The Bella Vista Neighbors Association was scheduled to die Monday night.
A complicated lawsuit three years ago had made the civic association's liability insurance unaffordable, so the meeting at Palumbo Recreation Center was to be the group's last. But a Utah-based carrier specializing in tough-to-insure entities — think fireworks, helicopter bungee jumps, and trampoline companies — stepped in, finalizing a plan hours before the meeting, which coincided with the last day of the association's coverage.
"It was down to the wire, but they saved us," Eugene Desyatnik, president of the association, said at the meeting. The audience applauded and cheered at the news the 25-year-old organization would survive.
Yet the issue that almost sunk Bella Vista's civic group remains, as it does for the dozens of community organizations across Philadelphia.
Registered community organizations, or RCOs, have to provide their own liability insurance to protect their volunteer staffers, and all it takes is one or two lawsuits for premiums to reach untenable heights.
And getting sued can be fairly routine, since the city's Zoning Board of Adjustments asks civic groups to submit recommendations on land-use proposals. The groups can attract the ire of developers.
"All developers who are unscrupulous have to do now is whisper 'Bella Vista' to get the desired effect," Ken Weinstein, a developer in Germantown, said. "No lawyer or lawsuit is even necessary."
In Bella Vista's case, the trouble stemmed from a 2015 lawsuit against Joel Palmer, who directed a group that predated the Bella Vista Neighbors Association. None of the current board members was involved in the complaint. The association was ultimately dismissed from the suit.
Still, the civic group racked up thousands of dollars in legal fees and in May learned it was being dropped by its insurance carrier. The group previously had a $2,500 deductible and a $1,000 premium. Alternative insurers offered deductibles between $50,000 and $70,000 and premiums between $7,500 and $13,000.
"I don't think anyone really had the insurance industry knowledge to anticipate the magnitude of the effect," Desyatnik said. If you get into a car accident, he said, your rates go up a bit and you drive more carefully. "Here, we weren't even at fault and we saw a 20-fold increase."
Civic groups can be difficult to insure because of their vulnerability to lawsuits. Prime Insurance Co., a boutique carrier, which ultimately insured Bella Vista, specializes in risky clients and will cover Bella Vista for a $5,000 annual deductible and a $1,900 premium.
"When an insurance company is taking in $1,500 and paying out $50,000 in legal fees for a lawsuit, that's not a very attractive ratio," said Keith Daniels, the underwriter who worked on the agreement between Prime and Bella Vista. "Many carriers looked at these associations in general and in this case Bella Vista and were not willing to step into it."
It can cost as little as $300 to file a complaint, whether legitimate or from a disgruntled developer hoping to silence a group by burying them in legal fees, a move known as strategic lawsuits against public participation, or SLAPP, suits.
When Joe Schiavo represented the Old City Civic Association, a series of SLAPP suits caused insurance to spike so dramatically that the group folded in 2013.
"I don't see any reason why it wouldn't repeat," Schiavo said. "In land-use decisions, you might say there's a winner and a loser and it will always be the case that the loser may decide to take action. They may lash out."
Complaints are almost always sealed, said Schiavo, who is under a gag order for the two lawsuits he was named in while heading the Old City group. This leads to a lack of transparency about the frequency and absurdity of some of the claims.
"You never get the option of publicly sharing the ridiculous terms of the complaint," Schiavo said. "How you 'maliciously interfered with their business opportunity' just because you went to a [zoning] hearing and you presented your community group's letter."
Since the city requires RCOs to weigh in on land use issues, several of the organizations' leaders have asked why the city doesn't insure the RCO groups. The Bella Vista Association asked that question Monday night.
City spokeswoman Lauren Hitt said that's not an option.
"The city can't provide insurance on our own; we're not an insurance company, obviously," Hitt said.
Sen. Larry Farnese introduced a bill in Harrisburg that would allow defendants to submit anti-SLAPP motions to challenge the legitimacy of a plaintiff's claim.
The bill, which passed the Senate is unlikely to pass the House, where it faces opposition from the chairman of the judiciary committee, Rep. Ron Marsico. The state chamber of commerce has also said it is against the measure.
The survival of the Bella Vista Neighbors Association means the annual October pumpkin painting is now back on, a fund-raising effort for weekly street cleanings continues, and a newsletter keeps printing. The group's zoning committee will also continue to issue letters on behalf of members to the city.
They'll do so with a better appreciation of the stakes, said treasurer Brandy Bones.