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Chef Ethan Stowell’s Restaurant Group Sues Insurance Company Over COVID-19 Losses

Canlis and Fire & Vine could eventually file similar suits as well, should their claims be denied

A pasta dish from Ethan Stowell’s Tavolàta
Ethan Stowell’s restaurants, such as Italian spot Tavolata, have reopened for takeout and some outdoor dining, where available.
Tavolàta [Official Photo]

Earlier this month, restaurateur Ethan Stowell’s restaurant group (ESR) filed a lawsuit against an insurance company over a denied COVID-19-related claim.

According to the filing, first reported by the Puget Sound Business Journal (PSBJ), the group said it lost an estimated $1.5 million so far due to the pandemic. The suit notes that the policy from Fireman’s Fund Insurance (a California-based company owned by global conglomerate Allianz) is supposed to cover that, even though the claim was rejected.

Details from the lawsuit also mention that the shift to takeout for many of Stowell’s restaurants, such as the acclaimed Mediterranean spot How to Cook a Wolf, represented just 20 percent of the typical revenue (around $2.2 million per month). Most of those restaurants continue to offer to-go and delivery services, with a few — such as hard seltzer gastropub San Juan Seltzery in Sodo — starting to open for outdoor patio seating.

ESR laid off about 90 percent of its staff in the weeks following Washington’s implementation of the stay-at-home order in March, when dining rooms were completely shut down. Since then, Stowell says he’s been able to hire some people back (about 60 more), although that’s still not near what the restaurant group was at full capacity pre-pandemic.

“We believe the insurance policy covers the COVID losses as it’s written,” Steve Hooper, president of ESR, tells Eater Seattle. “And we’re just asking the court to enforce it.”

When reached, a rep for Allianz (Fireman’s parent company) said, “We are not able to comment on pending litigation at this time.”

Several other prominent restaurants in Seattle are covered by the same insurance company. Late-night favorite 13 Coins also had a claim that was recently denied, while fine-dining destination Canlis and the Fire & Vine Hospitality Group (which owns several Pacific Northwest restaurants, including steakhouse chain El Gaucho) are still waiting to hear back on their own claims.

Stowell’s group is the first among those mentioned to file a lawsuit against Fireman’s Fund Insurance. However, a lawyer representing all of the restaurants told the PSBJ that others are prepared to take legal action, if they run into similar issues. That lawyer claims the insurance company has been basically sending out a form letter to claimants, even using the wrong name in reference to ESR.

Battling insurance companies during the COVID-19 pandemic has been a months-long fight for many restaurants around the country, and is expected to continue, particularly in Seattle, where small businesses have been dealing with financial impacts since early March under a cloud of continued uncertainty. “We’re probably the first of many who are going to be doing what we’re doing,” Stowell tells Eater Seattle.

But the efficacy of such efforts may be unclear. The litigation process could take months (or even years) to complete. And it should be noted that smaller restaurants likely don’t have the resources to hire high-powered lawyers to recoup their own losses, if they want to dispute a denied insurance claim. Still, Stowell and others restaurant owners around the U.S. feel it doesn’t hurt to try the courts.

UPDATED, July 16, 5:08 p.m.: This article originally listed Ray’s Boat House as one of the Fireman’s Fund Insurance clients, but that restaurant has a different insurer, and the piece has been corrected.