Opinion ID: 414040
Heading Depth: 2
Heading Rank: 2

Heading: Extra Operating Expense Policy.

Text: 32 Great American had issued SJLP an extra operating expense insurance policy. The policy covered any extra expenses incurred by SJLP to maintain its business during the period necessary to repair damage caused by fire. The policy did not cover extra expenses resulting from damage caused by a low-water condition. During the outage of Boiler No. 6, SJLP claimed to have incurred expenses of $544,309 in purchasing electricity from Associated Electric Cooperative to have sufficient capacity to meet the needs and demands of its customers. 33 The jury returned a verdict against Great American in the sum of $544,309 for extra operating expense during the period of the boiler's repair. After deducting amounts that were by agreement not submitted to the jury, the court entered a final judgment of $494,309 against Great American. The district court subsequently granted Great American's motion for judgment n.o.v. The district court stated in its order: 34 The prerequisite to recover under the extra expense policy is the occurrence of fire which directly resulted in the insured having incurred extra expenses to maintain its business during the periods necessary to repair the fire damage. The jury's duty was to allocate the extra expenses incurred as a result of the damages due solely to fire. However, the evidence presented at trial did not afford the jury any basis upon which to allocate what portion of the outage was caused by the low water condition and what portion was caused solely by fire. The jury's verdict against Great American was pure speculation and must be set aside. 35 SJLP advances four arguments contending that the district court erred in granting Great American's motion for judgment n.o.v. First, SJLP asserts that Great American, in its motion for directed verdict, did not raise the issue that there was no evidence to afford the jury a basis to allocate those extra expenses incurred by fire damage. SJLP therefore contends that the district court had no jurisdiction to grant a judgment n.o.v. on grounds not raised in the motion for directed verdict. See Johnson v. Rogers, 621 F.2d 300, 305 (8th Cir.1980) (a motion for judgment n.o.v. is technically only a renewal of motion for directed verdict made at close of evidence; a party cannot assert a ground not included in motion for directed verdict). 36 We reject SJLP's contention on this issue. Paragraph 3 of Great American's motion for a directed verdict set forth the issue of SJLP's failure to present evidence supporting an award against Great American. Paragraph 3 states:The evidence requires a finding that any fire damage which occurred did not in any way extend the period of time during which the boiler was down for repairs due to the damage caused by overheating. 37 Therefore, Great American argued in both its motions for judgment n.o.v. and directed verdict that SJLP had failed to present any evidence upon which the jury could base an award against Great American. 38 SJLP's second contention is that because the jury found that more than half the damage sustained by Boiler No. 6 had been caused by fire, all the extra expense incurred by SJLP can be deemed to have been caused by fire. SJLP's assertion that all of the boiler's downtime may be attributable to Great American simply does not follow from the proposition that fire produced approximately $2.5 million of damage to the boiler. The extra expense policy issued to SJLP by Great American provides in pertinent part: 39 1. This policy covers the necessary Extra Expense, as hereinafter defined, incurred by Insured in order to continue as nearly as practicable the normal operation of the Insured's business following damage to or destruction of real or personal property, by the peril(s) insured against   . 40 2. In the event of such damage or destruction, this Company shall be liable for such necessary Extra Expense incurred for only such length of time    as would be required with the exercise of due diligence and dispatch to rebuild, repair or replace such part of the property herein described as has been damaged   . 41 Thus, where only a portion of the loss is attributable to fire, only downtime caused specifically by fire damage can constitute a basis for recovery under the policy. We simply do not know, on the basis of the record, how long it took to repair those components which were damaged by fire. Since a low-water condition, rather than a fire, caused some of the damage, SJLP had the burden, in order to support recovery, of establishing how much time was required to repair those portions of the boiler damaged by fire. The record is devoid of such proof. There is no evidence that repair of portions of the boiler damaged only by fire took one month or thirteen months. Our review of the record reveals that the only testimony that SJLP presented relating to the extra expense loss was that of Ralph B. Mayer, SJLP's vice president of operations, who stated that the total time necessary to repair all portions of the boiler lasted from April 26, 1975, through June 7, 1976. In addition, SJLP introduced exhibit 732b into evidence which simply set forth in summary fashion the extra expenses incurred on a month-to-month basis for the entire period of downtime. SJLP made no attempt to allocate the extra expense cost between that caused by fire and that caused by the low-water condition. 42 Third, SJLP contends that because the trial judge properly instructed the jury on the question of extra expenses, we must presume that the jury properly followed those instructions. This argument is entirely without merit. Where there is no evidence to support a jury's award of damages, that award must be overturned. Chicago, B. & Q.R. Co. v. Gelvin, 238 F. 14 (8th Cir.1917). 43 SJLP asserts, finally, that there is evidence in the record from which the jury could have found that fire was the precipitating event, and thus caused the entire outage. Accordingly, SJLP argues that the jury could properly award the full amount of $544,309. SJLP argues essentially that the jury found that the fire was the first or initiating event, and therefore all loss necessarily resulted from the fire. We reject SJLP's argument. The jury did not find that fire was the precipitating event. If the jury had so found, it would not have returned a verdict against Zurich. Jury Instruction No. 5 provided that the jury could not find Zurich liable for any loss which was the direct or indirect consequence of fire. The jury found Zurich liable for approximately $2.1 million of the loss. It could not, therefore, have determined that fire caused all of the damage, directly or indirectly. We note that SJLP has not challenged this verdict on appeal. 44 Accordingly, we hold that the trial court did not err in granting Great American's motion for judgment n.o.v. 45