of any other cause or event that
`
`contributes concurrently or in any sequence to the loss . . . whether or not the loss event
`
`results in widespread damage or affects a substantial area.” (Id. at 93.)
`
`II.
`
`PROCEDURAL BACKGROUND
`
`On May 6, 2020, Seifert filed a Complaint, alleging breach of contract and seeking
`
`declaratory and monetary relief. (Compl. ¶¶ 37–48, May 6, 2020, Docket No. 1.) In
`
`response, IMT filed a Motion to Dismiss pursuant to Rule of Civil Procedure 12(b)(6).
`
`(Mot. Dismiss, May 29, 2020, Docket No. 9.) The Court granted IMT’s Motion without
`
`prejudice to allow Seifert an opportunity to amend the pleadings, especially as the law
`
`concerning business interruption coverage with respect to the COVID-19 pandemic was
`
`very much in development. Seifert, 495 F. Supp. 3d at 753; id. at 753 n.7.
`
`On November 4, 2020, Seifert filed a Motion for Extension of Time,3 (Mot.
`
`Extension, Nov. 4, 2020, Docket No. 29), and then an Amended Complaint on November
`
`
`3 Under Rule 6(b), “[w]hen an act may or must be done within a specified time, the
`court may, for good cause, extend the time . . . if a request is made, before the original
`time or its extension expires.” Fed. R. Civ. P. 6(b)(1). “[M]otions to extend are to be
`
`-4-
`
`
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 5 of 15
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`10, 2020, alleging three Counts: (1) Breach of Contract; (2) Declaration of Rights; and (3)
`
`Regulatory Estoppel, (Am. Compl. ¶¶ 57–76.) IMT has filed a second Motion to Dismiss
`
`pursuant to Rule 12(b)(6). (Mot. Dismiss, Nov. 24, 2020, Docket No. 37.)
`
`I. STANDARD OF REVIEW
`
`DISCUSSION
`
`In reviewing a motion to dismiss under Rule 12(b)(6), the Court considers all facts
`
`alleged in the complaint as true to determine if the complaint states a “claim to relief that
`
`is plausible on its face.” Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009)
`
`(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). The Court construes the complaint
`
`in the light most favorable to the plaintiff, drawing all inferences in plaintiff’s favor.
`
`Ashley Cnty. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009).
`
`Although the Court accepts the complaint’s factual allegations as true, it is not
`
`bound to accept as true a legal conclusion couched as a factual allegation. Bell Atl. Corp.
`
`
`liberally permitted . . . to secure the just, speedy, and inexpensive determination of every
`action.” Baden v. Craig-Hallum, Inc., 115 F.R.D. 582, 585 (D. Minn. 1987) (citation
`omitted); see also 4B Charles Alan Wright & Arthur R. Miller, Federal Practice and
`Procedure § 1165 (4th ed.) (stating that a request will normally be granted absent bad
`faith or prejudice).
`Here, Seifert proceeded to file the Amended Complaint late without having
`received permission first. However, the Court finds that there was good cause for the six-
`day enlargement and that IMT was not prejudiced by it. Further, the Court held a hearing
`and has fully considered the pleadings and briefs, and deciding a case on the merits is
`always preferable to dismissing an action based on a procedural technicality. As such, the
`Court will grant Seifert’s Motion for Extension of Time.
`
`-5-
`
`
`
`
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 6 of 15
`
`v. Twombly, 550 U.S. 544, 555 (2007). Instead, “[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.” Iqbal, 556 U.S. at 678.
`
`II. STATE LAW
`
`Under Minnesota law, the interpretation of an insurance contract is a question of
`
`law. Horizon III Real Estate v. Hartford Fire Ins. Co., 186 F. Supp. 2d 1000, 1004 (D. Minn.
`
`2002). “[A] court will compare the allegations in the complaint in the underlying action
`
`with the relevant language in the insurance policy.” Midwest Family Mut. Ins. Co. v.
