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Broad St., LLC v. Gulf Ins. Co.

Supreme Court of New York, Appellate Division, First Department

December 12, 2006, Decided; December 12, 2006, Entered

8183, Index 602991/02

Opinion

 [**1]  [*127]  Nardelli, J.

In this appeal, we are asked to determine the scope of the business interruption coverage afforded in a commercial property insurance policy issued by defendant Gulf Insurance Company to plaintiff Broad Street, LLC, the owner of a lower Manhattan building which was temporarily [****2]  closed in the aftermath of the September 11, 2001 destruction and mass murder at the World [***2]  Trade Center. At the core of this dispute is the meaning of the policy term "necessary [**2]  suspension"; plaintiff asserts the term should be interpreted to mean the suspension of "normal business activities," whereas defendant submits the term is clear and unambiguous and is triggered only by a total interruption of business operations.

Plaintiff Broad Street, LLC (Broad Street) owns and operates the building designated as 25 Broad Street, New York, New York. The building, which is located approximately three blocks from the World Trade Center site, consists of 345 residential units and three commercial spaces. There is no dispute that following the events of September 11, 2001, the building was completely shut down from that day to September 18, 2001, at which time tenants were permitted back into their units. Plaintiff's staff, during the week the building was closed, cleaned the common areas, as well as the apartments, especially those with windows that had been left open, and replaced all of the air filters in the building.

There is also no dispute that a commercial property insurance policy was issued to plaintiff by defendant Gulf Insurance Company and covered the building at the [***3]  time in question. The policy provides, in pertinent part:

"We will pay for the actual loss of Business Income  [*128]  you sustain due to the necessary suspension of your 'operations' during the 'period of restoration.' The suspension must be caused by direct physical loss of or damage to property at the premises described in the Declarations … caused by or resulting from any Covered Cause of Loss."

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37 A.D.3d 126 *; 832 N.Y.S.2d 1 **; 2006 N.Y. App. Div. LEXIS 14730 ***; 2006 NY Slip Op 9316 ****

 [****1]  Broad Street, LLC, Plaintiff-Respondent, v Gulf Insurance Company, Defendant-Appellant.

Prior History:  [***1] Appeal from an order of the Supreme Court, New York County (Edward H. Lehner, J.), entered September 19, 2005. The order denied defendant's motion for partial summary judgment.

Broad St., LLC v Gulf Ins. Co., 9 Misc 3d 1119(A), 2005 NY Slip Op 51661(U), reversed.

Broad St., LLC v Gulf Ins. Co., 9 Misc 3d 1119A, 808 NYS2d 916, 2005 NY Misc LEXIS 2280 (2005)

CORE TERMS

suspension, tenants, restoration, coverage, resumed, air, apartments, business income, cessation, insurance contract, interruption, suspended, insured, trigger, Street, rent, business interruption, insurance policy, provisions, premises

Civil Procedure, Appeals, Reviewability of Lower Court Decisions, General Overview, Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Trials, Jury Trials, Province of Court & Jury, Ambiguous Terms, Construction Against Insurers, Ordinary & Usual Meanings, Plain Language, Business Insurance, Business Interruption Insurance