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COVID-19 Business Insurance Litigation

Paynter Law secures landmark victory: NC court finds Cincinnati Insurance must pay business interruption coverage to 16 area restaurants for COVID-related government shutdown orders.

Scroll down on this page for more information on this groundbreaking litigation. If you still have questions, get in touch with Lead Attorney Gagan Gupta.

Case Details

CAPTION: North State Deli LLC et al. v. The Cincinnati Insurance Company et al.

ATTORNEYS: Gagan Gupta (lead), Stuart Paynter

COURT: Durham County Superior Court


PLAINTIFFS: Sixteen North Carolina restaurants, including: Vin Rouge, Parizade, Mateo Bar de Tapas, Rosewater, Mothers & Sons Trattoria, Saint James Seafood, Lucky’s Delicatessen, Bin 54, City Kitchen, Village Burger, Nasher Cafe, Local 22, Kipos, Golden Fleece, Farm Table, and Gatehouse Tavern

DEFENDANTS: The Cincinnati Insurance Company, The Cincinnati Casualty Company, and Morris Insurance Agency, Inc.

CONTACT: Gagan Gupta / (844) 481-9713 /

Recent Case Activity

Paynter Law secured a major victory when a North Carolina court ruled that The Cincinnati Insurance Company must pay business interruption coverage for losses suffered by 16 restaurants due to COVID-19-related shutdown orders entered by government authorities across the state. Paynter Law’s action represents the first case in the country requiring an insurance company to pay such losses.

The Plaintiff-restaurants include sixteen restaurants operating in the Raleigh-Durham-Chapel Hill region of North Carolina and across the state. The restaurants are owned and operated by Matthew Kelly, Giorgios Bakatsias, Jay Mehdian, and Laszlo Lukacsi, local chefs, businessowners, and multi-time James Beard award nominees who helped ignite the region’s culinary renaissance.

“This ruling marks the first victory among the thousands of such lawsuits across the country,” says lead attorney for the Plaintiffs, Gagan Gupta. “It’s a groundbreaking and powerful win for policyholders during this era of economic devastation for small businesses everywhere.”

Business interruption policies, like the ones Cincinnati issued to the Plaintiffs, provide coverage when a business experiences “direct physical loss or direct physical damage.” During the September 23, 2020 hearing before Judge Orlando Hudson, Senior Resident Judge of the Durham County Superior Court, Cincinnati argued the position adopted by the insurance industry nationally that the phrase “direct physical loss or direct physical damage” requires structural alteration to property for coverage to apply. Cincinnati asserted that neither COVID-19 nor the related shutdown orders caused structural alteration to property. But as Judge Hudson’s opinions explain, Plaintiffs’ Cincinnati policies cover loss or damage, and because “loss” must mean something different from “damage,” there is no requirement for structural alteration to property. Rather, Judge Hudson ruled that Cincinnati must pay for coverage because the restaurants lost the physical use of and access to their businesses, a clear “direct physical loss.”

Key Case Documents

  1. ORDER — Denying Motion to Dismiss
  2. ORDER — Granting Partial Summary Judgment
  3. PRESS RELEASE — Paynter Law secures groundbreaking victory for restaurant clients
  4. Second Amended Complaint (September 21, 2020)
  5. Motion to Dismiss — Brief (Cincinnati)
  6. Motion to Dismiss — Opposition (North State Deli LLC)
  7. Motion to Dismiss — Reply (Cincinnati)
  8. Motion for Partial Summary Judgment — Brief (North State Deli LLC)
  9. Motion for Partial Summary Judgment — Opposition (Cincinnati)
  10. Motion for Partial Summary Judgment — Reply (North State Deli LLC)
  11. Amicus Brief in support of North State Deli LLC (NC Restaurant and Lodging Association)