`
`Justkyle, Inc., No. 17-1632, 2018 WL 3475486, at *5 (D. Minn. July 19, 2018) (quoting
`
`Meadowbrook, Inc. v. Tower Ins. Co., 559 N.W.2d 411, 415 (Minn. 1997)). “While the
`
`insured bears the initial burden of demonstrating coverage, the insurer carries the burden
`
`of establishing the applicability of exclusions.” Id. at *6 (quoting Travelers Indem. Co. v.
`
`Bloomington Steel & Supply Co., 718 N.W.2d 888, 894 (Minn. 2006)).
`
`III. ANALYSIS
`
`A. Coverage
`
`The Amended Complaint presents a more nuanced theory concerning the key
`
`policy language in dispute, “direct physical loss of or damage to property.” Because
`
`
`
`
`-6-
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 7 of 15
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`Seifert does not allege any damage to his properties, only the terms “direct physical loss
`
`of” are relevant.4
`
`The Court interpreted this language before when granting IMT’s motion to dismiss
`
`the Complaint; but, when doing so, the Court relied on Minnesota and Eighth Circuit cases
`
`that grappled with slightly different language: “direct physical loss to property.” See
`
`Source Food Tech., Inc. v. U.S. Fid. & Guar. Co., 465 F.3d 834, 835–36 (8th Cir. 2006); Gen.
`
`Mills, Inc. v. Gold Medal Ins. Co., 622 N.W.2d 147, 151 (Minn. Ct. App. 2001); Sentinel
`
`Mgmt. Co. v. New Hampshire Ins. Co., 563 N.W.2d 296, 297 (Minn. Ct. App. 1997); see
`
`also Pentair, Inc. v. Am. Guarantee & Liab. Ins. Co., 400 F.3d 613, 614, 616 (8th Cir. 2005)
`
`(reading a policy as if it said “direct physical loss to” instead of “direct physical loss of”).
`
`As Seifert correctly notes, because of the disjunctive separating “of” and “to,” these
`
`words must mean different things. Thus, the more precise question considered now is
`
`whether “of” makes a difference when assessing the plausibility of Seifert’s claims.
`
`As the policies do not define what “direct physical loss of” means, the Court will
`
`give the words their plain and ordinary meanings. See, e.g., Farm Bureau Mut. Ins. Co. v.
`
`Earthsoils, Inc., 812 N.W.2d 873, 876 (Minn. Ct. App. 2012). “Direct” means “stemming
`
`
`4 Seifert does not plead any facts demonstrating that any nearby properties were
`damaged either. Because only damage triggers civil authority coverage, the Court will
`grant IMT’s Motion to Dismiss with respect to Counts I and II as they relate to the civil
`authority provision.
`
`
`
`
`-7-
`
`
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 8 of 15
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`immediately from a source.”5 “Physical” is “having material existence[;] perceptible
`
`especially through the senses and subject to the laws of nature.”6 These two words
`
`modify “loss,” which means “destruction” or “deprivation.”7 As such, the policies insure
`
`against an immediate and materially perceptible destruction or deprivation of property.
`
`However, to give the full phrase meaning, there is also the word “of” to consider.
`
`As courts have stated when considering similar business interruption claims, “to”
`
`and “of” are not interchangeable; that is, they mean distinctly different things. See, e.g.,
`
`Seoul Taco Holdings, LLC v. Cincinnati Ins. Co., No. 20-1249, 2021 WL 1889866, at *6 (E.D.
`
`Mo. May 11, 2021); T & E Chicago LLC v. Cincinnati Ins. Co., 20-4001, 2020 WL 6801845,
`
`at *5 (N.D. Ill. Nov. 19, 2020); see also Source Food, 465 F.3d at 838 (“[T]he policy's use of
`
`the word ‘to’ in the policy language ‘direct physical loss to property’ is significant.
`
`[Plaintiff’s] argument might be stronger if the policy’s language included the word ‘of’
`
`rather than ‘to,’ as in ‘direct physical loss of property[.]’”).
`
` “To” is a preposition indicating an action toward a thing reached, or contact.8
`
`“Of,” on the other hand, is a preposition indicating “belonging or a possessive
`
`
`5 Merriam-Webster, https://www.merriam-webster.com/dictionary/direct (last
`visited May 21, 2021).
