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BY Dev., Inc. v. United Fire & Cas. Co.

United States District Court for the District of South Dakota, Western Division

March 14, 2006, Decided ; March 14, 2006, Filed

CIV. 04-5116

Opinion

MEMORANDUM OPINION AND ORDER

Pending before the Court is a Motion for Summary Judgment [doc. #22], by the Defendant, United Fire & Casualty Company, and a Motion for Summary Judgment [doc. #25], by the Plaintiff, By Development, Inc. All briefing is complete and this matter is ripe for disposition. For the following reasons, the Court grants the Defendant's Motion for Summary Judgment and denies the Plaintiff's Motion for Summary Judgment.

FACTUAL BACKGROUND

The parties filed a Statement of Stipulated Facts [doc. #24], which the Court hereby incorporates by this reference. The Court will, however, briefly summarize the facts underlying this lawsuit. The Plaintiff, a South Dakota corporation, does business as AmericInn and Cadillac Jack's in Deadwood, South Dakota. The Defendant is an Iowa corporation. The Defendant [*2]  issued an insurance policy ("the Policy") covering the Plaintiff's business enterprise in Deadwood. The Policy included "Commercial Property Coverage," which included "Business Income Other than Rental Value-with Extra Expense."

After a wildland fire, known as the "Grizzly Gulch" fire, came dangerously close to the City of Deadwood, the Governor of South Dakota gave a verbal order to evacuate Deadwood at 2:30 p.m. on Saturday, June 29, 2002. The evacuation order, under civil authority, was lifted for Deadwood at 8 p.m. on Monday, July 1, 2002. Deadwood residents were advised they could return to Deadwood using Highway 85 from the north or south. Residents of nearby Lead, South Dakota, were under a civil authority evacuation order beginning at 5 p.m. on Monday, July 1, 2002. The evacuation order for Lead was lifted, with some exceptions, at 6 a.m. on Thursday, July 4, 2002. At the time the evacuation order was lifted for Deadwood (at 8 p.m. on July 1, 2002) other evacuation orders and road closures remained in effect for areas surrounding Deadwood. Numerous highways and roads leading to Deadwood remained closed or had only restricted travel as of Monday, July 1, 2002. Other road restrictions [*3]  and closures were in effect in and around Lead. The closures and restrictions gradually were lifted over the next week, and all the road restrictions and closures in the area caused by the Grizzly Gulch fire were lifted by Monday, July 8, 2002, at 6 p.m. The Statement of Stipulated Facts contains statistics from the South Dakota Department of Transportation regarding average vehicle traffic for the year 2002 for specific road markers around Deadwood.

The Plaintiff's enterprise in Deadwood was closed and evacuated during the Deadwood evacuation order. The Plaintiff alleges the fire evacuation and road closures and restrictions caused it to have a business income loss, even though the evacuation order for Deadwood had been lifted by July 1, 2002, at 8 p.m. The Plaintiff claims it incurred substantial business income and other losses during that period, and that, upon opening on July 2, 2002, it continued to incur business income and other losses due to the Grizzly Gulch fire and the civil authority orders still in place around Deadwood.

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2006 U.S. Dist. LEXIS 14703 *

BY DEVELOPMENT, INC., Plaintiff, vs. UNITED FIRE & CASUALTY COMPANY, Defendant.

Subsequent History: Affirmed by BY Dev., Inc. v. United Fire & Cas. Co., 2006 U.S. App. LEXIS 32442 (8th Cir. S.D., Dec. 4, 2006)

CORE TERMS

civil authority, coverage, deductible, seventy-two, premises, evacuation, losses, business income, ambiguity, insurer, waiting period, prohibits, lifted, summary judgment motion, summary judgment, closures, hotels, provide coverage, extra expense, material fact, declarations, restrictions, genuine