Opinion
3:20-cv-00776-YY
04-26-2022
SERO, INC. dba Beast, an Oregon Corporation, on behalf of itself and all others similarly situated, Plaintiff, v. CONTINENTAL WESTERN INSURANCE COMPANY, an Iowa Corporation, Defendant.
FINDINGS AND RECOMMENDATIONS
Youlee Yim You United States Magistrate Judge.
FINDINGS
This insurance coverage dispute raises a question about which state and federal courts across the country have reached an overwhelming consensus: business loss insurance policies like the policy at issue here do not cover pandemic-related economic losses.
Plaintiff Sero, Inc., d/b/a Beast, has filed a putative class action suit against defendant Continental Western Insurance Company alleging claims for breach of contract, breach of the covenant of good faith and fair dealing, unfair trade practices under the Washington Consumer Protection Act, WASH. REV. CODE ch. 19.86, and declaratory relief. Am. Compl. ¶¶ 108-151, ECF 53. The court has original jurisdiction over this action pursuant to the Class Action Fairness Act of 2005, as the matter in controversy exceeds $5,000,000, exclusive of interest and costs, and some members of the proposed class are citizens of different states than defendant. See 28 U.S.C. § 1332(d)(2)(A).
Plaintiff originally sued three additional defendants but has stipulated to their dismissal without prejudice. See Notice of Dismissal, ECF 40.
Defendant has filed a motion for judgment on the pleadings (ECF 55) pursuant to Federal Rule of Civil Procedure 12(c). The motion should be granted for the reasons discussed below.
I. Factual Background
Plaintiff owned and operated Beast, an award-winning Portland restaurant that offered dine-in services only. Am. Compl. ¶ 1, ECF 53. Defendant issued plaintiff an “all risk” commercial property insurance policy (Policy No. CPA 6024894-23) covering the period from May 18, 2019, to May 18, 2020. Am. Compl., Ex. 7, at 33, ECF 53-7 (“Policy”).
Plaintiff closed Beast in March 2020, in response to orders issued by Oregon Governor Kate Brown and local authorities intended to slow the spread of the novel coronavirus. Id. ¶¶ 31, 36, 44-51; id., Ex. 1, ECF 53-1 (Executive Order No. 20-07 prohibiting on-premises consumption of food or drink and gatherings of more than 25 people). Plaintiff submitted a claim to defendant under the policy for losses stemming from the closure. Id. ¶ 2-3, 56-57, 8283. Defendant denied the claim only several days later. Id. ¶¶ 83, 88.
The amended complaint alleges the spread of the coronavirus caused physical damage and loss to plaintiff's property. Specifically, plaintiff alleges “[c]oronavirus particles pose a danger to humans when they attach themselves to surfaces used for eating, invade the air in a business where people gather to socialize, or infect employees of businesses whom customers come into close contact with.” Pl.'s Opp. 18, ECF 56 (citing Am. Compl. ¶¶ 17-26, ECF 53). The amended complaint further alleges that the coronavirus rendered all of plaintiff's physical facilities non-functional, id. (citing Am. Compl. ¶¶ 40-53, ECF 53), and “it is probable that particles were spread onto surfaces in the restaurant and that persons infected with Coronavirus entered the restaurant.” Id. (citing Am. Compl. ¶¶ 41-43, ECF 53).
II. Rule 12(c): Judgment on the Pleadings
A party may move for judgment on the pleadings after the pleadings are closed but early enough not to delay trial. FED. R. CIV. P. 12(c). “Analysis under Rule 12(c) is substantially identical to analysis under Rule 12(b)(6) because, under both rules, a court must determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy.” Pit River Tribe v. Bureau of Land Mgmt., 793 F.3d 1147, 1155 (9th Cir. 2015) (citation and quotation marks omitted). Accordingly, “[a] judgment on the pleadings is properly granted when, taking all allegations in the pleadings as true, the moving party is entitled to judgment as a matter of law.” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 713 (9th Cir. 2001) (quotation marks omitted).
To survive a motion for judgment on the pleadings, “the non-conclusory ‘factual content' [of the complaint], ” and reasonable inferences from that content, “must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “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. “[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 563 (2007).
In deciding a Rule 12(c) motion, the court may “‘consider materials that are submitted with and attached to the [c]omplaint'; ‘judicial notice of matters of public record'; and ‘unattached evidence on which the complaint necessarily relies if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the document.'” Beverly Oaks Physicians Surgical Ctr., LLC v. Blue Cross and Blue Shield of Illinois, 983 F.3d 435, 439 (9th Cir. 2020) (quoting United States v. Corinthian Colls., 655 F.3d 984, 998-99 (9th Cir. 2011)) (alteration in original).
