USCA11 Case: 21-11580 Date Filed: 06/02/2022 Page: 1 of 8
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-11580
Non-Argument Calendar
____________________
PF SUNSET VIEW, LLC,
individually and on behalf of all others similarly situated
d.b.a. Planet Fitness,
PF RIVERVIEW, LLC,
individually and on behalf of all others similarly situated
d.b.a. Planet Fitness,
PF SKIPPER,
individually and on behalf of all others similarly situated
d.b.a. Planet Fitness,
PF WATER VIEW, LLC,
individually and on behalf of all others similarly situated
d.b.a. Planet Fitness,
Plaintiffs-Appellants,
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2 Opinion of the Court 21-11580
versus
ATLANTIC SPECIALTY INSURANCE COMPANY,
a New York corporation,
Defendant-Appellee.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 9:20-cv-81224-AMC
____________________
Before BRANCH, LUCK, and LAGOA, Circuit Judges.
PER CURIAM:
This appeal involves claims for property loss insurance
coverage stemming from gym closures caused by the COVID-19
pandemic. The question is whether (under Florida law) the
COVID-19 related business losses suffered by the plaintiffs—the
owners and operators of four Planet Fitness franchise locations in
Florida—constituted “direct physical loss of or damage to” insured
property under a commercial all-risk insurance policy issued by the
defendant, Atlantic Specialty Insurance Company. The district
court held that it did not and granted judgment on the pleadings to
the insurance company. The franchisees appealed.
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21-11580 Opinion of the Court 3
Our Court recently decided a case involving multiple claims
for COVID-19 losses under nearly identical insurance contract
provisions, concluding that direct physical loss or damage to
property requires a “tangible alteration of the insured properties.”
SA Palm Beach, LLC v. Certain Underwriters at Lloyd’s of London,
32 F.4th 1347, 1350 (11th Cir. 2022). Because the losses alleged here
did not involve a tangible alteration of the insured properties—the
franchisees’ gym locations—Atlantic Specialty Insurance was
entitled to judgment as a matter of law. Accordingly, after careful
review, we affirm.
I. Background
The plaintiffs are the franchisees of four Planet Fitness gym
locations in Florida. The defendant, Atlantic Specialty Insurance
Company, issued separate—but materially identical—commercial
property insurance policies to the plaintiffs (collectively, the
“Policy”).
The Policy states that the insurance company “will pay for
the actual loss of Business Income you sustain due to the necessary
suspension of your ‘Operations’ during the ‘Period of
Restoration,’” but only if the suspension is caused “by direct
physical loss of or damage to” covered property. Under the Policy,
the insurance company “will pay necessary Extra Expense you
incur during the ‘Period of Restoration’ and the Extended Period
of Indemnity that you would not have incurred if there had been
no direct physical loss or damage to” one of the covered properties.
Moreover, the insurance company “will pay for the actual loss of
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4 Opinion of the Court 21-11580
Business Income you sustain and necessary Extra Expense caused
by action of civil authority that prohibits access to the described
premises due to direct physical loss of or damage to property, other
than at the described premises . . . .” Thus, for claims based on
business interruption, extra expense, or civil authority coverage,
the franchisees need to show “direct physical loss of or damage to
property.”
In response to the COVID-19 pandemic, Florida state and
county officials signed orders effectively shuttering gyms for
months beginning in late March 2020. The franchisees filed claims
with Atlantic Specialty Insurance for business income losses and
extra expenses incurred because of the closure orders. The
insurance company denied their claims.
The franchisees then filed a putative class action complaint
in Florida state court alleging that the insurance company
unlawfully denied coverage because
[t]he presence of COVID-19 caused direct physical
loss of and/or damage to the covered
premises . . . by, among other things, damaging the
properties, denying access to the properties,
preventing customers from physically occupying the
properties, causing the properties to be physically
uninhabitable by customers, causing their functions
to be nearly eliminated or destroyed, and/or causing
a suspension of business operations on the premises.
