USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 1 of 7
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 21-11046 Non-Argument Calendar ________________________
D.C. Docket No. 1:20-cv-02248-JPB
GILREATH FAMILY & COSMETIC DENTISTRY, INC., on behalf of itself and others similarly situated d.b.a. Gilreath Dental Associates,
Plaintiff-Appellant,
versus
THE CINCINNATI INSURANCE COMPANY,
Defendant-Appellee.
________________________
Appeal from the United States District Court for the Northern District of Georgia ________________________
(August 31, 2021) USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 2 of 7
Before WILSON, ROSENBAUM, and GRANT, Circuit Judges.
PER CURIAM:
In response to Georgia’s shelter-in-place order, as well as federal guidance,
Gilreath Family & Cosmetic Dentistry postponed routine and elective dental
procedures at the beginning of the COVID-19 pandemic. That obviously led to
financial pain, at least in the short term. So Gilreath filed a claim for business-
interruption coverage with its insurer, Cincinnati Insurance, seeking to recover the
income that it had lost. After Cincinnati Insurance denied the claim, Gilreath sued,
alleging that the insurer had breached the terms of its policy. The district court
dismissed the complaint because Gilreath had not alleged any “direct physical loss
or damage” to property, as necessary for coverage under the policy. We agree and
affirm.
I.
In Spring 2020, as COVID-19 spread throughout the United States,
Georgia’s governor declared a public health state of emergency and later ordered
Georgia residents and visitors to “shelter in place” where they lived. That “shelter-
in-place” order was not absolute; people could leave their homes to (among other
things) conduct and participate in “Essential Services,” which included medical
care necessary for health and safety. The Centers for Disease Control and
Prevention soon detailed what kinds of medical care it thought should continue. In
2 USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 3 of 7
its guidance, the CDC recommended that healthcare providers reschedule non-
urgent outpatient visits and elective surgeries and, more specifically, that dental
practices postpone elective and non-urgent dental visits.
Gilreath Family & Cosmetic Dentistry, a dental practice in Marietta,
Georgia, followed that guidance and canceled its routine and elective dental
procedures. But because those procedures made up the bulk of the business,
Gilreath lost a “substantial portion” of its usual income. To recover that lost
income, Gilreath filed a claim for business-interruption coverage with its insurer,
Cincinnati Insurance. The claim hinged on three provisions in Gilreath’s insurance
policy. The “Business Income” and “Extra Expense” provisions require Cincinnati
Insurance to pay for income that Gilreath lost “due to the necessary ‘suspension’”
of its operations and for extra expenses that it sustained during that suspension.
That coverage is not unlimited though. The suspension and expenses must have
been the result of a “direct ‘loss’ to property” at the insured premises—here,
Gilreath’s dental office—and that “loss” must have been the result of a “Covered
Cause of Loss.” The insurance policy defines a “Covered Cause of Loss” as a
“direct ‘loss’” not excluded or limited under the policy, and “loss” as “accidental
physical loss or accidental physical damage.”
The third provision Gilreath filed under, the “Civil Authority” provision,
applies when “a Covered Cause of Loss causes damage to property other than
3 USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 4 of 7
Covered Property,” which for the most part entails damage to property off the
dental practice’s premises. (Emphasis added.) If, for listed reasons, a civil
authority (for example, a city or state) “prohibits access” both to the dental practice
and to the area immediately surrounding the physically damaged property,
Cincinnati Insurance must pay for any income the business loses and extra
expenses it sustains as a result. This provision may come into play if, for example,
trees fall and damage the only road providing ingress and egress to a property.
Cincinnati Insurance determined that Gilreath had not asserted any physical
loss or damage to property, either at or off the dental practice’s premises, and thus
denied Gilreath’s claim. In response, Gilreath sued on behalf of itself and similarly
situated dental practices, alleging that Cincinnati Insurance had breached the
policy. A district court dismissed Gilreath’s complaint, concluding that the
complaint failed to state that any direct physical loss or damage to property had
occurred. This appeal followed.
II.
We review de novo a district court’s dismissal of a complaint for failure to
state a claim. See McGroarty v. Swearingen, 977 F.3d 1302, 1306 (11th Cir.
2020). In doing so, we accept the complaint’s factual allegations as true and view
them in the light most favorable to the plaintiff. See id. But a complaint survives a
motion to dismiss only if the plaintiff’s claim for relief is plausible—that is, if the
4 USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 5 of 7
plaintiff pleaded facts that allow a court to reasonably infer “that the defendant is
liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
III.
