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Law360 (April 13, 2021, 3:55 PM EDT) -- A Philadelphia County judge won't wait for an appeals court decision in a bellwether case over pandemic-related insurance coverage before moving forward with a set of similar cases from a group of preschool operators targeting Philadelphia Indemnity Insurance Co. for financial losses suffered due to COVID-19 restrictions.
Judge Gary Glazer said on Friday that the Superior Court's pending decision in a case out of Lackawanna County, in which a policyholder's claim for pandemic-related business interruption coverage was rejected, would not necessarily be dispositive when it came to claims leveled against PIIC by a group of Goddard School franchisees.
"The insurer, the policy terms and the allegations set forth in the complaints [here in Philadelphia] are different than those in [the Lackawanna County case], so the appeal of the latter would not necessarily make the path to resolving the former cases any smoother or quicker," Judge Glazer said in an order denying a bid by PIIC to stay each of the 10 cases it's facing from the preschool operators.
PIIC asked Judge Glazer last month to stay all 10 cases that the insurer is facing from Goddard School franchisees who say they were improperly denied coverage for business losses they suffered after being forced to close their doors as a result of the ongoing coronavirus pandemic.
The insurer pointed to a pending appeal in the Superior Court following a Lackawanna County judge's decision in January to toss claims from a Scranton social club that filed its own lawsuit last year seeking coverage for pandemic-related financial losses from Tuscarora Wayne Mutual Group Inc.
In pushing for the stay, PIIC argued that the Superior Court's holding in the Lackawanna County case would "likely be substantially controlling with respect to liability issues in … the actions against PIIC pending before this court."
Arguing against the stay, attorneys for the franchisees asserted that there were key differences between the Philadelphia cases and the Lackawanna County case. In particular, they said that where the Lackawanna County case did not involve allegations that there had been confirmed COVID-19 cases at the Scranton Club, the cases in Philadelphia did involve actual infections at the Goddard School locations.
As a result, the franchisees said that the cases triggered policy language covering losses occurring due to viruses and other communicable diseases.
"Since Scranton Club does not address the communicable disease rider in plaintiff's policy and contrary to Scranton Club, plaintiff is alleging that COVID-19 entered its property and individual employees suffered illness as a result of COVID-19, Scranton Club offers little guidance for this court in this matter," one of the franchisees wrote in response to the stay bid.
Judge Glazer ultimately agreed in his two-page order on Friday denying PIIC's motion.
Representatives for the parties did not immediately return messages seeking comment on Tuesday.
The franchises are represented by Arnold Levin, Laurence S. Berman, Frederick Longer and Daniel Levin of Levin Sedran & Berman LLP, and Richard Golomb and Kenneth Grunfeld of Golomb & Honik PC.
PIIC is represented by Jeffrey Grossman of Stradley Ronon Stevens & Young LLP, and Richard Fenton and Jeffrey Zachman of Dentons US LLP.
The cases are Striper LLC v. Philadelphia Indemnity Insurance Co., case number 201101509; Bellanza Inc. v. Philadelphia Indemnity Insurance Co., case number 201101522; Bellmazia Enterprises LLC v. Philadelphia Indemnity Insurance Co., case number 201101518; Speranza - Horsham Investment Group LLC v. Philadelphia Indemnity Insurance Co., case number 201101524; Ballmaizia - North Huntington Investment Group LLP v. Philadelphia Indemnity Insurance Co., case number 201101517; Bellanza Investments LLC v. Philadelphia Indemnity Insurance Co., case number 201101516; Speranza - Broadview Heights Investment Group LLC v. Philadelphia Indemnity Insurance Co., case number 201101526; Jatyson Inc. v. Philadelphia Indemnity Insurance Co., case number 201101513; Investment Group LLC v. Philadelphia Indemnity Insurance Co., case number 210101556; and Tiny Happy People Inc. v. Philadelphia Indemnity Insurance Co., case number 210101551, all in the Court of Common Pleas of Philadelphia County, Pennsylvania.
--Editing by Steven Edelstone.
For a reprint of this article, please contact reprints@law360.com.
