Bear River Mutual Insurance Co. v. Williams

OPINION

¶ 1 David and Deanna Williams (the Homeowners) appeal from the trial court's grant of summary judgment in favor of Bear River Mutual Insurance Company (Bear River). We reverse and remand this matter for further proceedmgs

BACKGROUND

¶ 2 The Homeowners own a rental home (the Property) located in Salt Lake City. The last tenants to occupy the Property moved out in the summer of 2002, leaving the Property in a damaged and uninhabitable condition. The Homeowners could not afford to repair the Property and had it boarded up. Over the course of the next year, there were several incidents of trespassing and vandalism on the Property. All utilities on the Property were d1sconnected during this period.

¶ 3 On July 3, 2003, a fire started in some debris located outside the Property's back door, causing substantial damage to the Property. Both Salt Lake County and Bear River, the Homeowners' property insurer, had fire inspectors examine the Property. Both inspectors found that there was no apparent accidental cause for the fire and con«cluded that the lack of an accidental cause indicated that the fire had been intentionally set. However, neither inspector found evidence of accelerant use or other conclusive proof that the fire was the result of arson.

¶ 4 The Homeowners filed a claim for fire damage with Bear River. The Homeowners' insurance policy contained an exclusion of *800coverage for loss caused by "vandalism and malicious mischief ... if the dwelling has been vacant for more than 30 consecutive days immediately before the loss." Bear River determined that this policy language excluded coverage for the Homeowners' loss and filed a declaratory judgment action seeking a determination of no coverage.1

¶ 5 Both parties sought summary judgment based on their competing interpretations of the vandalism and malicious mischief exclusion. Bear River supported its motion with the affidavits and deposition transcripts of Rex Nelson and Jeffrey Long, the two fire inspectors, which detailed their findings and stated their opinions that the fire was intentionally set. The Homeowners argued that even if arson losses are excluded under the policy, there were disputed questions of fact regarding the actual cause of the fire. The Homeowners did not provide any affidavits contradicting the affidavits of Nelson and Long, or any other additional evidence, but did cite to portions of Nelson's and Long's deposition transcripts to support their argument. _

¶ 6 The trial court granted Bear River's motion. The summary judgment order determined that there were "no genuine issues of material fact" but did not make express findings as to the cause of the fire. Nevertheless, the order stated that "[alrson is a form of vandalism and malicious mischief, consistent with the exelusion contained in the policy." The order then concluded that there was no coverage for the Homeowners' loss. The Homeowners appeal.

ISSUES AND STANDARDS OF REVIEW

¶ 7 The Homeowners argue that the policy exclusion for vandalism and malicious mischief should not include acts of arson. "Interpretation of an insurance contract presents a question of law." Viking Ins. Co. of Wis. v. Coleman, 927 P.2d 661, 663 (Utah Ct.App.1996). "This court should thus, 'accord the trial court's legal conclusions regarding the contract no deference but 'review them for correctness'" Id. (quoting AOK Lands, Inc. v. Shand, Morahan & Co., 860 P.2d 924, 925 (Utah 1993)). .

¶ 8 The Homeowners further argue that even if arson loss is excluded under the policy, the cause of the fire is a disputed fact that precludes summary judgment in favor of Bear River. "When reviewing a trial court's grant of a motion for summary judgment, this court reviews for correctness, giving no deference to the trial court's conclusions of law, and considers all evidence and reasonable inferences derived therefrom in the light most favorable to the losing party below." Forest Meadow Ranch Prop. Owners Ass'n v. Pine Meadow Ranch Home Ass'n, 2005 UT App 294, ¶ 16, 118 P.3d 871, cert. granted, 125 P.3d 102 (Utah 2005).

ANALYSIS

I. Vandalism and Malicious Mischief Includes Arson _-

¶ 9 The Homeowners first challenge the trial court's determination that arson is a form of vandalism .or malicious mischief within the meaning of the policy's exelusionary language. The Homeowners argue that the policy language, read as a whole, indicates that "fire losses and vandalism and malicious mischief are separate items." We agree with the trial court that arson is a type of vandalism or malicious mischief, and that the policy unambiguously excludes coverage for arson losses when the insured premises have been vacant for the preceding thirty days.

