LEGAL NEWSLINE

OLYMPIA, Wash. (Legal Newsline) – Dentists in Washington State have failed to convince courts to read their insurance policies in a way that would cover financial losses from the COVID-19 pandemic.

Hill and Stout, PLLC, was on the wrong end of an Aug. 25 ruling by the Washington Supreme Court. It sued Mutual of Enumclaw Insurance Company, claiming COVID shutdown orders from Gov. Jay Inslee triggered coverage for a “direct physical loss of or damage to covered property.”

However, the policy also had an exclusion for loss or damage caused by a virus.

“It is unreasonable to read ‘direct physical loss… of property’ in a property insurance policy to include constructive loss of intended use of property,” the decision says. “Such a loss is not ‘physical.’”

The company’s lawsuit, which alleged it was unable to use its two offices for nonemergency dental practice because of Inslee’s orders, survived a motion to dismiss. However, the trial court judge granted MOE’s motion for summary judgment before a trial could happen.

The case is notable because it gave the court the opportunity to address the issue of efficient proximate cause for the other lawsuits around the state making the same arguments.

“In the present case, we hold that… COVID-19 initiated the causal chain that led to the proclamation and the cause of any alleged loss of use of the property,” the ruling says.

Considering the virus was the cause of the shutdown order, the virus exclusion in the insurance agreement applied, the court ruled.

“(T)here is no reasonable question as to whether COVID-19 caused the governor to issue the proclamation,” the decision says.