Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-06-02016/USCOURTS-ca8-06-02016-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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1

The Honorable Patrick J. Schiltz, United States District Judge for the District

of Minnesota, sitting by designation.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 06-2016

___________

BY Development, Inc., *

*

Plaintiff - Appellant, *

* Appeal from the United States

v. * District Court for the District

* of South Dakota.

United Fire and Casualty Co., *

* [UNPUBLISHED]

Defendant - Appellee. *

___________

Submitted: November 17, 2006

Filed: December 4, 2006

___________

Before LOKEN, Chief Judge, MELLOY, Circuit Judge, and SCHILTZ, District

Judge.1

___________

PER CURIAM.

BY Development, Inc., owns and operates a casino and hotel in Deadwood,

South Dakota. In 2002 a wildfire, the “Grizzly Gulch” fire, came dangerously close

to the town of Deadwood, and South Dakota’s governor ordered evacuation of the

town. Approximately fifty-five hours later, the governor lifted the evacuation order

and access to the town via major roadways was once again possible. 

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The Honorable Andrew W. Bogue, United States District Judge for the District

of South Dakota.

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BY Development then submitted a claim to its insurer, United Fire & Casualty,

Co., alleging substantial business losses caused by the action of the civil authority that

prohibited access to BY Development’s insured premises. United Fire denied

coverage, relying on a provision in the insurance contract that stated coverage for such

losses begins after an action of civil authority prohibits access to the insured premises

for a continuous period of seventy-two hours. 

BY Development next instituted the present declaratory judgment action

arguing that the seventy-two-hour waiting or clearance period was, in fact and in

effect, a “time deductible.” BY Development further argued that, because the

insurance policy had a declarations page that contained the phrase “No. Ded.”

(indicating that the policy had no deductible), the seventy-two-hour waiting or

clearance period, if interpreted to be a deductible, did not apply. In the alternative,

BY Development argued that there existed an ambiguity on this issue that should be

interpreted against the insurer and in favor of providing coverage. Finally, BY

Development argued that, although the formal order of closure was not in effect for

a full seventy-two hours, other orders kept some roads into Deadwood closed and

thereby “prohibited access” for the requisite seventy-two hours.

Applying South Dakota law, the district court2

 rejected these arguments. The

district court found that no action of civil authority “prohibited access” beyond the

fifty-five-hour duration of the governor’s evacuation order. The district court also

found the policy language unambiguous and determined that the policy did not

provide coverage. The district court stated that, in general, a deductible applies to

reduce an insurer’s liability where coverage otherwise exists, but the waiting or

clearance period under the present contract defined coverage as beginning only after

a seventy-two-hour period of prohibited access. Because there was no coverage

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without seventy-two hours of prohibited access, there was no liability to which a

deductible could apply. As a result, BY Development’s attempt to characterize the

seventy-two-hour period as a “time-deductible” failed. 

On appeal, BY Development does not renew its argument that an action of a

civil authority actually prohibited access for a full seventy-two hours. BY

Development does, however, renew its argument regarding the issue of a “time

deductible.” As to this issue, we agree with the well-reasoned opinion of the district

court—the insurance contract was not ambiguous and did not provide coverage

because the waiting or clearance period was not in the nature of a deductible. 

We affirm the judgment of the district court without further comment. See 8th

Cir. R. 47B. 

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