Insurer Beats Fla. Restaurant Chain's Virus Coverage Suit

By Daphne Zhang
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Law360 (January 13, 2021, 2:37 PM EST) -- A Florida federal judge on Tuesday tossed a Miami restaurant chain's lawsuit seeking to compel Aspen Specialty Insurance Co. to cover its coronavirus-related business losses, holding that the restaurant owner failed to demonstrate breach of contract after the carrier denied coverage.

U.S. District Judge Robert N. Scola dismissed the case, finding that Carrot Love LLC could not show its restaurants experienced physical loss or damage, a precondition for coverage, under its policy with Aspen.

According to the suit, the company owns three health-focused restaurants in South Florida and had to shut them down or operate them on a limited basis due to government closure orders and the COVID-19 pandemic.

Carrot has claimed that since last February the virus "deposited on various surfaces such as countertops, tables and chairs" in its three restaurants, and the presence of COVID-19 particles impaired the restaurant's intended function, causing direct physical loss or damage.

The judge disagreed on Tuesday, saying that the restaurant's owner's losses are economic in nature and were not caused by property damage.

Judge Scola said that he was sympathetic to the restaurant owner's position as COVID-19 has devastated business in Florida and throughout the country, noting that 1.4 million Florida residents have been infected with the virus and more than 23,000 have died from it.

However, he said, "a growing number of state and federal courts" in the Sunshine State have "uniformly held that economic losses resulting from COVID-19 are not covered under 'all risk' policy."

"The plaintiff here simply does not provide the court with adequate reason to depart from the nearly unanimous view that COVID-19 does not cause direct physical loss or damage to a property sufficient to trigger coverage," he said.

Representatives for the parties could not be immediately reached for comment on Wednesday.

Carrot is represented by Adam S. Feldman and Candise Lynn Shanbron of Cernitz Shanbron LLC.

Aspen is represented by William S. Berk and Alan Henry Swindoll of Berk Merchant & Sims PLC and Yvette Ostolaza and Yolanda Garcia of Sidley Austin LLP.

The case is Carrot Love LLC v. Aspen Specialty Insurance Co., case number 1:20-cv-23586, in the U.S. District Court for the Southern District of Florida.

--Editing by Brian Baresch.

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Case Information

Case Title

Carrot Love LLC v. Aspen Specialty Insurance Company

Case Number



Florida Southern

Nature of Suit



Robert N. Scola, Jr

Date Filed

August 27, 2020

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