Insurer Opposes Restaurant Owner's King's Bench Petition in Pa. Business Interruption Case
An insurer sued in a coverage dispute over whether it should compensate a restaurant owner over loss of business due to COVID-19 closures has urged the Pennsylvania Supreme Court not to fast-track its review of the case.
May 08, 2020 at 12:07 PM
3 minute read
An insurer sued in a coverage dispute over whether it should compensate a restaurant owner over loss of business due to COVID-19 closures has urged the Pennsylvania Supreme Court not to fast-track its review of the case.
In late April, Pittsburgh restaurant owner Joseph Tambellini filed a petition requesting a ruling from the justices, saying a decision on the issue could provide guidance to the "hundreds, if not thousands," of lawsuits expected to result from the statewide closures Gov. Tom Wolf mandated as an effort to stem the spread of the highly contagious disease.
His insurance carrier, Erie Insurance Exchange, filed an answer to that petition Thursday, opposing Tambellini's request that the court exercise its King's Bench powers to review the case.
Tambellini asked the high court to rule on whether Erie Insurance, which sold him a policy that does not include an exclusion for virus-related incidents, must provide coverage for the business disruption he's faced after his business was closed as part of the ongoing shutdowns. If the claim is successful, the plaintiff further asked that the justices consolidate all insurance claims related to the COVID-19 shutdowns into a single court in Pennsylvania—much like what happens in a federal multidistrict litigation—so the claims can be handled quickly.
"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," Tambellini said in 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."
In its May 7 response, Erie argued the court should decline to fast track the case because the case was not one of immediate public importance.
"While the ongoing COVID-19 crisis itself obviously is of immediate importance to the nation as a public health matter, that fact alone does not establish that Tambellini's contractual dispute with Erie is of such immediacy that the normal litigation process and procedures that govern civil disputes in Pennsylvania should suddenly be disregarded entirely," Erie said in its petition.
Erie said that it was not attempting to minimize the hardships business face during the pandemic, but said the courts should not "panic" and be pressured to make "ad hoc" solutions to the problem.
"Instead, the courts use the types of tools to address precisely these types of situations, where the requirements are met," Erie said.
Scott Cooper of Schmidt Kramer represents Tambellini and said insurance companies "want to try and avoid the threshold issue that these are losses covered under each and every policy. They did not define the term and they did it at their peril. They should acknowledge the claims and then rewrite the policies if they choose."
Richard Dibella of DiBella Geer McAllister Best represents Erie and did not respond to a request for comment.
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