Opinion ID: 793431
Heading Depth: 2
Heading Rank: 5

Heading: Recovering Loss Under the Gross Earnings Section of the Policy

Text: 29 As noted, United's property at the Airport was not physically damaged. 4 It therefore cannot recover, with respect to its Airport location, for damage to or destruction of the Insured Locations resulting from Terrorism under section III. C.1. of the Policy. But the airline also seeks to recover under the civil authority clause of that section of the Policy for its loss of gross earnings during the government's suspension of flights into and out of the Airport. In order to do so, United must show that it was denied access to its locations at the Airport as a direct result of damage to adjacent premises. The district court determined that the Pentagon does not qualify as an adjacent premise under this provision. 30 `As with contracts generally, a provision in an insurance policy is ambiguous when it is reasonably susceptible to more than one reading.' Haber, 137 F.3d at 695 (quoting U.S. Fire Ins. Co. v. Gen. Reins. Corp., 949 F.2d 569, 572 (2d Cir. 1991)). United correctly points out that the term adjacent may indeed be ambiguous: two properties can be adjacent, it seems, without necessarily sharing a border, i.e., without. adjoining. See, e.g., United States v. St. Anthony R.R. Co., 192 U.S. 524, 538-40, 24 S.Ct. 333, 48 L.Ed. 548 (1904) (noting that the word adjacent has uncertain meaning and declaring that [i]t is very difficult to determine just where twilight ends and night begins, but it is easy enough to distinguish noon from midnight). On the one hand, United argues persuasively that, under the circumstances, the distance between the two locations should be judged by the air-distance of less than 1 mile instead of the driving distance of 3.4 miles. 5 But on the other hand, as the district court pointed out, even judging the distance from an aerial photograph, the properties are still separated by the Crystal City apartment complex, three highways, an active railway, fifteen identifiable parcels of property, a waterfowl sanctuary, and a wooded area. United Airlines, 385 F.Supp.2d at 351 (internal quotation marks omitted; alterations incorporated). ISOP also notes that, were we to conclude nonetheless that the Airport's outermost runway is adjacent to the Pentagon property line, the airport runway is not an Insured Location of United. United's facilities are inside the airport terminal, some 1.25 miles from the nearest boundary of Pentagon property. 31 Ultimately, though, we need not resolve whether the Pentagon is adjacent to United's property. Even if it were, United cannot show that the Airport was shut down as a direct result of damage to the Pentagon. There was apparently a temporary halt of flights into and out of the Airport on 9/11 before the Pentagon was struck. 6 The evidence also indicates, not surprisingly, that the government's subsequent decision to halt operations at the Airport indefinitely was based on fears of future attacks. See Memorandum of Understanding between U.S. Department of Transportation and Metropolitan Washington Airports Authority on Assistance for Ronald Reagan Washington National Airport dated Dec. 6, 2001, Ex. 19 to Greeves Decl. dated May 28, 2004 (Because of the location of [the Airport] and the airport's flight paths that take aircraft near the White House, Pentagon, Capitol, and other facilities in the Nation's capital, the Federal Government required that [the Airport] remain completely closed until October 4, 2001, when a phased reopening began.). The Airport was reopened when it was able to comply with more rigorous safety standards; the timetable had nothing to do with repairing, mitigating, or responding to the damage caused by the attack on the Pentagon. See Alan R. Miller, Business Interruption Insurance: Current Issues, 702 PLI Litig. & Admin. Practice Course Handbook Series 233, 267 (2004) (Access may have been prevented to some property, but not because of the physical damage that occurred. For example, access may have been prohibited because of concerns over a possible further attack. In such a case, it cannot be considered due to physical damage of the type insured.). 32 In other words, suppose American Airlines Flight 77 that day had missed the Pentagon and smashed into a private office building a mile beyond, or some other similar property not very far from the Airport but clearly not adjacent to it. In light of the hijacking of the other airplanes that morning and the successful attack on the World Trade Center, it can hardly be doubted that the effect on subsequent flight operations generally, and United operations at the Airport in particular, would have been virtually identical. 7 The interruption to United's business following the attacks was, therefore, not the direct result of damage to adjacent premises. 8