`6 Merriam-Webster, https://www.merriam-webster.com/dictionary/physical (last
`visited May 21, 2021).
`7 Merriam-Webster, https://www.merriam-webster.com/dictionary/loss
`visited May 21, 2021).
`8 Merriam-Webster, https://www.merriam-webster.com/dictionary/to
`visited May 21, 2021).
`
`(last
`
`(last
`
`
`
`
`-8-
`
`
`
`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 9 of 15
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`relationship,”9 with “possessive” meaning “manifesting possession,” or occupying and
`
`controlling property.10 Thus, “direct physical loss to” involves a force acting toward and
`
`reaching property, a contact that leads to an immediate and materially perceptible
`
`destruction or deprivation of the property itself. See, e.g., Promotional Headwear Int'l v.
`
`Cincinnati Ins. Co., No. 20-2211, 2020 WL 7078735, at *7 (D. Kan. Dec. 3, 2020). “Direct
`
`physical loss of,” however, is a severing of an owner’s possession of property, one which
`
`causes an immediate and materially perceptible inability to occupy and control property
`
`as intended.
`
`It is undisputed that the executive orders had the effect of depriving business
`
`owners of the ability to occupy and control business properties as intended. But a
`
`question remains: What type of deprivation is required to trigger coverage? Neither the
`
`Eighth Circuit nor Minnesota courts have answered this directly, as they have not
`
`interpreted the exact phrase, “direct physical loss of.”11 However, when interpreting
`
`“direct physical loss to” property, Minnesota courts have concluded that “direct physical
`
`(last
`
`
`9 Merriam-Webster, https://www.merriam-webster.com/dictionary/of
`visited May 21, 2021).
`10 Merriam-Webster, https://www.merriam-webster.com/dictionary/possession
`visited May
`21,
`2021); Merriam-Webster,
`https://www.merriam-
`(last
`webster.com/dictionary/possessive (last visited May 21, 2021).
`11 As mentioned above, the Pentair court read the “loss of” policy language as if it
`actually read “loss to.” 400 F.3d at 614, 616. Because the significance of “of” was not
`questioned or established in Pentair, and because the Source Food court then explicitly
`stated that the analysis would likely be different if a policy uses “of” rather than “to,” 465
`F.3d at 838, the Court finds that the Eighth Circuit has not yet established binding
`precedent with respect to the precise question considered here.
`
`-9-
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`
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 10 of 15
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`loss” can exist without structural damage or tangible injury to property; “it is sufficient to
`
`show that the insured property is injured in some way.” General Mills, 622 N.W.2d at 152
`
`(citing Sentinel, 563 N.W.2d at 300 (intangible contamination of property)). As such, a
`
`qualifying loss may arise from “an impairment of function and value” to property, as when
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`legal regulations stymie a business’s ability to lawfully provide its products. Id. (citing
`
`Marshall Produce Co. v. St. Paul Fire & Marine Ins. Co., 98 N.W.2d 280, 293 (Minn. 1959)).
`
`Additionally, a qualifying loss may arise if a building’s function is seriously impaired and
`
`the property is rendered useless. Sentinel, 563 N.W.2d at 300.
`
`Here, with “of” instead of “to” in play, the situation is not completely analogous.
`
`However, the Court concludes that Minnesota courts would extend the same reasoning
`
`when interpreting “direct physical loss of” and only require some injury to an owner’s
`
`ability to occupy and control property as intended, not an absolute or permanent
`
`dispossession.12 The Court further concludes that if a government deems a property
`
`dangerous to use and an owner is thus unable to lawfully realize the business property’s
`
`physical space to provide services, Minnesota courts would find this to be a cognizable
`
`impairment of function and value. In sum, the Court concludes that a plaintiff would
`
`
`12 When the Minnesota Supreme Court has not decided an issue, federal courts
`must predict how it would resolve the issue, and while intermediate appeals court
`decisions are not binding, they are not to be disregarded unless the Court is convinced
`that the Minnesota Supreme Court would decide otherwise. Harleysville Ins. Co. v.
`Physical Distribution Servs., Inc., 716 F.3d 451, 457 (8th Cir. 2013). The Court is not
`convinced of such here.
