J-A03039-25
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37
PENN ENTERTAINMENT, INC., F/K/A : IN THE SUPERIOR COURT OF PENN NATIONAL GAMING, INC., : PENNSYLVANIA AMERISTAR CASINO BLACK HAWK, : LLC, SOKC, LLC, PENN SANFORD, : LLC, AMERISTAR CASION COUNCIL : BLUFFS, LLC, ALTON CASIN, LLC, HC : AURORA, LLC, HC JOLIET, LLC, : ILLINOIS GAMING INVESTORS LLC, : AMERISTAR CASINO EAST CHICAGO, : No. 832 EDA 2024 LLC, INDIANA GAMING COMPANY, : LLC, KANSAS ENTERTAINMENT, LLC, : PNK (BOSSIER CITY), L.L.C., : LOUISIANA-I GAMING, PNK (BATON : ROUGE) PARTNERSHIP, PNK (LAKE : CHARLES), L.L.C., BOSSIER CASINO : VENTURE, LLC, PLAINVILLE GAMING : AND REDEVELOPMENT, LLC, HC : BANGOR, LLC, GREEKTOWN CASINO, : L.L.C., THE MISSOURI GAMING : COMPANY, LLC, ST. LOUIS GAMING : VENTURES, LLC, PNK (RIVER CITY), : LLC, RIH ACQUISITIONS MS II, LLC, : PNK VICKSBURG, LLC, BTN, LLC, : BSLO, LLC, HWCC-TUNICA, LLC, : PENN NJ OTW, LLC, ZIA PARK LLC, : CACTUS PETE'S, LLC, LVGV, LLC, : TROPICANA LAS VEGAS, INC., : CENTRAL OHIO GAMING VENTURES, : LLC, TOLEDO GAMING VENTURES, : LLC, DAYTON REAL ESTATE : VENTURES, LLC, YOUNGSTOWN : REAL ESTATE VENTURES, LLC, : MOUNTAINVIEW THOROUGHBRED : RACING ASSOCIATION, LLC, CCR : RACING MANAGEMENT, : WASTINGTON TROTTING : ASSOCIATION, LLC, MARQUEE BY : PENN, LLC, SAM HOUSTON RACE : PARK, LLC, AND PNGI CHARLES : TOWN GAMING, LLC : : Appellants : J-A03039-25
: : v. : : : ZURICH AMERICAN INSURANCE, : AIOI NISSAY DOWA INSURANCE : COMPANY LTD., CHINA RE, SWISS : RE, INTERSTATE FIRE AND : CASUALTY COMPANY, AMERICAN : INTERNATIONAL GROUP UK LTD, : AMERISTAR CASINO COUNCIL : BLUFFS, LLC, ACE AMERICAN : INSURANCE COMPANY, HALLMARK : SPECIALTY INSURANCE COMPANY, : STARR SURPLUS LINES INSURANCE : COMPANY, KOREAN REINSURANCE : COMPANY, BERKLEY RE, SINOSAFE : GENERAL INSURANCE COMPANY, : LTD, COLONY INSURANCE COMPANY, : AXIS SURPLUS INSURANCE : COMPANY, EVANSTON INSURANCE : COMPANY, GREAT AMERICAN : INSURANCE COMPANY, QBE : SPECIALTY INSURANCE COMPANY, : NEON WORLDWIDE PROPERTY : CONSORTIUM 9761, CERTAIN : UNDERWRITERS AT LLOYD'S : LONDON-1886 QBE, CERTAIN : UNDERWRITERS AT LLOYD'S : LONDON- 1414 ASC, CERTAIN : UNDERWRITERS AT LLOYD'S : LONDON- AXIS SPEC EURO SE LIR, : CERTAIN UNDERWRITERS AT : LLOYD'S LONDON- 2468 NEO, : CERTAIN UNDERWRITERS AT : LLOYD'S LONDON- 0033 HIS, : CERTAIN UNDERWRITERS AT : LLOYD'S LONDON- 1183 TAL, : CERTAIN UNDERWRITERS AT : LLOYD'S LONDON- 1200 AMA, HCC : INTERNATIONAL INSURANCE : COMPANY PLC, CERTAIN : UNDERWRITERS AT LLOYD'S :
-2- J-A03039-25
LONDON- 4444 CNP, CERTAIN : UNDERWRITERS AT LLOYD'S : LONDON- 1458 RNR, CERTAIN : UNDERWRITERS AT LLOYD'S : LONDON- 0609 AUW :
Appeal from the Order Entered February 22, 2024 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): 200801187
BEFORE: STABILE, J., McLAUGHLIN, J., and LANE, J.
MEMORANDUM BY LANE, J.: FILED MAY 7, 2025
Penn Entertainment, Inc., and its various operating subsidiaries, as
identified in the caption (collectively “Penn”), appeals from the orders:
granting the motions for summary judgment filed by Penn’s various insurers,
as identified in the caption (collectively “Insurers”); denying Penn’s motions
for partial summary judgment against Insurers; and granting Zurich American
Insurance Company’s (“Zurich”) motion to deem admitted certain of its
requests for admission directed to Penn. We affirm.
