Atty Won't Face Subpoena In La. COVID-19 Coverage Suit

By Mike Curley
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Law360 (November 17, 2020, 2:26 PM EST) -- A Louisiana state judge has denied a bid by a group of underwriters at Lloyd's of London to subpoena an opposing attorney they alleged had influenced a COVID-19 shutdown order from the mayor of New Orleans in order to secure business interruption coverage.

The Lloyd's underwriters told the court in a motion filed Nov. 9 that Roderick "Rico" Alvendia of Alvendia Kelly & Demarest LLC — representing the owner of Oceana Grill, Cajun Conti LLC — had contacted the attorney of Mayor LaToya Cantrell prior to Cantrell's March 16 shutdown order to ensure the order included language saying the virus caused physical damage to property because it attached to surfaces.

According to the Lloyd's underwriters' motion, Cajun Conti relied almost exclusively on the text of that order in its suit seeking coverage for business interruption losses stemming from efforts to contain the virus. The underwriters sought documentation of Alvendia's communications with Cantrell's attorney.

John W. Houghtaling II of Gauthier Murphy & Houghtaling LLC, who represents Cajun Conti, told Law360 on Tuesday that the motion was denied at a hearing last week, after counsel for the restaurant presented evidence showing Alvendia was not influencing the order, but rather blowing the whistle on a plan by insurers to deny coverage. Judge Paulette R. Irons also struck the allegations in the motion from the record, Houghtaling added, saying that Cajun Conti and the underwriters had agreed on the language of the order denying the motion and striking the allegations.

In its opposition to the motion, Cajun Conti pointed to a March 11 memo released by Zelle LLP, a law firm that has represented underwriters at Lloyd's and other insurers in the past. The memo discusses the then-anticipated shutdown orders that cities and states across the country would later issue in response to the COVID-19 pandemic.

Houghtaling told Law360 that the memo advised insurers that if the government shutdown orders did not specify that COVID-19 caused physical damage or loss by adhering to surfaces, they could use that omission as a way to deny coverage. He said the insurers were counting on "hasty" orders that did not go into detail on how COVID-19 spread or adhered to surfaces.

When Alvendia contacted Cantrell's attorney asking for language to that effect to be included in shutdown orders, Houghtaling said, he was not acting improperly, but alerting government officials to an attempt by insurers to escape their coverage obligations.

Houghtaling called the allegations against Alvendia in the Lloyd's underwriters' motion "outrageously salacious" and incorrect. He said that, at the hearing, attorneys for the underwriters withdrew their allegations that Alvendia had acted improperly, before the judge denied their motion for a subpoena.

He added that the March 11 memo was particularly "upsetting," as it advised the insurers to reverse course on what they had told the Louisiana government in 2006, when, in the wake of the SARS outbreak, they averred that disease causing agents did trigger physical loss policies by contaminating surfaces.

Cajun Conti filed the first-of-its-kind suit in March, shortly after Cantrell's order came through, asking the judge to hold that its property and business interruption policy with the Lloyd's underwriters will cover its losses due to government-mandated closures tied to the outbreak of the novel coronavirus. Judge Irons denied the underwriters' motion for summary judgment two weeks ago.

Representatives for the Lloyd's underwriters could not immediately be reached for comment Tuesday.

Cajun Conti is represented by John W. Houghtaling II, Jennifer Perez and Kevin Sloan of Gauthier Murphy & Houghtaling LLC; Daniel E. Davillier of Davillier Law Group LLC; Roderick Alvendia, J. Bart Kelly III, Jeanne K. Demarest and Kurt A. Offner of Alvendia Kelly & Demarest LL;, James M. Williams of Chehardy Sherman & Williams; and Desiree Charbonnet of the Law Office of Desiree M. Charbonnet LLC.

Lloyd's is represented by Virginia Y. Dodd, Kate B. Mire, Kevin W. Welsh, Allen C. Miller and Thomas H. Peyton of Phelps Dunbar LLP.

The case is Cajun Conti LLC et al. v. Certain Underwriters at Lloyd's London et al., case number 2020-02558, in the Civil District Court for the Parish of Orleans, State of Louisiana.

--Additional reporting by Jeff Sistrunk. Editing by Alyssa Miller.

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