`
`
`
`
`-10-
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 11 of 15
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`plausibly demonstrate a direct physical loss of property by alleging that executive orders
`
`forced a business to close because the property was deemed dangerous to use and its
`
`owner was thereby deprived of lawfully occupying and controlling the premises to
`
`provide services within it. Accord In re Soc’y Ins. Co. COVID-19 Bus. Interruption Prot. Ins.
`
`Litig., No. 20-2005, 2021 WL 679109, at *8–10 (N.D. Ill. Feb. 22, 2021) (“Plaintiffs did
`
`suffer a direct ‘physical’ loss of property on their premises . . . the pandemic-caused
`
`shutdown orders do impose a physical limit . . . Plaintiffs cannot use (or cannot fully use)
`
`the physical space.”).13
`
`Seifert alleges just this, for he asserts that his businesses were forced to close by
`
`executive orders issued in response to the pandemic and, as a result, the businesses
`
`suffered an impairment of function and value, as he was deprived of occupying and
`
`controlling them to provide hair salon and barbershop services. Thus, the Court finds that
`
`Seifert plausibly alleges direct physical losses of his property. Additionally, the business
`
`activities that were suspended while the executive orders were in effect certainly qualify
`
`
`13 Courts have come to the same conclusion when interpreting policy language that
`involves “direct physical loss to.” See Elegant Massage, LLC v. State Farm Mut. Auto. Ins.
`Co., No. 20-265, 2020 WL 7249624, at *10 (E.D. Va. Dec. 9, 2020) (“[I]t is plausible that
`Plaintiff's experienced a direct physical
`loss when the property was deemed
`uninhabitable, inaccessible, and dangerous to use by the Executive Orders[.]”); Studio
`417, Inc. v. Cincinnati Ins. Co., 478 F. Supp. 3d 794, 800–01 (W.D. Mo. 2020) (“[A] physical
`loss may occur when the property is uninhabitable or unusable for its intended
`purpose.”).
`
`
`
`
`-11-
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 12 of 15
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`as “operations” under the policies.14 As IMT has allegedly refused to cover these losses,
`
`the Court will deny IMT’s Motion to Dismiss with respect to Counts I and II as they relate
`
`to the business income provision.
`
`B. Exclusions
`
`The virus exclusion precludes coverage for any loss or damage caused indirectly or
`
`directly by any virus that induces or is capable of inducing physical distress, illness or
`
`disease.15 Furthermore, the virus exclusion is an anti-concurrent loss provision, which
`
`“exclude[s] coverage where any portion of the loss was caused or contributed to by an
`
`excluded loss.” Ken Johnson Props., LLC v. Harleysville Worcester Summary Ins. Co., No.
`
`12-1582, 2013 WL 5487444, at *12 (D. Minn. Sept. 30, 2013).
`
`
`14 With respect to the “period of restoration,” the Court notes that this period ends
`when “the property at the described premises should [have been] repaired, rebuilt or
`replaced.” (Policy at 110). “Replace” means, as relevant here, “to restore to a former
`place or position,” which would include restoring an owner’s full manifestation of
`possession over property to occupy and control it as intended. Merriam-Webster,
`https://www.merriam-webster.com/dictionary/replace (last visited May 21, 2021),
`15 In addition to the virus exclusion, IMT argues that the ordinance or law exclusion
`applies. However, IMT offers nothing to demonstrate that the executive orders
`specifically closing barbershops and hair salons had the force of law. Moreover, this
`exclusion likely only applies to ordinances or laws regulating the construction or repair of
`a property, or land use. See, e.g., Frank Van's Auto Tag, LLC v. Selective Ins. Co. of the
`Southeast., No. 20-2740, 2021 WL 289547, at *8–9 (E.D. Pa. Jan. 28, 2021). As such, IMT
`has not meet its burden to demonstrate that the ordinance or law exclusion applies.
`IMT also argues that the consequential losses exclusion would preclude coverage
`resulting from any loss of use. However, as the policies specifically insure against lost
`business income, interpreting “loss of use” to sweep in such income would undermine
`the central purpose of the policy provisions in dispute. As such, the Court finds this
`argument to be unavailing.