In this insurance coverage dispute, Penn challenges the denial of its
claims for insurance coverage benefits for economic losses Penn sustained due
to business closures caused by the COVID-19 pandemic. Penn is a
Pennsylvania-based gaming company that, through its various subsidiaries,
owns, operates, or has ownership interests in more than forty casinos,
racetracks, and gaming facilities. Penn purchased a group of commercial
property insurance policies for these businesses from the Insurers which were
in effect from December 31, 2019, to December 7, 2020. Although the
Insurers generally sold separate policies to Penn, every policy issued to Penn
-3- J-A03039-25
incorporated the same eighty-nine-page core policy form, subject to
endorsements added by each Insurer. Importantly, the common core policy
provided policy declarations that included an insuring agreement which
specified:
Subject to the terms, conditions, exclusions and limitations contained here or endorsed herein and in consideration of the premium charged, this “policy” covers all risks of direct physical loss or damage to insured property at insured location(s), provided such physical loss or damage occurs during the policy period.
Policy, Section 1(A), at 4 of 89 (emphasis added).
Penn sought coverage under the policies for economic losses it suffered
after its various facilities were closed due to orders issued by the Gaming
Control Board (“GCB”) and civil authorities at the inception of the global
outbreak of COVID-19 in March 2020. Upon receipt of Penn’s insurance
claims, the Insurers denied coverage on the basis that, pursuant to the
insuring agreement and all relevant endorsements, the polices required “direct
physical loss or damage” to the insured property. The Insurers took the
position that, because no “direct physical loss or damage” had occurred to any
of the insured premises, coverage was not triggered under the policies.
Penn then initiated the instant declaratory judgment action seeking a
judicial determination that its business income losses were covered by the
subject commercial property insurance policies, and the Insurers were
obligated to provide policy benefits for such losses. Penn argued that several
types of coverage provided by the policies, including coverage for time
-4- J-A03039-25
element losses and orders by the GCB and civil authorities, applied to its claim
for business losses stemming from the COVD-19 closures of its various
facilities. Two of the Insurers, Interstate Fire & Casualty Company (“IFCC”)
and ACE American Insurance Company (“ACE”), filed counterclaims against
Penn for reformation of their polices due to a mutual mistake in endorsements
included in their policies.1
The matter then proceeded through extensive discovery. Zurich served
requests for admission upon Penn. Based on Penn’s responses, Zurich filed a
motion to deem as admitted certain of its requests for admission directed to
Penn. On September 7, 2023, and October 11, 2023, the trial court entered
orders granting Zurich’s motions. The Insurers then filed a joint motion for
summary judgment on Penn’s claims against them. Penn filed motions for
partial summary judgment regarding its right to coverage under the Time-
Element loss provisions, the “Interruption by Gaming or Racing Control Board”
endorsement (“the GCB endorsement”), and the non-application of certain
policy exclusions. The trial court entered orders granting the motions for
summary judgment filed by IFCC and Ace on their counterclaims for
reformation and denying Penn’s motions for partial summary judgment
____________________________________________
1 IFCC and Ace sought reformation of the policies they issued to Penn based
on a transcription error in which the sublimits for communicable disease and crisis management coverages, while negotiated to be $5,000,000 and confirmed as such in the relevant insurance quotes and binders, appeared as “$” in the policies.
-5- J-A03039-25
against Insurers. On February 22, 2024,2 the trial court entered an order
granting summary judgment for all Insurers on Penn’s claims against them on
the basis that no coverage was triggered under the polices because there was
no direct physical loss or damage to Penn’s covered properties. 3 Penn filed a
timely notice of appeal, and both it and the trial court complied with Pa.R.A.P.
1925. This Court thereafter issued a briefing schedule to which the parties
adhered.
However, after the parties had completed their briefing in this matter,
our Supreme Court issued its opinion in Ungarean v. CNA, 323 A.3d 593 (Pa.
2024), wherein it addressed claims similar to those raised herein by Penn. 4
In Ungarean, a dentist, individually and on behalf of a class of similarly
situated individuals, claimed that he was entitled to coverage under his
commercial property insurance policy for financial losses sustained following
2 The trial court had entered earlier orders which inadvertently provided rulings on all but one motion for summary judgment by the Insurers. Accordingly, the trial court vacated a prior order entered on January 31, 2024, and entered a clarifying order on February 22, 2024, which granted all motions for summary judgment filed by Insurers, and which had the effect of disposing of all claims against all parties.
3 The trial court further determined that, because no coverage was triggered
under the polices, it did not need to address Penn’s motion for partial summary judgment regarding the non-application of policy exclusions and denied that motion as moot.
4 We note that Penn appeared in the Ungarean litigation, represented by the
same counsel, and filed amicus curiae briefs in favor of a finding of insurance coverage for COVID-19 related financial losses caused by business closures.
-6- J-A03039-25
the COVID-19 pandemic and Pennsylvania’s non-essential business shutdown
in March 2020. The High court ruled that, pursuant to the plain and
unambiguous language of his commercial property insurance policy, he was
not entitled to coverage because his covered business properties did not
sustain any direct physical loss or damage. Furthermore, the Court ruled that
the sole reason for the insured’s financial losses during the policy period was
the government-ordered shutdown due to COVID-19, which prevented him
from operating his insured properties at their full potential. The High Court
stated:
In short, we conclude that the language of the CNA policy is not ambiguous because it is subject to only one reasonable interpretation. That is, for coverage to apply under the CNA policy, there must be a physical alteration to the subject property as a result of a direct physical loss or damage necessitating repairs, rebuilding, or entirely replacing the property. As applied to the present case, we fail to find any facts in the record suggesting that the covered properties required these necessary actions in order to trigger coverage under the CNA policy. . . . Ungarean did not lose access to the covered properties during the government-ordered COVID-19 shutdown whatsoever; Ungarean could enter the covered properties at will and Ungarean’s business remained open for emergency dental procedures. The only loss Ungarean sustained, rather, was pure economic loss because the government-ordered COVID-19 shutdown prevented Ungarean from operating his covered properties at their full potential. That partial closure, however, had nothing to do with the physical attributes of the covered properties, as required by the CNA policy for insurance coverage.
