Rwjbarnabas Health Suit

ESX-L-002271-21 03/19/2021 9:27:35 PM Pg 1 of 230 Trans ID: LCV2021615272 Lynda A. Bennett (Bar No. 10251995) Michael D. Lichtenstein (Bar No. 3511992) LOWENSTEIN SANDLER LLP One Lowenstein Drive Roseland, New Jersey 07068 (973) 597-2500 [email protected] [email protected] Attorneys for Plaintiffs RWJBARNABAS HEALTH, INC.; SUPERIOR COURT OF NEW JERSEY BARNABAS BAYONNE DEVELOPMENT LAW DIVISION: ESSEX COUNTY URBAN RENEWAL CORP.; BARNABAS HEALTH MEDICAL GROUP, P.C.; BARNABAS HEALTH, INC. T/A RWJ DOCKET No. CORPORATE SERVICES, INC.; CHILDREN’S SPECIALIZED HOSPITAL; Civil Action CLARA MAASS MEDICAL CENTER; CBLP Action COMMUNITY MEDICAL CENTER, INC.; JERSEY CITY MEDICAL CENTER, INC.; COMPLAINT AND JURY DEMAND LAKEVIEW CHILD CENTER, INC.; LIBERTY REALTY HOLDINGS, LLC; LSC PHARMACY SERVICES, INC.; MONMOUTH MEDICAL CENTER, INC.; MONMOUTH MEDICAL CENTER, INC. T/A MONMOUTH MEDICAL CENTER SOUTHERN CAMPUS; NEWARK BETH ISRAEL MEDICAL CENTER, INC.; ESX-L-002271-21 03/19/2021 9:27:35 PM Pg 2 of 230 Trans ID: LCV2021615272 ROBERT WOOD JOHNSON FITNESS & WELLNESS CENTER OF OLD BRIDGE, LLC; ROBERT WOOD JOHNSON FITNESS AND WELLNESS CENTER OF NEW BRUNSWICK LIMITED LIABILITY COMPANY; ROBERT WOOD JOHNSON PHYSICIAN ENTERPRISE, P.A.; ROBERT WOOD JOHNSON UNIVERSITY HOSPITAL AT HAMILTON, INC.; ROBERT WOOD JOHNSON UNIVERSITY HOSPITAL RAHWAY; ROBERT WOOD JOHNSON UNIVERSITY HOSPITAL, INC.; ROBERT WOOD JOHNSON UNIVERSITY HOSPITAL, INC. T/A ROBERT WOOD JOHNSON UNIVERSITY HOSPITAL SOMERSET; RWJUH PLUM STREET, LLC; SAINT BARNABAS BEHAVIORAL HEALTH CENTER; SAINT BARNABAS MEDICAL CENTER; SAINT BARNABAS OUTPATIENT CENTERS CORP.; SAINT BARNABAS REALTY DEVELOPMENT CORPORATION; SHREWSBURY DIAGNOSTIC IMAGING, L.L.C.; SOMERSET REALTY GROUP, INC., Plaintiffs, v. ZURICH AMERICAN INSURANCE COMPANY, Defendant. COMPLAINT Plaintiff RWJBarnabas Health, Inc. brings this complaint on behalf of itself and its affiliates Barnabas Bayonne Development Urban Renewal Corp.; Barnabas Health Medical Group, P.C.; Barnabas Health, Inc. t/a RWJ Corporate Services, Inc.; Children’s Specialized Hospital; Clara Maass Medical Center; Community Medical Center, Inc.; Jersey City Medical Center, Inc.; Lakeview Child Center, Inc.; Liberty Realty Holdings, LLC; LSC Pharmacy Services, Inc.; Monmouth Medical Center, Inc.; Monmouth Medical Center, Inc. t/a Monmouth -2- ESX-L-002271-21 03/19/2021 9:27:35 PM Pg 3 of 230 Trans ID: LCV2021615272 Medical Center Southern Campus; Newark Beth Israel Medical Center, Inc.; Robert Wood Johnson Fitness & Wellness Center of Old Bridge, LLC; Robert Wood Johnson Fitness and Wellness Center of New Brunswick Limited Liability Company; Robert Wood Johnson Physician Enterprise, P.A.; Robert Wood Johnson University Hospital at Hamilton, Inc.; Robert Wood Johnson University Hospital Rahway; Robert Wood Johnson University Hospital, Inc.; Robert Wood Johnson University Hospital, Inc. t/a Robert Wood Johnson University Hospital Somerset; RWJUH Plum Street, LLC; Saint Barnabas Behavioral Health Center; Saint Barnabas Medical Center; Saint Barnabas Outpatient Centers Corp.; Saint Barnabas Realty Development Corporation; Shrewsbury Diagnostic Imaging, L.L.C.; and Somerset Realty Group, Inc. (RWJBarnabas Health, Inc. and its affiliates collectively, “RWJBarnabas”) against Defendant Zurich American Insurance Company (“Zurich”), and alleges as follows: NATURE OF THIS LAWSUIT 1. This is an insurance coverage action for declaratory judgement and breach of contract arising from Zurich’s refusal to provide coverage to RWJBarnabas – under a comprehensive loss policy issued by Zurich called “The Zurich Edge Healthcare Policy” – which is a unique policy form targeting healthcare facilities with the marketing promise of “higher limits, broader coverage and greater flexibility” and which expressly provides coverage for the losses RWJBarnabas sustained as a result of COVID-19. 2. RWJBarnabas provides a comprehensive healthcare delivery system in New Jersey, treating over 3 million patients a year. The system includes eleven acute care hospitals – Clara Maass Medical Center in Belleville, Community Medical Center in Toms River, Jersey City Medical Center in Jersey City, Monmouth Medical Center in Long Branch, Monmouth Medical Center Southern Campus in Lakewood, Newark Beth Israel Medical Center in Newark, Robert Wood Johnson University Hospital (“RWJUH”) in New Brunswick and Somerville, RWJUH- Hamilton, RWJUH- Rahway and Saint Barnabas Medical Center in Livingston, three acute care children’s hospitals and a leading pediatric rehabilitation hospital (Children’s Specialized Hospital), a freestanding 100-bed behavioral health center, ambulatory care centers, -3- ESX-L-002271-21 03/19/2021 9:27:35 PM Pg 4 of 230 Trans ID: LCV2021615272 geriatric centers, New Jersey’s largest behavioral health network, comprehensive home care and hospice programs, fitness and wellness centers, retail pharmacy services, a medical group, multi- site imaging centers and four accountable care organizations. 