Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Food & Beverage newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (June 2, 2020, 2:33 PM EDT) -- Motorists Mutual Insurance Co. is looking to send a restaurant's coverage suit back to Pennsylvania federal court, saying there is complete diversity between the parties and the amount the restaurant is seeking for alleged losses stemming from the COVID-19 pandemic is more than $75,000.
In a notice filed two weeks after U.S. District Judge Nora Barry Fischer remanded the case to state court, Motorists Mutual urged the Western District of Pennsylvania to reconsider Monday, saying DiAnoia's Eatery LLC's own pleadings establish that the business and its owners are based in Pennsylvania, while Motorists Mutual is based in Ohio.
In addition, the insurer said the restaurant claims to have lost about $110,000 in revenue as a result of the government-mandated shutdown, and as it is seeking to have those losses covered by the insurance policy in this suit, that puts the amount in controversy well above the $75,000 threshold for federal jurisdiction.
An Italian restaurant based in Pittsburgh's Strip District, DiAnoia's and its associated carry-out storefront, Pizzeria Davide, filed the complaint against Motorists in the Allegheny County Court of Common Pleas on April 28. They claimed Motorists breached its contract by denying coverage and sought a declaratory judgment from the court that the COVID-19 closures and the business losses associated with losing all their sit-down customers were covered by their policy. The insurer removed the suit to federal court May 15, citing its Ohio citizenship and DiAnoia's Pennsylvania citizenship.
The restaurant is one of many businesses that have sued their insurers in Pennsylvania. The state's Supreme Court on May 14 rejected a petition from another Pittsburgh establishment asking to expedite such cases, which Judge Fischer wrote in her May 19 order was another reason for declining to take DiAnoia's case while the state courts still grappled with the same questions.
In Monday's notice, Motorists argued that there are already federal court cases involving similar claims even within the same district, making it inevitable that the federal court system will decide litigation on these issues.
The insurer further argued that DiAnoia's is making claims for breach of contract and monetary damages independently of its bid for declaratory relief, and those claims alone require that the federal court exercise jurisdiction over the case. While DiAnoia's may have attempted to "artfully plead" those claims as bids for declaratory relief, the insurer said they are nonetheless independent claims that the court does not have discretion to abstain from hearing.
Finally, the insurer turned to the factors outlined in the Third Circuit's 2014 ruling in Reifer v. Westport Insurance Corp., saying none of the parties would be inconvenienced if the matter was decided in federal court, there is no specific public interest at stake in the suit, both state and federal courts are equally equipped to decide the matter and there is no pending parallel state court case that would cause duplicative litigation.
Scott B. Cooper of Schmidt Kramer PC, representing DiAnoia's, criticized the insurer's bid to move the case back to federal court.
"This shows how desperate the insurance companies are to avoid having the central issue decided," he told Law360 on Tuesday. "All this will do is further delay the case and it is an issue of state law."
He added other judges in the district have similarly recognized that the state courts will determine the issue of COVID-19 coverage.
An attorney for Motorists Mutual said the company declined to comment Tuesday.
DiAnoia's is represented by James C. Haggerty of Haggerty Goldberg Schleifer & Kupersmith PC, Scott B. Cooper of Schmidt Kramer PC, John P. Goodrich of Jack Goodrich & Associates PC and Jonathan Shub of Kohn Swift & Graf PC.
Motorists Mutual Insurance is represented by Matthew A. Meyers, Robert E. Dapper Jr. and Taylor M. Wantz of Burns White LLC.
The case is DiAnoia's Eatery LLC v. Motorists Mutual Insurance Co., case number 2:20-cv-00787, in the U.S. District Court for the Western District of Pennsylvania, and case number GD-20-005273 in the Court of Common Pleas of Allegheny County, Pennsylvania.
--Additional reporting by Matthew Santoni. Editing by Abbie Sarfo.
Update: This story has been updated with a response from Motorists Mutual's attorney to a request for comment.
For a reprint of this article, please contact reprints@law360.com.
