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Law360 (September 21, 2020, 3:35 PM EDT) -- The Dentists Insurance Co. is asking a Washington federal judge for a win in a suit alleging it wrongfully denied business interruption claims by a proposed class of dental offices, saying the COVID-19 pandemic hasn't caused physical damage that would trigger the policies.
In a motion for summary judgment filed Friday, TDIC took aim at claims by Mark Germack DDS, saying that several courts have found that COVID-19 hasn't triggered the "physical damage or loss" clauses in business interruption insurance, and Germack has not alleged the virus is even present in his office.
In addition, the insurer told the court that Germack wasn't even required by the government's orders to completely shut down, but could still perform emergency services, and so he can't claim that he was subject to a "necessary suspension of operations" or prohibited from using or entering his building.
"The threat of a microscopic virus spreading to and infecting people and resulting orders limiting business activities to prevent the spread of such virus do not constitute physical loss of or damage to property," TDIC wrote. "There can be no reasonable debate on this point."
Regardless of whether Germack chose to shut down because of the government limits, or if he believes he was unable to access or use the clinic, his losses are not caused by damage or loss of his property, the insurer told the court, and thus don't trigger coverage.
Germack's suit, like many others filed since cities and states around the country issued stay-at-home orders to stem the spread of COVID-19, alleges that TDIC intended to wrongfully deny coverage of business losses related to those shutdowns.
In the class action complaint, Germack alleged the insurer was issuing blanket denials of coverage to all claimants and the issue was ripe for class certification based on the common circumstances.
In May, TDIC pushed to have Germack's class claims dismissed, arguing that there are far too many individual inquiries for the case to work as a class action. While some states and cities completely shut down dental operations, others ordered partial shutdowns or only recommended that offices close, the insurer argued.
In Friday's motion, TDIC further argued that even if Germack established that his coverage would have been triggered, his policy includes a virus or bacteria exclusion that bars coverage for losses stemming from the "presence, growth, proliferation, spread or any activity of a virus."
As COVID-19 is unquestionably a virus, and the shutdown orders that Germack says halted his business are the direct result of COVID-19, that exclusion precludes any possibility of coverage, the insurer said.
An attorney for TDIC declined to comment Monday.
Representatives for Germack could not immediately be reached for comment Monday.
TDIC is represented by Eric J. Neal and Thomas Lether of Lether Law Group.
Germack is represented by Ian S. Birk, Lynn L. Sarko, Gretchen Freeman Cappio, Irene M. Hecht, Maureen Falecki, Amy Williams-Derry, Nathan L. Nanfelt and Alison Chase of Keller Rohrback LLP.
The case is Germack v. The Dentists Insurance Co., case number 2:20-cv-00661, in the U.S. District Court for the Western District of Washington.
--Editing by Rebecca Flanagan.
For a reprint of this article, please contact reprints@law360.com.