Id. at 608-09 (emphasis in original, unnecessary capitalization omitted). The
High Court additionally determined that “[b]ecause the government-ordered
COVID-19 shutdown cannot constitute ‘direct physical loss of or damage to’
-7- J-A03039-25
any property,” the civil authority endorsement of the CNA policy simply did
not apply. Id. at 610 (emphasis in original).
On the same day that it issued its decision in Ungarean, the High Court
affirmed this Court’s decision in Macmiles, LLC v. Erie Ins. Exch., 286 A.3d
331 (Pa. Super. 2022) (en banc), affirmed, 323 A.3d 610 (Pa. 2024). Therein,
MacMiles, a tavern owner, sought coverage under his commercial property
insurance policy for business losses he sustained as a result of the COVID-19
shutdown. The insurer denied coverage because MacMiles’ covered property
did not suffer any physical loss or damage. On appeal, this Court ruled that
the trial court erred in granting partial summary judgment in favor of MacMiles
and in denying Erie’s motion for judgment on the pleadings. In so doing, this
Court noted that “[n]early all courts addressing this issue have held that
economic loss unaccompanied by a physical alteration to the property does
not trigger coverage under a commercial property insurance policy.” Id. at
335. Instead, this Court ruled, “policy language covering “‘direct physical loss
or damage’ unambiguously requires that the ‘claimed loss or damage must be
physical in nature.’” Id. at 337-38. This Court additionally observed that “the
prohibition on in-person dining had nothing to do with any condition, visible
or invisible, at the . . . tavern. Rather, the prohibition was meant to eliminate
the possibility of infected patrons spreading an airborne illness to uninfected
patrons.” Id. at 338. This Court also addressed whether the presence of the
COVID-19 virus constituted “physical damage,” in the context of coverage for
-8- J-A03039-25
loss of business income where a civil authority prohibits access to the insured
premises. Id. at 339-40. This Court concluded, “where the alleged property
damage is invisible (as is the possible presence of Covid-19 on surfaces), it
does not qualify as physical damage for purposes of a commercial property
insurance policy.” Id. at 340.
Based on the High Court’s decision in Ungarean, and its affirmance of
MacMiles, this Court continued the instant case to the next argument panel
to permit the parties to submit supplemental briefs regarding the effect of
these decisions on the issues in this case.5 The parties did so. A few days
before the rescheduled oral arguments were to take place in this matter, this
Court issued its decision in Scranton Club v. Tuscarora Wayne Mut. Grp.,
Inc., 2025 Pa. Super. LEXIS 180 (Pa. Super. 2025) (unpublished
memorandum), following remand from our Supreme Court for reconsideration
of the case in light of Ungarean.6 The Insurers sent a letter brief to this Court
to advise it of the recent Scranton Club decision. In Scranton Club, this
5 Notably, Penn’s appellate brief and reply brief relied heavily on this Court’s
decision in Ungarean, and this Court’s initial decision in Scranton Club, both which were vacated by the Supreme Court. Thus, most of the argument provided by Penn in its initial brief and reply brief was rendered moot by the high Court’s decision in Ungarean, and its affirmance of MacMiles.
6 This Court had issued a prior decision in the case at Scranton Club v. Tuscarora Wayne Mut. Grp., Inc., 305 A.3d 982 (Pa. Super. 2023) (unpublished memorandum). The High Court granted allowance of appeal, vacated that decision, and remanded the matter back to this Court to issue a new ruling in light of its Ungarean decision. See Scranton Club v. Tuscarora Wayne Mut. Grp., Inc., 2024 Pa. LEXIS 1919 (Pa. 2024).
-9- J-A03039-25
Court addressed similar claims for economic losses as a result of COVID-19
related business shutdowns. This Court affirmed the trial court’s order
sustaining the preliminary objections filed by insurers and dismissing all claims
against insurers with prejudice. In so doing, this Court reasoned, “[t]here
was no “physical damage” and therefore nothing that required restoration of
[the insured’s] property as a result of the COVID shutdown. As such, there
was no coverage under the policy.” Id. (unpublished memorandum at *5).
This matter then proceeded to oral argument before the merits panel, at which
the parties discussed the effect of the Ungarean, MacMiles, and Scranton
Club cases. The appeal is now ripe for our disposition.
Penn raises the following issues for our review:
1. Did the trial court err in granting summary judgment for the Insurers, denying partial summary judgment for Penn, and more specifically, in concluding that:
a. Penn’s COVID-19 related losses did not result from “physical loss or damage” under the . . . policies?
b. orders of state GCBs or equivalents resulting from the COVID-19 pandemic did not trigger Penn’s bespoke GCB coverage under the Insurers’ . . . policies . . ..?
c. orders of civil authorities resulting from the COVID-19 pandemic did not trigger coverage under the . . . policies?
d. the contamination exclusion, interruption of business/loss of use exclusion, and law or ordinance exclusion could apply to Penn’s time-element losses and denying Penn’s exclusions motion as moot; and
e. IFCC’s and ACE’s reformation motions should be granted because of an alleged mutual mistake in the . . . policies they delivered to Penn?
