Oceana Grill, Bourbon Street’s tourist-centric restaurant loved by New Orleans hotel concierges, has won the country’s first victory in appellate court for an insured business seeking damages related to COVID-19 shutdown losses. A split Louisiana court found the policy’s definition of “direct physical loss or damage” ambiguous, ruling in favor of the restaurant on Wednesday, June 15.
Cajun Conti, the company that owns Oceana Grill, among other French Quarter tourist haunts, sued Lloyd’s of London on March 20, 2020 — the same day the restaurant shut down — seeking coverage for losses incurred while Louisiana’s restaurant dining rooms were closed due to the pandemic. A lower court previously denied Cajun Conti’s request to seek damages from its insurer, but the decision this week reversed that decision on appeal, ruling 3-2 that Lloyd’s owed coverage under its policy — because it can be interpreted as ambiguous.
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.”
Oceana Grill is a massive, 500-seat building that draws tourists almost exclusively, and is always busy, with a line often running down the block on Friday and Saturday nights. It’s previously known for a Gordon Ramsay’s Kitchen Nightmares television appearance in 2011, after which it sued the show to block the episode from airing. The episode ran anyway, and when an old clip resurfaced on the show’s Facebook page in 2018, Cajun Conti sued Ramsay directly for defamation and for the specific clip from the episode to be blocked from use.
According to Law360, one of the policyholder attorneys involved said the “dam has broken” with the ruling, paving the way for other appellate courts to agree. For more background on the lawsuit and ruling, see Law360’s rundown or reporting from Reuters.