Gilreath argues that Cincinnati Insurance breached its policy when it denied
Gilreath’s claim for business-interruption coverage. The parties agree that we
should interpret this policy under Georgia law. Georgia courts interpret an
insurance policy like any other contract: they begin with its text. See Reed v. Auto-
Owners Ins. Co., 284 Ga. 286, 287 (2008). A court reads that text “as a layman
would.” Nat’l Cas. Co. v. Georgia Sch. Bds. Ass’n–Risk Mgmt. Fund, 304 Ga.
224, 228 (2018). And if that text “unambiguously governs the factual scenario
before the court,” the policy applies “as written, regardless of whether doing so
benefits the carrier or the insured.” Reed, 284 Ga. at 287.
Gilreath contends that the “Business Income” and “Extra Expense”
provisions required Cincinnati Insurance to pay for its lost income and extra
expenses while the government restrictions were in effect. But those provisions
apply only if the events alleged here—the COVID-19 pandemic and related
shelter-in-place order—caused direct “accidental physical loss” or “damage” to the
dental practice’s property. And the Georgia Court of Appeals has already
explained the “common meaning” of “direct physical loss or damage,” holding that
there must be “an actual change in insured property” that either makes the property
5 USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 6 of 7
“unsatisfactory for future use” or requires “that repairs be made.” AFLAC Inc. v.
Chubb & Sons, Inc., 260 Ga. App. 306, 308 (2003).
Gilreath has alleged nothing that could qualify, to a layman or anyone else,
as physical loss or damage. Here, the shelter-in-place order that Gilreath cites did
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USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 1 of 7
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 21-11046 Non-Argument Calendar ________________________
D.C. Docket No. 1:20-cv-02248-JPB
GILREATH FAMILY & COSMETIC DENTISTRY, INC., on behalf of itself and others similarly situated d.b.a. Gilreath Dental Associates,
Plaintiff-Appellant,
versus
THE CINCINNATI INSURANCE COMPANY,
Defendant-Appellee.
________________________
Appeal from the United States District Court for the Northern District of Georgia ________________________
(August 31, 2021) USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 2 of 7
Before WILSON, ROSENBAUM, and GRANT, Circuit Judges.
PER CURIAM:
In response to Georgia’s shelter-in-place order, as well as federal guidance,
Gilreath Family & Cosmetic Dentistry postponed routine and elective dental
procedures at the beginning of the COVID-19 pandemic. That obviously led to
financial pain, at least in the short term. So Gilreath filed a claim for business-
interruption coverage with its insurer, Cincinnati Insurance, seeking to recover the
income that it had lost. After Cincinnati Insurance denied the claim, Gilreath sued,
alleging that the insurer had breached the terms of its policy. The district court
dismissed the complaint because Gilreath had not alleged any “direct physical loss
or damage” to property, as necessary for coverage under the policy. We agree and
affirm.
I.
In Spring 2020, as COVID-19 spread throughout the United States,
Georgia’s governor declared a public health state of emergency and later ordered
Georgia residents and visitors to “shelter in place” where they lived. That “shelter-
in-place” order was not absolute; people could leave their homes to (among other
things) conduct and participate in “Essential Services,” which included medical
care necessary for health and safety. The Centers for Disease Control and
Prevention soon detailed what kinds of medical care it thought should continue. In
2 USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 3 of 7
its guidance, the CDC recommended that healthcare providers reschedule non-
urgent outpatient visits and elective surgeries and, more specifically, that dental
practices postpone elective and non-urgent dental visits.
Gilreath Family & Cosmetic Dentistry, a dental practice in Marietta,
Georgia, followed that guidance and canceled its routine and elective dental
procedures. But because those procedures made up the bulk of the business,
Gilreath lost a “substantial portion” of its usual income. To recover that lost
income, Gilreath filed a claim for business-interruption coverage with its insurer,
Cincinnati Insurance. The claim hinged on three provisions in Gilreath’s insurance
policy. The “Business Income” and “Extra Expense” provisions require Cincinnati
Insurance to pay for income that Gilreath lost “due to the necessary ‘suspension’”
of its operations and for extra expenses that it sustained during that suspension.
That coverage is not unlimited though. The suspension and expenses must have
been the result of a “direct ‘loss’ to property” at the insured premises—here,
Gilreath’s dental office—and that “loss” must have been the result of a “Covered
Cause of Loss.” The insurance policy defines a “Covered Cause of Loss” as a
“direct ‘loss’” not excluded or limited under the policy, and “loss” as “accidental
physical loss or accidental physical damage.”