- 10 - J-A03039-25
2. Did the trial court err . . . by granting Zurich’s motion to deem admitted [requests for admission] 36-38, 52-53, 57-60, and 69-82 and its . . . order . . . denying Penn’s motion for partial reconsideration of the court’s . . . order deeming [requests for admission] 36-38 admitted?
Penn’s Brief at 8-9 (unnecessary capitalization omitted, issues reordered for
ease of disposition).
Our standard of review of an order granting or denying summary
judgment is well-settled:
In evaluating the trial court’s decision to enter summary judgment, we focus on the legal standard articulated in the summary judgment rule. [See] Pa.R.C.P. 1035.2. The rule states that where there is no genuine issue of material fact and the moving party is entitled to relief as a matter of law, summary judgment may be entered. Where the non-moving party bears the burden of proof on an issue, he may not merely rely on his pleadings or answers in order to survive summary judgment. Failure of a nonmoving party to adduce sufficient evidence on an issue essential to his case and on which it bears the burden of proof establishes the entitlement of the moving party to judgment as a matter of law. Lastly, we will view the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.
State Farm Mut. Auto. Ins. Co. v. Dooner, 189 A.3d 479, 482 (Pa. Super.
2018); see also Washington v. Baxter, 719 A.2d 733, 737 (Pa. 1998)
(holding that, in order to withstand a motion for summary judgment, a non-
moving party must adduce sufficient evidence on an issue essential to his case
and on which he bears the burden of proof such that a jury could return a
verdict in his favor).
- 11 - J-A03039-25
An insured may invoke the Declaratory Judgments Act, 42 Pa.C.S.A. §
7531, et seq., to determine whether an insurance contract covers an asserted
claim. See Genaeya Corp. v. Harco Nat'l Ins. Co., 991 A.2d 342, 346 (Pa.
Super. 2010). “In reviewing a declaratory judgment, we are limited to
determining whether the trial court committed a clear abuse of discretion or
committed an error of law.” Vanderhoff v. Harleysville Ins. Co., 997 A.2d
328, 332 (Pa. 2010).
Further, because an insurance policy is, at its base, nothing more than
a contract between an insurer and an insured, we apply general principles of
contract interpretation. See Ungarean, 323 A.3d at 604. As our Supreme
Court has explained:
The purpose of that task is to ascertain the intent of the parties as manifested by the terms used in the written insurance policy. The language of the policy must be construed in its plain and ordinary sense, and the policy must be read in its entirety. Where a policy’s provisions are unambiguous, a court is required to give effect to that language. Where a provision of a policy is ambiguous the policy provision is to be construed in favor of the insured and against the insurer, the drafter of the agreement. Ambiguity exists in a contract where its language is reasonably susceptible of different constructions and capable of being understood in more than one sense. This Court will not distort the meaning of the language or resort to a strained contrivance, however, in order to find an ambiguity.
Id. (citations, quotations, and brackets omitted)
In its first issue, Penn contends that the trial court erred by determining
that coverage under the policies was not triggered because it did not sustain
any “direct physical loss or damage.” Penn points out that the polices do not
- 12 - J-A03039-25
define “physical loss or damage.” Penn claims that, unlike the policyholders
in Ungarean and MacMiles, who did not allege that the COVID-19 virus was
on the covered properties or caused any physical damage thereto at any time
during the government-ordered shutdown, Penn put forward substantial,
credible evidence that its properties suffered physical damage as a result of
the pandemic because virus particles became stuck to surfaces through a
physicochemical interaction of adsorption. Penn points to the thousands of
pages it presented to the trial court from its various experts that showed “the
virus is physically measurable; it has a physical impact on, and physically
damages, the surfaces and the air where it is present.” Penn’s Supplemental
Brief at 6.
The trial court, without the benefit of Ungarean, MacMiles, or
Scranton Club, considered Penn’s first issue and determined that it lacked
merit. The court reasoned:
[T]he polic[ies’] declarations plainly state the policy only covers “direct physical loss or damage” to the insured property and each type of coverage reiterates this requirement.
****
[I]n case after case, courts have held that claims for COVID- 19 related business losses which require “direct physical loss or damage” are not covered given that in these cases the premises involved have not been structurally altered or damaged and there was no issue with the physical premises that impeded or prevented business operations.
In other words, the inability to use the property must have some direct nexus to the physical condition of the premises. Thus, even if Penn’s properties were contaminated with COVID-19, the
- 13 - J-A03039-25
virus did not damage or physically alter the premises and its claim therefore does not give rise to coverage. While Penn makes an array of arguments as to why coverage applies, many are based on a reading of “physical loss” that makes it synonymous with “loss of use,” an interpretation that has already been rejected in hundreds of cases. The rest of Penn’s arguments rely on a conception of physical “damage” far removed from the everyday understanding of that word as its employed in the polic[ies]. The court here follows the near unanimous opinion of state and federal courts across the country in reading “direct physical loss or damage” as unambiguously requiring physical/structural damage to the property in order to trigger coverage under the polic[ies]. As a result, the court grant[ed] [Insurers’] motion for summary judgment.
Trial Court Opinion, 4/8/24, at 4-5 (footnotes and unnecessary capitalization
omitted).
Based on our review, we conclude that the language included in each of
the policies, which requires “direct physical loss or damage,” is not ambiguous
because it is subject to only one reasonable interpretation. See Ungarean,
323 A.3d at 608. As our Supreme Court explained:
. . . [T]he only reasonable interpretation of the operative phrase “direct physical loss of or damage to property” in the CNA Policy becomes clear: There must be either (1) a physical disappearance, partial or complete deterioration, or absence of a physical capability or function of the property (loss), or (2) a physical harm or injury to the property (damage). In other words, a physical alteration to the subject property is a threshold requirement for coverage to apply under the CNA Policy.
