The law firm that sued insurers on behalf of the Thomas Keller Restaurant Group in California and Cajun Conti in Louisiana has formed a coalition to take on the insurance industry on behalf of restaurants.
New Orleans-based law firm Gauthier Murphy & Houghtaling LLC has teamed up with celebrity chefs and restaurant industry groups to form the Business Interruption Group, with the purpose of demanding immediate payment for restaurants that have business interruption insurance and don’t have exclusions for viruses.
John Houghtaling, majority partner in the law firm, told Restaurant Hospitality that the lawsuits were filed for Keller and Cajun Conti to establish precedent that business interruption due to the coronavirus pandemic must be covered.
“The purpose of Thomas Keller’s lawsuit is to establish the law, that the insurance companies owe for civil authority coverage for the coronavirus,” he said. “We’re asking a judge to determine what the law is.”
Keller’s claim was denied on the grounds that his property had not suffered physical damage, which the lawsuit claims is untrue because the virus does, indeed, stay on hard surfaces for many days, damaging the property by putting at risk anyone who comes in contact with it. The legal complaint points out that China, France, Italy and Spain have required that public areas be cleaned and fumigated before being reopened.
Houghtaling said BIG was founded to pressure insurers into paying insured restaurants that do not have explicit virus exemptions on their policies.
“We are saying to the insurance industry, ‘You are to pay immediately the claims that do not have a virus exclusion. You must pay them immediately, because they are owed. If you do not, we will sue you in every single state in America. We are coming after you,’” Houghtaling said.
According to BIG’s web site, The James Beard Foundation and Ment’or, a scholarship foundation established by Keller and other prominent chefs, are industry partners, as is hospitality-oriented insurance broker HGR Group. So are high-profile chefs Wolfgang Puck, Daniel Boulud, Jean-Georges Vongerichten, Jérôme Bocuse and Dominique Crenn, as well as Keller.
Houghtaling said insurers could owe restaurants as much as $300 billion, a sum that could drive them out of business, but he said that if they did pay what he says restaurants our owed, BIG would support them in a request for a bailout from the federal government.
He added that he wanted to work in partnership with insurance companies, who are essential to the survival of restaurants. “They are the proverbial life preserver,” he said.
Houghtaling said Keller, Puck, Boulud and Vongerichten all participated in a phone call with President Trump about the initiative.
In a press release about the call, which took place on March 29, Puck said, “We were encouraged by our conversation with the President about the urgent need to help the restaurant industry. All of us paid business interruption insurance for years to protect the livelihood of our employees. If the restaurant industry collapses it has a massive effect on the entire economy. Many restaurants have different [insurance] policies, but we need to find a solution for restaurateurs big and small."
The release quoted Boulud as saying, "The president took time to listen to us and was very supportive. We provided him why we believed the insurance companies were wrong. He understands insurance and asked to see our policies to read them for himself. We cannot be more grateful for his support. The President recognized that some of us have [virus] exclusions and some do not, and the insurance companies are denying us all."
The restaurant industry has been crushed by the coronavirus pandemic, with most restaurants forced to close their dining rooms and many finding takeout and delivery to be unviable.
The National Restaurant Association estimates that 3% of restaurants have permanently closed since the pandemic it, and 11% of operators surveyed said the expect to close permanently within 30 days. An additional 44% have closed temporarily.
It said that nationwide, sales between March 1 and March 22 had dropped by 47%.
Contact Bret Thorn at [email protected]
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