UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

PGB RESTAURANT, INC., and all others 

similarly situated,

Court No. 20-cv-2403

Plaintiffs,

v. JURY TRIAL DEMANDED

ERIE INSURANCE COMPANY, 

Defendant.

COMPLAINT AT LAW

Plaintiff, PGB RESTAURANT, INC., doing business as “Mother’s Day 

Restaurant,” (“Plaintiff”) on behalf of itself and all others similarly situated, by and through 

their undersigned attorneys complaining of the Defendant, ERIE INSURANCE COMPANY 

(hereinafter “Erie” or “Erie Insurance”), for its Complaint at Law, pleading in the alternative, on 

behalf of themselves and all others similarly situated, state: 

Nature of the Action

1. This action arises out of Erie’s failure to provide insurance coverage for the

business income Plaintiff lost because of the ongoing Coronavirus (COVID-19) pandemic. 

2. Plaintiff brings this action for breach of contract and declaratory relief on behalf

of themselves and all other similarly situated Illinois businesses that offer food or beverages for 

on-premises consumption. 

The Parties

3. Plaintiff, PGB Restaurant, Inc., is an Illinois corporation with its principal place of

business at 8815 W Cermak Rd. in Norther Riverside, Illinois. 

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4. Defendant, Erie Insurance, is a publicly held insurance corporation organized under 

the laws of the State of Pennsylvania, with its principal place of business in Erie, Pennsylvania.

5. At all times mentioned herein, Defendant, Erie Insurance, was licensed to do 

business in the State of Illinois, selling property and casualty insurance policies to bars, restaurants, 

caterers, banquet halls, and other hospitality businesses. 

Jurisdiction and Venue

6. This Court has jurisdiction over this action pursuant to 28 U.S.C. §1332(d)(2)(A), 

as modified by the Class Action Fairness Act of 2005, because at least one member of the Class is 

a citizen of a different state than Defendant; there are more than 100 members of the Class; and 

upon information and belief the aggregate amount in controversy exceeds $5,000,000.00 exclusive 

of interest and costs.

7. This Court also has jurisdiction over this action pursuant to 28 U.S.C. §1332(a)(1) 

because there is complete diversity among the parties, and the amount in controversy exceeds 

$75,000.00 exclusive of interest and costs.

8. This Court has personal jurisdiction over Erie Insurance pursuant to Illinois’s longarm statute, 735 ILCS 5/2-209, because this complaint concerns: (1) one or more contracts Erie

made to insure property and/or risk in Illinois, (2) business that Erie transacted within Illinois, and

(3) one or more contracts and/or promises Erie made that are substantially connected with Illinois. 

735 ILCS 5/2-209(a)(1), (4), (7). 

9. Additionally, because this action presents an actual controversy within this Court’s 

jurisdiction, this Court may declare the legal rights and obligations of the parties hereto 

under 28 U.S.C. § 2201.

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10. Venue is appropriate because “a substantial part of the events or omissions giving 

rise to the claim[s] occurred” in the Northern District of Illinois and Erie “resides” in the Northern 

District of Illinois. 28 U.S.C. § 1391. 

Factual Allegations

Coronavirus (COVID-19) and Illinois’s Response

11. For years, if not decades, the Center for Disease Control and the World Health 

Organization have been warning about the possibility of an airborne virus that could cause a 

worldwide pandemic.

12. Coronavirus (COVID-19) (hereinafter “COVID-19”) is a highly contagious 

airborne virus that has rapidly spread and continues to spread across the United States.

13. COVID-19 is spread by a number of methods, including “community spread”

disease meaning that some people have been infected and it is not known how or where they 

became exposed. Public health authorities, including the CDC, have reported significant ongoing 

community spread of the virus including instances of community spread in all 50 states.

14. The CDC has reported that a person can be become infected with COVID-19 by 

touching a surface or object (like a fork, plate, table, or chair, to name a few) that has the virus on 

it, and then touching their own mouth, nose or eyes.

