This issue has caused debate among courts and commentators. See, e.g., H. Richard 1

Chattman & Gregory D. Miller, Measuring Business Interruption Loss in Wide-Impact

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 09-60209

CATLIN SYNDICATE LIMITED,

Plaintiff–Appellee

v.

IMPERIAL PALACE OF MISSISSIPPI, INC; IMPERIAL PALACE OF

MISSISSIPPI, LLC,

Defendants–Appellants

Appeal from the United States District Court 

for the Southern District of Mississippi

No. 1:08-CV-97

Before JONES, Chief Judge, and BENAVIDES and PRADO, Circuit Judges.

PRADO, Circuit Judge:

Insurer Catlin Syndicate and casino operator Imperial Palace disagree

about how to determine loss under the business-interruption provision of the

insurance policy that Catlin issued to Imperial Palace. Catlin argues that the

business-interruption provision unambiguously indicates that only historical

sales figures should be considered when determining loss. Imperial Palace

argues that the provision is ambiguous, and therefore sales figures after

reopening should also be taken into account. 

1

United States Court of Appeals

Fifth Circuit

F I L E D

March 15, 2010

Charles R. Fulbruge III

Clerk

Case: 09-60209 Document: 00511051539 Page: 1 Date Filed: 03/15/2010
No. 09-60209

Catastrophes: Insurance Against Catastrophes or Only Against Insured Damage from

Catastrophes?, 19 COVERAGE 1 (Jul./Aug. 2009).

2

We addressed the definition of “loss” under a materially identical businessinterruption provision in Finger Furniture Co. v. Commonwealth Insurance Co.,

404 F.3d 312 (5th Cir. 2005). Finger Furniture does not control this case because

it dealt with a question of Texas law, while this case deals with a question of

Mississippi law. However, there is no significant difference between Texas and

Mississippi law on this issue. Accordingly, we find that Mississippi courts would

apply the law in the same way as Texas courts, and we AFFIRM. 

I.

Hurricane Katrina damaged Imperial Palace, forcing it to shut down for

several months. When Imperial Palace reopened, its revenues were much

greater than before the hurricane; many nearby casinos remained closed, and

people who wanted to gamble had few choices. Imperial Palace submitted a

claim to its insurers, including Catlin. Catlin agreed to pay the claim, but the

parties disputed Imperial Palace’s losses. Imperial Palace stated that its losses

were approximately $165 million, while Catlin believed the losses were closer to

$65 million. The largest discrepancy was in the amount of business-interruption

loss: Imperial Palace put this amount at about $80 million, while Catlin put it

at about $6.5 million. This discrepancy resulted from the parties’ different

interpretations of the policy’s business-interruption provision, which states, in

pertinent part:

Experience of the business – In determining the amount of the Time

Element loss as insured against by this policy, due consideration

shall be given to experience of the business before the loss and the

probable experience thereafter had no loss occurred.

Catlin filed a complaint in federal district court, seeking declaratory relief.

Imperial Palace counterclaimed for breach of contract and negligence, among

other claims. The parties filed cross-motions for summary judgment. Catlin

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No. 09-60209

3

argued that under the business-interruption provision, Imperial Palace’s

recovery should be based on net profits Imperial Palace would probably have

earned if Hurricane Katrina had not struck the Mississippi Gulf Coast and

damaged its facilities. Thus, Catlin stated that Imperial Palace’s loss should be

determined by looking solely at pre-hurricane sales. Imperial Palace argued

that the correct hypothetical was not one in which Hurricane Katrina did not

strike at all; it was one in which Hurricane Katrina struck but did not damage

Imperial Palace’s facilities. Accordingly, Imperial Palace averred that its

recovery should be based in part on the amount it actually earned when it

reopened after Katrina. 

After considering the parties’ arguments, the district court denied Imperial

Palace’s motion in its entirety, and granted Catlin’s motion “to the extent that

Catlin [sought] a partial summary judgment that [Imperial Palace’s] profits

upon reopening after Hurricane Katrina should not be taken into account to

determine what [Imperial Palace] would have experienced had the storm not

occurred.” Catlin Syndicate Ltd. v. Imperial Palace of Miss., Inc., No. 1:08-CV97, 2008 WL 5235888, at *1, *8 (S.D. Miss. Dec. 15, 2008). We granted leave to

appeal the district court’s interlocutory order solely as to this ruling. 

II.

The district court has diversity jurisdiction over this case under 28 U.S.C.

§ 1332. We have jurisdiction over Imperial Palace’s interlocutory appeal under

28 U.S.C. § 1292(b).

We review the “legal determinations in a district court’s decision to grant

summary judgment de novo, applying the same legal standards as the district

court to determine whether summary judgment was appropriate.” Gonzalez v.

