Opinion ID: 790588
Heading Depth: 2
Heading Rank: 5

Heading: The Loss of Market Exclusion

Text: 69 Finally, St. Paul renews the argument it made in the district court that Duane Reade's losses are excluded under the policy because they would have occurred in any event as a result of the disappearance of the local consumer market that ensued from the destruction of the WTC. The provision relied on by St. Paul excludes loss or damage caused by ... delay or loss of market. 70 The district court held that St. Paul had foregone the issue because it had expressly acknowledged that Duane Reade had suffered both property loss and BI losses as a result of the destruction of its store in the WTC as a result of a covered peril. Duane Reade II, 279 F.Supp.2d at 239-40. If, by the term foregone, the district court meant that St. Paul had waived its right to claim an exclusion, the basis for the district court's holding is not apparent from the record. But we need not resolve this issue because the district court's rejection of St. Paul's argument can be affirmed on another basis. See Boy Scouts of Am. v. Wyman, 335 F.3d 80, 90 (2d Cir.2003) (court of appeals may affirm on any ground supported by the record). 71 Put simply, whether Duane Reade's BI losses can be attributed in whole or in part to a loss of market in the WTC vicinity has no bearing in this case. In filing for a declaratory judgment, Duane Reade presented the district court with a purely legal question concerning the scope of coverage provided by the St. Paul policy for BI losses. As the district court noted, St. Paul has already acknowledged that Duane Reade has suffered a loss due to BI and has paid Duane Reade some $9.8 million for these losses. Because there is no dispute that Duane Reade suffered a BI loss, St. Paul's assertion that the loss of market exclusion applies to Duane Reade's claim creates, at most, a factual issue concerning the amount of loss Duane Reade may recover. Such factual issues are properly the subject of the appraisal proceeding.