Opinion
CIVIL ACTION NO. 2:97CV-153-B-B.
November 4, 1999
MEMORANDUM OPINION
This cause comes before the court upon the parties' cross-motions for summary judgment. Upon due consideration of the parties' memoranda and exhibits, the court is ready to rule.
FACTS
On July 16, 1997, a barge collided with the Mississippi River bridge at Helena, Arkansas, causing major structural damage to the bridge. The bridge is located near the defendant's casino-hotel located in Lula, Mississippi. As a result of the collision, Arkansas state authorities closed the bridge from July 16, 1997 until August 4, 1997 in order to make repairs. Throughout the time of the bridge closure, the defendant continued operating business and accepting customers. There was access to the defendant's casino-hotel, and no physical damage was ever suffered by the defendant's casino-hotel resulting from the bridge accident.
The defendant claims to have lost approximately 80 percent of its business during the bridge closure, and because of this, the defendant made a claim for lost business income under the insurance policy provided by the plaintiff. The insurance contract issued by the plaintiff to the defendant contains both a "Blanket Earnings and Expense Endorsement" and a "Business Income and Extra Expense Endorsement," and these two endorsements contain similar language. The Blanket Earnings and Expense Endorsement, with the differences of the Business Income and Extra Expense Endorsement in parentheses, reads in pertinent part as follows:
Blanket Earnings and Expenses:
We'll pay your actual loss of earnings as well as extra expenses (business income) that result from the necessary suspension of your operations during the period of restoration caused by direct physical loss or damage to property (building or covered business contents) at an insured location. The loss or damage must occur while this endorsement is in effect and must be due to a covered cause of loss.
. . . .
Additional Benefits:
All of the following benefits are in addition to the limit of coverage shown in the Coverage Summary. All of the other terms in this endorsement and the Property Protection apply to these additional benefits. Higher limits are available by endorsement to your policy.
. . . .
Interruption by Civil Authority:
We will pay your actual loss of earning and expense (business income and necessary extra expense) when a Civil Authority like a fire department 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. We'll pay for loss up to two consecutive weeks while access is denied.
The defendant asserts that coverage exists under both the Blanket Earnings and Expense Endorsement and the Business Income and Extra Expense Endorsement policies. As a result of the conflict as to whether coverage exists or not, the plaintiff brought this cause seeking a declaratory judgment from liability under the insurance policy, and the defendant filed a cross complaint against the plaintiff.
LAW
On a motion for summary judgment, the movant has the initial burden of showing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 91 L. Ed. 2d 265, 275 (1986) ("the burden on the moving party may be discharged by `showing' . . . that there is an absence of evidence to support the non-moving party's case"). Under Rule 56(e) of the Federal Rules of Civil Procedure, the burden shifts to the non-movant to "go beyond the pleadings and by . . . affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Celotex Corp., 477 U.S. at 324, 91 L. Ed. 2d at 274. That burden is not discharged by "mere allegations or denials." Fed.R.Civ.P. 56(e). All legitimate factual inferences must be made in favor of the non-movant.Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 216 (1986). Rule 56(c) mandates the entry of summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp., 477 U.S. at 322, 91 L. Ed. 2d at 273. Before finding that no genuine issue for trial exists, the court must first be satisfied that no reasonable trier of fact could find for the non-movant. Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 552 (1986).The interpretation of an insurance policy is a question of law for the court to decide when the meaning of the terms is clear and unambiguous. Certain Interested Underwriters at Lloyds v. Gulf Nat. Ins. Co., 898 F. Supp. 381, 384 (N.D. Miss. 1995). Mississippi's law recognizes the general rule that provisions of an insurance contract are construed strongly against the drafter.Canal Ins. Co. v. T.L. James Co., Inc., 911 F. Supp. 225, 228 (S.D. Miss. 1995). Because federal jurisdiction is premised upon diversity of citizenship, the substantive law of Mississippi governs the policy's interpretation. Gladney v. Paul Revere Life Ins. Co., 895 F.2d 238, 241 (5th Cir. 1990).
