FILED

NOT FOR PUBLICATION

MAR 16 2022

UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

STEVEN BAKER, DBA Chloe’s Cafe; No. 21-15716 MELANIA KANG, DBA Chloe’s Cafe, a California general partnership, individually D.C. No. 3:20-cv-05467-LB and on behalf of themselves and all others similarly situated,

MEMORANDUM*

Plaintiffs-Appellants,

v.

OREGON MUTUAL INSURANCE

COMPANY, an Oregon Corporation,

Defendant-Appellee.

Appeal from the United States District Court for the Northern District of California Laurel D. Beeler, Magistrate Judge, Presiding

Submitted March 14, 2022** San Francisco, California

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). Before: W. FLETCHER and COLLINS, Circuit Judges, and FEINERMAN,*** District Judge.

Appellants Steven Baker and Melania Kang (“Plaintiffs”) appeal from the

district court’s dismissal of their First Amended Complaint. Plaintiffs’ commercial

property insurance policy covered business losses resulting from “direct physical

loss of or damage to” the insured property. In their complaint, Plaintiffs contend

that this clause covered the closure of Plaintiffs’ restaurant caused by the COVID-

19 pandemic. The district court dismissed Plaintiffs’ complaint, finding that

neither the COVID virus nor COVID-related closure orders caused direct physical

loss or damage within the meaning of the insurance policy.

We have jurisdiction to review the district court’s order under 28 U.S.C.

§ 1291. We affirm the order.

We review de novo a district court’s order granting a motion to dismiss a

complaint for failure to state a claim under Rule 12(b)(6). L.A. Lakers, Inc. v. Fed.

Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017). Because California law controls our

interpretation of the relevant insurance policy language, we “are bound to follow

the decisions of the state’s highest court, and when the state supreme court has not

spoken on an issue, we must determine what result the court would reach based on

*** The Honorable Gary Feinerman, United States District Judge for the Northern District of Illinois, sitting by designation. 2 state appellate court opinions, statutes[,] and treatises.” Mudpie, Inc. v. Travelers

Cas. Ins. Co., 15 F.4th 885, 889 (9th Cir. 2021) (quoting Diaz v. Kubler Corp., 785

F.3d 1326, 1329 (9th Cir. 2015)). “We will ordinarily accept the decision of an

intermediate appellate court as the controlling interpretation of state law.” Id.

(quoting Tomlin v. Boeing Co., 650 F.2d 1065, 1069 n.7 (9th Cir. 1981)).

As both parties agree, the California Court of Appeal’s decision in Inns by

the Sea v. California Mutual Insurance Co., 286 Cal. Rptr. 3d 576 (Cal. Ct. App.

2021), controls the present case. In Inns by the Sea, the Court of Appeal held that

the commercial property insurance policy language at issue does not cover loss of

business income caused by COVID-related closure orders. 286 Cal. Rptr. 3d at

579–80, 590, 593. So too here. Plaintiffs’ insurance policy does not cover their

COVID-related business losses.

AFFIRMED.

3