15. More specifically, COVID-19 infections are spread through droplets of different 

sizes which can be deposited on surfaces or objects, according to the World Health Organization.

16. To reduce the spread of the disease, the CDC has recommended that business clean 

and disinfect all surfaces, prioritizing the most frequently touched surfaces.

17. COVID-19 has been declared a pandemic by the World Health Organization.

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18. The COVID-19 pandemic is a public health crisis that has profoundly impacted 

American society, including the public’s ability to patronize bars and restaurants.

19. In response to this pandemic, Federal and State authorities have mandated social 

distancing and limited the number of people that can gather in any setting.

20. On March 16, 2020, in direct response to the COVID-19 outbreak, and pursuant to 

the Illinois Emergency Management Agency Act, 20 ILCS 3305/1, et seq., Illinois Governor J.B. 

Pritzker issued Executive Order 2020-07, ordering “all businesses in the State of Illinois that offer 

food or beverages for on-premises consumption—including restaurants, bars, grocery stores, and 

food halls—[to] suspend service for and ... not permit on-premises consumption.” Executive 

Order 2020-07 (2020). Although Executive Order 2020-07 permitted such businesses to serve food 

and beverages for off-premises consumption, it mandated that they ensure they have an 

environment where patrons purchasing food or beverages “maintain adequate social distancing.” 

Id. 

21. On March 20, 2020, Governor Pritzker issued Executive Order 2020-10, (1) 

directing Illinois residents to stay in their homes except when performing “essential” activities, (2) 

prohibiting gatherings of 10 or more people, and (3) requiring “non-essential” businesses to cease 

operations. Executive Order 2020-10 (2020). 

22. Executive Orders 2020-07 and 2020-10 are not laws or ordinances.

23. Since March 16, 2020, countless Illinois bar and restaurant operators have made 

claims under their property and casualty insurance policies for the business income they lost as a 

result of COVID-19 and the resulting Executive Orders.

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24. Insurers, including Erie, have denied nearly every claim for lost business income—

taking the outrageous position that its insureds have not suffered a “direct physical loss” to their 

property, which Erie claims is a prerequisite for coverage. 

Plaintiff’s All-Risk Insurance Policy

25. In 2019, Erie sold Plaintiff an insurance policy (Erie Policy Number Q97 1258707) 

that included coverages for the “Income Protection” and “Extra Expense Coverage” (the 

“Policy”).1

26. At all times relevant hereto, Plaintiff was a named insured under the Policy.

27. At all times mentioned herein, the Policy covered the restaurants/premises

identified in paragraph 9, above. Id. at 3. 

28. Plaintiff fully complied with the terms of the Policy and have performed all of their 

obligations under the Policy, including but not limited to the payment of premiums and the timely 

reporting of claims. Therefore, the Policy has been in effect since its inception without interruption. 

29. Pursuant to the Policy, Erie agreed to pay for the loss of income sustained by 

Plaintiff “due to partial or total interruption of business resulting directly from loss or damage to 

property.”

30. Section XI of the Policy defines “Loss” to include “direct and accidental loss of or 

damage to covered property.”

31. The Policy defined “interruption of business” to mean the “period of time that your 

business is partially or totally suspended at it: (1) Begins with the date of direct “loss” to covered 

1 Plaintiff requested a copy of the Policy from Erie, but Erie has yet to provide the Policy, instead 

only providing Plaintiff with a denial letter.

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property caused by a peril insured against; and (2) Ends of the date when the covered property 

should be repaired, rebuilt, or replaced with reasonable speed and similar quality.”

32. The Insurance Services Office (“ISO”), the leading insurance advisory 

organization, provides policy-writing services for the insurance industry including standard policy 

forms.

33. In 2006, in response to the SARS epidemic and avian flu, ISO created a new 

“amendatory endorsement” to exclude loss due to virus or bacteria from coverage afforded by 

insurance policies like the Policy.

