All Nation Insurance Company provided commercial property and loss of business income coverage to Forestview The Beautiful, Inc. Forestview was a resort that, in mid 1999, was severely damaged by a storm. All Nation settled most of the claims arising from loss with one exception. All Nation and Forestview disagreed about the latter's claim for a business income loss.

Forestview continued rental for 20 of its resort cabins during the rest of the summer of '99, but it closed four cabins that were too damaged to use. Forestview filed a claim for the rental income it lost from the damaged cabins. All Nation refused to pay the claim and Forestview sought payment through the courts. After the trial court denied its motion for summary judgment, the resort appealed.

In the appeal, Forestview presented its argument that, according to ambiguous policy language and to a relevant case citation, it had a valid claim for loss of income. The resort argued that the policy's reference to "operations" should be considered as a plural reference, therefore its discontinued operation of four cabins could qualify as a cessation, triggering a lost income claim. The resort also cited another case where the appellate court held that a partial shut-down of operations could cause a business income loss. However, All Nation continued to argue that Forestview continued its cabin rental operation, so no covered loss occurred.

The court reviewed the arguments, the policy language and the cited case. It ruled that the case citation did not apply to this circumstance. That situation involved the court ruling that an insured party could make a claim for loss of part of its income, but the loss was the result of the complete shut down of a key supplier. In the court's view, Forestview's claim that the policy wording was ambiguous was not justified as the language clearly indicated that business income coverage applied to a total cessation of business operations and not to a reduction of operations.

The higher court ruled that the trial court's decision in favor of All Nation, finding that the business income coverage portion of the policy was inapplicable was correct and that decision was affirmed.

Forestview the Beautiful, Inc. Appellant, v. All Nation Insurance Company, respondent. Minnesota Court of Appeals No. A05-60. Filed October 11, 2005. Affirmed. CCH Personal and Commercial Liability Cases. Paragraph 48,030.