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NOT FOR PUBLICATION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.
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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.
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