Fitness studio files nationwide class action against COVID-denying insurance corporation

written by Amy Webb

May 7, 2021

Jay and Carol Jasunas achieved one of their lifelong dreams when they became small business owners. They own a boutique fitness franchise called Row House, located in Denver Colorado.

"It was an amazing experience," Jay said. "To take this leap with my wife, working together, building something we believe in. My family felt really blessed."

Then, the coronavirus pandemic hit. Like many other small businesses around the country, the Jasunas' fitness studio had to close for several months. 

"We were devastated," Carol said. We lost so much of our family's nest egg and income. We want to protect our clients and staff, and our whole community, but this last year has been incredibly challenging and we need financial assistance to ensure we can continue to be there for our community."

The family filed a claim with their business interruption insurance carrier, Arch Insurance Company, located in Kansas City, Missouri. The insurance policy is designed to reimburse businesses for financial losses due to unexpected shutdowns, including those related to pandemics. Despite this, Arch Insurance denied the claim without an investigation. 

To say the couple was upset is an understatement.

"After we spent thousands of dollars on an insurance policy, a denial felt like a kick in the teeth. That's why we bought insurance, to protect our small business. But Arch told us to take a hike," Jay said.

The Jasunas family’s fitness studio is a local franchise of Row House Franchise, LLC, whose parent company is Xponential Fitness LLC. Xponential Fitness owns nine major fitness brands (Club Pilates, CycleBar, StretchLab, Row House, Pure Barre, YogaSix, AKT, STRIDE, and Rumble), with thousands of studios worldwide. Seeing small business owners nationwide victimized by Arch Insurance, the company immediately sprang into action. Xponential Fitness has now filed a federal class action lawsuit on behalf of its thousands of small fitness studios nationwide that were also denied coverage by Arch Insurance. The lawsuit is the first of its kind, in which a parent company franchisor is driving such an effort on behalf of its franchisees for business interruption. 

The Welder Firm, located in Kansas City, Missouri, is representing the class, along with Howard & Howard Attorneys and Sherman & Howard, each firm led respectively by Michael Fawaz and Chris Mosley, while Xponential’s efforts are being managed by Michael Abramson.

Led by husband-and-wife team Brent and Kristie Welder, The Welder Firm has already set a national precedent requiring insurance companies to cover COVID-19 injuries and deaths in workers. The Welder Firm represented the families of Celia Yap-Banago and Tracy Kolterman, two nurses who lost their lives to coronavirus, and has filed catastrophic injury and wrongful death cases on behalf of other families as well.

Arch Insurance took millions of premium dollars from small businesses nationwide, promising to protect them in this kind of emergency. Right when hardworking families needed help the most, Arch Insurance violated its own policies to deny these claims. That decision, purely based on its own corporate greed, is illegal and immoral. We won’t stand for it,” said attorney Kristie Welder.

"The Jasunas family, along with all of our franchise partners, are incredibly dedicated to their communities and studios, and we support their tireless efforts to get through this pandemic. They deserve better from Arch Insurance and we stand with them," said Sarah Lund, President of Xponential Fitness.

Find the original story here.