Try Eagles Try

In the case of Philadelphia Eagles Limited Partnership v. Factory Mut. Ins. Co., No. 2:21-CV-01776-MMB (E.D. Pa. Dec. 13, 2024 Baylson, J.), the court denied a Motion for Reconsideration filed by the Plaintiff, Philadelphia Eagles, relative to the court’s previous decision to dismiss its Complaint in this coverage action related to the COVID-19 pandemic.

According to the Opinion, the Plaintiff, Philadelphia Eagles, LP, asserted that it was forced to shut down or modify operations for its various insured properties due to the COVID-19 pandemic and allegedly sustained financial losses as a result. The Defendant insurance carrier had denied coverage under the terms of the policy.

The Plaintiff sought a declaration that its losses were covered by the Defendant’s policy and that the Defendant was estopped from arguing that communicable diseases could not trigger coverage under the policy requiring a physical loss or damage to property to implicate coverage. In its previous decision, the trial court had followed other Pennsylvania Supreme Court and Third Circuit Court decisions to grant the Defendant carrier’s Motion to Dismiss.

Here, the Plaintiff’s Motion for Reconsideration was denied after the court again found that there mere presence of communicable disease at a business location did not render the property sufficiently dangerous to constitute a physical loss or damage that triggered insurance coverage.

Anyone wishing to review a copy of this decision may click this "LINC."


Source: “The Legal Intelligencer Federal Case Alert,” www.Law.com (Jan. 2, 2025).

Superior Court Addresses Business Interruption Coverage Case Related to Pandemic Closures

In the case of The Scranton Club v. Tuscarora Wayne Insurance Company, No. 238 MDA 2021 (Pa. Super. Sept. 12, 2023 Panella, P.J., Olson, J., and Kunselman, J.) (Op. by Kunselman, J.) (non-precedential)(Olson, J., Concurring), the Pennsylvania Superior Court affirmed in part and reversed in part a trial court’s decision sustaining Preliminary Objections filed by Tuscarora Wayne Mutual Group, Inc. regarding business interruption coverage issues arising out of the COVID-19 pandemic governmental closings of businesses.

In this matter, the Scranton Club was seeking a declaration that its insurance policy provided coverage for the losses sustained, including business income, during the pandemic.

In the time since the trial court’s decision was handed down, the Pennsylvania Superior Court held in the case of Ungarean v. CNA that the mere loss of the ability to use one’s property could constitute “direct physical loss of damage” to the property for purposes of business interruption insurance claims based upon governmental required closures during the pandemic.

It is parenthetically noted that, on July 13, 2023, the Pennsylvania Supreme Court granted a Petition for Allowance of Appeal in the Ungarean case, as well as another COVID-19 business interruption case with a contrary result, in order to decide the split of authority on that coverage issue.

In this case involving the Scranton Club, the Majority of the Superior Court panel affirmed the trial court’s rulings regarding the Virus Exclusion. In that regard, the trial court had denied the carrier’s request to dismiss the case as a matter of law based upon the Virus Exclusion in the policy since the Exclusion did not contain anti-concurrent causation language and, instead, used wording that required the application of an efficient proximate cause or concurrent causation standard. In this regard, the trial court found that the causation issued had to be decided by the jury rather than by the court as a matter of law.

The appellate court in this case involving the Scranton Club also affirmed the trial court’s ruling regarding the civil authority coverage. The trial court had ruled that coverage was not available to the insured under the civil authority coverage since that the required government closures due to the damage condition of neighboring properties, not the insured’s property.

However, based upon the Superior Court’s previous decision in Ungarean, the Superior Court reversed the trial court’s holding on the “direct physical loss of damage” issue. 

The trial court had held that there was no business income or building damage coverage based upon that policy provision due to the Scranton Club’s failure to allege any physical loss or damage to its property and its allegation that the virus was never present on the property.  As noted, the trial court had issued its decision based upon precedent that existed at the time that supported the trial court’s decision, with precedent has since changed.

In this case involving the Scranton Club, the Pennsylvania Superior Court re-affirmed its majority ruling in the Ungarean case that a loss of use could constitute “direct physical loss or damage” to property. As noted, this issue is set to be decided by the Pennsylvania Supreme Court.

