Bi-Economy Mkt., Inc. v. Harleysville Ins. Co.

886 N.E.2d 127 (2008)

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Nature of the Case

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Facts

P, a wholesale and retail meat market suffered a major fire resulting in the complete loss of food inventory and heavy structural damage to the building and business-related equipment. P was insured by D under a 'Deluxe Business Owners' policy that provided replacement cost coverage on the building as well as business property or 'contents' loss coverage. The policy covered lost business income for up to one year from the date of the fire. D would 'pay for the actual loss of Business Income … sustain[ed] due to … the necessary suspension of 'operations' during the 'period of restoration.' ' Business income is defined as the '(1) Net Income (Net Profit or Loss before income taxes) that would have been earned or incurred; and (2) Continuing normal operating expenses incurred, including payroll.' 'Period of restoration' is defined as the period of time that 'begins with the date of direct physical loss or damage' and 'ends on the date when the property … should be repaired, rebuilt or replaced with reasonable speed and similar quality.' D disputed P's claim for actual damages and advanced only the sum of $163,161.92. After submission of their dispute to alternative dispute resolution, P was awarded the additional sum of $244,019.88. D offered to pay only seven months of P's claim for lost business income, despite the fact that the policy provided for a full 12 months. P never resumed business operations. P sued D for bad faith claims handling, tortious interference with business relations and breach of contract, seeking consequential damages for 'the complete demise of its business operation in an amount to be proved at trial.' P contends in part that because of d's breach of contract, its business collapsed, and that liability for such consequential damages was reasonably foreseeable and contemplated by the parties at the time of contracting. D moved for leave to amend its answer to raise the defense that the contract excluded consequential damages and for partial summary judgment dismissing P's breach of contract cause of action. The court granted the motion, and it was affirmed. P again appealed.