Buxbaum

A law firm sustained water damage that had the effect of reducing the number of hours billed to clients during the week after the flood. The firm made a claim under its business interruption insurance policy, asserting that, during the one-week period, its attorneys billed less than usual. The insurer offered to settle the claim on terms that the firm rejected. This lawsuit followed.

The trial court granted summary judgment in favor of the insurer. We conclude that summary judgment was proper because the law firm did not “suspend operations” within the meaning of the policy. Rather, it continued to operate, albeit at reduced capacity.

I

Background

Buxbaum & Chakmak is a law corporation with offices in Claremont and Newport Beach, California. On the weekend of Saturday, February 19, 1994, a water pipe broke at the Claremont office, flooding the premises. Monday, February 21, 1994, was Washington’s birthday, and the office was closed. When employees arrived for work on Tuesday, February 22, 1994, they found that most of the floor was covered by two inches of water, the carpet was ruined, the walls and wallpaper were soaked, the furniture was wet, and the computer system…