Elegant Massage, LLC v. State Farm Mutual Automobile Insurance Company

2022 WL 433006 (E.D. Va. Feb. 11, 2022)

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Nature of the Case

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Facts

In 2019, P purchased an insurance policy from State Farm (D). It is an 'all-risk' commercial property insurance policy, which covers loss or damage to the covered premises resulting from all risks other than those expressly excluded. It was effective from July 22, 2019, until July 22, 2020, and P paid an annual premium of $475.00. The Policy provides for the loss of business income sustained as a result of the suspension of business operations which includes action of a civil authority that prohibits access to P's business property. The Policy also states that it does not cover Exclusions for 'Fungi, Virus or Bacteria,' 'Ordinance or Law,' 'Acts or Decisions,' or 'Consequential Loss.' On March 13, 2020, PA National Emergency Concerning the Wuhan flu was issued. On March 20, 2020, Governor Northam and the Virginia State Health Commissioner declared a public health emergency and restricted the number of patrons permitted in restaurants, fitness centers, and theaters to ten or less. On March 23, 2020, Governor Northam issued Executive Order No. 53, which ordered the closure of 'recreational and entertainment businesses,' including 'spas' and 'massage parlors.' More restrictive orders were issued but by May 8, 2020 spas and message centers were permitted to re-open subject to certain restrictions including limiting occupancy to 50% as well as requiring six feet between workstations, workers, and patrons to wear face coverings, and hourly cleaning and disinfection while in operation. If businesses were unable to comply with the restrictions they were ordered to remain closed. P voluntarily closed Light Stream Spa on March 16, 2020. On March 23, 2020, Executive Order No. 53 mandated that Plaintiff remain closed through May 15, 2020. P suffered a complete loss of income after closing on March 16, 2020, and incurred extra expenses as well. P submitted a claim for loss of business income and extra expenses under the Policy. D denied the claim. The Denial Letter stated that the grounds for denial were because P voluntarily closed their business on March 16, 2020, and the cause was a virus which the policy excluded. P filed a Class Action Complaint for Declaratory Judgement (Count I) and Breach of Contract (Count II). They amended the complaint and D filed a motion to dismiss as to all counts. The Court granted in part and denied in part P's First Motion for Class Certification. The Fourth Circuit reversed and remanded the Court's sua sponte certification of an 'opt-in' Rule 23(b)(3) damages class. The Court granted P leave to file a new request for class certification if any. P filed their Second Motion for Class Certification. D filed a memorandum in opposition and P replied.