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Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co.

United States District Court for the Southern District of New York

August 20, 2003, Decided ; August 25, 2003, Filed

02 Civ. 7676 (JSR)




Confirming the Court's telephonic rulings of June 13, 2003 and letter to counsel dated July 8, 2003, defendant's motion for summary judgment is denied in its entirety and plaintiff's motion for summary judgment is granted in part and denied in part, as set forth below. Additionally, defendant's motion to submit the "number of years" calculation to an appraiser is granted.

By way of background, this case concerns insurance coverage for a drugstore (the "WTC store") that plaintiff Duane Reade, Inc. ("Duane Reade") operated [**2]  in the retail concourse of the World Trade Center prior to September 11, 2001. After the World Trade Center was destroyed, Duane Reade sought to recover under an insurance policy (the "Policy") issued by defendant St. Paul Fire & Marine Insurance Company ("St. Paul"). When the parties were unable to resolve a dispute concerning the scope of the Policy's coverage for "business interruption losses," Duane Reade brought this action, seeking both declaratory relief as to the scope of coverage and damages for breach of contract. St. Paul responded by moving to dismiss all the claims, but while the Court dismissed the contract claims as premature (because no proof of loss had been filed), it allowed the declaratory judgment claims to proceed. See Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co.,261 F. Supp. 2d 293, No. 02 Civ. 7676, 2003 WL 1990680 (S.D.N.Y. Apr. 30, 2003). 1

 [**3]  [*237]   Following discovery, the parties each moved for summary judgment. Their submissions show that St. Paul does not dispute that the destruction of the WTC store was caused by a covered peril. Indeed, St. Paul has already satisfied Duane Reade's property loss claims. Moreover, although St. Paul now disputes that any monies are due for business interruption losses, previously, in May of 2002, St. Paul paid Duane Reade $ 9,863,853 to cover what it then perceived to be Duane Reade's business interruption losses. 2

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279 F. Supp. 2d 235 *; 2003 U.S. Dist. LEXIS 14689 **


Subsequent History: Affirmed in part and modified in part by Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 2005 U.S. App. LEXIS 11965 (2d Cir., June 22, 2005)

Prior History: Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 261 F. Supp. 2d 293, 2003 U.S. Dist. LEXIS 7234 (S.D.N.Y., 2003)

Disposition:  [**1]  Defendant's motion for summary judgment denied in its entirety. Plaintiff's motion for summary judgment granted in part and denied in part. Defendant's motion to submit "number of years" calculation to appraiser granted.


Restoration, coverage, business interruption, summary judgment motion, losses, replace, interruption, concealed, calculation, rebuild, affirmative defense, loss of market, covered peril, disputes, damages, insured

Insurance Law, Business Insurance, Business Interruption Insurance, General Overview, Liability & Performance Standards, Disclosure Obligations by Insureds, Fraudulent Intent, Materiality, Good Faith & Fair Dealing, Claim, Contract & Practice Issues, Appraisals, Commercial General Liability Insurance, Coverage