III. Insurance Policy Interpretation in Oregon
A federal court, sitting in diversity, applies state law to interpret an insurance policy. Travelers Prop. Cas. Co. of Am. v. ConocoPhillips Co., 546 F.3d 1142, 1145 (9th Cir. 2008). Under Oregon law, the interpretation of an insurance policy is a question of law. Hunters Ridge Condo. Ass'n v. Sherwood Crossing, LLC, 285 Or.App. 416, 422 (2017) (citing Hoffman Const. Co. v. Fred S. James & Co., 313 Or. 464, 469 (1992)).
“The overriding goal in construing an insurance policy is to ‘ascertain the intention of the parties.'” Id. at 422 (quoting Dewsnup v. Farmers Ins. Co., 349 Or. 33, 39-40 (2010)). The court determines “the intention of the parties by analyzing the policy's express terms and conditions.” Id. (citing Hoffman, 313 Or. at 469; O.R.S. 742.016(1) (providing that, with some exceptions, “every contract of insurance shall be construed according to the terms and conditions of the policy”)). The court interprets the terms of the policy from the perspective of an “ordinary purchaser of insurance.” Id. (quoting Congdon v. Berg, 256 Or.App. 73, 87 (2013)) (quotation marks omitted). “The language used in a contract of insurance is entitled to a construction as favorable to the insured as in good conscience will be permitted, and every reasonable intendment will be allowed to support a view that will protect the insured and prevent forfeiture.” Schweigert v. Beneficial Standard Life Ins. Co., 204 Or. 294, 301 (1955) (citations omitted).
If an insurance policy explicitly defines a phrase, the court must apply that definition. Holloway v. Republic Indemn. Co. of America, 341 Or. 642, 650 (2006). “If the policy does not define the phrase in question, [the court] ‘resort[s] to various aids of interpretation to discern the parties' intended meaning.” Id. (quoting Groshong v. Mutual of Enumclaw Ins. Co., 329 Or. 303, 307-08 (1999)). “Under that interpretive framework, [the court] first consider[s] whether the phrase in question has a plain meaning, i.e., whether it ‘is susceptible to only one plausible interpretation.'” Id. (quoting Groshong, 329 Or. at 308). “If the phrase in question has a plain meaning, [the court] will apply that meaning and conduct no further analysis.” Id. “If the phrase in question has more than one plausible interpretation, [the court] will proceed to the second interpretive aid”-”[t]hat is, [the court] examine[s] the phrase in light of ‘the particular context in which that [phrase] is used in the policy and the broader context of the policy as a whole.'” Id. (quoting Hoffman, 313 Or. at 470) (alteration in original).
“If the ambiguity remains after the court has engaged in those analytical exercises, then ‘any reasonable doubt as to the intended meaning of such [a] term[ ] will be resolved against the insurance company....'” North Pacific Ins. Co. v. Hamilton, 332 Or. 20, 25 (2001) (quoting, among other cases, Hoffman, 313 Or. at 470 (alteration in original)); see also Allen v. Cont'l Cas. Co., 280 Or. 631, 633 (1977) (“[A]lthough an insurance company is ordinarily entitled to the enforcement of an insurance policy as written by the company if its terms are clear and unambiguous, in the event of an ambiguity in the terms of an insurance policy any reasonable doubt will be resolved against the insurance company and in favor of extending coverage to the insured.”). “[A] term is ambiguous . . . only if two or more plausible interpretations of that term withstand scrutiny, i.e., continue[ ] to be reasonable ....” Hoffman, 313 Or. at 470 (emphasis in original).
The general rule in Oregon is that the insured bears the initial burden of proving coverage, the insurer has the burden of proving exclusions to coverage, and the insured has the burden of proving exceptions to exclusions. Employers Ins. of Wausau, A Mut. Co. v. Tektronix, Inc., 211 Or.App. 485, 509, 514 (2007), rev den, 343 Or. 363 (2007) (reasoning the party seeking the benefit of a particular provision generally bears the burden of proving its application).
