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Law360 (June 16, 2020, 6:30 PM EDT) -- One of Pennsylvania's first proposed class actions filed against an insurer seeking COVID-19 loss coverage has been dropped by a pub, a few weeks after Erie Insurance Exchange moved the suit to federal court.
HTR Restaurants Inc., doing business as Sieb's Pub in Ross Township, Pennsylvania, said Monday that it decided to "voluntarily dismiss" its class action lawsuit against Erie over the insurer's wrongfully denying coverage of its property and revenue loss from state-mandated closures amid the COVID-19 pandemic.
The class suit was originally filed in Pennsylvania state court in April, and Erie removed the case to Pennsylvania federal court in early June. The parties were notified last week that Erie would have until June 25 to respond to Sieb's complaint.
Sieb's said in the complaint that it has suffered substantial business loss because of possible COVID-19 contamination and the state-mandated closure of nonessential businesses. The bar shut its doors following Pennsylvania Gov. Tom Wolf 's stay-at-home order in late March.
The pub said that though some restaurants were given exceptions to stay open for delivery and takeout services, it had to close and furlough employees.
In the suit, Sieb's claimed that its commercial general liability policy with Erie does not have a virus exclusion and should cover losses from the government's coronavirus response. It argued that the state-mandated closures trigger "civil authority" coverage in its policy with Erie.
The pub was seeking to represent similarly situated Pennsylvania businesses with Erie policies that had suffered losses because of the pandemic and been denied coverage.
The bar requested a declaration from the Allegheny County Court of Common Pleas that COVID-19-related losses were covered under their insurance policies and asked for an injunction blocking Erie from further denials.
An Erie spokesperson said in early June that business interruption insurance isn't generally intended to cover events like the coronavirus crisis, adding that the policies usually cover financial losses when a business cannot function due to physical damage to a commercial property.
Attorneys representing Sieb's Pub declined to comment on the decision. Representatives from Erie did not immediately respond to requests for comment.
Sieb's Pub is represented by Jonathan Shub and Kevin Laukaitis of Kohn Swift & Graf PC.
Erie is represented by Tara L. Maczuzak of DiBella Geer McAllister & Best PC.
The case is HTR Restaurants Inc. v. Erie Insurance Exchange, case number 2:20-cv-00819, in the U.S. District Court for the Western District of Pennsylvania.
--Editing by Jack Karp.
For a reprint of this article, please contact reprints@law360.com.