34. The ISO amendatory endorsement states that there is “no coverage for loss or 

damage caused by or resulting from any virus, bacterium or other microorganism that induces or 

is capable of inducing physical distress, illness or disease” (the “Virus Exclusion”).

35. Although most standard business income insurance (also known as business 

interruption insurance) policies include the Virus Exclusion, Erie Insurance policies–including the 

Policy at issue here–do not contain the Virus Exclusion or similar exclusion for virus or bacteria.

36. On or about March 16, 2020, and in compliance with Executive Orders 2020-07 

and 2020-10, Plaintiff suspended all dine-in operations at their restaurants and began suffering an 

ongoing loss of business income.

37. On or about April 14, 2020, Plaintiff filed a claim with Erie related to their lost 

business income. 

38. On or about April 16, 2020, Erie denied coverage for the lost income Plaintiff has

suffered because of COVID-19 and Executive Orders 2020-07 and 2020-10. 

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Class Allegations

39. Pursuant to Federal Rules of Civil Procedure 23(a), 23(b)(2) and 23(b)(3), Plaintiff

brings this action on behalf of themselves and the following Class:

All Illinois businesses offering food or beverages for on-premises 

consumption that: (1) are covered under Erie Insurance insurance policies 

containing “Income Protection” coverage; (2) have made a claim for lost 

business income as a result of COVID-19 and Executive Orders 2020-07 

and 2020-10; and (3) been denied coverage.

40. The Class is so numerous that joinder of all members is impracticable. Due to the 

nature of the trade and commerce involved, the members of the Class are geographically dispersed 

throughout the State of Illinois. While only Erie Insurance knows the exact number of Class 

members, Plaintiff believes there are hundreds and likely thousands of members in the Class.

41. Plaintiff’s claims are typical of the claims of the other members of the Class they 

seek to represent because Plaintiff and all Class members purchased identical coverage from Erie

Insurance containing identical language regarding lost business income.

42. Plaintiff will fully and adequately protect the interests of all members of the Class. 

Plaintiff hasretained counsel experienced in complex class action and insurance litigation. Plaintiff

has no interests which are adverse to or in conflict with other members of the Class. 

43. The questions of law and fact common to the members of the Class predominate 

over any questions that may affect only individual members. 

44. A class action is superior to other available methods for the fair and efficient 

adjudication of this controversy since joinder of all Class members is impracticable. The 

prosecution of separate actions by individual members of the Class would impose heavy burdens 

upon the courts and would create a risk of inconsistent or varying adjudications of the questions 

of law and fact common to the Class. A class action, on the other hand, would achieve substantial 

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economies of time, effort, and expense, and would assure uniformity of decision with respect to 

persons similarly situated without sacrificing procedural fairness or bringing about other 

undesirable results.

45. The interest of the members of the Class in individually controlling the prosecution 

of separate actions is theoretical rather than practical. The Class has a high degree of cohesion, 

and prosecution of the action through representatives would be unobjectionable. The damages 

suffered by the Class are uniform and/or formulaic, and the expense and burden of individual 

litigation might make it virtually impossible for them to redress the wrongs done to them. Plaintiff

anticipates no difficulty in the management of this action as a class action.

COUNT I – Breach of Contract (“Business Income”)

46. Plaintiff repeats and reallege the allegations of paragraphs 1 through 45 as if fully 

set forth herein.

47. Plaintiff brings this count on behalf of the Class. 

48. By purchasing the Policy, Plaintiff entered into a contract with Erie Insurance.

49. Erie Insurance promised to provide Plaintiff coverage for lost income as described 

above.

50. COVID-19 rendered the covered property at the premises identified in paragraph 

9, above, unsafe and inaccessible for dine-in customers. 

51. As a result of COVID-19 and Executive Orders 2020-07 and 2020-10, Plaintiff

suffered a “Loss” as defined by the Policy.