Anyone wishing to review a copy of this non-precedential decision may click this LINK.  The Concurring Opinion by Judge Olson can be found HERE.

Third Circuit Court of Appeals Affirms Denials of Coverage in Covid-19 Business Loss Matters

In the case of Wilson v. USI Ins. Serv., LLC, No. 20-3124 (3d Cir. Jan. 6, 2023) (Op. by Chagres, C.J.), the court, in a consolidated appeal, found that the district courts properly found for the insurance companies in Plaintiff businesses’ actions for coverage for COVID-19 business losses under commercial property insurance policies.

The rationale behind the decisions, in part, was that the Plaintiffs did not suffer a “physical loss of or damage to” property.

Because the Court made the above initial finding it felt that it did not need to address the arguments raised by the carriers relative to any Virus Exclusions contained in the policies.    

Anyone wishing to review a copy of this decision may click this LINK.

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Jan. 24, 2023).

Fly Eagles Fly

In the case of Philadelphia Eagles, LP v. Factory Mut. Ins. Co., No. 2:21-CV-01776-MMB (E.D. Pa. Dec. 15, 2022 Baylson J.), the court denied a carrier’s Motion to Dismiss in a case involving the Philadelphia Eagles seeking coverage from their carriers for financial losses associated with the COVID-19 pandemic and governmental closure orders.  The Eagles had a $1 Billion Dollar policy in this regard.

The carrier moved to dismiss and asserted exclusions in the policies.

The court ruled that, due to the unsettled status of Pennsylvania law on the issues presented, it was appropriate to deny the Motion to Dismiss and to allow discovery limited to the exchange of pertinent documents.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's companion Order can be viewed HERE.


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Jan. 5, 2023).

Microorganism Exclusion Found to Preclude Coverage for Business Shut Down by COVID-19 Pandemic Closure Order

 

In the case of Big Red Management Corp. v. Zurich Amer. Ins. Co., No. 2:20-CV-02113-KSM (Jan. 7, 2022 Marston, J.), the court ruled that a restaurant was not entitled to coverage for business losses allegedly caused by COVID-19 governmental closure orders where the insurance policy in question contained a microorganism exclusion.

The court also noted that coverage was properly denied by the carrier in that there had been no evidence of any direct physical damage or loss to the insured’s property. The court additionally held that coverage was properly denied because the governmental closure orders did not completely prohibit access to the restaurant since the restaurant was permitted to continue to offer takeout and delivery services.

As such, the court granted the Defendant’s Motion to Dismiss.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's companion Order can be viewed HERE.

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Feb. 3, 2022).

Motion To Compel Discovery on Meaning of Virus Exclusion in Covid-19 Business Interruption Coverage Case Denied

In the case of 1800 Farrugut, Inc. v. Utica First Ins. Co., No. 2:20-cv-03449-KSM (E.D. Pa. Sept. 16, 2021 Marston, J.), the court ruled that a business owner seeking a judicial declaration that it was entitled to losses caused by the COVID-19 pandemic governmental shutdown orders could not obtain targeted discovery on the meaning of the virus exclusion in its insurance policy where the meaning of the exclusion was unambiguous and plainly barred the Plaintiff’s claims for recovery.

According to the Opinion, the Plaintiff owned a restaurant and bar which was subjected to governmental shutdown orders during the COVID pandemic. Thereafter, the business sought business interruption coverage from its carrier.

According to the Opinion, the court found that the insurance policy contained a plainly worded virus exclusion.

As noted above, during the course of this declaratory judgement action regarding coverage, the court denied the Plaintiff’s efforts to compel discovery relative to the meaning of the virus exclusion.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's companion Order can be viewed HERE


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Oct. 8, 2021).

Source of image:  Photo by Markus Winkler on Unsplash.com.

COVID-19 Business Interruption Coverage Claim Dismissed

In the case of Penn Asian Senior Serv. v. Selective Ins. Co.,  No. 20-4919 (E.D. Pa. Sept. 30, 2021 Pratter, J.), the court granted an insurance company’s Motion to Dismiss a Plaintiff’s business interruption coverage action under its property insurance policy relative to the COVID-19 pandemic closures.

