Ungarean v. CNA & Valley Forge Ins. Co., 2022 Pa. Super. LEXIS 467 (November 30, 2022) (Panella, P.J.) Like so many other businesses, the dental practice of Timothy Ungarean, DMD, d/b/a Smile Savers Dentistry, PC (“Ungarean”) suffered significant losses when business was disrupted by the COVID-19 pandemic. Ungarean sought coverage for those losses under the business interruption provisions of the business insurance policy he had bought from CNA and Valley Forge Insurance Company (“CNA”) (“CNA Policy”). After CNA denied his claim, Ungarean filed a complaint seeking a declaration under the Declaratory Judgments Act, 42 Pa.C.S.A. §§ 7531-7541, that the CNA Policy covered his loss. Ungarean followed that complaint with a motion for summary judgment, which the Allegheny County Court of Common Pleas granted. The court declared Ungarean was entitled to business interruption coverage because COVID-19 and the related governmental orders had caused Ungarean to suffer a direct physical loss of his dental practice, which was within the ambit of coverage provided by the CNA Policy. Moreover, the court found that the exclusions CNA tried to invoke to deny coverage were not applicable to Ungarean’s claim. We are in full agreement with the court’s conclusions. We are also in full agreement with the court’s reasoning in support of those conclusions. Therefore, based primarily on the trial court’s thoughtful opinion, we affirm the court’s order granting summary judgment and declaring that coverage is owed to Ungarean for his COVID-related business losses under the specific terms of the CNA Policy. We affirm the trial court’s order granting Ungarean’s motion for summary judgment and its declaration that Ungarean’s direct physical loss to his dental practice is covered by the CNA Policy. We recognize, as CNA has taken great pains to point out, that this conclusion runs against the tide of cases finding an insured was not owed COVID-related business interruption coverage under their policy’s provisions. However, as we stressed above, our review must be confined to the CNA policy purchased by Ungarean to determine whether coverage has been triggered. We base our finding that coverage has indeed been triggered on the plain language of the CNA policy, the guiding principle that ambiguities in insurance policies such as the ones we identified in the CNA Policy must be construed in favor of the insured, and the analysis and opinion of the trial court.
Order affirmed. Judges Lazarus, Kunselman, Nichols, and McLaughlin join the Opinion. Judge Stabile files a dissenting opinion in which President Judge Emeritus Bender, and Judges Bowes and King join.
Macmiles, LLC v. Erie Ins. Exch., 2022 Pa. Super. LEXIS 469 (November 30, 2022) (Stabile, J.) Appellant, Erie Insurance Exchange (“Erie”), appeals from the May 25, 2021 order granting summary judgment in favor of Appellee, MacMiles, LLC d/b/a/ Grant Street Tavern (“MacMiles“) and denying its motion for judgment on the pleadings. MacMiles owns and operates the Grant Street Tavern in Pittsburgh Pennsylvania. Like many similarly situated parties, MacMiles suffered a significant disruption of its business activity during the Covid-19 pandemic. And like many similarly situated parties, MacMiles believed its economic losses due to the loss of use of its business premises were covered under its commercial property insurance. Erie, like many other insurers who have issued policies with substantially similar terms, denied the claim because MacMiles‘ commercial property did not suffer any physical damage. This issue has made its way through many of our nation’s federal and state courts, but it is an issue of first impression for this Court. Upon review, we reach the same result as the near-universal majority of courts to have addressed this issue: the policy does not cover mere loss of use of commercial property unaccompanied by physical alteration or other condition immanent in the property that renders the property itself unusable or uninhabitable. We therefore reverse the trial court’s grant of summary judgment in favor of MacMiles and direct that judgment on the pleadings be granted in favor of Erie.
Ungarean and MacMiles come to absolutely opposite conclusions. They both have business interruption insurance. The court in Ungarean found that the owner was entitled to business interruption coverage because COVID-19 and the related governmental orders caused Ungarean to suffer a direct physical loss to his dental practice, which was within the ambit of coverage provided by the CNA policy. In MacMiles, the court found just the opposite. MacMiles’ commercial policy did not suffer any physical damage. The policy does not cover mere loss of use of commercial property unaccompanied by physical alteration or other condition imminent in the property that renders the property itself unusable or uninhabitable. Ungarean was before President Judge Panella, Bender, Bowes, Lazarus, Stabile, Kunselman, Nichols, McLaughlin and King. MacMiles was before the same judges.