Philadelphia, PA – The Pennsylvania Superior Court has reinstated a jury verdict of $2,431,000.00 for the Roman Catholic Diocese of Greensburg, Pennsylvania, against Gallagher Bassett Services, Inc.

The Diocese of Greensburg was represented Anderson Kill & Olick, P.C., a national law firm with offices in New York, Philadelphia, Washington,  and Newark, NJ.  Anderson Kill & Olick regularly represents policyholders in disputes against insurance companies, insurance brokers, and third party administrators, like Gallagher Bassett.  In addition, Anderson Kill regularly advises and represents religious institutions with regard to insurance issues, and has previously represented a number of Dioceses in the Roman Catholic Church in insurance disputes. The jury verdict related to the loss of the Queen of Angels School building, formerly known as the St. Agnes school building, which was located in St. Agnes Parish, Westmoreland County, Pennsylvania.  On February 23, 1999, a structural engineer determined that the school’s structural integrity had failed due to earth movement caused by pyrite, a mineral that unpredictably expands when exposed to air or water.  The Diocese immediately closed the School.  Shortly thereafter, the Diocese provided notice of the loss to Gallagher Bassett, the claims administrator under the Diocese’s insurance program.  Ultimately, the building was demolished, with the exception of a small wing containing six classrooms. The lawsuit against Gallagher Bassett alleged that Gallagher Bassett had breached its contract to provide services in accordance with its contracts with the Diocese.  From the early 1970’s to the late 1990’s, the Diocese hired Gallagher Bassett to do risk and safety inspections of the buildings of the Diocese, including the Queen of Angels school building.  In addition to those inspections, the contracts obligated Gallagher Bassett to perform the claims administration under the insurance policies. The Diocese alleged that Gallagher Bassett had not met its obligations under the contracts.  After a week-long trial, the jury found that Gallagher Bassett materially breached its contractual obligation to the Diocese, and the Diocese sustained damages as a result of those breaches.  The judge molded the jury’s verdict of $4.5 million to the sum of $2,431,000, plus prejudgment interest at 6% from August 20, 1999, to the date of the Order. Despite the findings of the jury, however, the trial judge granted judgment in favor of Gallagher Bassett.  In its recent decision, the Superior Court decided that the judge should not have thrown out the jury verdict.  The Superior Court found that the evidence adduced at trial was in accordance with the Diocese’s breach of contract claim against Gallagher Bassett.  The Superior Court ruled that the foundation of the Diocese's case against Gallagher Bassett had always been whether Gallagher breached its separate contract with the Diocese, with the corollary issue of the amount of damages the Diocese sustained as a result.  Simply put, the Superior Court found that the Diocese had always alleged that Gallagher Bassett's breach of its contract resulted in either: 1) no insurance coverage; or 2) denial of coverage by the insurance companies. The Superior Court disagreed with Gallagher Bassett's contention that the Diocese materially changed the theory of its case at trial.  The Superior Court further found that the record revealed no prejudice or surprise suffered by Gallagher Bassett as a result of any alleged contract theory or evidence offered in support thereof by the Diocese at trial.  The Court further noted that Gallagher Bassett had not objected to the introduction of evidence alleged to be at variance with the Diocese’s pleadings.  Accordingly, the Superior Court reversed and vacated the trial judge’s grant of judgment for Gallagher Bassett notwithstanding the verdict, and remanded the case to the trial judge for entry of judgment in favor of the Diocese in the amount of $2,431,000 and calculation of pre-judgment interest.  Judges Joan Orie Melvin, Debra Todd, and Seamus McCaffery sat on the Superior Court panel that heard the case. For more information, please contact:

Carol A. Ueckerman Communications/Marketing Managercueckerman@andersonkill.com(212) 278-1339