Funeral Director Who Took and Sold Body Parts Loses Coverage Claim

January 31, 2013 | Insurance Coverage

A Pennsylvania federal district court has ruled that complaints against a funeral director who had been convicted of crimes involving the unlawful taking and sale of body parts did not allege an “occurrence” and that none of the alleged damages met the definitions of “bodily injury” or “property damage.” 

The Case 

The case involved Gerald Garzone, a licensed funeral home director and co-owner of Liberty Crematorium in Philadelphia, Pennsylvania, who allegedly agreed to provide corpses to another individual so that he could remove and sell the corpses’ organs and tissues without the consent of the deceased or their families. Garzone pleaded guilty in a Pennsylvania state court to multiple criminal charges, including corrupt organizations, criminal conspiracy, 244 counts of theft by unlawful taking, and abuse of corpse, and was sentenced to eight to 20 years in prison. 

Families of the decedents whose tissues and organs were illegally harvested filed a civil suit against Garzone, seeking compensation for injuries suffered when they learned that the bodies of their deceased loved ones had been desecrated. They alleged that they suffered “severe pain, suffering, severe emotional distress, mental anguish and harm, financial or economic loss, including, but not limited to, present and future lost wages, and other damages” as a result of Garzone’s intentional or, alternatively, negligent actions. 

Garzone’s insurer, State Automobile Mutual Insurance Company, filed an action seeking a judgment that it had no duty to defend or indemnify Garzone, and moved for summary judgment. 

The Court’s Decision 

The court granted the insurer’s motion. It first found that the alleged injuries were not caused by an occurrence that took place within the policy period. It reasoned that the families were seeking compensation for severe pain and suffering and other damages they sustained after they learned about the illegal body parts scheme. It then ruled that because none of the families knew about the scheme until after the insurance policy had expired, the alleged injuries arose outside of the policy period, and as such, there was not an “occurrence” within the policy period. 

Consequently, the court held, the insurer had no duty to provide a defense or indemnification coverage and summary judgment was appropriate. 

The court then declared that even assuming the alleged injuries had arisen within the coverage period, the alleged injuries did not qualify as bodily injury or property damage. As the court observed, Pennsylvania courts have rejected the contention that policy definitions of injury or bodily injury encompass mental or emotional harm, and they have ruled that complaints alleging physical manifestations of mental or emotional harm likewise fail to trigger coverage under a policy insuring against claims brought for “bodily injury.” Thus, the court found that “severe pain and suffering, severe emotional distress[,] mental anguish and harm” and economic losses associated with these emotional injuries that allegedly were caused when the family members learned of the organ theft scheme did not qualify as “bodily injury” as defined by the policy and Pennsylvania law. 

Finally, with respect to the property damage claims, the court observed that it was by no means settled under Pennsylvania law that a deceased body was the “property” of the family, nor was it settled that harvesting the organs of the deceased was “damage” to that “property.” It concluded that any injuries that the family members alleged when they learned of the organ harvesting scheme were not “property damage.” 

The case is State Automobile Mut. Ins. Co. v. Angellilli, No. 11-3425 (E.D. Pa. Jan. 29, 2013).

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