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Dickie Brennan & Co. v. Lexington Ins. Co.

United States Court of Appeals for the Fifth Circuit

March 22, 2011, Filed

No. 10-30381

Opinion

 [*684]  W. EUGENE DAVIS, Circuit Judge.

This dispute concerns coverage for a type of business interruption insurance. The Appellants 1 (collectively "the Brennans") brought suit against their insurer, Lexington Insurance Co. ("the Appellee"), when Lexington denied coverage for the Brennans' losses incurred when they were unable to conduct business during a mandatory evacuation of New Orleans.

When the evacuation order was issued, Hurricane Gustav was approaching New Orleans from the Gulf of Mexico. Fortunately, New Orleans suffered only minor damage, and neither the Appellants' nor their neighbors' properties were damaged. Because no nexus was shown between the evacuation order and "damage to property, other than at the described premises," the district court granted summary judgment for Lexington, dismissing the Brennans' suit. The Brennans timely appealed. We agree with the district court that the evidence fails to demonstrate the required nexus between the evacuation order and damage to property "other than at the described premises." We therefore affirm.

I. BACKGROUND

As Hurricane Gustav approached Louisiana on August 30, 2008, New Orleans Mayor Ray Nagin issued a mandatory evacuation order requiring the evacuation of the West Bank commencing at 8:01 a.m. on August 31, 2008 and of the East Bank commencing at noon on August 31, 2008. 2 Although the order did not refer to any property damage, it stated that both the Governor and Mayor Nagin were declaring a state of emergency "because of anticipated high lake and marsh  [**3] tides due to the tidal surge, combined with the possibility of intense thunderstorms, hurricane force winds, and widespread severe flooding." The Brennans allege that Hurricane Gustav had already damaged property in the Caribbean nations of Cuba, Jamaica, the Dominican Republic, and Haiti when Nagin issued the evacuation order.

 [*685]  The Brennans operate New Orleans restaurants that were insured by Lexington during the evacuation. The Business Income and Extra Expense form of the Lexington policy contained a civil authority provision under the heading "Additional Coverages." The provision stated:

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636 F.3d 683 *; 2011 U.S. App. LEXIS 5843 **

DICKIE BRENNAN & COMPANY, INC.; COUSIN'S RESTAURANT, INC., doing business as Palace Café; SEVEN SIXTEEN IBERVILLE, L.L.C., doing business as Dickie Brennan's Steakhouse; BRASSERIE, L.L.C., doing business as Bourbon House, Plaintiffs-Appellants v. LEXINGTON INSURANCE CO., Defendant-Appellee

Prior History:  [**1] Appeal from the United States District Court, Eastern District of Louisiana.

CORE TERMS

civil authority, evacuation, property damage, coverage, described premises, insured, district court, Hurricane, causal link

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Appeals, Summary Judgment Review, Standards of Review, Standards of Review, De Novo Review, Insurance Law, Business Insurance, Business Interruption Insurance, General Overview