Finally, an insured restaurant can now seek COVID-19 shutdown damages after an appellate court has ruled for the FIRST TIME.
A Louisiana court has ruled that a New Orleans restaurant is entitled to payment from its business-interruption insurer for losses incurred during the pandemic, a rare victory after a slew of failed attempts by eating places to collect on their policies.
A panel of judges decided that Lloyd’s was obliged to compensate Oceana Grill’s owner-operator because the restaurant’s assumed contamination by coronavirus could be interpreted as physical damage to the establishment. The justices noted that emergency measures imposed by local government officials necessitated such physical adjustments as removing and repositioning tables.
Here’s what Chief Judge Terri Love wrote in the ruling:
“The physical presence of COVID-19 substantially diminished the usable space of the property, as tables needed to be pushed farther apart, and resulted in economic losses due to the slowdown of the appellants’ business.”
Cajun Conti, the company that owns Oceana Grill, among other French Quarter attractions, filed a lawsuit against Lloyd’s of London on March 20, 2020 – the same day the restaurant closed – seeking to cover losses it incurred while closing its dining rooms. Louisiana restaurant due to pandemic.
A lower court previously denied Cajun Conti’s claim for damages from her insurer, but this week’s decision reversed that decision on the appeal, ruling 3-2 that Lloyd owes coverage under her policy – because it could be interpreted as vague.
Here’s what NOLA reported:
“Oceana Grill’s parent company was one of the first, if not the first, to file a COVID insurance coverage lawsuit, though many more followed. The general consensus was that the pandemic wouldn’t qualify for business interruption assistance, as it was created to cover closures due to property damage from natural disasters. This court, however, found that the wording is open to interpretation and that physical damage did not have to be ‘obvious and observable.”
More details of this story from The Gateway Pundit:
One of the policyholder attorneys involved said the “dam has broken” with the ruling, paving the way for other businesses to do the same, according to a report from Reuters.
Lloyd’s attorney Virginia (Ginger) Dodd of Phelps Dunbar told Reuters that she believes the ruling was inconsistent with “ten federal circuit courts of appeal and every other state appellate court.”
“We will pursue all options to address what we believe to be an outlier decision,” Dodd added.
Reuters noted that “while Wednesday’s appellate decision is the first to find coverage for COVID-19 income losses under an all-risk property insurance policy, a state appellate court in New York on Monday affirmed a Bronx judge’s ruling that allowed the New York Botanical Garden to sue its Pollution Liability Insurer, Allied World Assurance, for denying its COVID-related loss of business income claim and for breach of the implied covenant of good faith and fair dealing.”
“This lawsuit was all about coverage,” Daniel Davillier, an attorney representing Oceana Grill’s owner, told Nola. “If you don’t have coverage you can’t claim any damages. There are a lot of people out there who suffered losses during the pandemic who’ve been waiting to see how this turns out.”
The Louisiana decision noted that Oceana paid $91,000 for its business-interruption policy.