Denning, 394 F.3d 388, 391 (5th Cir. 2004) (citations omitted). “Summary

judgment is proper where, after viewing the evidence in the light most favorable

to the nonmovant, the record indicates that no genuine issue of material fact

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4

exists.” Finger Furniture, 404 F.3d at 313 (citing Denning, 394 F.3d at 391).

Interpretation of a contract is a purely legal matter; therefore, we review the

district court’s construction of Imperial Palace’s policy de novo. See id. (citing

Sentry Ins. v. R.J. Weber Co., 2 F.3d 554, 556 (5th Cir. 1993)). Because this is

a diversity case involving a Mississippi contract, we apply Mississippi contract

law to interpret the policy. See Ideal Mut. Ins. Co. v. Last Days Evangelical

Ass’n, 783 F.2d 1234, 1240 (5th Cir. 1986) (stating that a federal court applies

the substantive law of the forum state in a diversity action). Under Mississippi

law, if a policy is worded so that it can be given only one reasonable construction,

a court must enforce the policy as written. See U.S. Fid. & Guar. Co. of Miss. v.

Martin, 998 So. 2d 956, 963 (Miss. 2008).

III.

In Finger Furniture, a tropical storm caused Finger’s stores to close for one

to two days. 404 F.3d at 313. A week after reopening, Finger slashed prices,

and sales soared. Id. Finger filed a claim for lost sales under the businessinterruption provision of its insurance contract with Commonwealth. Id. The

business-interruption provision stated, in pertinent part:

In determining the amount of gross earnings covered hereunder for

the purposes of ascertaining the amount of loss sustained, due

consideration shall be given to the experience of the business before

the date of the damage or destruction and to the probable

experience thereafter had no loss occurred.

Id. at 314. 

Commonwealth denied the claim, arguing that Finger’s increased sales the

following week made up for the sales that it did not make while closed. Id. at

314. Commonwealth filed a declaratory judgment action. Id. at 313. The

district court granted Finger’s motion for summary judgment, and

Commonwealth appealed. Id. 

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5

In affirming, we explained that the proper method for determining loss

under the business-interruption provision was to look at sales before the

interruption rather than sales after the interruption. Id. at 314. We noted that

“the policy requires due consideration of the business’s experience before the

date of the loss and the business’s probable experience had the loss not

occurred,” and that this language should be interpreted as meaning “that a

business-interruption loss will be based on historical sales figures.” Id. We

stated that “[h]istorical sales figures reflect a business’s experience before the

date of the damage or destruction and predict a company’s probable experience

had the loss not occurred,” and that “[t]he strongest and most reliable evidence

of what a business would have done had the catastrophe not occurred is what it

had been doing in the period just before the interruption.” Id.

We declined to consider post-interruption sales, noting that “the

business-loss provision says nothing about taking into account actual

post-damage sales to determine what the insured would have experienced had

the storm not occurred.” Id. Further, we stated that “[t]he contract language

does not suggest that the insurer can look prospectively to what occurred after

the loss to determine whether its insured incurred a business-interruption loss.”

Id.

The language in the business-interruption provision of Imperial Palace’s

insurance policy with Catlin mirrors the language in Finger Furniture, with one

minor distinction. In Finger Furniture, the provision said, “In determining the

amount of . . . loss . . . , due consideration shall be given to the experience of the

business before the . . . damage or destruction and to the probable experience

thereafter had no loss occurred.” Here, the provision says, “In determining the

amount of the . . . loss . . . , due consideration shall be given to experience of the

business before the loss and the probable experience thereafter had no loss

occurred.” Imperial Palace urges us to distinguish Finger Furniture on this

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No. 09-60209

 Imperial Palace also argues that in Finger Furniture we used loss as a descriptive 2

term and did not intend to equate it with damage or destruction. Nowhere in Finger Furniture

do we find support for this argument. 

6

basis. But this is a distinction without a difference; in the context of these

business-interruption provisions, the terms “damage or destruction” and “loss”

are functionally equivalent. Indeed, in common usage “damage” and 2

“destruction” are two definitions of “loss.” RANDOM HOUSE WEBSTER’S

UNABRIDGED DICTIONARY 1137 (2d ed. 2001). Likewise, “loss” is a synonym for

“damage.” Id. at 504.

In addition, Imperial Palace tries to distinguish Finger Furniture on its

facts. In Finger Furniture, the insurer argued that post-storm sales should be

taken into account to show that the insured did not actually incur any losses.

