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Lether Law Group Welcomes 5 New Legal Professionals

Chance Laboda

Chance Laboda

Senior Associate Attorney

Chance’s practice involves insurance coverage and litigation of first and third party disputes involving both contractual and extra-contractual claims, including insurance bad faith, negligence, and violation of the Washington State Consumer Protection Act and Insurance Far Conduct Act. Chance’s experience includes coverage analysis and litigation of disputes arising from commercial general liability, business owners, and automobile insurance policies. Chance also has experience providing legal services to individuals, businesses, and real estate developers in a broad range of real estate disputes

Dan Schilling

Dan Schilling

Associate Attorney

Dan has a practice background in family law, personal injury, workers’ compensation law, and formerly worked as a public defender in the 24th Judicial District Court for Jefferson Parish in Louisiana. Dan is licensed in both Washington and Louisiana.

Ryan Bisel

Ryan Bisel

Associate Attorney

Ryan graduated from Seattle University School of Law. Ryan is a licensed attorney in Washington and has recently passed the Hawaii State Bar.

Tate Kirk

Tate Kirk

Associate Attorney

Tate has a practice background in workers’ compensation law and is licensed in both Washington and Oregon.

Matt Allinder

Matt Allinder

Rule 9 Intern

Matt earned his Juris Doctor from Loyola University Chicago School of Law. Currently working remote, he will join us at the Seattle office in June. 

Appellate Practice Tips

Lether Law Group is engaged in appellate practice across multiple jurisdictions including multiple State Courts of Appeals and the Federal Circuit Courts of Appeal. As any experienced insurance defense litigator knows, a win at the trial level for your client is often not the end of the story. Accordingly, in this week’s newsletter, our office will share some helpful practice pointers we have gained through our litigation in the various Courts of Appeals.

            A Complete Record – The first and most essential step in any appeal is assuring you and your client have the complete trial court record. While seemingly elementary, effective appellate advocacy starts with a complete underlying record. Once the Appellant has designated the clerks’ papers and statement of arrangements, and prior to receiving a copy of those clerks’ papers, proactively cross reference opposing counsel’s designation with the trial court docket. If any relevant pleading is absent, or any potentially relevant pleading is absent from opposing counsels designated clerks’ papers, move to supplement the clerk’s papers. Failure to do so will foreclose an appellate attorney’s ability to argue a potentially relevant issue or procedural aspect before the appellate court.

           Comprehensive Legal Briefing – There is a natural tendency in appellate practice to rely partly upon the briefing at the trial court level because the issues in question were fully litigated. However, it would be an error to rely on the underlying briefing and assume it is sufficient for a review by the Court of Appeals. Rather, effective appellate practice requires a total reassessment of the underlying case from the facts as plead to the citations relied upon by the parties. The loadstar for any appeal is the standard of review. A de novo review by the Court of Appeals will requires a total reevaluation of the underlying case in a manner that a review for abuse of discretion might not. Further, the caselaw relied upon by the parties at the trial court level may have changed in the time since the trial court’s decision and should always be verified as to the holdings they purport. Accordingly, the process of drafting an appeal often requires a ground up reassessment of the facts and law surrounding the trial court’s decision.

            Patience – Appeals take time. The average lifespan of an Appeal is 18 to 24 months. Even after the Court of Appeals receives all briefing from the parties, it will often take 6 to 10 months or more to render a decision on the matter. Given this expansive timeline, it is helpful to communicate reasonable expectations to your client about the resolution their appeal. Further, it is essential to communicate with the client periodically throughout this time to inform them you are monitoring the matter throughout the lengthy appeals process.  

            Lether Law Group currently represents clients in multiple jurisdictions for their appellate matters. For questions regarding acute appeals State Courts of Appeal or the Federal Circuit Courts of Appeal, please feel free to contact our office.

Chris Kranda

Chris Kranda

Associate Attorney

Born and raised in the pacific northwest Chris attended Seattle University’s Matteo Ricci College where he graduated cum laude with a bachelor’s degree in Humanities. He remained in the area and earned his Juris Doctor Seattle University School of Law.

