Filed: Apr. 29, 2003
Latest Update: Feb. 21, 2020
Summary: United States Court of Appeals Fifth Circuit F I L E D UNITED STATES COURT OF APPEALS April 29, 2003 For the Fifth Circuit Charles R. Fulbruge III No. 02-31071 Clerk 730 BIENVILLE PARTNERS, LTD., Plaintiff - Appellant, VERSUS ASSURANCE COMPANY OF AMERICA, Defendant - Appellee. Appeal from the United States District Court For the Eastern District of Louisiana (02-CV-106) Before SMITH, DENNIS, and CLEMENT, Circuit Judges. PER CURIAM:* Plaintiff-appellant 730 Bienville Partners, Ltd. (“Bienville”)
Summary: United States Court of Appeals Fifth Circuit F I L E D UNITED STATES COURT OF APPEALS April 29, 2003 For the Fifth Circuit Charles R. Fulbruge III No. 02-31071 Clerk 730 BIENVILLE PARTNERS, LTD., Plaintiff - Appellant, VERSUS ASSURANCE COMPANY OF AMERICA, Defendant - Appellee. Appeal from the United States District Court For the Eastern District of Louisiana (02-CV-106) Before SMITH, DENNIS, and CLEMENT, Circuit Judges. PER CURIAM:* Plaintiff-appellant 730 Bienville Partners, Ltd. (“Bienville”) c..
More
United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS April 29, 2003
For the Fifth Circuit
Charles R. Fulbruge III
No. 02-31071 Clerk
730 BIENVILLE PARTNERS, LTD.,
Plaintiff - Appellant,
VERSUS
ASSURANCE COMPANY OF AMERICA,
Defendant - Appellee.
Appeal from the United States District Court
For the Eastern District of Louisiana
(02-CV-106)
Before SMITH, DENNIS, and CLEMENT, Circuit Judges.
PER CURIAM:*
Plaintiff-appellant 730 Bienville Partners, Ltd. (“Bienville”)
contests dismissal of its insurance coverage claim against
defendant-appellee Assurance Company of America (“Assurance”) on
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
1
summary judgment. For the following reasons, we AFFIRM.
I. Background
Bienville owns the New Orleans-based St. Louis Hotel and St.
Ann Hotel, for which it purchased a single commercial property
insurance policy for both properties from Assurance. That policy
included a “Civil Authority Extension,” which provides coverage for
sustained business income losses due to the actions of a
governmental authority. This Extension reads:
We will pay for the actual loss of “business
income” you sustained 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 that 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.
After the terrorist attacks in New York and Washington, D.C.
on September 11, 2001, the Federal Aviation Administration (“FAA”)
grounded all non-military aircraft and closed all non-military
airports. The airports reopened two days later. Because the
airports were closed, Bienville’s hotels received a significant
number of guest cancellations between September 11 and September
26. The slowdown in business led Bienville to close the St. Ann
Hotel from September 18 to September 26. Although the hotels still
generated approximately $200,000 in revenue between September 11
and September 26, Bienville claims to have lost $202,940 in room
revenue and banquet facility food and beverage sales due to the
2
airport shutdown. Bienville filed a claim with Assurance for these
losses, which Assurance denied.
On December 3, 2001, Bienville filed suit against Assurance in
Louisiana state court for coverage under the policy. Assurance
removed the suit to the Eastern District of Louisiana on January
14, 2002. Both parties moved for summary judgment, and on
September 30, 2002, the district court granted Assurance’s motion
and denied Bienville’s motion, ruling that Bienville was not
entitled to coverage under the Assurance policy. Bienville timely
appealed.
II. Analysis
We review a district court’s grant of summary judgment de
novo, N.Y. Life Ins. Co. v. Travelers Ins. Co., 92 F.3d 336, 338
(5th Cir. 1996), and we apply Louisiana law to this diversity suit.
Under Louisiana law, the rules of interpretation for insurance
contracts are as follows:
An insurance policy is a contract between the
parties and should be construed employing the general
rules of interpretation of contracts set forth in the
Louisiana Civil Code. The parties' intent, as reflected
by the words of the policy, determine the extent of
coverage. 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. An insurance policy should not be
interpreted in an unreasonable or a strained manner so as
to enlarge or to restrict its provisions beyond what is
reasonably contemplated by its terms or so as to achieve
an absurd conclusion. Where the language in the policy
is clear, unambiguous, and expressive of the intent of
3
the parties, the agreement must be enforced as written.