. . . That is, for coverage to apply under the CNA Policy, there must be a physical alteration to the subject property as a result of a direct physical loss or damage necessitating repairs, rebuilding, or entirely replacing the property.
Id. at 607-08 (emphasis in original).
- 14 - J-A03039-25
As applied to the present case, we fail to find any facts in the record
suggesting that the covered properties required these necessary actions or
repairs in order to trigger coverage under the policies. See id. at 608. The
only losses that Penn sustained were economic losses because the
government-ordered COVID-19 shutdown temporarily prevented it from
operating its covered properties.7 See id. at 608-09. That temporary closure,
however, had nothing to do with the physical attributes of the covered
properties, as required by the policies for insurance coverage. See id. at 609.
Instead, as this Court observed in Macmiles, the closures were meant to
eliminate the possibility of infected patrons spreading an airborne illness to
uninfected patrons. See Macmiles, 286 A.3d at 338. Moreover, as this Court
further explained in Macmiles, “where the alleged property damage is
invisible (as is the possible presence of Covid-19 on surfaces), it does not
qualify as physical damage for purposes of a commercial property insurance
policy.” Id. at 340. Thus, as we discern no error or abuse of discretion by
7 Indeed, in its claims to the Insurers, Penn listed only its business income
losses due to facility closures and costs for COVID-19 related supplies (i.e., gloves, masks, antibacterial wipes, and plexiglass). Penn submitted no claims for repairs for physical damage to any of its properties. We additionally note that improvements to property in response to COVID-19 do not constitute repairs. See Ungarean, 323 A.3d at 609 (rejecting the rationale that the installation of partitions, additional handwashing/sanitization stations, and the installation or renovation of ventilation systems would constitute repairing, rebuilding, or replacing the subject property). The High Court instead ruled that “[a]dding new installations that do not correct a physical attribute of the property does not constitute repairing, rebuilding, or replacing the existing property as a result of a physical loss or damage.” Id. (emphasis in original).
- 15 - J-A03039-25
the trial court in granting the Insurers’ motion for summary judgment on the
basis that Penn did not establish that it sustained “direct physical loss or
damage to any of its properties, we find no merit to Penn’s initial issue.
In its next issue, Penn contends that the trial court erred by concluding
that the GCB orders did not trigger coverage under the GCB endorsement that
was included in certain of Penn’s policies. Penn directs this Court to the
language of the GCB endorsement, which provides:
This Policy covers the Actual Loss Sustained by the Insured during the PERIOD OF LIABILITY due to the necessary interruption of the Insured’s business due to an order of the gaming or racing control board commission or similar authority that prohibits access to the Insured Location and (i) provided such order is made because of or in anticipation of physical loss or damage of the type insured against under this Policy, (ii) regardless of whether physical loss or damage actually occurs at the Insured Location, (iii) This policy shall cover the period of time starting at the time such order is issued and ending when the business is made ready for operations under the same or equivalent physical and operating conditions that existed prior to the order.
Penn’s Supplemental Brief at 3 (quoting Policy, Section C(3)(J)) (emphasis
supplied by Penn).
Penn claims that, unlike the policy language at issue in Ungarean, the
GCB endorsement did not require actual physical loss or damage to trigger
coverage and did not reference a period of restoration that required repair or
replacement of property. Rather, Penn asserts, the GCB endorsement is
“triggered by orders issued as a result of actual or anticipated physical loss
or damage.” Penn’s Supplemental Brief at 29. Penn claims that “the GCB
orders were issued in anticipation of the physical loss of Penn’s property – that
- 16 - J-A03039-25
is, the inability to use the property safely because of COVID-19.” Penn’s Brief
at 32. Penn points out that there is no requirement in the GCB endorsement
that the anticipation be ultimately correct about whether physical loss or
damage actually occurred. Penn’s Supplemental Brief at 33. While Penn
submits that even if the GCB orders did not anticipate property damage, the
GCB endorsement was still triggered because Penn “was forced to close its
operations to comply with government and GCB orders that were based on
real anticipated fears, and the corresponding loss Penn suffered is the same,
whether or not those fears ultimately proved correct.” Id.
Penn additionally argues that the GCB endorsement includes “period of
liability” language that does not require repair or replacement of lost or
damaged property, and the Ungarean decision did not address this “period
of liability” wording. According to Penn, unlike the policy in Ungarean, the
“period of liability” for GCB coverage states, in Clause (iii), that it “start[s] at
the time such order is issued and end[s] when the business is made ready for
operations under the same or equivalent physical and operating conditions
that existed prior to the order.” Id. at 30 (emphasis supplied by Penn). Penn
contends that this language is tied to restoration of normal business
operations, not repair of property, and nothing in the GCB coverage requires
an interpretation of the insurance agreement that limits coverage to actual
physical alteration (or, indeed, to any alteration at all) of property,
necessitating repair or replacement. Id.
- 17 - J-A03039-25
The trial court considered Penn’s issue and concluded that no coverage
was provided by the GCB endorsement because “the policy’s declarations
plainly state the policy only covers ‘direct physical loss or damage’ to the
insured property and each type of coverage reiterates this requirement.”