During law school, Chris externed in US District Court for the Western District of Washington for the Honorable Robert S. Lasnik, and later worked as a Rule 9 prosecutor before joining the King County Prosecutor’s Office as a Deputy Prosecuting Attorney. He served in District Court and Violent & Economic Crime Units from 2019 to 2021 before joining Lether Law Group to begin his civil practice.

In his free time, Chris enjoys camping, fly fishing, and road trips.

The Western District of Washington Dismisses All Pending Covid-19 Business Interruption Cases

On May 28, 2021, the United States District Court for the Western District of Washington issued an Order Granting Motions to Dismiss, which given various consolidations effectively dismissed 60+ COVID-19 Business Interruption cases, including in Germack v. The Dentists Insurance Company, Cause No. 2:20-cv-00616.

The Business Income Loss coverage in the policies issued by the multiple defendant insurers provides coverage for loss of business income due to a necessary suspension of operations because of “direct physical loss of or damage to the insured premises,” caused by a “covered cause of loss.”  The Court focused its analysis on whether COVID-19 has caused “direct physical loss of or damage to” the insured premises and whether virus exclusions operate to eliminate COVID-19 as a “covered cause of loss.”

Regarding the first issue, the Court engages in a thorough analysis of what it is that constitutes “direct physical loss of or damage to” insured property, paying particular attention to the distinction between the terms “loss” and “damage”.  As to the term “damage”, the Court rejected the argument that the average purchaser of insurance would believe that COVID-19 causes damage because it contaminates and therefore alters physical surfaces.  The Court ultimately agreed with other Courts throughout the country, holding as follows:

The Court rejects this interpretation of direct physical damage. As numerous courts have recognized, “COVID-19 hurts people, not property,” . . . as “the pandemic impacts human health and human behavior, not physical structures,”. . . The Court concludes that COVID-19 does not cause direct physical damage to property as the term is used in the insurance policies.

Regarding the term “loss”, the Court concluded that when combined with ‘direct’ and ‘physical’, “’loss’ means that the alleged peril must set into motion events which cause inability to physically own or manipulate the property, such as theft or total destruction.”  The Court further noted that interpreting the policy to require tangible dispossession is consistent with insurance law doctrine holding that all-risk policies are intended to cover damage to property rather than economic losses.

In regard to the applicability of the Virus exclusions, the Court first rejected the argument that there is somehow a distinction between a “virus” and a “pandemic.”  The Court then addressed the Plaintiff Group’s efficient proximate cause argument, finding that under Washington law, the efficient proximate cause of the Business Income losses was not the governmental proclamations, but the virus itself.  Finally, the Court rejected a regulatory estoppel argument, finding that it would not recognize a rule that the Washington Supreme Court has not adopted.

Honorable Barbara Rothstein’s Order, which can be accessed here, is amongst the most comprehensive in the nation, and is likely to serve as teaching material in law schools for years to come.
Lether Law Group represents The Dentists Insurance Company in the Germack matter, which was designated as a national class action for dentists impacted by COVID-19.

Lether Law Group is also currently representing several other insurers in COVID-19 business interruption litigation in state, federal, and tribal courts in Washington, Oregon, California, and Pennsylvania amongst others. If you would like to discuss or have any questions about COVID-19 business interruption claims and/or litigation, please feel free to contact our office.

COVID-19 Business Interruption Case Law: The Western District of Washington Denies Plaintiffs’ Motions to Certify Questions to the Washington State Supreme Court

COVID-19 Business Interruption Case Law: The Western District of Washington Denies Plaintiffs’ Motions to Certify Questions to the Washington State Supreme Court

In February of 2021, Plaintiffs in 10 consolidated cases before the United States District Court for the Western District of Washington, including in Germack v. The Dentists Insurance Company, Cause No. 2:20-cv-00616, filed motions to certify questions to the Washington State Supreme Court regarding business interruption coverage for losses arising from the COVID-19 pandemic. The Plaintiffs’ group specifically sought to certify the following questions:

  • Does being physically deprived of the ability to use covered property directly as a result of the Governor’s shut-down orders constitute a “direct physical loss of” such property?
  • Does Washington’s efficient proximate cause rule require a factual determination of the predominant cause of an individual business’s loss, before a virus (or other) exclusion may be applied to bar coverage?

