Berk-Cohen Associates v. Landmark American Insurance Co.
United States District Court for the Eastern District of Louisiana
2009 WL 2777163 (2009)
- Written by Rich Walter, JD
Facts
Landmark American Insurance Company (Landmark) (defendant) insured Berk-Cohen Associates, LLC (Berk-Cohen) (plaintiff) against business-interruption losses affecting Berk-Cohen’s Louisiana apartment complex. The policy covered interruptions due to wind damage but excluded coverage for interruptions due to flood damage. In measuring losses, policy clause 3(a)(2) precluded taking into account any improved postinterruption business conditions resulting from the same cause that produced the interruption. Clause 3(a)(2) specifically did not apply to business improvements caused by factors outside the policy’s scope of coverage. A devastating region-wide hurricane hit Berk-Cohen’s apartments and temporarily disrupted its tenants’ abilities to pay rent. Landmark disputed Berk-Cohen’s subsequent claim for business-interruption losses. Berk-Cohen sued for a federal district court’s judgment calculating those losses as the difference between Berk-Cohen’s rent revenue before and after the hurricane. Posthurricane revenue was up significantly from prehurricane figures because of a surging demand for apartments from people who had lost their houses in the hurricane. Landmark argued that the case should be dismissed, citing the Fifth Circuit’s Finger Furniture decision as precedent. Landmark moved for summary judgment.
Rule of Law
Issue
Holding and Reasoning (Block, J.)
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