The applicable provisions of the insurance policy have been set forth above. The actual dispute is whether the loss in revenues sustained by the defendant as a result of the closure of the Mississippi River bridge at Helena, Arkansas is covered by the insurance policy provided by the plaintiff. Upon the court's inspection of the plain language of both the Blanket Earning and Expense Endorsement and the Business Income and Extra Expense Endorsement's general coverage paragraphs, it is clear that in order for the actual loss of earnings and extra expenses or business income to be reimbursed, there must be a direct physical loss or damage to property at the insured location.
The defendant claims that the interruption of their business was "tantamount to a direct physical loss to the insured location." Through this argument, the defendant all but admits that there was no physical damage to any property at the insured location. Further, there is no plausible reason to allow physical damage to property that is neither owned nor possessed by the defendant to equate to physical damage of the insured property. The contention by the defendant that the endorsements give rise to a reasonable expectation on the part of the defendant that the closure of the bridge constituted a peril for which coverage existed also fails under the determination of the plain meaning of the language of the insurance contract. The court finds that no physical loss or damage occurred to the defendant's insured property, and accordingly no liability coverage can be claimed by the defendant through the general coverage paragraphs of either endorsement.
The second contention by the defendant is that both the Blanket Earnings and Expense Endorsement and the Business Income and Extra Expense Endorsement contain an "Additional Benefits" portion of the insurance policy with an "Interruption by Civil Authority" subsection providing for loss of business revenues. Under this subsection, actual loss of earnings or business income will be covered "when a civil authority . . . denies access to the described location because of direct physical loss or damage to property by the covered cause of loss other than at the described location."
The court's primary focus under this provision of the policy concerns the interpretation of the words "denies access." Under Mississippi jurisprudence words, terms, phrases, and clauses in insurance contracts are to be given their everyday, plain and common meanings. McFarland v. Utica Fire Ins. Co., 814 F. Supp. 518, 525 (S.D. Miss. 1992). The plain and common definition of "deny" is to "refuse to grant" or "withhold." WEBSTER'S II NEW RIVERSIDE DICTIONARY, p. 363 (1988). Upon applying these definitions to the insurance policy, it is clear to see that there was no denial of access to the defendant's casino-hotel. The defendant's casino-hotel was accessible during the period of time the bridge was under repair, and the defendant continued operating business and accepting customers. Contrary to the defendant's assertion that customers from Arkansas were denied access, access was never totally denied because customers from Arkansas could have gained access from the Mississippi side of the bridge.
Thus, liability coverage under the "Interruption by Civil Authority" subsection of both the Blanket Earnings and Expense Endorsement and the Business Income and Extra Expense Endorsement fails due to the everyday meaning of the words "denies access." It is noted by the court that the endorsement policies' phrase "damage to property by a covered cause of loss other than at the described location" may be ambiguous. However, the court finds that the prevailing language of the contract requires a denial of access before this later clause arises. Thus, the court is not ruling on whether or not the contract contains ambiguous language, and therefore the court is not required to come to a determination of the meaning of this language.
There is a dispute as to whether the Business Income and Extra Expense Endorsement even applies to the defendant's casino-hotel located in Lula, Mississippi. As to the contention that the Business Income and Extra Expense Endorsement does not apply to the Lula, Mississippi location because this endorsement only applies to rental property, the court finds that this issue is moot. Regardless of whether or not the Business Income and Extra Expense Endorsement applies to the defendant's casino-hotel, there is no coverage under it based on the foregoing determinations.
The claim made by the defendant that the plaintiff's failure to deliver the contract of insurance prior to the date of the purported loss, thereby causing the defendant not to know that the subject incident would not be covered, is not well taken by the court. The endorsements in the policies under question are renewals from the previous year's insurance provisions supplied by the plaintiff to the defendant. It is clear that the defendant had full knowledge of all provisions contained in both endorsements as they were not altered from the prior year. Further, the defendant did have access to a copy of the policy prior to the date of the purported loss through the defendant's insurance agent who received a copy of the insurance policy on April 21, 1997, nearly three months prior to the date of the purported loss. Therefore, the defendant had knowledge of the insurance policies and should have known that the plaintiff did not intend for the policies to cover the underlying loss.
CONCLUSION
For the foregoing reasons, the court finds that St. Paul Mercury Insurance Company's motion for summary judgment should be granted, and Magnolia Lady, Inc., d/b/a Lady Luck Rhythm Blues Casino-Hotel's motion for summary judgment should be denied. An order will issue accordingly.