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21-11580 Opinion of the Court 5
The insurance company removed the case to federal district
court and moved for judgment on the pleadings. Because COVID-
19 closures did not cause a “distinct, demonstrable, physical
alteration of the property,” the insurance company argued, the
closures did not result in a “direct physical loss” covered by the
policy. The franchisees responded that Florida law does not
interpret “physical loss” of property so narrowly and that the
phrase includes more than losses caused by actual harm to the
structure of the covered property. The district court agreed with
the insurance company and granted its motion for judgment on the
pleadings. The franchisees timely appealed.
II. Standard of Review
“Judgment on the pleadings is appropriate where there are
no material facts in dispute and the moving party is entitled to
judgment as a matter of law.” Perez v. Wells Fargo N.A.,
774 F.3d
1329, 1335 (11th Cir. 2014) (quoting Cannon v. City of W. Palm
Beach,
250 F.3d 1299, 1301 (11th Cir. 2001)). “In determining
whether a party is entitled to judgment on the pleadings, we accept
as true all material facts alleged in the non-moving party’s pleading,
and we view those facts in the light most favorable to the non-
moving party.”
Id.
III. Discussion
For any of the plaintiffs’ insurance claims to be viable, they
had to stem from “direct physical loss of or damage to” covered
property. The dispositive question, therefore, is whether losses
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6 Opinion of the Court 21-11580
from the suspension of business operations and increased cleaning
and sanitation costs constitute “direct physical loss of or damage
to” property under Florida law. The franchisees say that requiring
a direct, physical alteration of the property departs from the plain
meaning and context of that phrase. Their arguments are a non-
starter—binding precedent mandates the franchisees show a
“tangible alteration to the insured propert[y]” and that losses
stemming from suspension of operations and extra expenses
incurred in response to COVID-19 closure orders do not count. SA
Palm Beach, 32 F.4th at 1350.
Our recent decision in SA Palm Beach resolves this appeal.
In that case, we addressed whether, under Florida law, “direct
physical loss of or damage to” property included losses stemming
from the suspension of business operations and extra costs incurred
because of COVID-19. Id. Facing a dearth of Florida Supreme
Court decisions on the meaning of “direct physical loss of or
damage to” property in the COVID-19 closure context, we
predicted the Florida Supreme Court would adopt the majority
position that “physical loss of or damage to” requires some
“tangible alteration of the insured properties.” Id. We held that
“[t]here is . . . no coverage for loss of use based on intangible and
incorporeal harm to the property due to COVID-19 and the closure
orders that were issued by state and local authorities even though
the property was rendered temporarily unsuitable for its intended
use.” Id. at 1358. We also noted that the “need to clean or
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disinfect” property to “get rid of COVID-19 does not constitute
direct physical loss or damage under Florida law.” Id. at 1362.
The losses alleged by the plaintiffs here are functionally the
same as those alleged by the plaintiffs in SA Palm Beach—losses
from the suspension of business operations under COVID-19
closure orders and extra cleaning and sanitation costs. But as
discussed above, we previously held that such losses are not
“physical loss of or damage to” insured property under Florida law.
We are bound by our prior decision. See EmbroidMe.com, Inc. v.
Travelers Prop. Cas. Co. of Am.,
845 F.3d 1099, 1105 (11th Cir.
2017) (“[W]hen we have issued a precedential decision interpreting
. . . state law, our prior precedent rule requires that we follow that
decision . . . .). Accordingly, the insurance company properly
denied the plaintiff’s claims, and the district court did not err in
holding it was entitled to judgment as a matter of law. 1
1
We note that within one week of our decision in SA Palm Beach, Florida’s
Third District Court of Appeal rendered a similar interpretation of the phrase
“direct physical loss of or damage to property”: losses stemming from
suspension of business operations during the pandemic did not fall under the
policy provision because they did not “carr[y] a tangible aspect” or cause some
“actual alteration to the insured property.” Commodore, Inc. v. Certain
Underwriters at Lloyd’s London,
2022 WL 1481776, at *4 (Fla. 3d Dist. Ct.
App. May 11, 2022). Because this intervening state appellate court decision
supports our interpretation of Florida law in SA Palm Beach, we are still bound
by our prior decision. See EmbroidMe.com, Inc., 845 F.3d at 1105 (noting that
we follow our prior decisions interpreting state law “absent a later decision by
the state appellate court casting doubt on our interpretation of that law”
(emphasis added)).
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AFFIRMED.
