An attempt by an Oklahoma thrift store to sue its insurer for refusing to cover “lost business income” caused by government-ordered closures at the start of the pandemic was dismissed by the courts on Tuesday.
The 10th Circuit Court of Appeals upheld a lower court ruling dismissing the lawsuit brought by Goodwill Industries of Central Oklahoma Inc. against its insurer, Philadelphia Indemnity Insurance Co. The court found that Goodwill’s interpretation of the language of his police defied the ordinary meaning of words.
The goodwill has been classified as a non-core business that was scheduled to shut down from March 25 to April 30, 2020, pursuant to Gov. Kevin Stitt’s executive order declaring a statewide emergency due to COVID-19. The mayors of Oklahoma City, Norman, Moore, Ardmore, Guthrie, Stillwater and Midwest City have also ordered the non-profit organization’s thrift stores temporarily closed.
Goodwill’s insurance policy covered “actual loss of business income” resulting from a necessary suspension of operations due to “direct physical loss of” its property. The policy covered losses incurred during a “restoration period” that ends when business resumes.
“Goodwill does not claim ‘material damage’, but does claim it suffered a ‘direct physical loss of’ property when it suspended operations in accordance with COVID shutdown orders,” court documents say . “It doesn’t. The business income provision unambiguously covered only losses resulting from physical alteration or material dispossession of property. Neither has happened here. …
“After suspending operations due to COVID restrictions, Goodwill had nothing to repair, rebuild or replace before it could resume operations,” the court said. “Nothing ‘physical’ happened to his property – goodwill just had to wait for the government to lift the restrictions. “
The appeals court cited “decisions from all other circuits and the vast majority of district courts” which interpret the “restoration period” clause as referring to a period in which physical repairs are carried out. or reconstruction takes place.
The appeals court declined to ask the Oklahoma Supreme Court to legally clarify terms used in the policy, ruling instead that “we can consult dictionaries to provide common meanings of words.”
The American Property Casualty Insurance Association and the National Association of Mutual Insurance Companies have been granted leave to file an amicus curiae brief in this case.
The court also dismissed Goodwill’s objection to an “virus exclusion” included in the insurance policy, which “unambiguously excluded coverage” for loss or damage caused by or resulting from any virus, bacteria or other microorganism which induces or is capable of inducing physical distress, disease or illness. “
Goodwill argued that the exclusion did not apply because the loss suffered resulted from government orders related to the pandemic, and not from the actual presence of the virus itself in stores.
“This argument assumes that the virus exclusion only applied when the virus was physically present in an insured’s property,” the court concluded. “But the text of the exclusion” does not in any way suggest that the virus must be present in the insured property for the exclusion to apply. “”