IV. Coverage Provisions and Analysis
Plaintiff seeks coverage under policy provisions that share the requirement that the insured sustain “direct physical loss of or damage to” covered property. See Am. Compl. ¶ 5660, ECF 53. The “Business Income (and Extra Expense) Coverage” provision states in relevant part:
We will pay for the actual loss of Business Income you sustain due to the necessary “suspension” of your “operations” during the “period of restoration”. The “suspension” must be caused by direct physical loss of or damage to property at premises which are described in the Declarations and for which a Business Income Limit Of Insurance is shown in the Declarations. The loss or damage must be caused by or result from a Covered Cause of Loss.Policy 123, ECF 53-7. A “Covered Cause of Loss” is defined as “direct physical loss unless the loss is excluded or limited in this policy.” Id. at 134. The “period of restoration” begins “72 hours after the time of direct physical loss or damage” and ends on the earlier of “[t]he 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 131.
The policy also provides “Extra Expense” coverage for “necessary expenses” incurred during the period of restoration that “would not have [been] incurred if there had been no direct physical loss or damage to property caused by or resulting from a Covered Cause of Loss.” Id. at 123. Finally, the policy's “Extended Business Income” coverage extends the time period of coverage for loss of business income “caused by direct physical loss or damage at the described premises caused by or resulting from any Covered Cause of Loss.” Id. at 125.
Although the amended complaint alleged claims for coverage under the policy's Civil Authority provision, plaintiff has withdrawn those claims. See Pl.'s Opp. 30, ECF 56.
Shortly after filing suit, plaintiff informed the court of a related case, Dakota Ventures, LLC v. Oregon Mutual Ins. Co., No. 3:20-cv-00630-HZ, proceeding before Chief Judge Marco Hernandez. Notice Related Case, ECF 16. That case has been dismissed with prejudice on a similar motion as the one filed in this case. See id., Opinion and Order (August 11, 2021), ECF 74, found at 2021 WL 3572657. There, as in this case, the insured restaurant owner alleged that the insurer breached its “all risk” insurance policy by denying “coverage for losses stemming from the COVID-19 pandemic, ” including losses caused by “the Governor's orders” restricting dine-in services. 2021 WL 3572657, at *1. Also, like this case, the insured sought coverage under numerous coverage provisions that depended on whether the insured's claimed losses constituted “direct physical loss or damage to” covered property, a phrase that the policy did not define. Id. at *1-2.
After examining the dictionary definition of “damage, ” the court determined that “the plain meaning of the phrase ‘direct physical loss of or damage to property' is direct (without any intervening space or time) physical (of or relating to natural or material things) loss of (the act or fact of losing) or damage (injury or harm) to property.” Id. at *6 (citing WEBSTER'S THIRD NEW INT'L DICTIONARY 571). “The plain meaning of those terms requires a Covered Cause of Loss to directly cause property to be lost or physically damaged for coverage to exist ....” Id. (citing Or. Shakespeare Festival Ass'n v. Great Am. Ins. Co., No. 15-1932-CL, 2016 WL 3267247, at *5 (D. Or. June 7, 2016), vacated by stipulation, 2017 WL 1034203 (D. Or. Mar. 6, 2017); Columbiaknit, Inc. v. Affiliated FM Ins. Co., No. 98-434-HU, 1999 WL 619100, at *5 (D. Or. Aug. 4, 1999); and Wyo. Sawmills, Inc. v. Transp. Ins. Co., 282 Or. 401, 405 (1978)). Moreover, modification of the words “loss” and “damage” with the word “physical” “means that the insured must demonstrate a loss of functionality, value, or use that is physical in nature, which requires that the loss or damage cause a tangible alteration of the physical condition, possession, or presence of the property.” Id. at *9. For support, the court observed that “Oregon courts have construed the phrase ‘direct physical loss of or damage to property' and similar phrases to require some degradation in the condition of the property to invoke coverage.” Id. at *7 (citing Columbiaknit, 1999 WL 619100, at *4; Wyo. Sawmills, 282 Or. at 406). The court also cited to Ninth Circuit decisions holding “that the phrase ‘direct physical loss' required damage to a tangible item of property.” Id. (citing Sentience Studio, LLC v. Travelers Ins. Co., 102 Fed.Appx. 77, 81 (9th Cir. 2004); Commonwealth Enters. v. Liberty Mut. Ins. Co., 101 F.3d 705, at *2 (9th Cir. 1996)).
