Several companies, including the Seattle Seahawks and Vulcan Inc., a development company founded in 1986 by the late Microsoft co-founder Paul Allen, have dismissed their federal lawsuit seeking COVID-19 loss coverage following the announcement of a ruling from the Washington Supreme Court, ruling in favor of insurers in a similarly situated case.

In a stipulated agreement seeking the court's approval of the Plaintiff's request for dismissal filed last Thursday. The Plaintiffs, which include the Seattle Museum of Popular Culture, have agreed to dismiss their cases against Zurich American Insurance Co. and Evanston Insurance Co., with prejudice, in other words, dismissed permanently, and each party will bear its own attorney's fees.

In July, Judge Barbara J. Rothstein granted the plaintiff's request for a stay of proceedings pending the outcome of the Washington Supreme Court's ruling in the case of Hill and Stout PLLC v. Mutual of Enumclaw Insurance Co. In August, the court found in favor of the insurers.

In that case, the court's unanimous decision that a pediatric dental practice was not entitled to coverage for COVID-19-related losses, because the loss of business and revenue was the result of government shutdown orders; and not the result of tangible damage required by the insurer's policy.

In light of this decision, numerous businesses in Washington and around the country have started dismissing their own cases for COVID-19 insurance coverage, which if not checked, could embolden insurance providers to deny future claims. This could also have a chilling effort on the policyholders who may delay or not file a claim for losses, in fear that their claim will be vigorously challenged by the insurer and they could potentially be liable for attorneys fees and costs should the policyholder lose his/her case in court.

Records show that Federal district courts all over the country have already tossed or rejected a significant portion of the COVID-19 insurance coverage lawsuits filed since the beginning of the pandemic. Cases that are still pending are not expected to receive favorable treatment in light of the Washington Supreme Court's recent decision.

The plaintiffs, in this case, did not make it known why they chose not to continue with the suit, but the Washinton Supreme Court ruling undoubtedly had a huge impact on their decision to dismiss their case.