However, if after applying the other rules of
construction an ambiguity remains, the ambiguous
provision is to be construed against the drafter and in
favor of the insured.
Reynolds v. Select Properties, Ltd., 634 So. 2d 1180, 1183 (La.
1994) (citations omitted).
The main issue in this appeal concerns whether the FAA
prohibited access to the Bienville hotels by shutting down the
airports. The Civil Authority Extension provides the insured with
coverage for business income losses “caused by action of civil
authority that prohibits access to your premises due to direct
physical loss of or damage to property, other than that at the
‘covered premises’ caused by or resulting from any Covered Cause of
Loss.” Therefore, the airport shutdown must have prohibited access
to the Bienville properties in order for us to find that its losses
are covered under the policy.
Assurance argues that the policy provision unambiguously
excludes coverage because the FAA did not “prohibit access” to the
Bienville hotels. It contends that the district court correctly
recognized that the generally prevailing meaning of “prohibit” is
“to forbid by authority or command,” and the FAA never forbade
guests from going to the Bienville hotels. Bienville’s guests were
allowed to and did stay at the hotels during the disputed period.
In fact, Bienville earned $200,000 during this period.
4
Bienville responds that the term “prohibit” is broader than
Assurance’s interpretation. It argues that the policy can be
reasonably interpreted to encompass its business losses due to the
FAA shutdown. It notes that alternative definitions of “prohibit”
are: “to prevent from doing or accomplishing something: effectively
stop” and “to make impossible.” WEBSTER’S THIRD NEW WORLD INTERNATIONAL
DICTIONARY (1963). Bienville asserts that under these definitions,
the policy covers the FAA’s actions because the airport shutdown
“prevented” or made it “impossible” for Bienville’s guests to get
to its hotels.
Bienville’s argument is not persuasive. Under Louisiana law,
we are required to give words their plain, ordinary, and generally
prevailing meaning. The generally prevailing meaning of “prohibit”
is, as noted by the district court, “to forbid by authority or
command.” It is undisputed that the FAA did not forbid any person
to access the Bienville hotels. The FAA did not “prevent” the
customers from going to the Bienville hotels because it was not
“impossible” for the guests to get there. Despite assertions by
Bienville that customers can only access its hotels by plane, no
customer was actually prevented from getting to New Orleans. There
were viable transportation options, such as automobiles and trains,
even if customers chose not to use them. That these options were
viable is evidenced by that fact that the hotels still operated at
5
nearly half capacity during the weeks after September 11.
Therefore, it is not reasonable to interpret the FAA’s actions as
prohibiting access to the Bienville hotels under this policy.
Although no Louisiana case addresses civil authority
extensions, the district court decision in St. Paul Mercury
Insurance Co. v. Magnolia Lady, Inc., 1999 WL 335371191, at *1
(N.D. Miss. Nov. 4, 1999), supports this conclusion. In Magnolia
Lady, a casino-hotel sued for coverage for business losses after
the closure of a nearby bridge resulted in an eighty percent drop
in business.
Id. The policy provision provided coverage for
business losses “when a Civil Authority ... denies access to the
described location because of direct physical loss or damage to
property by a covered cause of loss other than at the described
location.”
Id. The court denied coverage because the civil
authority did not “deny access” as the “casino-hotel was accessible
during the period of time the bridge was under repair, and the
defendant continued operating business and accepting customers.”
Id. at *3.
As in Lady Magnolia, the Bienville customers had access to the
hotels during the time the airports were closed, and Bienville
continued to operate its business and to accept customers.
Although Bienville notes that the policy language is cast in terms
of an action that “denies,” not “prohibits,” access, it does not
6
explain how the difference in terminology would affect the
determination of coverage. Consequently, Bienville has not proven
it is entitled to coverage under this policy.
III. Conclusion
Because the FAA’s action did not prohibit access to the
Bienville properties, it is not entitled to coverage under the
Assurance policy for business losses sustained due to the events of
September 11. Therefore, we AFFIRM the district court’s grant of
summary judgment in favor of Assurance.
7
