In other words, under the Appleman Rule, the insured may recover if a covered cause of loss "was the last step in [a] chain of causation set in motion by an uninsured peril, or where the [covered cause of loss] itself set into operation a chain of causation in which the last step may have been an [excluded] risk." Auto Lenders Acceptance Corp. v. Gentilini Ford, Inc., 181 N.J. 245, 854 A.2d 378, 385 (2004) (quoting, 5 Appleman, supra, § 3083 at 309-11); Downs Ford, Inc. v. Zurich Am. Ins. Co., 2021 WL 1138141, at *4 (D.N.J. Mar. 25, 2021). "Ultimately, however, the pertinent question [under Appleman] is not where in the sequence the alleged cause of loss occurred, but what was the predominant cause that produced the loss."
This Court sees “no reason to deviate from this growing line of recent opinions.” Quakerbridge Early Learning LLC v. Selective Ins. Co. of New Eng., No. 20-7798, 2021 WL 1214758, at *4 (D.N.J. Mar. 31, 2021); see also, e.g, Arrow Health & Racquet Club, LLC v. Twin City Fire Ins. Co., No. 20-8968, 2021 WL 2525739 (D.N.J. June 21, 2021); Downs Ford, Inc. v. Zurich Am. Ins. Co., No. 20-8595, 2021 WL 1138141 (D.N.J. Mar. 25, 2021); Colby Rest. Grp., Inc. v. Utica Natl Ins. Grp.,No. 20-5927, 2021 WL 1137994 (D.N.J. Mar. 12,2021).
Downs Ford, Inc. v. Zurich Am. Ins. Co., No. 20-08595, 2021 WL 1138141, at *6 (D.N.J. Mar. 25, 2021) (quoting N.J. Transit Corp. v. Certain Underwriters at Lloyd's London, 461 N.J.Super. 440, 461 (App. Div. 2019) (internal quotation marks omitted)); see also N&S Restaurant, 499 F.Supp.3d at 80 (citing Assurance Co. of Am., Inc. v. Jay-Mar, Inc., 38 F.Supp.2d 349, 353 (D.N.J. 1999)); Lam Investment Research, LLC v. Pub. Serv. Mutual Ins. Co., No. 12-5576, 2016 WL 6634931, at * 5 (D.N.J. Apr. 1, 2016). The inclusion of an anti-concurrent clause in the Virus Exclusion means that a policy “does not provide coverage for losses caused directly or indirectly by a virus, regardless of any other cause or event that contributes concurrently or in any sequence to the loss.”
apply “[w]hen there is a conflict as to whether, for coverage purposes, losses should be considered to be ‘caused by' an excluded risk or by a covered peril.” N.J. Transit Corp. v. Certain Underwriters at Lloyd's London, 221 A.3d 1180, 1192 (N.J.Super.Ct.App.Div. 2019), aff'd, 243 A.3d 1248 (N.J. 2021). “Under this test, if an exclusion ‘bars coverage for losses caused by a particular peril, the exclusion applies only if the excluded peril was the efficient proximate cause of the loss.'” Id. (quoting Zurich Am. Ins. v. Keating Bldg. Corp., 513 F.Supp.2d 55, 70 (D.N.J. 2007)) (emphasis in original). Thus, absent an anti-concurrent or anti-sequential clause in the applicable exclusion, under Appleman's Rule, “an insured is normally afforded coverage where an included cause of loss is either the first or last step in the chain of causation which leads to the loss.” Downs Ford, Inc. v. Zurich Am. Ins. Co., No. 20-08595, 2021 WL 1138141, at *5 (D.N.J. Mar. 25, 2021) (quotations omitted). The pertinent question, however, “is not where in the sequence the alleged cause of loss occurred, but what was the predominant cause that produced the loss.”
Moreover, courts in this district confronted with more robust public policy arguments have concluded that virus exclusion provisions do not run afoul of New Jersey public policy. See Downs Ford, Inc. v. Zurich Am. Ins. Co., No. 20-08595, 2021 WL 1138141, at *8 (D.N.J. Mar. 25, 2021); Causeway Auto., LLC v. Zurich Am. Ins. Co., No. 20-8393, 2021 WL 486917, at *8 (D.N.J. Feb. 10, 2021). c. Plaintiff States No Claims for Relief
Further, based on other identical or similar virus exclusions, courts nationwide have granted motions to dismiss in cases seeking coverage for similar COVID-19 related property insurance claims. See Cali Fresh, LLC v. Twin City Fire Ins. Co., No. 20-CV-522, 2021 WL 3620074, at *8 (M.D. N.C. Aug. 16, 2021) (finding that the virus exclusion bars plaintiff's breach of contract claim where it “expressly states that viruses are not a covered cause of loss”); Downs Ford, Inc. v. Zurich Am. Ins. Co., No. 20-CV-08595, 2021 WL 1138141, at *4-6 (D.N.J. Mar. 25, 2021) (finding that because the executive orders were issued as a direct result of COVID-19 that the cause of loss fell squarely within the policy's virus exclusion and thus could not trigger civil authority coverage); AFM Mattress Co. v. Motorists Com. Mut. Ins. Co., 503 F.Supp.3d 602, 607 (N.D. Ill. 2020) (granting motion to dismiss because under the policy, “damage from a virus was not a covered cause of loss” and it “explicitly excluded coverage for virus-related loss”). Moreover, Plaintiff urges the Court to find that the Acts or Decisions and Ordinance or Law Exclusions do not apply. (Policy at 36, 40; Pls.
