Lawsuit filed by Coi and Alta Adams restaurants to be joined by subsequent high-profile restaurant suits seeking damages from insurers for interruption of business claims arising from COVID-19 shutdowns.
Lieff Cabraser Heimann & Bernstein, LLP, has filed a lawsuit in San Francisco Superior Court against Farmers’ Group and Mid-Century Insurance Company on behalf of Michelin-starred Coi Restaurant of San Francisco and Alta Adams of Los Angeles for claims including breach of contract, bad faith denial of insurance claims, and fraud. The complaint alleges that in the wake of substantial financial losses incurred after government-ordered Coronavirus-driven business shutdowns, the plaintiff restaurants made claims on their business interruption insurance policies and were instantly denied coverage by the defendant insurers.
While this is the first such suit filed by Lieff Cabraser, there are additional culinary luminaries working with Lieff Cabraser and Alexandra Foote to bring their business interruption claims, including Pim Techamuanvivit (Nari, Kin Khao) and Thomas McNaughton (Flour + Water) in San Francisco; Naomi Pomeroy (Beast) and Katy Millard (Coquine) in Portland; as well as Jessica Koslow (Sqirl); Josiah Citrin (Mélisse, Citrin) in Los Angeles, and others.
“This is the first of many lawsuits we intend to file on behalf of the nation’s great chefs who have built their restaurants from the ground up, and who have paid their insurance premiums for years,” notes Lieff Cabraser partner Robert Nelson, who represents the plaintiffs in the litigation. “Now, when these restaurant owners need their insurers to step up and honor their insurance contracts, the insurers are wrongly denying coverage. By this lawsuit and the others that will follow, we intend to level the playing field and recover the insurance benefits to which these chefs are entitled.”
Founded by internationally renowned chef Daniel Patterson, plaintiff Coi is a two Michelin star restaurant in San Francisco. Patterson also recently opened the highly acclaimed Alta Adams in Los Angeles, which is one of the Los Angeles Times’ top 101 restaurants. Coi was forced to shut down after state and local governments ordered it and all residents of San Francisco to “shelter in place” and engage in “social distancing.” Since the first such order, issued on March 16, 2020, Coi has had no business operations or income.
Coi has business interruption insurance from Defendants. The policy expressly provides coverage for business interruptions caused by “Civil Authority” in the unlikely event that the government compelled a shutdown for any period of time, yet Defendants immediately denied coverage. The lawsuit alleges that this denial was part of a premeditated strategy to deny all claims related to the “shelter in place” orders and COVID-19, and was thus untethered to the facts of the claim and fraudulent under California law.
Alta Adams Restaurant also has business interruption insurance. Alta closed following orders from Los Angeles authorities. Notwithstanding this, Defendants immediately denied its claim under a similar policy. Like Coi, in the face of defendants’ refusal to honor insurance contracts, it now has no choice but seek Court relief.
“This is destroying our restaurant industry and ripping apart the fabric of our communities,” notes attorney Alexandra Foote, who also represents the plaintiffs, and has represented prominent restaurants in a boutique practice for over a decade. “We are committed to helping restaurants fight to survive.”
Plaintiffs’ complaint alleges that this wholesale denial of valid and justified claims constitutes breach of contract and breach of the covenant of good faith and fair dealing, in addition to a violation of the state’s unfair competition law. The complaint seeks declaratory and injunctive relief as well as money damages.