Apple Annie, LLC v. Oregon Mutual Ins. Co.

BACKGROUND

At all relevant times, plaintiff Apple Annie, LLC, operated restaurants in Marin, San Francisco, and Santa Barbara counties. Defendant Oregon Mutual Insurance Company issued Apple Annie a comprehensive commercial liability and property insurance policy that, as relevant here, promised in general to “pay for direct physical loss of or damage to Covered Property at the [insured] premises,” and in particular to “pay for the actual loss of Business Income you sustain due to the necessary suspension of your ‘operations’ during the ‘period of restoration.[1]. The suspension must be caused by direct physical loss of or damage to property at the described premises. The loss or damage must be caused by or result from a Covered Cause of Loss.” The policy did not define “direct physical loss of or damage.” The policy included two provisions that will have only glancing provisions relevant to our analysis and conclusion.

“ ‘Period of restoration’: [¶] a. Means the period of time that: [¶] (1) Begins: [¶] (a) 72 hours after the time of direct physical loss or damage for Business Income Coverage; or [¶] (b) immediately after the time of direct physical loss or damage for Extra…