Washington, D.C.-based companies Fiola Holdings LLC from Fabio Trabocchi — representing Michelin-starred restaurant Fiola, Fiola Mare, Del Mar, and three locations of Sfoglina Pasta House — and the six-unit, Michelin-starred RW Restaurant Group from Robert Wiedmaier have sued their insurance company for wrongfully denying coverage during the COVID-19 crisis.
Fiola Holdings’ complaint was filed in the U.S. District Court for the District of Columbia, and RW Restaurant Group’s complaint was filed in the U.S.District Court for the District of Maryland Southern Division.
The two restaurant groups join a growing throng of restaurant owners and chefs that have taken to court after being denied insurance coverage during the pandemic, including chef Thomas Keller, who sued his insurance company for declaratory judgments on behalf of business interruption insurance claims.
In these two new lawsuits, both companies are suing their insurance provider Charter Oak Insurance Company “for losses resulting from government-mandated public health shutdowns related to COVID-19.”
According to the lawsuit Fiola Holdings filed on July 24, the restaurant company claims that it “believed that it had purchased comprehensive coverage that would apply to business interruptions under circumstances like this,” but that the coverage was “swiftly denied.”
All of Trabocchi’s restaurants had to close “fully or partially” based on the mandated districtwide health orders during the pandemic. Their insurance claim was denied because “there was no physical loss or damage,” though the lawsuit claims that the original policy did not mention “there would need to be visible physical damage to property.”
“We feel fortunate that we have been able to hire back nearly half of our staff,” Trabocchi said in a statement. “But the financial losses continue to be grave and things could get much worse before this crisis is over. The livelihoods of so many in our family are still in the balance because the Charter Oak Fire Insurance Company isn’t living up to its commitments.”
In the second similar lawsuit filed on July 24 by RW Restaurant Group, the company also said Charter Oak swiftly denied coverage after filing a business interruption insurance claim was filed. Eight of the plaintiff’s restaurants, located in Maryland, Washington, D.C. and Virginia, are covered under the same insurance and were forced by state and district orders to either close completely or curtail restaurant service during the pandemic, and they have had to lay off 80% of their staff.
The lawsuit claims that the “cursory denial” they received is contrary to the terms and conditions of the policy and applicable law.
“Unfortunately, [our insurance company] has put us in a dire situation like many of our peers in the restaurant community, who are struggling to stay afloat,” Wiedmaier said in a statement. “That is why we are pushing back — to put an end to insurers’ greed and to their absolute indifference to destroying the restaurant industry nationwide.”
The Charter Oak Fire Insurance Company did not respond to requests for comment.
The two lawsuits are part of a string of legal actions restaurants like Protégé and Gio Pizzeria and Bar Hospitality have taken against insurance companies that claim that either the insurance companies do not have virus exclusions in their contracts or because the case for the virus exclusion is not strong enough.
In response to the growing number of lawsuits, insurance providers have made the argument that COVID-19 is an exception, and that business interruption insurance was never meant to cover a universal catastrophe such as this pandemic, insurance groups wrote in a letter to members of Congress.
Contact Joanna Fantozzi at [email protected]
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