The court found more support for this interpretation by looking at the context in which the phrase “direct physical loss of or damage to” appeared in the policy. 2021 WL 3572657, at *12. Specifically, the court observed that the Business Income and Extra Expense provisions provide coverage for certain losses during the “period of restoration, ” which starts 72 hours after the “physical loss or damage” occurs and ends on “[t]he date when the premises should be repaired, rebuilt or replaced with reasonable speed and similar quality” or when the insured's “business is resumed at a new permanent location.” Id. Plaintiff's policy contains the same “period of restoration” provision. See Policy 123, ECF 53-7. The court found “[t]hat description of ‘period of restoration' implies that Plaintiff must lose or suffer physical damage to its tangible property which requires repair or replacement in order to invoke coverage.” Id.
Applying the plain meaning of the phrase “direct physical loss or damage to, ” the court held that the complaint did “not allege a Covered Cause of Loss that would trigger coverage under any of the relevant provisions of the Policy” and observed that the insured's losses were “purely economic.” Id. at *8-9. As in this case, the insured alleged it had suffered “direct physical loss and damage” because “the presence of COVID-19 on property damages property [and] makes it unsafe” and “COVID-19 has impaired Plaintiff's property by making it unusable.” Id. at *8 (original alterations omitted). However, the insured did “not allege that its restaurants or the business personal property located inside them was lost, destroyed, or physically changed in any manner, ” nor did the insured “allege that any nearby property suffered direct physical loss or damage that physically prevented ingress or egress from [its] restaurants or that resulted in an action of civil authority that prohibited access to its restaurants.” Id. The court emphasized that the complaint lacked
any facts from which a factfinder could conclude that any of Plaintiff's property was lost or damaged. . . . Even assuming that the virus was present in Plaintiff's restaurants, Plaintiffs' property has not been lost or damaged by the virus in a manner that required it to suspend operations in order to conduct repairs or replace the property. ...
[The complaint] alleges only that government orders restricted the manner in which its restaurants may serve customers, while leaving the property itself in Plaintiff's possession, unharmed, and undamaged.Id. The same is true in this case.
In the weeks following the decision in Dakota Ventures, Chief Judge Hernandez dismissed with prejudice four other cases with similar claims and the same policy language. See NUE, LLC v. Oregon Mut. Ins. Co., No. 3:20-CV-01449-HZ, 2021 WL 4071862, at *13 (D. Or. Sept. 4, 2021), appeal filed No. 21-35813 (9th Cir. Sept. 28, 2021); Nari Suda LLC v. Oregon Mut. Ins. Co., No. 3:20-CV-01476-HZ, 2021 WL 4067684, at *8 (D. Or. Sept. 6, 2021), appeal filed No. 21-35846 (9th Cir. Oct. 7, 2021); HILLBRO LLC v. Oregon Mut. Ins. Co., No. 3:21-CV-00382-HZ, 2021 WL 4071864, at *10 (D. Or. Sept. 7, 2021), appeal filed No. 21-35810 (9th Cir. Sept. 28, 2021); N. Pac. Mgmt., Inc. v. Liberty Mut. Fire Ins. Co., No. 3:21-CV-00404-HZ, 2021 WL 4073278, at *4 (D. Or. Sept. 7, 2021), appeal filed No. 21-35842 (9th Cir. Oct. 6, 2021). Since then, Judge Michael Mosman and Judge Stacie Beckerman adopted this reasoning and reached the same result in their cases. See RV Agate Beach, LLC v. Hartford Fire Ins. Co., No. 3:21-CV-00460-MO, 2021 WL 4851304 at *2 (D. Or. Oct. 16, 2021) (J. Mosman); The Oregon Clinic, PC v. Fireman's Fund Insurance Company, 3:21-CV-00778-SB, 2021 WL 5921370, at *8-10 (D. Or. Dec. 15, 2021) (J. Beckerman).
In Papi, LLC v. The Cincinnati Ins. Co., 3:21-cv-00405-JR, Judge Jolie Russo also recently found the analysis in Dakota Ventures regarding the phrase “direct physical loss of or damage to property” to be persuasive, although that case involves interpreting materially different coverage provisions. See Findings and Recommendation 13 (Nov. 10, 2021), ECF 24.
Although the Ninth Circuit has not decided this issue under Oregon law, it recently held that under California law, the phrase “direct physical loss of or damage to” means that “for loss to be covered, there must be a distinct, demonstrable, physical alteration of the property.” Mudpie, Inc. v. Travelers Cas. Ins. Co. of Am., 15 F.4th 885, 891 (9th Cir. 2021) (simplified) (citing MRI Healthcare Ctr. of Glendale, Inc. v. State Farm Gen. Ins. Co., 187 Cal.App.4th 766, 779, 115 Cal.Rptr.3d 27, 38 (2010)). Plaintiff tries to distinguish Mudpie by arguing the Ninth Circuit “was evaluating a case with a virus exclusion.” Pl. Resp. Second Notice Suppl. Auth., ECF 62. But while the Ninth Circuit concluded that the policy's virus exclusion barred coverage, it did so after observing that “California courts would construe the phrase as requiring an insured to allege physical alteration of its property.” Id. at 892-93.
