The controversial right to recover for diminution in value in commercial property losses, mentioned in our Fall edition of the First Party Report (http://www.swiftcurrie.com/uploads//FPR_Fall2010.pdf), was rejected in a recent order issued by the federal district court for the Northern District of Georgia. The December 2, 2010, order granted summary judgment to Maryland Casualty Company. The case, Royal Cap. Dev., LLC v. Maryland Cas. Co. (Civil Action No. 1:10-CV-1275-RLV), involved damage to a structure as a result of nearby construction on the “Streets of Buckhead” project. The Court held that economic damage or “diminution in value” was not included within the commercial property policy’s coverage for “direct physical loss of or damage to” property and determined that loss of value to the building post-repair was not covered. As stated in the Court’s order, the matter “boil[ed] down to simple policy interpretation.” According to Senior Judge Robert L. Vining’s office, the order is not expected to be published although the judge’s office has received numerous contacts regarding the decision. Please note that this decision is subject to appeal. The insured’s attorney told reporters that the plaintiff intends to appeal the decision. (Tobin, Buckhead Building Owner Loses Damage Suit, AJC.com, December 7, 2010.)

If you wish to further discuss either case, please contact a Swift, Currie, McGhee & Hiers, LLP, attorney at 404.874.8800 or via our website, www.swiftcurrie.com.

The foregoing is not intended to be a comprehensive analysis of the full effect of these changes. Nothing in this notice should be construed as legal advice. This document is intended only to notify our clients and other interested parties about important recent developments. Every effort has been made to ascertain the accuracy of the information contained within this notice.