The suit filed Monday in Cook County Circuit Court by various entities controlling the Major League Soccer club and Subaru Park stadium accuses Continental Casualty Company of breach of contract for not honoring its $192 million policy covering loss and damage at the stadium and several outlying buildings caused by contamination and government shutdown orders.
“As a direct and foreseeable result of the defendant’s breach of contract and duty of good faith and fair dealing, plaintiffs have been deprived of the benefits due to them because of their covered loss,” the suit says.
Due to public health restrictions, the 18,500-seat stadium was unable to host fans between March and October 2020, and was only recently allowed to admit guests at full capacity in June. Even after occupancy restrictions were eased to 50% in April, the franchise could only seat a quarter of the stadium while adhering to social distancing requirements, the suit says.
The team says it lost more revenue than it might have in previous years, because it won its first-ever trophy in 2020 and missed opportunities to capitalize on celebratory events.
“Ordinarily, this success would have enabled plaintiffs to sell out home games more regularly at Subaru Park, obtain lucrative sponsorship deals, and to enjoy substantially increased merchandise sales to paying fans during the home games,” the suit says. “Plaintiffs have been severely limited in their ability to realize these sources of revenue that would have accompanied the Philadelphia Union’s success due to COVID-19.”
Instead, the club incurred additional expenses to reconfigure spaces for social distancing, implement touchless vending systems and beef up building air filtration as government restrictions were lifted, according to the lawsuit.
But Continental never sent an adjuster and instead deemed remediation work “preventative” and refused to acknowledge that players and employees got sick, the team says.
The policy contained no exclusions for viruses or communicable diseases, and Continental’s addition of virus and disease carve-outs in a new policy effective July 1 just proves the old one covered them, the soccer club says.
The policy excludes damage by microbes, but its language refers exclusively to “living organisms,” and the suit argues viruses are not alive.
The team is asking for a judge’s declaration that the pandemic triggered coverage under its policy with Continental, as well as damages in excess of $30,000 at a jury trial, court papers show.
The case is one of nearly 2,000 similar actions filed in state and federal courts around the country since March 2020, according to a litigation-tracking project by the University of Pennsylvania.
Like many others, the team argues that the presence of the coronavirus physically damages surfaces on its property, and says government restrictions on public gatherings led to a steep loss in revenue.
“The probability of illness prevented the use of the space in no less of a way than, on a rainy day, a crumbling and open roof from the aftermath of a tornado would make the interior space of a business unusable,” the suit says.
The team declined to comment on Wednesday.
A representative for Continental told Law360 on Wednesday that the insurer was “not available” for comment.
Plaintiffs Keystone Sports Entertainment, FC Pennsylvania Stadium LLC, Pennsylvania Professional Soccer LLC, Rivertown Developers LP, Rivertown TCI LP and KSE U2 LLC are represented by Adam J. Levitt, Amy E. Keller, Daniel R. Ferri, Mark Hamill, Laura E. Reasons, Mark A. DiCello, Kenneth P. Abbarno and Mark Abramowitz of DiCello Levitt Gutzler LLC; Mark Lanier, Alex Brown and Skip McBride of The Lanier Law Firm PC; Jeffrey P. Goodman, Marni S. Berger and Samuel B. Dordick of Saltz Mongeluzzi & Bendesky PC; Timothy W. Burns, Jeff J. Bowen, Jesse J. Bair and Freya K. Bowen of Burns Bowen Bair LLP; and Douglas Daniels of Daniels & Tredennick.
Counsel information for Continental was not immediately available.
The case is Keystone Sports and Entertainment LLC et al. v. Continental Casualty Company, case number 2021L006588, in the Circuit Court of Cook County, Illinois.
–Editing by Ellen Johnson.