730 BIENVILLE PARTNERS, LTD. v. ASSURANCE COMPANY OF AMERICA (E.D.La. 2002)

MARTIN L. C. FELDMAN, United States District Judge.

Before the Court are cross-motions for summary judgment. For the reasons that follow, defendant's motion is GRANTED and plaintiffs motion is DENIED.

This dispute arises out of the denial of insurance coverage after the 9/11 tragedy. The plaintiff, 730 Bienville Partnership, Ltd. asserts that the defendant, Assurance Company of America, wrongfully denied its claim for coverage under a commercial property insurance policy. Bienville maintains that the standard policy contained additional business income coverage (the Civil Authority Extension) for business losses where the physical damage was remote from the insured's premises. Bienville filed their claim under this provision after the Federal Aviation Administration closed all the United States airports after the September 11, 2001 terrorist attacks. Assurance denied Bienville's claim. As a result, Bienville sued in state court and Assurance removed the lawsuit based on federal question and diversity jurisdiction. Both parties now move for summary judgment to determine whether the policy provision at issue provides coverage for plaintiff's damages.

Federal Rule of Civil Procedure 56 instructs that summary judgment is proper if the record discloses no genuine issue as to any material fact such that the moving party is entitled to judgment as a matter or law. No genuine issue of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586 (1986). A genuine issue of fact exists only "if the evidence is such that a reasonable jury could return a verdict for the non-moving party."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

The Court emphasizes that the mere argued existence of a factual dispute does not defeat an otherwise properly supported motion. See id. Therefore, "[i]f the evidence is merely colorable, or is not significantly probative," summary judgment is appropriate. Id. at 249-50. Summary judgment is also proper if the party opposing the motion fails to establish an essential element of his case. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). In this regard, the non-moving party must do more than simply deny the allegations raised by the moving party. Donaghey v. Ocean Drilling Exploration Co., 974 F.2d 646, 649 (5th Cir. 1992). Rather, he must come forward with competent evidence, such as affidavits or depositions, to buttress his claims. Id. Hearsay evidence and unsworn documents do not qualify as competent opposing evidence. Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir. 1987). Finally, in evaluating the summary judgment motion, the court must read the facts in the light most favorable to the non-moving party. Anderson, 477 U.S. at 255.

The insurance provision at issue states:

We will pay for the actual loss of "business income" you sustain and necessary "extra expense" caused by action of civil authority that prohibits access to your premises due to direct physical loss of or damage to property, other than at the "covered premises," caused by or resulting from any Covered Cause of Loss. This coverage will apply for a period of up to 4 consecutive weeks from the date of that action.

Because the Court is sitting in diversity, Louisiana law applies. Howe v. Scottsdale Ins. Co., 204 F.3d 624, 627 (5th Cir. 2000). The rules of interpretation that guide the Court are clear. Under Louisiana law governing insurance policies, "[t]he ordinary meaning of the text [of the policy] governs in the absence of an absurd result, and each provision is read in light of the other." Williamson v. J.C. Penney Life Ins., 226 F.3d 408, 409 (5th Cir. 2000). "Words and phrases used in a policy are to be construed using their plain, ordinary and generally prevailing meaning, unless the words have acquired a technical meaning." Reynolds v. Select Properties, Ltd., 634 So.2d 1180, 1182 (La. 1994). "In the case of ambiguity, Louisiana courts construe insurance contracts against the insurer and in favor of coverage." Id.

Bienville asserts that the FAA's closure of the nation's airports after 9/11 and the subsequent cancellation of flights kept many intended guests from getting to its hotels, and, therefore, the Civil Authority Extension covers its lost business income and necessary expenses. The Court is not persuaded. The terms of the policy are unambiguous. To recover for business losses under the Civil Authority Extension, the loss of business income and necessary expenses must be "caused by action of civil authority that prohibits access to your premises . . ." While the FAA's closure of the airports and cancellation of flights may have prevented many guests from getting to New Orleans and ultimately to plaintiff's hotels, the FAA hardly "prohibited" access to the hotels. See Peterson v. Schimek, 729 So.2d 1024, 1029 (La. 1999) (The rules of contractual interpretation "do not authorize a perversion of the words or the exercise of inventive powers to create ambiguity where none exists."). Accordingly, defendant's motion for summary judgment dismissing plaintiff's claims is GRANTED. Plaintiff's cross-motion for summary judgment is DENIED.