State Automobile Ins. Co. v. Garzone Funeral Home Inc. E.D. Penn., May 27, 2011
Plaintiff insurer filed suit against defendant policyholder, seeking to avoid indemnity for a host of lawsuits over the harvesting and sale of body parts from bodies at the Philadelphia funeral home. The underlying actions by the families of the deceased allege that defendants and others conspired to sell body parts of corpses.
Plaintiff insurer files the current suit seeking an order declaring that it does not have a duty to defend the policyholder in lawsuits brought by families of the deceased. Plaintiff insurer also named several of the plaintiffs in the underlying actions as defendants in the insurance coverage action.
In 2009, Gerald Garzone pled guilty to 244 counts of theft of body parts, as well as criminal conspiracy and reckless endangerment, and was sentenced in to a prison term of eight to 20 years. Garzone was insured by plaintiff insurer and plaintiff insurer argues that the language of Garzone’s policy excludes coverage for injury resulting from a criminal act by the insured.
Under the criminal indictment, prosecutors claimed that Garzone along with other funeral directors and medical workers alleged and sold body parts from corpses that were scheduled to be cremated by another company also owned by Garzone. Spines, bones, organs and other tissues from these bodies were collected by a team of “cutters.” These body parts – some of which had been left out unrefrigerated for days – were then sold to medical providers and researchers through a company owned by the conspirators.
The ringleaders of the conspiracy was, Gerold Garzone, his brother, Louis Garzone, and former dentist Michael Mastromarino. It is believed that the body selling conspiracy collected $3.8 million from the dismemberment of 1,077 bodies in New York, New Jersey and Pennsylvania, including $1 million for 244 bodies in Philadelphia.
Mastromarino was sentenced to 18 to 54 years in prison in New York in June 2008 while Louis Garzone was sentenced to 8 to 20 years after pleading guilty in a Pennsylvania court.
In November, another insurer, who issued insurance policies to the cremation company and another Philadelphia funeral home linked to the body parts scheme, has settled over its coverage for the lawsuits but the terms of settlement were not disclosed.
For a copy of the complaint click here