52. On or about April 14, 2020, Plaintiff made a claim for coverage pursuant to the 

terms and conditions of the Policy.

53. On April 16, 2020, Erie Insurance denied Plaintiff’s claim for Coverage.

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54. By denying Plaintiff’s claim, Erie Insurance breached its contract with Plaintiff.

55. As a result of Erie Insurance denying Plaintiff’s claim, Plaintiff has been prevented 

from recovering lost business income pursuant to the terms and conditions of the Policy, thereby 

suffering damages.

COUNT II – Declaratory Judgment

56. Plaintiff repeats and reallege the allegations of paragraphs 1 through 55 as if fully 

set forth herein.

57. Plaintiff brings this count on behalf of the Class and pursuant to the Declaratory 

Judgment Act, 28 U.S.C. §2201, et seq.

58. Because Erie Insurance has denied Plaintiff’s claim for lost business income under

the Policy, there is an actual controversy between the parties. 

59. Plaintiff seeks a declaration by this Court that Plaintiff sustained a “Loss” as 

defined by the Policy because of COVID-19 and Executive Orders 2020-07 and 2020-10. 

60. Plaintiff seeks an additional declaration that the lost business income they sustained

(and continue to sustain) is covered under the Policy, namely that the lost business income is a 

partial or total interruption of business resulting directly from loss or damage to property.

61. A declaratory judgment regarding Erie Insurance’s obligation to reimburse Plaintiff

for the business income they lost as a result of COVID-19 and Executive Orders 2020-07 and 

2020-10 will terminate the controversy and clarify the respective rights and obligations of the 

parties under Policy. 

Request for Relief

WHEREFORE, Plaintiff demands the following relief on behalf of themselves and all 

others similarly situated:

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A. That an Order be entered certifying this action as a Plaintiff Class action under 

Federal Rule of Civil Procedure 23;

B. A declaration by this Court that Plaintiff sustained a “loss” as defined by the Policy 

because of COVID-19 and Executive Orders 2020-07 and 2020-10; 

C. A declaration by this Court that the lost business income Plaintiff sustained (and 

continue to sustain) is covered under the Policy, namely that the lost business 

income is a partial or total interruption of business resulting directly from loss or 

damage to property; 

D. A declaration that the business income Plaintiff lost as a result of COVID-19 and 

Executive Orders 2020-07 and 2020-10 is a covered loss under Policy Number 

BP17022546-2; 

E. Compensatory damages in such amount as demonstrated by the proofs at trial and 

that the Court deems just and proper;

F. Punitive damages as to Counts for which such damages are available under 

applicable law and in an amount that the Court deems just and proper;

G. Imposition of a constructive trust, an order granting recessionary and injunctive 

relief and other such equitable relief that the Court deems just and proper;

H. An appropriate claims resolution facility, funded by Defendant, to administer relief 

to the Class in this case;

I. Costs of litigation and attorneys’ fees; and

J. All other appropriate relief.

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Dated: April 19, 2020 Respectfully submitted, 

DUNCAN LAW GROUP, LLC,

By: /s/ Robert R. Duncan 

Attorney for Plaintiff

Robert R. Duncan (Illinois Bar #6277407)

James H. Podolny (Illinois Bar #66321307)

DUNCAN LAW GROUP, LLC

161 North Clark Street, Suite 2550

Chicago, Illinois 60601

Phone: (312) 202-3283

Fax: (312) 202-3284

rrd@duncanlawgroup.com 

jp@duncanlawgroup.com

ESBROOK LAW, LLC,

By: /s/ Christopher Esbrook 

Attorney for Plaintiff

Christopher J. Esbrook (Illinois Bar #6282829)

Michael Kozlowski (Illinois Bar #6320950)

ESBROOK LAW, LLC

77 W. Wacker Dr. Suite 4500

Chicago, Illinois 60601

Phone: (312) 319-7680

christopher.esbrook@ebsrooklaw.com

michael.kozlowski@esbrooklaw.com

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