Penn Entertainment v. Zurich American Ins.

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37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 :

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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

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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

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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.

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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.

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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’

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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

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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).

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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?

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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).

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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

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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

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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).

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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).

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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

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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.

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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

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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.

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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

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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.

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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

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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

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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

omitted).

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

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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 . . ..

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(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

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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

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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.

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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.

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Date: 5/7/2025

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