Coronavirus: Vallejo City Council ratifies emergency order to help local businesses

Apr. 16--In an attempt to help local businesses, the Vallejo City Council on Tuesday unanimously ratified an emergency order, issued from City Manager Greg Nyhoff last week, declaring Vallejo businesses have suffered physical damages as a result of COVID-19.

The action is meant to bolster claims local businesses have filed with their insurance companies stating they have had an interruption to their business due to the governor's executive order to close all non-essential businesses.

Councilmember Pippin Dew said she reached out to Vallejo's businesses and was told the claims were being denied because the interruption policies only apply to businesses which have suffered physical damage and are unable to operate.

Calling local businesses the "lifeblood of our community," Dew said the physical damage language was modeled after similar language from Napa County. Chef Thomas Keller filed a lawsuit against Hartford Fire Insurance Co., over the physical damage clause in his policy.

Keller shuttered his two businesses, the French Laundry restaurant and the Bouchon Bistro, both in Yountville, on March 18 following a Napa County order telling residents to stay at home except for essential services or activities.

"Well, the physical damage is closing up your business," Vallejo Mayor Bob Sampayan said in support of the emergency order.

Sampayan said the current situation with COVID-19 is making it difficult for small businesses to survive.

On the same day, U.S. Rep. Mike Thompson, D-St. Helena, announced the introduction of the Business Interruption Insurance Coverage Act of 2020. The legislation ensures that businesses with interruption insurance won't get their claims denied because of certain major events, like the COVID-19 pandemic, evacuations or public safety power shutoffs.

"Businesses who have purchased business interruption insurance in good faith and are forced to close their doors because of a major event and through no fault of their own deserve to have their claims honored," Thompson said in a statement released by his office. "I have heard from many local businesses in my district who are getting denied and are worried about making necessary expenses, like payroll or rent, during the Coronavirus pandemic."

The emergency order also granted some relief for the city's hotels and motels by providing a temporary deferral from paying the March and April Transient Occupancy Tax (TOT).

Deferment of the tax is expected to impact the city's cash flow from between $200,000 to $300,000.

In other news, the council unanimously approved an unlimited contract with the Sacramento-based law firm, Porter Scott, to assist the city in the defense of 12 cases after two in-house attorneys recently departed Vallejo.

John Whitefleet, a partner in the firm, will serve as outside legal counsel and make $230 per hour to defend the city in mostly excessive force cases filed against the Vallejo Police Department and its officers.

One of the Vallejo's litigation attorneys, Timothy Smyth, resigned recently, as deputy city attorney, while Assistant City Attorney Kelly Trujillo left Vallejo to take a similar job with the city of Livermore.

The two in-house lawyer positions are expected to be filled by early May. City Hall estimates that defense of the city in all 12 cases could cost Vallejo more than $500,000.

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