Opinion
Index No. 505724/2022 Motion Seq. Nos. 1 2
08-10-2023
THE WILLIAM VALE HOTEL, LLC; and ESPRESSO HOSPITALITY MANAGEMENT, LLC, Plaintiffs, v. FIREMAN'S FUND INSURANCE COMPANY; ALLIANZ GLOBAL CORPORATE AND SPECIALTY; and RSG UNDERWRITING MANAGERS OPERATING AS SUITELIFE UNDERWRITING MANAGERS, Defendants
Unpublished Opinion
DECISION AND ORDER
EON. LEON RUCHELSMAN JUDGE
The defendant moves pursuant to CPLR §3211 seeking to dismiss the lawsuit. The plaintiff has cross-moved pursuant to CPLR 3025 seeking to amend the complaint. The motions have been opposed respectively. Papers were submitted by the parties and after reviewing the arguments this court now makes the-, following determination.
As recorded in a prior order, this lawsuit concerns losses sustained by the plaintiff hotel due to government mandated shutdowns imposed in the wake of the COVID-19 pandemic. The plaintiff purchased comprehensive insurance from the defendant and sought payment for the losses sustained during the shut-down. The defendant disclaimed coverage and informed plaintiff that "Vale has not reported any direct physical loss or damage to its buildings or to its business personal property.. Instead, AGCS understands that the claim arises from Vale's loss of income due to cancellation of bookings and reduced reservations in response to governmental 'stay at home' orders aimed at stopping the spread of COVID-19. Vale's claim does not fall within the coverage provided by Section II.A. because any 'slowdown or cessation' of Vale's business operations resulted from compliance with government orders issued in relation to COVID-19, and not due to any actual direct physical loss or damage to Vale's hotel property or within 1000 feet of the hotel" (see, Letter dated October 24, 2021 [NYSCEF Doc. No. 31]). The plaintiff instituted this lawsuit and asserted causes of action for a declaratory judgement, breach of contract and breach of implied covenant of good faith and fair dealing due to the defendant's failure to entertain the claim submitted by the plaintiff. The defendant has now moved seeking to dismiss the lawsuit arguing the plaintiff did not suffer any "direct physical loss" necessary to trigger any coverage. The plaintiff opposes the motion arguing that requirement is ambiguous and is an insufficient basis upon which to dismiss the lawsuit and that in any event there are surely questions whether a direct physical loss has been presented. Further, the plaintiff has moved seeking to amplify the pleadings and to further insist the lawsuit must be permitted to proceed.
Conclusions of Law
It is well settled that upon a motion to dismiss the court must determine, accepting the allegations of the complaint as true, whether the party can succeed upon any reasonable view of those facts (Ripa v. Petrosyants, 203 A.D.3d 768, 160 N.Y.S.3d 658 [2d Dept., 2022]) . Further, all the allegations in the complaint, .are deemed true and all reasonable inferences may be drawn in favor of the plaintiff (BT Holdings, LLC v. Village of Chester, 18 9 A.D.3d 7 54,.. 137 N.Y.S.2d 458 [2d Dept., 2020]). Whether the complaint will later survive a motion for summary judgment, or whether the plaintiff will ultimately be able to prove its claims, of course, plays no part in the determination of a pre-discovery CPLR §3211 motion to dismiss (see, Redwood Property Holdings, LLC v. Christopher, 211 A.D.3d 758, 177 N.Y.S.3d 895 [2d Dept., 2022]).
The amended complaint asserts losses as a result of the shutdowns imposed in the wake of the COVID-19 pandemic. Specifically, the amended complaint asserts losses due to the costs of, essentially, cleaning the property and losses of income due to the contamination of the property and loss of income due the governmental shutdown orders which prevented the.- hotel from operating.
There have been numerous cases that have all rejected any such causes of action on the grounds there can be no recovery for any insurance proceeds without a direct physical loss. Recently, in 147 First Realty LLC v. Aspen American Insurance Company, 2023 WL 3014780 [2d Cir. 2023] the court reiterated that "policy provisions establishing coverage for physical loss of or physical damage to the insured's business property, or property within its vicinity, do not extend to claims for losses and expenses resulting from business suspensions in response to COVID-related public health restrictions" (id) . The complaint in this case does not differ from the myriad of cases that have rejected such claims.
Even considering the proposed second amended complaint the complaint fails to state any cause of action. The proposed amended complaint does not add new causes of action. Rather, the amendments "serves to clarify the original complaint., adding more precise details with regard to the allegations of damage to the plaintiffs' hotel, i.e. that "respiratory droplets (i.e., droplets larger than 5 10 pm) that were expelled from' infected individuals and have, landed on, and then adhered to, surfaces and objects at the Vale property, such as doors, beds, windows and furniture, thereby structurally changing said surfaces and objects and/or causing damage thereto by becoming a part of said surfaces and objects, rendering them unusable as potential physical contact with said surfaces and objects would be hazardous."" (see, Memorandum in Opposition and in Support, pages 12,13 [NYSGEF Doc. No. 33]).
Again, the case of 147 First Realty LLC, (supra) is instructive. In that case the court rejected the same arguments. The court explained that "even if we accept that argument as true, 147 First Realty has not plausibly alleged that its business losses arose from loss of or damage to its property through actual COVID-19 contamination, as opposed to from measures designed to prevent or mitigate the consequences of potential future contamination that would result if it had maintained its usual pre-COVID-19 operations. As another panel of this Court observed in a non-binding but persuasive decision, 'the virus's inability to physically alter or persistently contaminate property differentiates it from radiation, chemical dust, gas, asbestos, and o the r co nt ami n ants.' Kim-Chee LLC v. Philadelphia Indem. Ins. Co., 2022 WL 258569 at *2 (2d Cir. Jan. 2:8, 2022)" (supra) . Therefore, the amended complaint fails to allege any cause of action. Consequently, the motion seeking to dismiss the complaint is granted. The cross-motion seeking to amend the complaint is denied.
So ordered.