b'TABLE OF CONTENTSCASE LAW DEVELOPMENTSThe Seventh Circuit affirmed the district courtsthe Tenth Circuit in Goodwill Industries Of dismissal of these cases, rejecting two commonCentral Oklahoma, Inc. v. Philadelphia policyholder arguments. First, the Seventh CircuitIndemnity Insurance. Co. ([The insureds] held that while government restrictions limited thetemporary inability to use its property for its intended or preferred use of insureds properties,intended purpose was not a direct physical the government restrictions did not physically alterloss.To conclude otherwise would ignore the the property, much less render it a total loss orword physical and violate the requirement that completely uninhabitable so as to equate toevery part of a policy be given meaning.); andphysical loss. Second, the court reasoned that eventhe Eleventh Circuit in Gilreath Family & if the COVID-19 virus attached to the properties,Cosmetic Dentistry, Inc. v. The Cincinnati it had not physically altered the properties so as toInsurance Co. ([The insured] finds it cause damage or destruction of property. problematic that its office is an enclosed space Similar distinctions between mere loss of use ofwhere viral particles tend to linger, and where property and actual physical property loss orpatients and staff must interact with each other damage formed the basis for the affirmance ofin close quarters. Even so, we do not see how dismissals by other federal circuits, such as: the presence of those particles would cause the Second Circuit in 10012 Holdings, Inc.physical damage or loss to the property.). v. Sentinel Insurance Co. (10012 HoldingsState appellate courts have employed the same alleges only that it lost access to itsreasoning. For example, in Inns-by-the-Sea v. property as a result of COVID-19 and theCalifornia Mutual Insurance Co., the California governmental shutdown orders, and not thatCourt of Appeal for the Fourth District affirmed it suspended operations because of physicaldismissal of a coverage claim because the damage to its property); policyholder had not alleged a direct physical loss. the Fifth Circuit in Terry Blacks Barbecue,The court reasoned that the viruss alleged L.L.C. v. State Automobile Mutual Insurancepresence did not cause the insureds business Co. (A physical loss of property cannot meanlosses, since, as an example, even if the business something as broad as the loss of use ofhad eliminated the virus from its premises, it would property for its intended purpose.); have still been subject to the governmental restrictions and the same incurred losses. The the Ninth Circuit in Mudpie, Inc. v. Travelersappellate court also stated that the insureds loss Casualty Insurance Co. of Americaof use of the premises as intended did not (Interpreting the phrase direct physical loss ofconstitute direct physical loss. As another example, or damage to property as requiring physicalthe court pointed to the period of restoration alteration of property is consistent with otherprovision in the policy, which stated that the provisions of Mudpies Policy.); insurer would cover losses until the location could MAYER BROWN |157'