First and Stewart Hotel Owner LLC argued Friday that its suit with Fireman's Fund Insurance Co. isn't based solely on government orders or economic loss, but rather on the latest scientific findings. That science shows the coronavirus causes "property loss or damage" by physically altering indoor air, the hotel said.
"Attempting to make property exposed to coronavirus safe thus requires numerous physical alterations to property, but fully removing coronavirus from the air is not practically possible, and no amount of cleaning will prevent reintroduction of the virus," the hotel said, noting it couldn't use the property.
In March, the owner filed suit in Washington state court, seeking coverage for losses stemming from the closure of its hotel, including a restaurant and bar, during the COVID-19 pandemic. The suit was removed to federal court.
The coronavirus was present at the hotel through infected individuals, causing unsafe property conditions, according to the suit. And routine disinfectant not only fails to stop the virus but can make it worse, the owner said. The virus physically alters the air, the hotel said, citing over three dozen scientific studies.
Fireman's Fund in May asked for the suit to be tossed, arguing that more than 260 federal courts have dismissed similar cases for the same reasons plaguing First and Stewart's suit. The hotel can't show a "direct physical loss or damage" caused by a physical alteration to the property, the insurer said.
"A chair is still a chair even when there's no one sitting there," Fireman's Fund said, using the Luther Vandross hit song "A House is Not a Home" as a basis to counter the hotel's loss-of-use argument.
While public health restrictions may have kept "large groups" and "happy-hour goers" from the hotel's restaurant, the insurer explained, First and Stewart still possessed its dining room, bar and flatware.
In Friday's brief, First and Stewart hit back, arguing that Fireman's Fund is ignoring the policy's language that "communicable disease" can cause "physical loss or damage" to property, ignoring recent decisions from Washington courts, and disregarding decades of pre-COVID-19 precedent.
The hotel underscored that its business interruption suit, unlike others that focused on surface contamination, is backed by current science showing that the coronavirus physically transforms the air and remains airborne "for indefinite periods unless removed by air currents or dilution ventilation."
Pre-COVID-19 court cases confirm hazardous airborne substances cause "physical loss or damage," and the coronavirus falls in line with those substances but is "more deadly," according to the hotel. And post-COVID-19 cases support a finding of "physical loss or damage" — a prerequisite for coverage — when the virus is on the property, the hotel argued.
"While ventilation systems can be a key transmission vector by spreading airborne particles up to 56 meters from an infected person, removing airborne coronavirus particles simply cannot be achieved, including by surface cleaning, which may only make matters worse by causing additional virus particles to become airborne," the hotel said.
Finally, First and Stewart challenged Fireman's Fund's reliance on a "mortality and disease" exclusion, which the hotel said the insurance company falsely named as a virus exclusion. Rather, the hotel argued that the policy's exclusion applies only when a loss is caused by death as a result of a virus.
Counsel for both parties declined to comment Monday.
The hotel is represented by Christopher S. Marks, Malika Johnson and Alice C. Serko of Tanenbaum Keale LLP and Joseph D. Jean and Benjamin D. Tievsky of Pillsbury Winthrop Shaw Pittman LLP.
Fireman's Fund is represented by Anthony Todaro and Joseph Davison of DLA Piper.
The case is First and Stewart Hotel Owner LLC v. Fireman's Fund Insurance Co., case number 2:21-cv-00344, in the U.S. District Court for the Western District of Washington.
--Editing by Abbie Sarfo.
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