July 24, 2020

Two prominent Greater Washington restaurant groups have filed lawsuits against their insurance provider alleging they were wrongfully denied coverage for losses sustained during the mandatory Covid-19 lockdowns.

Fabio Trabocchi's FT Group and Robert Wiedmaier's RW Restaurant Group filed lawsuits Friday against The Charter Oak Fire Insurance Co., a Hartford, Connecticut-based subsidiary of The Travelers Cos. Inc. (NYSE: TRV). Both restaurant groups are represented by District-based Cohen Milstein Sellers and Toll PLLC and California-based Gibbs Law Group, which have formed a task force to review similar claims on behalf of restaurants and small businesses across the country.

Both lawsuits allege that Charter Oak "swiftly denied" insurance claims the restaurateurs brought forth, citing a dramatic drop in sales due to the government-mandated lockdown orders that began in mid-March. The two restaurant groups say they purchased their insurance with the expectation of coverage, not only for damage to the premises or equipment, but also for interruptions in business operations that result in a loss of income, according to the lawsuits.

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Geoffrey Graber, a partner with Cohen Milstein who is working with FT Group and RWRG, also represented GCDC Grilled Cheese Bar in a class-action suit filed in April against Hartford Financial Services Group Inc. that brought forth similar allegations. In that case, Hartford Financial on July 10 filed a motion to dismiss.

The Judicial Panel on Multidistrict Litigation will hold a July 30 hearing to decide whether to consolidate hundreds of Covid-related insurance cases into a class-action lawsuit, which Graber said would affect how FT Group's and RWRG's cases move forward. If the cases are not centralized, the lawsuits will proceed individually and Graber said he expects Charter Oak to also file a motion to dismiss in both of these cases.

"On the one hand, every policy can be different," Graber said in an interview. "That said, there are broad similarities across many of these policies — I would say most of them. Whether this type of loss is covered as a threshold matter, I think those issues are broadly similar across the cases."

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