Here, the insured—not the insurer—argues that post-hurricane sales should be

taken into account to show that losses were much greater than pre-hurricane

figures would indicate. But our determination in Finger Furniture, like our

determination here, was based on a legal analysis of the business-interruption

provision and did not depend on the facts that Imperial Palace highlights. The

language in the two provisions is materially identical, so the analysis is the same

despite the factual dissimilarities.

Imperial Palace also argues that Finger Furniture is distinguishable

because a “favorable conditions clause” might have existed in that case, but none

exists in the instant case. A favorable conditions clause prohibits consideration

of post-loss business increases when determining the amount of businessinterruption losses. If a favorable conditions clause existed in Finger Furniture,

it did not impact the analysis. Accordingly, it is not a valid basis on which to

distinguish Finger Furniture from the instant case. 

Finally, Imperial Palace argues that Catlin’s interpretation of the

business-interruption provision conflates the term “loss” with the idea of an

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No. 09-60209

 Courts interpreting similar business-interruption provisions have generally reached 3

the same conclusion. See, e.g., Finger Furniture, 404 F.3d at 314 (“[T]he business-loss

provision says nothing about taking into account actual post-damage sales to determine what

the insured would have experienced had the storm not occurred.”); Prudential LMI

Commercial Ins. Co. v. Colleton Enters., Inc., No. 91-1757, 1992 WL 252507, at *4 (4th Cir.

Oct. 5, 1992) (“[A]n insured under a business interruption provision such as that here in issue

may not claim as a probable source of expected earnings . . . a source that would not itself have

come into being but for the interrupting peril’s occurrence.”); Am. Auto. Ins. Co. v. Fisherman’s

Paradise Boats, Inc., No. 93-2349, 1994 WL 1720238, at *4 (S.D. Fla. Oct. 3, 1994) (“[H]ad no

hurricane occurred (the policy’s built in premise for assessing profit expectancies during

business interruption), [then] neither would the claimed earnings source.”) (quotation

omitted). But see Colleton Enters., Inc., 1992 WL 252507, at *4 (Hall, J., dissenting) (“‘Had no

loss occurred’ does not refer to the overall loss in the surrounding area; rather, it clearly refers

only to the loss incurred by the insured.”); Stamen v. Cigna Prop. & Cas. Ins. Co., No. 93-1005,

slip op. at 6 (S.D. Fla. June 10, 1994) (order granting summary judgment) (“If Cigna had

meant to preclude consideration of Food Spot’s post-hurricane profits in the lost profits

calculation, it should have substituted the word ‘occurrence’ for the word ‘loss’ in the clause

describing how business interruption losses would be calculated.”).

7

“occurrence.” In this case, Hurricane Katrina was the “occurrence”, which

inflicted “losses” on many victims, one of which was Imperial Palace. Imperial

Palace asserts that Catlin asks us to interpret the business-interruption

provision in such a way that the phrase “had no loss occurred” morphs into “had

no occurrence occurred.” Imperial Palace argues that instead, we should

disentangle the loss from the occurrence and determine loss based on a

hypothetical in which Hurricane Katrina hit Mississippi, damaged all of

Imperial Palace’s competitors, but left Imperial Palace intact: the occurrence

occurred, but the loss did not. While we agree with Imperial Palace that the loss

is distinct from the occurrence—at least in theory—we also believe that the two

are inextricably intertwined under the language of the business-interruption

provision. Without language in the policy instructing us to do so, we decline to

interpret the business-interruption provision in such a way that the loss caused

by Hurricane Katrina can be distinguished from the occurrence of Hurricane

Katrina itself.3

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8

Because “loss” and “damage or destruction” are equivalent terms, the

business-interruption provision in Finger Furniture is materially identical to the

provision in this case, and our interpretation of the provision in Finger Furniture

guides us now. Finger Furniture tells us “that a business-interruption loss will

be based on historical sales figures,” and that we should not “look prospectively

to what occurred after the loss.” 404 F.3d at 314. Thus, in the businessinterruption provision at hand, only historical sales figures should be considered

when determining loss, and sales figures after reopening should not be taken

into account. 

Finger Furniture does not control this case because it dealt with a question

of Texas law, while this case deals with a question of Mississippi law. However,

there is no material difference between Texas and Mississippi law on this issue.

Compare Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 938 (Tex. 1984) (“When

there is no ambiguity [in an insurance contract], it is the court’s duty to give the

words used their plain meaning.”), with Martin, 998 So. 2d at 963 (“[I]f [an

insurance policy] is clear and unambiguous, then it must be interpreted as

written.”). Accordingly, we find that Mississippi courts would apply the law in

the same way as Texas courts.

IV.

We AFFIRM. 

Case: 09-60209 Document: 00511051539 Page: 8 Date Filed: 03/15/2010