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Law360 (July 2, 2021, 7:26 PM EDT ) A hair salon lost its bid for COVID-19 coverage Thursday after a federal judge in Washington state dismissed its lawsuit against a Chubb unit, the latest ruling that the novel coronavirus did not cause "direct physical loss or damage" to a property.
Seven salon, at a mall in Bellevue, filed a putative class action in March seeking coverage from Ace Property and Casualty Insurance Co., but Judge Barbara J. Rothstein of U.S. District Court for the Western District of Washington relied on her own recent ruling on a larger group of cases, in which she rejected insurance coverage for income lost due to COVID-19.
In May, Judge Rothstein dismissed 10 similar suits that had been consolidated from dental and orthodontic practices, a restaurant and the Seattle Symphony Orchestra.
While Seven, which also sells haircare products, had asked for coverage under lost business income, extra expenses and civil authority provisions, the judge concluded that those provisions all require "direct physical loss or damage" either to the covered property or a nearby property.
"Given the court's conclusion that COVID-19 does not cause physical loss or damage, these provisions fail to provide coverage," wrote Judge Rothstein, who said she has been assigned all COVID-19 coverage suits in Washington's Western District.
Even if Seven could show that it deserved coverage under those provisions, Judge Rothstein concluded that the virus exclusion in Seven's policy would prevent coverage.
While Seven said in its lawsuit that the virus was never present at its salon and argued that COVID-19 orders were the cause of its losses and not the virus, Judge Rothstein cited her previous order, which dismissed arguments that pandemic orders are separate from the virus.
Seven filed the suit after Ace denied coverage in February, according to court records.
The salon had to close for nearly three months last year while the mall it was in closed, according to Seven's response to Ace's motion to dismiss, and once the salon reopened in June 2020, it did so under reduced capacity
The Bellevue location eventually closed for good in November, according to its Instagram page.
Representatives for the salon and Ace did not immediately return requests for comment on Friday, nor did their counsel.
Seven is represented by Amy Williams-Derry, Lynn L. Sarko, Ian S. Birk, Gretchen Freeman Cappio, Irene M. Hecht, Gabriel E. Verdugo and Nathan Nanfelt of Keller Rohrback LLP.
Ace is represented by William Knowles and Cameron D. Young of Cozen O'Connor PC, and Richard B. Goetz, Andrew Levine and Daniel M. Petrocelli of O'Melveny & Myers LLP.
The case is Seven LLC v. ACE Property and Casualty Insurance Co., case number 2:21-cv-00432, in the U.S. District Court for the Western District of Washington.
--Additional reporting by Eli Flesch. Editing by Karin Roberts.
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