HARRISBURG – A restaurant taking action against its insurer for allegedly not covering losses sustained during the coronavirus quarantine has filed an emergency petition seeking the Supreme Court of Pennsylvania to take the case.
Joseph Tambellini, Inc. (doing business as “Joseph Tambellini Restaurant”) of Pittsburgh initially filed suit on April 17 in the Allegheny County Court of Common Pleas versus Erie Insurance Exchange, of Erie.
According to the plaintiff restaurant, it was holder of an insurance policy with Erie that took effect in July 2019 and was to last for the duration of one year.
“The Erie Policy is an ‘All Risks’ policy which provides coverage for losses to the insured premises unless specifically excluded. The Erie Policy does not exclude the losses caused by the coronavirus pandemic. The Erie Policy provides coverage for the losses incurred by [the plaintiffs] as a result of the coronavirus pandemic and the actions of the government in response thereto,” the lawsuit stated.
On March 6, Pennsylvania Gov. Tom Wolf issued a Proclamation of Disaster Emergency due to the coronavirus and in subsequent weeks, other orders required the closure of all “non-life sustaining businesses” and state residents to stay at home whenever possible (with limited exceptions).
As a result of both the impact of the virus and the governor’s orders, businesses like the plaintiff’s which operated in closed environments have been forced to shut down and furlough their employees, in addition to sustaining commercial losses on several fronts.
The plaintiff believed those losses were covered by their insurance policy from Erie Insurance Exchange, and made claims to the defendant. However, the defendant denied paying the plaintiff’s claim requests.
“Defendant Erie has denied and/or refused to acknowledge coverage for the losses of [plaintiff] caused by the coronavirus and the referenced orders. Defendant Erie has wrongfully refused to provide coverage to [plaintiff] under the Erie Policy. The denial and refusal to acknowledge coverage to [plaintiff] under the Erie Policy is a material breach and in direct violation of the specific terms and provisions of the Erie Policy. Defendant Erie must be enjoined from continuing to deny and/or refuse to acknowledge coverage to insureds for losses caused by the COVID-19 virus and the referenced orders,” the lawsuit stated.
Plaintiff counsel Scott B. Cooper explained the plaintiff is seeking relief under the insurance policies they have been paying premiums on for years, and that there are usually two types of coverage in such policies.
One is “Business Interruption”, which covers physical losses and use of the premises or damage to the premises, and lasts for the duration of the insurance policy. The other is “Civil Authority” which has a more limited scope, in that it takes effect 72 hours after a business is shut down and lasts for only six weeks.
“The people have been paying for these premiums for all these years, and now the insurance company is saying, ‘We don’t have to cover it, because we just have a lot of claims at one time.’ They’re just blanket-denying every claim without even investigating them,” Cooper previously stated.
In a related class action lawsuit brought by HTR Restaurants, a successful class certification would mean the preservation of any putative plaintiffs’ claims through a tolling of the statutes of limitations associated with those same claims.
“One of the tricks that the insurance companies put in the policies is, generally, if there’s a breach of contract, you have four years to file a lawsuit. But, if you look in the policies, they lower it to two years or even sometimes, one year, and the courts enforce that. This puts everyone who’s an Erie-insured [policyholder] on the same page, that they’re all being protected by the [HTR] case,” Cooper said previously.
In the instant case, the petition seeks the state Supreme Court to exercise its rarely-used King’s Bench provision. That rule allows the Court to oversee any case filed at any level of judiciary in Pennsylvania, if the case in question is a matter of “immediate public importance.”
“The instant action presents issues of immediate public importance to not only plaintiff Tambellini, but to all citizens of the Commonwealth who are seeking recompense from their insurers for the losses, damages and expenses caused by the COVID-19 pandemic and the related governmental orders,” according to the petition.
“Exercise of jurisdiction by the Court is warranted by the immediate needs of citizens of the Commonwealth who need resolution of the legal insurance coverage issues facing them in attempting to restart their businesses and their lives in the face of the losses, damages and expenses caused by the COVID-19 pandemic and the related governmental orders.”
Cooper adds the Supreme Court is being asked to step in because their timely review is needed in such dire operating circumstances as his client currently finds themselves in.
“We are asking the Court to decide a threshold issue that will help expedite the Tambellinis and all other small business receiving desperately-needed monies in order to operate. Erie had over 25,000 policies in effect itself, so the breadth and importance of expedited review cannot be understated,” Cooper said.
The plaintiff is seeking declaratory, compensatory and injunctive relief in the form of judicial orders stating it is entitled to coverage for losses caused by the coronavirus, enjoining the defendant from denying said coverage and mandating the payment of said coverage to the plaintiff.
The plaintiff is represented by John P. Goodrich of Goodrich & Associates in Pittsburgh, Scott B. Cooper of Schmidt Kramer in Harrisburg, James C. Haggerty of Haggerty Goldberg Schleifer & Kupersmith and Jonathan Shub of Kohn Swift & Graf, both in Philadelphia.
The defendant is represented by Tara L. Maczuzak of DiBella Geer McAllister Best, in Pittsburgh.
Allegheny County Court of Common Pleas cases GD-20-005137
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com