Trial Court Opinion, 4/8/24, at 4 (emphasis added, footnote and unnecessary
capitalization omitted). The trial court reasoned that, “because the policy
requires ‘direct physical loss or damage’ to the insured property to trigger
coverage, including the . . . Gaming Control Board Coverage, [Penn’s] motion
for partial summary judgment [is] denied.” Id. at 6 (footnote and
unnecessary capitalization omitted).
Based on our review, we discern no error or abuse of discretion by the
trial court in reaching its determination that Penn was not entitled to coverage
under the GCB endorsement. In advancing its arguments, Penn ignores the
key language included in the GCB endorsement which requires that the GCB
order prohibiting access to the covered properties must be made because of
or in anticipation of “physical loss or damage of the type insured against
under this Policy.” Policy, Section 1(A), at 4 of 89 (emphasis added). This
language is critical, as it requires that the order be issued because of or in
anticipation of the type of physical loss or damage that the policies insure
against. Stated differently, when the policies use the phrase “physical loss or
damage of the type insured against under this policy,” the policy is referring
to the threshold coverage requirement of “direct physical loss or damage to
- 18 - J-A03039-25
insured property.” In this regard, as explained above, our Supreme Court has
ruled that such “direct physical loss or damage” to covered properties means
“either (1) a physical disappearance, partial or complete deterioration, or
absence of a physical capability or function of the property (loss), or (2) a
physical harm or injury to the property (damage).” Ungarean, 323 A.3d at
607-08 (emphasis in original). On the record before us, Penn has not
established that the GCB orders were issued because of or in anticipation of
this type of damage. Accordingly, we find no merit to Penn’s GCB
endorsement issue.
In its next issue, Penn similarly contends that the trial court erred by
holding that no coverage was provided by the Time-Element loss provision
included in the policies, which provides:
This Policy insures TIME ELEMENT loss, as provided in the TIME ELEMENT COVERAGES, directly resulting from physical loss or damage of the type insured by this Policy . . ..
Policy, Section C(1)(A), at 43 of 89 (unnecessary capitalization omitted,
emphasis added).
Penn asserts that a reasonable reading of “loss” in the context of the
Time-Element provision must include the inability to use property (as through
the loss of a license or because of theft) and the loss of conditions beneficial
to operations (as in “Loss of Attraction”). Penn’s Brief at 40. Penn argues
that this Court must give “loss” and “damage” separate meanings, such that
“loss” cannot be construed to mean “damage” or “destruction.” Id. at 41.
- 19 - J-A03039-25
Penn contends that the trial court’s interpretation of “direct physical loss or
damage” to mean that coverage is not triggered unless property is structurally
altered or damaged, would render as redundant many exclusions in the
policies.
As explained above, the trial court concluded that no coverage was
provided by any endorsement because “the policy’s declarations plainly state
the policy only covers ‘direct physical loss or damage’ to the insured property
and each type of coverage reiterates this requirement.” Trial Court
Opinion, 4/8/24, at 4 (emphasis added, footnote and unnecessary
capitalization omitted).
Based on our review, we discern no error or abuse of discretion by the
trial court in reaching its determination that Penn was not entitled to coverage
under the Time-Element coverage provision. In presenting its arguments,
Penn again ignores the key language included in the Time-Element provision,
which requires that the loss for which the insured seeks coverage be “directly
resulting from physical loss or damage of the type insured by this
policy.” Policy, Section C(1)(A), at 43 of 89 (unnecessary capitalization
omitted, emphasis added). On the record before us, Penn has not established
that its economic losses directly resulted from the type of physical loss or
damage that the policies insure against, i.e., “either (1) a physical
disappearance, partial or complete deterioration, or absence of a physical
capability or function of the property (loss), or (2) a physical harm or injury
- 20 - J-A03039-25
to the property (damage).” Ungarean, 323 A.3d at 607-08 (emphasis in
original). Accordingly, we find no merit to Penn’s Time-Element loss issue.
In its next issue, Penn contends that the trial court erred by denying its
motion for partial summary judgment regarding the non-application of certain
policy exclusions; namely, the contamination exclusion, the interruption of
business/loss of use exclusion, and the law or ordinance exclusion. Penn
summarily argues that this Court should rule as a matter of law that these
exclusions do not apply to its Time-Element claims as a matter of law. See
Penn’s Brief at 50.
Initially, we note that Penn has not developed this issue by providing
the specific language of any of these exclusions, or discussing such language
in the context of relevant decisional law. See Pa.R.A.P. 2119(a). Rule 2119
requires an appellant’s brief to present an argument for each issue on appeal
which includes references to the certified record and a discussion of and
citation to pertinent legal authority. See id. “Where an appellate brief fails
to provide any discussion of a claim with citation to relevant authority or fails
to develop the issue in any other meaningful fashion capable of review, that
claim is waived.” B.S.G. v. D.M.C., 255 A.3d 528, 535 (Pa. Super. 2021).
Moreover, Penn does not advance any argument within its briefs as to why
those exclusions would not apply, and candidly admits that it “does not
address in depth its argument on these exclusions.” Penn’s Brief at 50 n.22.
- 21 - J-A03039-25
Accordingly, as Penn has failed to develop this issue in any meaningful fashion,
we deem the issue waived. See id.
In its next issue, Penn contends that the trial court erred by granting
the motions for summary judgment filed by IFCC and ACE for reformation of
their policies. It has long been the law that courts of equity have the power
to reform a written instrument where there has been a showing of fraud,
accident, or mistake. See Zurich Am. Ins. Co. v. O'Hanlon, 968 A.2d 765,
770 (Pa. Super 2009). Mutual mistake will afford a basis for reforming a
contract, and exists “where both parties to a contract [are] mistaken as to
existing facts at the time of execution.” Id. (citation omitted). “Moreover, to
obtain reformation of a contract because of mutual mistake, the moving party
is required to show the existence of the mutual mistake by evidence that is
clear, precise and convincing.” Id. (citation omitted).