3. RWJBarnabas is New Jersey’s second largest private employer. RWJBarnabas employs more than 32,000 employees, 9,000 physicians, and 1,000 residents and interns. 4. The coronavirus (formally known as “severe acute respiratory syndrome coronavirus 2” or “SARS-CoV-2”) and the coronavirus disease 2019 (commonly known and referred to herein as “COVID-19”) that it causes have wreaked havoc throughout the State of New Jersey and throughout the world. As of March 2021, more than 29 million individuals have contracted COVID-19 and there have been approximately 539,000 tragic fatalities in the United States, including 24,000 in New Jersey alone. 5. Sadly, like many businesses, RWJBarnabas has suffered substantial financial losses as a result of SARS-CoV-2 and COVID-19, the resulting actions and orders of federal, state, and local civil authorities, and the need to mitigate loss and damage. 6. SARS-CoV-2 and COVID-19 have caused direct physical loss of and damage to properties throughout New Jersey, including at RWJBarnabas properties. The coronavirus attaches to physical surfaces and alters the physical condition of air in buildings, thereby causing physical change to property. Importantly, RWJBarnabas has confirmed the actual presence of SARS-CoV-2 and COVID-19 at its facilities and has had over 1,000 confirmed cases of COVID- 19 contractions at its properties among its patients and staff. Tragically, nine RWJBarnabas staff have passed away after contracting COVID-19 at its properties. As a result, RWJBarnabas’s properties were rendered damaged, lost, uninhabitable, unusable and unfit for their intended purposes. 7. As a result of direct physical loss of or damage to property caused by SARS-CoV- 2 and COVID-19, the State of New Jersey, public authorities in the counties in which RWJBarnabas operates, and various public health authorities have issued civil orders or declarations that, inter alia, prohibited access to RWJBarnabas’s properties, requiring -4- ESX-L-002271-21 03/19/2021 9:27:35 PM Pg 5 of 230 Trans ID: LCV2021615272 RWJBarnabas to suspend many of its operations and otherwise restricting RWJBarnabas’s operations. 8. When RWJBarnabas turned to Zurich, its commercial property and business interruption insurer, RWJBarnabas reasonably expected Zurich to provide coverage for its financial losses under the Zurich EDGE Healthcare property insurance and business interruption policy sold to RWJBarnabas. The Zurich EDGE policy form that Zurich drafted has unique features and was designed specifically for entities operating in and around the healthcare industry. Through the Policy, Zurich promised coverage for RWJBarnabas’s economic losses from all risks except those expressly excluded. Yet, even though the insurance industry has had a standard-form “virus and bacteria” exclusion since 2006 and has utilized various forms of pandemic exclusions, Zurich chose to sell its Policy without including either form of exclusion, and instead made changes to the policy form via endorsement that affirm the intent to cover losses caused by viruses. 9. Rather than honor its promises to RWJBarnabas, Zurich has wrongfully refused to provide the policy benefits that RWJBarnabas is entitled to receive. RWJBarnabas is informed and believes, and on that basis alleges, that Zurich has taken, and is taking, a similar position with other insureds, having adopted a corporate-wide position that deprives RWJBarnabas and Zurich’s other insureds of hundreds of millions of dollars of promised insurance. RWJBarnabas is informed and believes, and on that basis alleges, that Zurich has done so, and is doing so, to protect its own financial interests at the expense of its insureds’ interests and with conscious disregard for the rights, interests, and reasonable expectations of its insureds, including RWJBarnabas. 10. Zurich’s conduct constitutes a breach of the insurance policy. By this lawsuit, RWJBarnabas seeks recovery for the losses it has incurred and the damages that Zurich has inflicted upon it by its wrongful conduct. RWJBarnabas also seeks declaratory relief confirming that Zurich must honor the terms of its policy. -5- ESX-L-002271-21 03/19/2021 9:27:35 PM Pg 6 of 230 Trans ID: LCV2021615272 JURISDICTION AND VENUE 11. The Court has personal jurisdiction because RWJBarnabas Health, Inc. and its affiliates are all residents of this state with their principal places of business in New Jersey, including, but not limited to, Essex County, New Jersey. Zurich, which is a New York company with a principal place of business

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