According to the Opinion, the Plaintiff filed a declaratory judgment action seeking coverage under its property insurance policy for operating expenses incurred while its adult daycare center was closed due to COVID-19 orders.

The court found that the Plaintiff did not show any evidence of a physical loss of the premises.

The court additionally stated that the civil authority provision did not apply under the circumstances presented.

The virus exclusion in the policy was also found to preclude coverage.

As such, the court granted the carrier’s Motion to Dismiss.

Anyone wishing to review a copy of this decision may click this LINK.


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Oct. 21, 2021).

COVID-19 Business Interruption Coverage Claim Dismissed

In the case of Infinity Real Estate, LLC v. Travelers Excess & Surplus Lines Co., No. 2:20-CV-06398-CMR (E.D. Pa. Sept. 13, 2021 Rufe, J.), the court granted a Defendant’s Motion to Dismiss in a business interruption coverage case related to the COVID-19 pandemic. 

The Plaintiff asserted that it suffered a loss of rental income when its commercial tenants were forced to shut down or limit operations in response to government orders issued during the COVID-19 pandemic. The Plaintiff filed a claim with the Defendant carrier, who denied coverage. The Plaintiff then filed suit.

The court agreed with the Defendant’s Motion to Dismiss after ruling that, under the policy, the Plaintiff was only entitled to coverage for loss of business or rental income caused by physical loss of property or by civil authority orders.

The court noted that, although the COVID-19 shutdown Orders were issued by a civil authority, the court noted that the Orders were motivated by the pandemic, meaning that the Plaintiff’s loss of income was caused at least indirectly by a virus. The court otherwise noted that the policy contained a virus exclusion, which was applicable in this matter.

The court in this matter also ruled that the COVID-19 shutdown Orders did not cause a direct physical loss of the Plaintiff’s properties, which was required under the policy for coverage to be implicated.

As noted, the court granted the Defendant’s Motion to Dismiss.

Anyone wishing to review a copy of this decision may click this LINK.


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Oct. 5, 2021).

Source of image:  Photo by Tim Mossholder from Pexels.com.

Minor League Baseball Team Pops Out on Business Interruption Claim

In the case of Lehigh Valley Baseball LP v. Philadelphia Indem. Ins. Co., Dec. Term, 2020, No. 00958, Control No. 21020014 (C.P. Phila. Co. June 17, 2021 Glazer, J.), the court ruled that the Plaintiff minor league baseball team failed to show that they sustained any direct physical loss due to the COVID-19 pandemic and that, as a result, the Plaintiffs were not entitled to recover under the business loss provision of their insurance policy.  

The court also found that a virus exclusion under the policy also barred the Plaintiff’s claims.   

Anyone wishing to review a copy of this decision may click this LINK.

Source:  “Digest of Recent Opinions.”  Pennsylvania Law Weekly (Aug. 17, 2021). 

Source of image: Photo by Chris Briggs on Unsplash.com.

Carrier's Denial of Claim for Business Interruption Coverage Upheld

In the case Isaac’s At Spring Ridge, LLP v. MMG Ins. Co., No. CI-20-03613 (C.P. Lanc. Co. March 2, 2021 Sponaugle, J.), the court issued an Order granting the carrier’s Motion for Judgment on the Pleadings in a coverage action arising out of the Plaintiff’s claim of business income losses under an all-risk commercial property policy involving a restaurant that was forced to modify, but not close, its operation due to the Commonwealth’s COVID-19 Orders.

In so ruling, the court relied, in part, upon a virus exclusion contained in the policy.

The court also found that the civil authority coverage requirements under the policy were not met.

The court also noted that the Plaintiff did not suffer any direct physical loss or damage to its premises in order to meet the requirements of another policy provider for coverage.

Anyone wishing to review this detailed Order without Opinion issued by the Court may click this LINK.


I send thanks to Attorney Peter J. Speaker of the Harrisburg, PA office of the law firm of Thomas, Thomas & Hafer, LLP for bringing this case to my attention.