The six other federal circuit courts that have been presented with the question whether the coronavirus or government shutdown orders cause “direct physical loss or damage to” property, or similar phrases, have uniformly held that they do not. See 10012 Holdings, Inc. v. Sentinel Ins. Co., Ltd., No. 21-80-CV, 2021 WL 6109961, at *1-4 (2d Cir. Dec. 27, 2021); Goodwill Industries of C. Oklahoma, Inc. v. Philadelphia Indem. Ins. Co., No. 21-6045, 2021 WL 6048858, at *1-3 (10th Cir. Dec. 21, 2021); Sandy Point Dental, P.C. v. Cincinnati Ins. Co., 20 F.4th 327, 2021 WL 5833525, at *2-6 (7th Cir. 2021); Santo's Italian Cafe LLC v. Acuity Ins. Co., 15 F.4th 398, 401-03 (6th Cir. 2021); Gilreath Family & Cosmetic Dentistry, Inc. v. Cincinnati Ins. Co., No. 21-11046, 2021 WL 3870697, at *1-3 (11th Cir. Aug. 31, 2021); Oral Surgeons, P.C. v. Cincinnati Ins. Co., 2 F.4th 1141, 1143-45 (8th Cir. 2021).
Indeed, the overwhelming consensus in state and federal courts nationwide is that “neither COVID-19 nor the governmental orders associated with it cause or constitute property loss or damage for purposes of insurance coverage.” The Oregon Clinic, 2021 WL 5921370, at *4 (quoting Out W. Rest. Grp. Inc. v. Affiliated FM Ins. Co., 527 F.Supp.3d 1142, 1148 (N.D. Cal. 2021), appeal filed No. 21-15585 (9th Cir. Apr. 1, 2021)); see also Dakota Ventures, 2021 WL 3572657, at *8 (collecting cases); Nguyen v. Travelers Cas. Ins. Co. of Am., 2:20-CV-00597-BJR, 2021 WL 2184878, at *1 (W.D. Wash. May 28, 2021) (“Like the overwhelming consensus that has formed, this Court determines that COVID-19 does not cause the physical loss or damage to property required as a condition precedent to trigger coverage in all the relevant policies.”), reconsideration denied sub nom. Vita Coffee LLC v. Fireman's Fund Ins. Co., 2:20-CV-01079-BJR, 2021 WL 3077922 (W.D. Wash. July 21, 2021), appealfiled No. 21 35496 (9th Cir. June 25, 2021); Assoc. in Periodontics, PLC v. Cincinnati Ins. Co., 2021 WL 1976404, at *6 (D. Vt. May 18, 2021) (“The Court now joins the majority of courts throughout the country in concluding that the COVID-19 pandemic did not cause physical damage or loss to covered property as defined in the Policy. The virus posed a threat to people, while ultimately leaving the property and its environment unscathed.”).
The Dakota Ventures court also rejected the argument, which plaintiff makes here, that the coronavirus can cause physical loss or damage like other “dangerous microscopic agents” such as odor, mold, smoke, or gas. Pl.'s Opp. 10-18, ECF 56. Distinguishing the same cases upon which plaintiff relies, the court held:
The cases cited by Plaintiff to establish that a noxious odor, mold, smoke, or gas renders a property uninhabitable have characteristics that Plaintiff's case does not: First, every noxious odor, mold or gas at issue in those cases was a physical characteristic of the building that required repairs to the building to alleviate; second, the presence of the substance rendered the property completely uninhabitable, not just dangerous to occupy in significant numbers. Here, no characteristic of the building itself rendered it unsafe to occupy or required Plaintiff to make repairs to make the building safe to occupy.2021 WL 3572657, at *10 (emphasis in original) (discussing Oregon Shakespeare Festival, 2016 WL 3267247, at *5-6, 9; Stack Metallurgical Servs. v. Travelers Indem. Co. of Conn., No. CIV-05-1315-JE, 2007 WL 464715, at *9 (D. Or. Feb. 7, 2007); Prudential Prop. & Cas. Co. v. Lillard-Roberts, No. CV-01-1362-ST, 2002 WL 31495830, at *8 (D. Or. June 18, 2002); Columbiaknit, 1999 WL 619100, at *7; and Great N. Ins. Co. v. Benjamin Franklin Fed. Sav. & Loan Ass'n, 793 F.Supp. 259 (D. Or. 1990)).