`
`
`
`
`-12-
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 13 of 15
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`Seifert alleges that his businesses would be open, “if not for the Governmental
`
`Closure Orders.” (Am. Compl. ¶ 33.) Thus, he alleges a single cause of loss: the executive
`
`orders. Of course, the orders were issued in response to the growing cases of COVID-19
`
`in Minnesota, which in turn were a result of the coronavirus spreading within the
`
`community. Yet, as the Amended Complaint demonstrates, when the insurance industry
`
`proposed this exclusion to state regulators, they were intent on excluding coverage
`
`“involving contamination by disease-causing agents” at the property. 16 (Am. Compl. ¶
`
`51).
`
`The Court concludes that the policies’ virus exclusion is intended to preclude
`
`coverage only when there has been some direct or indirect contamination of the business
`
`premises, not whenever a virus is circulating in a community and a government acts to
`
`curb its spread by means of executive orders of general applicability. Accord Henderson
`
`Rd. Rest. Sys., Inc. v. Zurich Am. Ins. Co., No. 20-1239, 2021 WL 168422, at *14–15 (N.D.
`
`Ohio Jan. 19, 2021); see also Urogynecology Specialist of Fla. LLC v. Sentinel Ins. Co., Ltd.,
`
`489 F. Supp. 3d 1297, 1302–03 (M.D. Fla. 2020) (noting that no prior cases considering
`
`
`16 Seifert also alleges that IMT should be estopped from invoking the virus
`exclusion because the industry made misrepresentations when they proposed it.
`However, the Minnesota Supreme Court has rejected the regulatory estoppel doctrine
`when an exclusion is clear and unambiguous, as it is here. Anderson v. Minnesota Ins.
`Guar. Ass'n, 534 N.W.2d 706, 709 (Minn. 1995); see also SnyderGeneral Corp. v. Great Am.
`Ins. Co., 928 F. Supp. 674, 682 (N.D. Tex. 1996), aff'd sub nom. SnyderGeneral Corp. v.
`Cont'l Ins. Co., 133 F.3d 373 (5th Cir. 1998). As such, the Court will grant IMT’s Motion to
`Dismiss with respect to Count III.
`
`
`
`
`-13-
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 14 of 15
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`virus exclusions considered “the unique circumstances of the effect COVID-19 has had on
`
`our society—a distinction this Court considers significant”). Extending the causal chain
`
`beyond situations involving a direct or indirect contamination of business premises would
`
`extend the chain too far; in this case, it would transform a virus exclusion into a
`
`government-order or pandemic exclusion, which is not what the parties intended. As
`
`such, the operative question is whether Seifert’s losses involved a viral contamination at
`
`the covered premises.
`
`No. Seifert’s business income losses are all alleged to have been caused by
`
`executive orders, ones which shuttered every barbershop and hair salon irrespective of
`
`whether they had been contaminated. Moreover, Seifert does not allege that his
`
`businesses suffered any actual contamination or that staff or patrons either contracted
`
`or circulated the coronavirus. The Court therefore finds that Seifert’s losses, as alleged,
`
`are not precluded by the virus exclusion and will deny IMT’s Motion to Dismiss in this
`
`regard.
`
`ORDER
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`Based on the foregoing, and all the files, records, and proceedings herein, IT IS
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`HEREBY ORDERED that:
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`1. Seifert’s Motion for Extension of Time [Docket No. 29] is GRANTED;
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`2. IMT’s Motion to Dismiss [Docket No. 37] is DENIED in part and GRANTED in part
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`as follows:
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`-14-
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`CASE 0:20-cv-01102-JRT-DTS Doc. 57 Filed 06/02/21 Page 15 of 15
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`a. The Motion is denied with respect to Counts I and II as they relate to coverage
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`under the business income provision;
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`b. The Motion is granted with respect to Counts I and II as they relate to coverage
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`under the civil authority provision; and
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`c. The Motion is granted with respect to Count III.
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`DATED: June 2, 2021
`at Minneapolis, Minnesota.
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`___
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`JOHN R. TUNHEIM
`Chief Judge
`United States District Court
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`-15-
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