Virus Exclusion Defeats COVID-19 Business Interruption Coverage Claims

In the case of Newchops Rest. Comcast LLC v. Admiral Indem. Co., No. 20-1949 (E.D. Pa. Dec. 17, 2020 Savage, J.), the court addressed insurance coverage issues relative to alleged business losses by the Plaintiff’s restaurants due to COVID-19 closures.

According to the Opinion, the Defendant carrier had issued to the Plaintiff multiple commercial lines insurance policies that provided property, business income, extra expenses, and other coverages.

After the city in which the Plaintiff’s restaurants were located ordered the closure of all non-essential businesses due to the COVID-19 pandemic, the Plaintiff closed their restaurants to comply with the order.

At some point thereafter, the Plaintiffs filed a declaratory judgment action seeking a judicial declaration that their business losses were covered under the insurance policies. The case came to a head when the carrier filed a Motion for Judgment on the Pleadings.

The court ruled that the Plaintiffs had failed to state a claim for coverage under the civil authority or business income provisions of the Defendant carrier’s policy. The court found that the Plaintiff did not allege any losses caused by a “covered cause of loss.”

The court additionally ruled that, even if the Plaintiffs had alleged losses caused by a “covered cause of loss,” the Plaintiff’s claims for coverage were precluded by the virus exclusion contained in the policy. The court stated that the lack of a specific reference to a pandemic in the policy language did not render the policy provision ambiguous.

As such, the court granted the carrier’s Motion for Judgment on the Pleadings.

Anyone wishing to review a copy of this decision may click this LINK.


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Jan. 5, 2021).

Dental Practice Not Permitted to Recover Under All-Risk Policy Relative to COVID-19 Pandemic

In the case of Brian Handel, D.M.D., P.C. v. Allstate Ins. Co., No. 20-3198 (E.D. Pa. Nov. 6, 2020 Bartle, J.), the court found that the Plaintiff, which was a Pennsylvania dental practice, had failed to plead plausible facts that the restrictions placed upon the practice due to the COVID-19 pandemic caused damage or loss in any physical way to its property so as to trigger coverage under its “all-risk” insurance policy with the Defendant. 

The court noted that the dental office had been required to close its practice under the governmental orders related to the pandemic. Thereafter, the dental practice made a claim against the insurance company under the “all-risk” insurance policy for claims of business income loss and extra expenses due to the interruption of the dental practice due to the COVID-19 pandemic.

The dental practice filed this declaratory judgment action and a breach of contract. Allstate moved to dismiss the Plaintiff’s Complaint for failure to state a claim and this motion was granted.

The court noted that, under the subject insurance policy, Allstate had agreed to pay for “direct physical loss of or damage to covered property…caused by or resulting from any covered cause of loss.”

The policy defined a “covered cause of loss” as a “direct physical loss unless the loss is excluded or limited under Section 1-Property.” 

In response to the Plaintiff’s claims, the District Court noted that the Governor’s order did not require dental offices such as the Plaintiff's office to close completely. Rather, the Plaintiff’s practice was able to remain open for emergency procedures. As such, the court found that the dental practice/property remained inhabitable and usable, albeit in limited ways.

As such, the court found that the Plaintiff failed to plead plausible facts that COVID-19 caused damage or loss in any physical way to the property so as to trigger the coverage.

The court also found that the Plaintiff’s claim of coverage pursuant to the Civil Authority Provision of the policy also failed. Under that provision, Allstate was obligated to cover the loss of business income and necessary expenses when a “covered cause of loss” damage property in the immediate area and a civil authority prohibited access to the covered property.

The court found no facts pled of any direct physical loss of prohibited access to the property. As such, the court found that the Plaintiff could not sustain a claim for coverage under the Civil Authority Provision of the policy based upon the COVID Pandemic.

The court went on to note that, even if the Plaintiff had pled sufficient facts for physical damage or loss as a result of the pandemic, the Plaintiff’s claims were still barred by the virus exclusion provision of the policy. Under that exclusion, it was provided that the carrier would not cover loss or damage if caused, either directly or indirectly by “any virus, bacterium, or other microorganism that induces or is capable of inducing physical stress, illness, or disease.” 

In the end, the District Court granted the carrier’s Motion to Dismiss.

Anyone wishing to review a copy of this decision may click this LINK.


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Nov. 24, 2020).