Fireman's Fund Insurance v. Holland America Line-Westours, Inc.

MEMORANDUM *

Fireman’s Fund Insurance Company (“Fireman’s Fund”) sought a declaratory judgment to establish the amount due its insured under a business interruption policy. It now appeals the district court’s summary judgment in favor of its insured, Holland America Cruise Lines (“Holland America”). The district court awarded Holland America $1,083,383.25, but denied its request for attorneys’ fees. Holland America cross-appeals the district court’s denial of its request for attorneys’ fees. We have jurisdiction under 28 U.S.C. § 1291 , and we reverse in part and affirm in part.

*603 On January 20, 1993, a major storm caused Holland America’s centralized nationwide reservation facility in Seattle to lose power from approximately 11:00 a.m. through 4:30 a.m. the following day. Because its computer was down, Holland America’s agents were unable to book any reservations and instead instructed callers to call back at another time.

Holland America maintained a business interruption insurance policy that required Fireman’s Fund to pay 75 percent of covered losses less a $100,000 deductible. The insurer invoked an arbitration clause to have “Appraisers” establish the amount of the…

Dissenting in part.

I dissent with respect to the reversal of the district court’s award of damages to Holland America. The panel majority resolves this case by relying on the principle that an insured should receive “only that amount that will indemnify actual loss, not an additional windfall above this amount.” See Dombrosky v. Farmers Ins. Co., 84 Wash.App. 245 , 928 P.2d 1127 , 1136 n. 4 (Wash.Ct.App.1997). Whatever weight we should give this policy beyond its limited application by Washington state courts, the majority’s reliance on this principle overlooks our primary obligation to construe the contract itself and enforce it accordingly. Our starting point should be the contract entered into by these sophisticated parties, rather than the relative monetary outcome or equities. Any evaluation of loss is limited to the Period of Restoration, which concludes when the business is up and running after the business interruption — not at some later date.

The Period of Restoration — which the parties agree creates the relative scope of indemnity — is defined as “the length of time, commencing with the date of damage or destruction, which will be required, with the exercise of due…