According to Penn, when the final versions of the policies were delivered
to it on May 28, 2020, Penn was repeatedly assured that its policies had “been
reviewed for accuracy” and that “[n]o further corrections are required.”
Penn’s Brief at 53. Penn asserts that IFCC’s policy, as inspected and signed
by its underwriter, assured Penn: “We trust that this policy meets with the
specifications outlined in our quotation.” Id. Penn claims that it was
reasonable for it to believe that the Insurers had thoroughly checked the draft
policies and made any corrections needed to the final versions. Id. Penn
points out that neither IFCC nor ACE presented any evidence from any Penn
- 22 - J-A03039-25
witness that there was any mistake concerning the applicable sublimit for their
respective communicable disease endorsements. Penn contends that any
purported mistake was not mutual because the mistake, if any, made in the
issuance of the policy was the careless and negligent act of the agents or
employees of IFCC and ACE and not of Penn. According to Penn, IFCC noticed
that the communicable disease endorsement did not contain a sublimit prior
to the policies’ execution, and its failure to change the endorsement’s terms
prior to issuance should be held as its assent to providing communicable
disease coverage per the terms in the policies as delivered to Penn. Penn
argues that summary judgment should not have been granted in favor of IFCC
and ACE because they did not present clear, precise and convincing evidence
that both they and Penn were mistaken on existing facts about the policies.
The trial court considered Penn’s issue regarding reformation of the
insurance policies issued by IFCC and ACE and determined that the issue was
meritless. The trial court reasoned:
[IFCC and Ace] seek reformation on policies issued to [Penn] based on a transcription error in which the sublimits for communicable disease and crisis management coverages, while negotiated to be $5,000,000 and confirmed as such in the relevant insurance quotes and binders, appeared as “$” in the policies.
Reformation of an insurance contract is allowed when the policy is based on mutual mistake caused by a scrivener’s error. The mutual mistake must be established by clear and convincing evidence that the error was contrary to both parties’ intent. Here, [IFCC and Ace] have met their burden. Both the terms of the quote and the binder had $5,000,000 sublimits for both the communicable disease and crisis management coverages. Additionally, the policy for the prior year contained the identical
- 23 - J-A03039-25
sublimits. [Penn] wanted to keep their premiums manageable and [it] ha[s] provided no evidence regarding discussions about raising the sublimit on those coverages or removing the sublimits completely. Based on the evidence, this was clearly a scrivener’s error and [IFCC and Ace] are therefore entitled to summary judgment on their reformation counterclaims.
Trial Court Opinion, 4/8/24, at 6-7 (footnotes and unnecessary capitalization
Based on our review, we discern no error by the trial court in granting
the motions for summary judgment filed by IFCC and ACE on their
counterclaims for reformation of their policies. As explained above, where the
non-moving party bears the burden of proof on an issue, it may not merely
rely on its pleadings or answers in order to survive summary judgment. See
Dooner, 189 A.3d at 482 (holding that the failure of the nonmoving party to
adduce sufficient evidence on an issue essential to its case and on which it
bears the burden of proof establishes the entitlement of the moving party to
judgment as a matter of law). Thus, in order to withstand the motions for
summary judgment filed by IFCC and ACE, Penn was required to present
sufficient evidence that there was no mutual mistake. Here, Penn fell far short
of that mark. Rather than presenting evidence that the absence of any
sublimits for communicable disease and crisis management coverages in the
final policy was deliberate, intended, and/or specifically negotiated and agreed
to between the parties, Penn merely argues that IFCC and ACE should have
discovered the mistake before the policies were issued and, therefore, they
should singularly bear the burden of the mistake. IFCC and ACE, on the other
- 24 - J-A03039-25
hand, presented clear and convincing evidence from which the trial court could
determine that there was, in fact, a mutual mistake in the issuance of the final
policy. Specifically, they presented evidence that the terms of the insurance
quote and the insurance binder reflected sublimits of $5,000,000 for both the
communicable disease and crisis management coverages. They also
presented evidence that the policies issued for the prior year contained the
identical $5,000,000 sublimits for both the communicable disease and crisis
management coverages. Thus, as we discern no error or abuse of discretion
by the trial court in granting the motions for summary judgment filed by IFCC
and ACE on their counterclaims for reformation of their policies, we find no
merit to this issue.
In its final issue, Penn challenges the trial court’s orders granting
Zurich’s motion to deem as admitted certain of its requests for admission. We
review an order relating to discovery for an abuse of discretion. See Kuwait
& Gulf Link Transport C. v. Doe, 92 A.3d 41, 44 (Pa. Super. 2014). Where
the court’s decision implicates a question of law, our scope of review is
plenary, and our standard of review is de novo. See id. at 44-45. As this
matter involves the trial court’s application of Pa.R.C.P. 4014, we set forth
that rule’s salient provisions:
(a) A party may serve upon any other party a written request for the admission, for purposes of the pending action only, of the truth of any matters within the scope of Rules 4003.1 through 4003.5 inclusive set forth in the request that relate to statements or opinions of fact or the application of law to fact . . ..