On April 23, 2021, Plaintiffs’ motion was denied. The Court began by noting the Plaintiffs’ argument that “the Washington Supreme Court has not yet addressed the question of whether COVID-19 and its resulting business closures and limitations causes ‘direct physical loss’ to an insured property,” and that the Court should defer to the Supreme Court to determine the issue. The Court rejected Plaintiffs’ argument in whole, noting that at least five other federal courts addressing similar issues have considered certification to their respective state supreme courts and found certification to be unnecessary:

This Court has at its command all the tools necessary to reach its decision, including the extensive briefing provided by the numerous parties in the consolidated cases on both questions Plaintiffs seek to certify.

Additionally, the Court found “several other strong federal interests weigh against certification,” including the constitutional provisions for diversity for out-of-state parties, the number of putative class actions filed under the Class Action Fairness Act of 2005, and the unjustifiable delay and expense that would be incurred if certification was allowed. The Court ultimately denied Plaintiffs’ motion for certification, finding that Plaintiffs’ questions “do not present such unique and exceptional issues as to warrant certification.”

Lether Law Group represents The Dentists Insurance Company in the Germack matter, which is designated as a national class action for dentists impacted by COVID-19. TDIC’s Motion for Summary Judgment on the coverage issue is currently pending before the Court as is a Motion for Dismissal of the Class Allegations.

Lether Law Group is also currently representing several other insurers in COVID-19 business interruption litigation in state, federal, and tribal courts in Washington, Oregon, California, and Pennsylvania amongst others. If you would like to discuss or have any questions about COVID-19 business interruption claims and/or litigation, please feel free to contact our office.

The above article is an opinion based on various resources such as industry knowledge and is not to be construed as legal advice or to be used as such. If you require legal advice or would like to inquire further about the information contained in this article, please feel free to contact our office directly.

COVID-19 Litigation Update

COVID-19 Litigation Update
Lether Law Group represents The Dentists Insurance Company (TDIC) as national coordinating counsel in COVID-19 related business interruption litigation in a number of jurisdictions throughout the United States. We are happy to announce the dismissal of one such action in the Eastern District of Pennsylvania.

 

In KesslerDental Associates, P.C. v. The Dentists Insurance Company, Cause No. 2:20-cv-03376-JDW, Honorable Joshua D. Wolson granted TDIC’s Motion to Dismiss finding that the COVID-19 pandemic and the governmental and societal response thereto does not trigger the business interruption coverages in the TDIC policy. Summarizing his decision, Judge Wolson stated the following:
“The Covid-19 pandemic might be unprecedented, particularly in its impact on businesses large and small. But it is not a writ for the Court to rewrite the Policy to which Kessler Dental and Dentists Insurance agreed. That Policy does not provide coverage for the losses that Kessler Dental has suffered.”

Kessler Dental sued TDIC claiming that TDIC wrongfully denied coverage for business income losses sustained as a result of the pandemic and the State of Pennsylvania’s shutdown orders. The Court, “at the risk of being labeled anti-Dentite”, citing to The Yada Yada Seinfeld episode from 1997, held that the TDIC virus exclusion operates to defeat coverage.

The TDIC virus exclusion precludes coverage for “loss or damage, including economic loss” caused by a virus. The Court found, simply, that the language is not ambiguous and applies to the COVID-related claims. Kessler attempted to overcome the virus exclusion by claiming that the business income losses that it sought were not “loss” or “damage”. The Court rejected this argument based on the plain language of the policy and Pennsylvania’s clear law regarding policy construction and interpretation.