As explained in First & Stewart Hotel Owner, LLC v. Fireman's Fund Insurance Co., courts across the country “have nearly uniformly rejected the comparison” between COVID-19 and other hazardous airborne substances like asbestos, smoke and ash, gasoline fumes, and ammonia. 2:21-CV-00344-BJR, 2021 WL 3109724, at *4 (W.D. Wash. July 22, 2021) (“the majority of courts looking at this question have held COVID-19 does not cause the sort of allencompassing loss . . . equated with physical damage”). Unlike other hazardous airborne substances, “the coronavirus poses a temporary health hazard to the occupants of a building, whose threat to human health dissipates with the passage of time.” Id. (quoting Buffalo Xerographix, Inc. v. Sentinel Ins. Co., No. 20-cv-520, 2021 WL 2471315, at *4 (W.D.N.Y. June 16, 2021)).
Plaintiff makes one additional argument not raised in Dakota Ventures. Plaintiff extensively discusses the Insurance Service Office's form endorsement excluding coverage for viruses, defendant's decision not to add the endorsement to the policy for nearly 14 years, and then defendant's decision, made within one week of Governor Brown's first shutdown order, to add the endorsement to the policy at renewal. See Pl.'s Opp. 1, 4-10, ECF 56. “This contention is flawed because it improperly attempts to rely on the absence of an exclusion to create an ambiguity in an otherwise unambiguous insuring clause.” Inns by the Sea v. California Mut. Ins. Co., 286 Cal.Rptr.3d 576, 593-94 (Cal.App. 4th Dist. 2021). “[T]he absence of an available exclusion does not imply the existence of coverage. Id. (collecting cases). Plaintiff's line of reasoning also runs afoul of a fundamental rule governing the interpretation of insurance policies in Oregon. With narrow exceptions irrelevant here, the court may not consider extrinsic evidence to interpret an insurance policy. See Great N. Ins. Co. v. Crown Pine Timber 4, L.P., 3:18-CV-2104-YY, 2021 WL 38187, at *8 (D. Or. Jan. 5, 2021) (explaining Oregon's four-corners rule). The court must look to the plain meaning of the terms and phrases in the policy.
In sum, the reasoning in Dakota Ventures, and cases like it across the country, is persuasive and applies with equal force to the policy and claims in this case. Similarly, dismissal with prejudice is the appropriate result here. See Dakota Ventures, 2021 WL 3572657, at *13 (“Because the Court finds that Plaintiff's FAC cannot be amended to plausibly allege a claim under the terms of the Policy, the Court denies leave to amend.”); RV Agate Beach, 2021 WL 4851304 at *2 (“Because the Court finds that Plaintiffs' complaint cannot be amended to plausibly allege a claim under the terms of the policy, the Court denies leave to amend.”).
V. Judgment on All Claims
Because there is no coverage for plaintiff's claims under the policy, defendant is entitled to judgment on all claims for relief in the amended complaint. The claims for breach of contract and declaratory judgment fail because there is no coverage under the Policy. See Nguyen, 2021 WL 2184878 at *16 (dismissing breach of contract and declaratory judgment claims in the absence of coverage). The claim for breach of the covenant of good faith and fair dealing similarly fails because defendant did not wrongfully or unreasonably deny coverage. See id. at *17 (dismissing bad faith claims because denial of coverage was reasonable). Finally, even assuming the Washington Consumer Protection Act, WASH. REV. CODE ch. 19.86, applies here, any claims brought under that act likewise fail. See id. (“[S]ince the Court has found that COVID-19 does not cause physical loss or damage, denial of coverage on these grounds was reasonable. Therefore, any claims . . . under the [Washington CPA] . . . premised on these grounds must fail.”).
RECOMMENDATIONS
Defendant's motion for judgment on the pleadings (ECF 55) should be GRANTED and this case should be dismissed with prejudice.
SCHEDULING ORDER
These Findings and Recommendations will be referred to a district judge. Objections, if any, are due Monday, January 24, 2022. If no objections are filed, then the Findings and Recommendations will go under advisement on that date.
If objections are filed, then a response is due within 14 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendations will go under advisement.
NOTICE
These Findings and Recommendations are not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any Notice of Appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of a judgment.