The third provision Gilreath filed under, the “Civil Authority” provision,
applies when “a Covered Cause of Loss causes damage to property other than
3 USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 4 of 7
Covered Property,” which for the most part entails damage to property off the
dental practice’s premises. (Emphasis added.) If, for listed reasons, a civil
authority (for example, a city or state) “prohibits access” both to the dental practice
and to the area immediately surrounding the physically damaged property,
Cincinnati Insurance must pay for any income the business loses and extra
expenses it sustains as a result. This provision may come into play if, for example,
trees fall and damage the only road providing ingress and egress to a property.
Cincinnati Insurance determined that Gilreath had not asserted any physical
loss or damage to property, either at or off the dental practice’s premises, and thus
denied Gilreath’s claim. In response, Gilreath sued on behalf of itself and similarly
situated dental practices, alleging that Cincinnati Insurance had breached the
policy. A district court dismissed Gilreath’s complaint, concluding that the
complaint failed to state that any direct physical loss or damage to property had
occurred. This appeal followed.
II.
We review de novo a district court’s dismissal of a complaint for failure to
state a claim. See McGroarty v. Swearingen, 977 F.3d 1302, 1306 (11th Cir.
2020). In doing so, we accept the complaint’s factual allegations as true and view
them in the light most favorable to the plaintiff. See id. But a complaint survives a
motion to dismiss only if the plaintiff’s claim for relief is plausible—that is, if the
4 USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 5 of 7
plaintiff pleaded facts that allow a court to reasonably infer “that the defendant is
liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
III.
Gilreath argues that Cincinnati Insurance breached its policy when it denied
Gilreath’s claim for business-interruption coverage. The parties agree that we
should interpret this policy under Georgia law. Georgia courts interpret an
insurance policy like any other contract: they begin with its text. See Reed v. Auto-
Owners Ins. Co., 284 Ga. 286, 287 (2008). A court reads that text “as a layman
would.” Nat’l Cas. Co. v. Georgia Sch. Bds. Ass’n–Risk Mgmt. Fund, 304 Ga.
224, 228 (2018). And if that text “unambiguously governs the factual scenario
before the court,” the policy applies “as written, regardless of whether doing so
benefits the carrier or the insured.” Reed, 284 Ga. at 287.
Gilreath contends that the “Business Income” and “Extra Expense”
provisions required Cincinnati Insurance to pay for its lost income and extra
expenses while the government restrictions were in effect. But those provisions
apply only if the events alleged here—the COVID-19 pandemic and related
shelter-in-place order—caused direct “accidental physical loss” or “damage” to the
dental practice’s property. And the Georgia Court of Appeals has already
explained the “common meaning” of “direct physical loss or damage,” holding that
there must be “an actual change in insured property” that either makes the property
5 USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 6 of 7
“unsatisfactory for future use” or requires “that repairs be made.” AFLAC Inc. v.
Chubb & Sons, Inc., 260 Ga. App. 306, 308 (2003).
Gilreath has alleged nothing that could qualify, to a layman or anyone else,
as physical loss or damage. Here, the shelter-in-place order that Gilreath cites did
not damage or change the property in a way that required its repair or precluded its
future use for dental procedures. In fact, though the practice postponed routine and
elective procedures, Gilreath still used the office to perform emergency
procedures. Gilreath finds it problematic that its office is an enclosed space where
viral particles tend to linger, and where patients and staff must interact with each
other in close quarters. Even so, we do not see how the presence of those particles
would cause physical damage or loss to the property. Gilreath thus has failed to
state a claim that Cincinnati Insurance breached the policy’s “Business Income” or
“Extra Expense” provisions.
Gilreath also contends that the “Civil Authority” provision required
Cincinnati Insurance to pay for the lost income and extra expenses. But that
provision too is contingent on a “Covered Cause of Loss” damaging property—
albeit, as relevant here, property off the business premises. See Assurance Co. of
Am. v. BBB Serv. Co., 265 Ga. App. 35, 36 (2003) (applying a similar civil-
authority provision when a county issued a hurricane evacuation order, and the
hurricane damaged property south of the affected business). The allegations about
6 USCA11 Case: 21-11046 Date Filed: 08/31/2021 Page: 7 of 7
off-premises property are no different than those about the property at the dental
practice—Gilreath offers no allegation of physical loss or damage. So Gilreath’s
reliance on the “Civil Authority” provision fails for the same reason as its reliance
on the other two provisions. Because all of Gilreath’s claims are contingent on a
breach of those policy provisions, it has failed to state a claim.
AFFIRMED.