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Supreme Court of Washington
June 28, 2022, Argued; August 25, 2022, Filed
¶1 Whitener, J. — In early 2020, to help curtail the spread of COVID-191 (coronavirus disease 2019), Governor Inslee issued Proclamation 20-24 (Proclamation), https://www.governor.wa.gov/sites/default/files/20-24%20COVID-19%20non-urgent%20medical%20procedures%20%28tmp%29.pdf?utm_medium=email&utm_source=govdelivery [https://perma.cc/BM69-Q3MY], prohibiting nonemergency dental care. This case concerns lost business income from the Proclamation and the interpretation of an insurance contract under which the insurance company covers lost business income for the “direct physical loss of or damage to Covered Property” and excludes coverage for loss or damage caused by a “virus.” Clerk’s Papers (CP) at 349, 365, 368.
¶2 Drs. Sarah Hill and Joseph Stout are dentists who operate two dental offices under their business Hill and Stout PLLC (HS). HS bought a property insurance policy from Mutual of Enumclaw Insurance Company (MOE) that [*212] covers business income lost due to “direct physical loss of or damage to” the properties. The policy also included [***4] a virus exclusion that reads MOE “will not pay for loss or damage caused directly or indirectly by” “[a]ny virus … that induces or is capable of inducing physical distress, illness or disease.” Id. at 365, 368. HS sued MOE for coverage because of its inability to use its offices for nonemergency dental practice under the Proclamation and later amended to add a putative class action.
¶3 MOE moved to dismiss, arguing that HS failed to show a “direct physical loss of or damage to” the property and that the virus exclusion applied. The trial court denied the motion. After discovery, a different trial court judge granted summary judgment in favor of MOE, finding that “direct physical loss of or damage to property” is not ambiguous and does not cover the constructive loss of property under the Proclamation. In addition, the trial court held that the virus exclusion applied and that the efficient proximate cause rule did not apply in this case. HS appealed directly to this court.
¶4 We affirm the trial court order granting summary judgment in favor of MOE. It is unreasonable to read “direct physical loss of … property” in a property insurance policy to include constructive loss of intended use [***5] of property. Such a loss is not “physical.” Accordingly, the Proclamation did not trigger coverage under the policy.
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200 Wn.2d 208 *; 515 P.3d 525 **; 2022 Wash. LEXIS 434 ***; 2022 WL 3651805
Hill and Stout, PLLC, Appellant, v. Mutual of Enumclaw Insurance Company, Respondent.
Prior History: [***1] Appeal from King County Superior Court. 20-2-07925-1. Honorable Samuel S. Chung
physical loss, Proclamation, coverage, causal chain, proximate cause, virus, initiated, insured, excluded peril, deprivation, dental, exclude coverage, cases, insurance policy, property damage, ambiguous, trigger, grant summary judgment, functionality, sequence, peril, present case, destroyed, asbestos, contends, losses, policy language, cause of loss, covered peril, deny a motion
Civil Procedure, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Judgments, Entitlement as Matter of Law, Appellate Review, Standards of Review, Genuine Disputes, Legal Entitlement, Evidence, Burdens of Proof, Allocation, Insurance Law, Procedure, Evidence & Trial, Burdens of Proof, Claim, Contract & Practice Issues, Policy Interpretation, Entire Contract, Reasonable Expectations, Reasonable Person, Exclusions, Ambiguous Terms, Construction Against Insurers, Ordinary & Usual Meanings, Unambiguous Terms, Plain Language, Coverage Favored, Technical Constructions & Meanings, Business Insurance, Commercial General Liability Insurance, Property Claims, Property Insurance, Coverage, Property Damage, Liability & Performance Standards, Notice to Insurers, Actual Knowledge & Notice, Concurrent Causes Doctrine, Obligations, Covered Losses, Occurrences, Claims Made Policies, Trials, Jury Trials, Province of Court & Jury, Inferences & Presumptions, Inferences, Appeals, Standards of Review, Questions of Fact & Law