Kessler also argued that the Court should bar TDIC’s reliance on the virus exclusion based upon a regulatory estoppel theory. Kessler argued that ISO and AAIS made false representations to the Pennsylvania Insurance Commissioner in 2006 when proposing the virus exclusion. The Court rejected this argument for two reasons. First, the Court held that Kessler had failed to allege that ISO or AAIS was representing TDIC in making any regulatory representations. Second, the Court held that Kessler had failed to allege any inconsistent statements.
“But even if the Court were to attribute those trade groups’ statements to Dentists Insurance, Kessler Dental does not plead any inconsistency. it alleges that ISO and AAIS made statements in 2006 representing that property policies were not intended to cover virus-related losses. Dentists Insurance takes the same position here today as the ISO and AAIS did in 2006; it argues that the Virus Exclusion bars coverage. Thus, regulatory estoppel does not apply, even if, as Kessler Dental claims, the insurance trade groups made statements to regulators in 2006 that were at odds with the then-current state of the law.”

The Court went on to further analyze the specific Business Interruption Coverages – Business Income Loss, Extra Expense, Civil Authority – finding that even in the absence of the virus exclusion, the coverages are not triggered. Importantly, the Court found that the virus and the governmental response thereto did not cause “direct physical loss of or damage to” the insured premises. Notably, the Court found that Kessler was never actually shut down. Pursuant to the governor of Pennsylvania’s business shutdown order, dental practices were not actually closed, but were limited to performing emergency procedures.

Below is a link to the complete Order of the Court.

Order of the court

TDIC was represented by Tom Lether and Eric Neal as national coordinating counsel and was represented locally by Michael Smith and Marc Kamin of the Stewart Smith law firm in Philadelphia.

To the extent that you have any questions about any COVID-19 related matters, please feel free to contact Lether Law Group at any time.

The above article is an opinion based on various resources such as industry knowledge and is not to be construed as legal advice or to be used as such. If you require legal advice or would like to inquire further about the information contained in this article, please feel free to contact our office directly.

To Fry or Not to Fry? Homeowner Coverage Issues for Turkey Frying

It is estimated that turkey frying-related accidents cause in excess of $15 million in property damage each year in the U.S. In fact, Thanksgiving Day yields more than double cooking-related home insurance claims compared to any other day in November. The holiday season is upon us.  As a result, it is important for insurers to be ready to handle an increase in all kinds of fire-loss claims. Additionally, it is important to note, given the current COVID restriction across the United States, there may be an increase in families attempting to fry their Thanksgiving bird outdoors in an attempt to maintain a safe distance from loved ones. This could lead to a potential increase in claims this holiday season.

Insurers need to be prepared for an uptick in claims under insureds homeowners’ policies. The dwelling coverage of homeowners’ insurance will typically cover the cost to repair or replace damage resulting from a turkey frying accident.  However, it will still be important to investigate the claim to determine whether there is enough dwelling coverage to cover the replacement costs and sufficient coverage to cover any built-ins and/or contents that are destroyed.

Additionally, it may not be the home itself that suffers property damage. Many at-home-fryers turn their backyards or detached garages into temporary kitchens. It will be important to check if any auxiliary structures are damaged and whether or not those structures are covered under the policy. It is also important to note that the liability coverage will likely cover any injury to guests, so long as your policy covers the proper amount of liability coverage.

While homeowners will likely be covered by frying mistakes under homeowners policy, an interesting issue arises about potential damage to common areas at condominiums. Several states, including Washington, have explicit laws regarding coverages that must be maintained by condominium associations.  In Washington, RCW 64.34.352 requires condominium associations to maintain property insurance on the condominium insuring against all risks of direct physical loss commonly insured against and liability insurance, including injury and property damage from using the common areas. It will be important for any adjuster to be aware of any legal requirements for coverage. Additionally, a condominiums association’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs) may specifically prohibit turkey frying (as is the trend with many condominium associations) which would preclude coverage for any loss resulting from the same.

Lether Law Group has been handling large first-party property losses for over 32 years. This includes fire loss and spontaneous, unexpected claims. If you would like to discuss these recent developments or any other matters, please feel free to contact us at any time.

The above article is an opinion based on various resources such as industry knowledge and is not to be construed as legal advice or to be used as such. If you require legal advice or would like to inquire further about the information contained in this article, please feel free to contact our office directly.