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Click here for the full text of this decision FACTS: Heavy rains from Tropical Storm Allison flooded parts of Houston in June 2001. Because of the flooding, employees of Finger Furniture Company could not access the store where the central computer was housed; consequently, none of the company’s seven stores could be operated on June 9. All stores reopened at some point on June 10. The weekend of June 16 and 17, Finger slashed its prices, and sales soared. Finger filed a claim for lost sales for the June 9 and 10 weekend with its insurance carrier, Commonwealth Insurance Co. The claim was denied. Commonwealth then initiated a declaratory judgment action against Finger. The parties stipulated that Finger lost $325,402 in gross earnings over the weekend in question, an amount which Finger increased in a counterclaim by adding $16,626 for expenses incurred to determine its loss. Faced with competing motions for summary judgment, the magistrate judge ruled for Finger on its adjusted loss amount. The district court entered judgment on the magistrate’s recommendation, and added $79,201 in attorneys’ fees. On appeal, Commonwealth challenged the way loss was calculated under the business-interruption provision of Finger’s policy. Commonwealth argued that Finger did not sustain an actual loss under the provision, because any sales Finger lost on June 9 and 10 were made up on June 16 and 17. HOLDING: Affirmed. The court found that Commonwealth’s argument on how to calculate the loss ignored the policy’s own instruction on how to calculate a business-interruption loss. The policy required loss to be calculated based on historical sales figures, the strongest and most reliable evidence of what a business would have done had the catastrophe not occurred. The court added that the policy did not suggest that Commonwealth could look prospectively into what occurred after the loss to determine whether Finger sustained a business-interruption loss. The parties did not dispute that Finger would have earned $325,402 on June 9 and 10 if it had been able to open its stores. No evidence indicated that any of the sales expected for June 9 and 10 were made up on June 16 and 17. In addition, no evidence indicates that Finger would have cut its prices for June 16 and 17 had the loss not occurred. The court also found that attorneys’ fees were proper, even though they included fees for pre-lawsuit work. The court reminded Commonwealth that the insurance policy contemplates covering attorneys’ fees for such things as appraisals to help determine loss. OPINION: Prado, J.; Reavley, DeMoss and Prado, JJ.

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