- 25 - J-A03039-25
(b) Each matter of which an admission is requested shall be separately set forth . . . If objection is made, the reasons therefor shall be stated. The answer shall admit or deny the matter or set forth in detail the reasons why the answering party cannot truthfully do so. A denial shall fairly meet the substance of the requested admission, and when good faith requires that a party qualify the answer or deny only a part of the matter of which an admission is requested, the party shall specify so much of it as is true and qualify or deny the remainder. An answering party may not give lack of information or knowledge as a reason for failure to admit or deny unless the answering party states that he or she has made reasonable inquiry and that the information known or readily obtainable by him or her is insufficient to enable him or her to admit or deny. . . ..
(c) . . . If the court determines that an answer does not comply with the requirements of this rule, it may order either that the matter is admitted or that an amended answer be served. . . ..
(d) Any matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission. . . ..
Pa.R.C.P. 4014.
The purpose of this discovery tool is “to clarify and simplify the issues
raised in prior pleadings in order to expedite the litigation process. See
Christian v. Pennsylvania Financial Responsibility Assigned Claims
Plan, 686 A.2d 1, 5 (Pa. Super. 1996). Requests for admission must call for
matters of fact rather than legal opinions and conclusions, as conclusions of
law are not within the permissible scope of requests for admissions. See id.
Penn contends that the trial court abused its discretion by deeming as
admitted more than twenty of Zurich’s requests for admission. Penn
maintains that the requests “largely sought legal conclusions or were
otherwise properly responded to by Penn.” Penn’s brief at 56. Penn initially
- 26 - J-A03039-25
points to requests 36-38, which asked Penn to admit that its insurance broker
was its “agent,” “agent for purposes of obtaining insurance policies or
coverage agent for specific purposes,” and contends that these requests
sought a legal conclusion because the question of whether an agency
relationship exists is a legal question. Id.
Penn next points to requests 52 and 53, which asked Penn to admit that
when it reopened its insured locations to patrons, some of its employees
“elected not to come to work,” and “elected not to come to work due to the
risk of catching or spreading COVID-19.” Id. at 56-57. Penn argues that
these requests sought admissions regarding the mental state, thought
process, and/or intentionality of employees who did not come to work, and
claims that whether employees voluntarily elected to not come to work is a
legal conclusion. See id. at 57.
Penn then points to request 69, which asked Penn to admit that its
“financial obligations for leasing certain games or machines were reduced
while those games or machines were turned off.” Id. According to Penn, this
request improperly sought a legal conclusion regarding the interpretation of
multiple contracts and financial records, which is a legal conclusion.
With respect to requests 72-80, Penn indicates that each of these
requests asked Penn to admit that it or its employees, staff, and vendors could
“access” its insured locations during the period during which such locations
were closed to patrons. Id. at 58. Penn argues that these requests
- 27 - J-A03039-25
improperly sought legal conclusions regarding the interpretation of “access,”
and were not within the permissible scope of requests for admissions under
Rule 4014.
Penn next points to requests 81 and 82, which asked Penn to admit that,
when its insured locations were closed, it “earned a revenue as a result of
online betting or gambling.” Id. at 59. Penn claims that it answered these
requests with the relevant facts, including referring to documents it produced
and the expert report of its forensic accountant, and its answers complied with
Rule 4014(b).
Finally, Penn points to requests 88 and 90, which asked Penn to admit
that it was not obligated by a court or government order “to continue to pay
its employees, including furloughed employees, through March 31, 2020,” or
“to pay for and provide Employment Benefits to furloughed employees through
June 30, 2020.” Id. Penn submits that it responded that it was not aware of
a court or government order responsive to these requests, and that its
response complied with Rule 4014.
The trial court considered Penn’s final issue and determined that it
lacked merit. The court reasoned:
Penn also appeals this court’s orders from September 7, 2023[,] and October 11, 2023[,] in which the court deemed admitted . . .Zurich[’s] . . . requests for admission . . . 36-38, 52- 53, 57-60, 69-82, and 87-90. While the court granted [Zurich’s] motion based on [Penn’s] repeated discovery deficiencies and was within its authority to deem the enumerated [requests] admitted pursuant to [Rule] 4014(c), those admissions were immaterial to the court’s rulings on th[e summary judgment] motions.
- 28 - J-A03039-25
Trial Court Opinion, 4/8/24, at 7 n.24 (unnecessary capitalization omitted).
Based on the trial court’s explanation, we need not reach the merits of
Penn’s final issue because, even if the trial court erred by deeming the
requests admitted, the error was harmless. See Bensinger v. Univ. of
Pittsburgh Med. Ctr., 98 A.3d 672, 683 n.12 (Pa. Super. 2014) (holding that
an error is harmless if the court determines that the error could not have
contributed to the verdict); see also Drew v. Work, 95 A.3d 324, 337 (Pa.
Super. 2014) (holding that an error is harmless if a party does not suffer
prejudice as a result of the error). Here, the trial court indicated that it did
not rely on the subject admissions in deciding the various motions for
summary judgment. Given the subject matter and content of the requests for
admission, we fail to see how they could have contributed in any manner to
the trial court’s rulings on the various motions for summary judgment.
Accordingly, as the trial court’s discovery rulings did not contribute to its
decision to grant the Insurers’ motions for summary judgment, or its decision
to deny Penn’s motions for partial summary judgment, we conclude that any
error by the court in deeming the requests admitted was harmless. Thus,
Penn’s final issue merits no relief.
Having found no merit to any of Penn’s issues, we affirm the orders in
question.
Orders affirmed.
- 29 - J-A03039-25
Date: 5/7/2025
- 30 -