Judges in this District who have considered similar provisions came to the same conclusion. See Downs Ford, Inc. v. Zurich Am. Ins. Co., No. 20-08595, 2021 WL 1138141, at *4 (D.N.J. Mar. 25, 2021); Causeway Automotive, 2021 WL 486917, at *5; Eye Care Center of N. J., PA v. Twin City Fire Ins. Co., 2021 WL 457890, at *3 (D.N.J. Feb. 8, 2021). Nor does the reference to “any exclusion relating to ‘pollutants'” in Section C of the Virus Exclusion impose a physical presence requirement.
Courts across the country have held that similar virus exclusions preclude coverage for property insurance claims arising from the COVID-19 pandemic. SeeCali Fresh, LLC v. Twin City Fire Ins. Co. , No. 20-CV-522, 2021 WL 3620074, at *8 (M.D.N.C. Aug. 16, 2021) (finding that the virus exclusion bars plaintiff's breach of contract claim where it "expressly states that viruses are not a covered cause of loss"); Downs Ford, Inc. v. Zurich Am. Ins. Co. , No. 20-CV-08595, 2021 WL 1138141, at *4–6 (D.N.J. Mar. 25, 2021) (finding that because the executive orders were issued as a direct result of COVID-19 that the cause of loss fell squarely within the policy's virus exclusion and thus could not trigger civil authority coverage); AFM Mattress Co. v. Motorists Com. Mut. Ins. Co. , 503 F. Supp. 3d 602, 607 (N.D. Ill. 2020) (granting motion to dismiss because under the policy, "damage from a virus was not a covered cause of loss" and it "explicitly excluded coverage for virus-related loss"). In fact, at least six courts, including one in this District, have granted motions to dismiss filed by Defendant or its affiliates that involve the exact same Virus Exclusion.
It necessarily follows, as held in prior cases, that the Closure Orders " ‘were issued as the direct result of COVID-19—a cause of loss that falls squarely within the Virus Exclusion,’ and are therefore not a Covered Cause of Loss and unable to trigger the Civil Authority coverage." Downs Ford, Inc. v. Zurich Am. Ins. Co. , No. 20-8595, 2021 WL 1138141, at *4 (D.N.J. Mar. 25, 2021) (quoting Franklin EWC, Inc. v. Hartford Fin. Servs. Grp. , 488 F.Supp.3d 904 (N.D. Cal. 2020) ). So, even assuming that the other requirements for Civil Authority coverage are satisfied, the Closure Orders do not trigger coverage because they were taken in response to a cause of loss (COVID-19) that falls within the virus exclusion. That conclusion arises from the plain language of the policy.
'” N&S Restaurant, 499 F.Supp.3d at 80 (internal quotation marks omitted); see also Garmany of Red Bank, Inc. v. Harleysville Ins. Co., No. 20-8676, 2021 WL 1040490, at *5 (D.N.J. Mar. 18, 2021). Such clauses “exclude coverage when a prescribed excluded peril, alongside a covered peril, either simultaneously or sequentially, causes damage to the insured” and are enforceable under New Jersey law. Downs Ford, Inc. v. Zurich Am. Ins. Co., No. 20-08595, 2021 WL 1138141, at *6 (D.N.J. Mar. 25, 2021) (quoting N.J. Transit Corp. v. Certain Underwriters at Lloyd's London, 461 N.J.Super. 440, 461 (App. Div. 2019) (internal quotation marks omitted)); see also N&S Restaurant, 499 F.Supp.3d at 80 (citing Assurance Co. of Am., Inc. v. Jay-Mar, Inc., 38 F.Supp.2d 349, 353 (D.N.J. 1999)); Lam Investment Research, LLC v. Pub. Serv. Mutual Ins. Co., No. 12-5576, 2016 WL 6634931, at *5 (D.N.J. Apr. 1, 2016).