¶ 10 The policy provides insurance against direct physical loss to the Property, but contains multiple exclusions under which coverage is not provided. The exelusion at issue in this matter states that Bear River does not insure loss to the Property caused by "vandalism and malicious mischief, theft or attempted theft if the dwelling has been vacant for more than 30 consecutive days immediately before the loss." The policy does not define vandalism or malicious mischief. Various other provisions in the policy specifically address fire, but the term arson is not used in the policy.

*801¶ 11 "Insurance policies are generally interpreted according to rules of contract interpretation." Utah Farm Bureau Ins. Co. v. Crook, 1999 UT 47, ¶ 5, 980 P.2d 685. "Courts interpret words in insurance policies according to their usually accepted meanings and in light of the insurance policy as a whole." Id. "Policy terms are harmonized with the policy as a whole, and all provisions should be given effect if possible." Id. Additionally, "iJnsurers 'may exclude from coverage certain losses by using language which clearly and unmistakably communicates to the insured the specific cireumstances under which the expected coverage will not be provided." Id. (quoting Alf v. State Farm Fire & Cas. Co., 850 P.2d 1272, 1275 (Utah 1998)).

¶ 12 Here, the Homeowners attempt to create ambiguity regarding the scope of the exclusion by arguing that arson is not mentioned in the policy; that malicious mischief and vandalism are defined in the personal property section of the policy as pilferage, theft, burglary, or larceny; and that fire loss is exeluded from personal property coverage.2 We see no tension between the various terms as used in the policy, and cannot identify the type of conflicting language that has led other courts to find coverage in this situation. See, e.g., American States Ins. Co. v. Rancho San Marcos Props., LLC., 123 Wash.App. 205, 97 P.3d 775, 778 (2004) (examining a policy's use of the terms fire, arson, and vandalism, and concluding that to this policy ... arson is different from vandalism"), review denied, 154 Wash.2d 1008, 114 P.3d 1198 (2005).

¶ 13 Seeing no conflict within the terms of the policy, we look to the "usually accepted meanings," Utah Farm Bureau, 1999 UT 47 at ¶ 5, 980 P.2d 685, of the terms vandalism and malicious mischief to determine whether arson is included therein. The New Mexico Supreme Court recently addressed this issue and concluded "that arson is a type of vandalism and malicious mischief" Battishill v. Farmers Alliance Ins. Co., 139 N.M. 24, 127 P.3d 1111, 1115 (2006). As noted in Battishill,

[the common and ordinary meaning of an undefined term should be based upon contemporary usage, where possible, because the issue is how a reasonable insured would understand the term at the time of purchase. We agree ... that "the ancient connotations of 'vandalism' have given way, in modern- usage of the term, to a very broad meaning of the word that includes the destruction of property generally."

Even if historically the term vandalism was limited to "behavior primarily directed at property having artistic, historical, architectural, literary, musical, personal or emotional significance or value" and to "damage that is not devastating," in contemporary usage, the terms vandalism and malicious mischief are not so limited.

Id. at 1114 (citations omitted). We agree and hold that the policy language excludes coverage of vandalism or malicious mischief losses regardless of the means used to inflict those losses, even when a loss could also be characterized by a more specific term such as arson.3

IIL Factual Issues Preclude Summary Judgment

¶ 14 Having determined that the policy's vandalism and malicious mischief exclusion encompasses losses due to arson, we address whether the trial court correctly treated the Homeowners' loss as an arson loss for purposes of granting Bear River's motion for summary judgment. We agree with the Homeowners that the cause of the fire remains a disputed fact and that the trial court's entry of summary judgment was erroneous.

¶ 15 Summary judgment is appropriate only "when the evidence shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Anderson Dev. *802Co. v. Tobias, 2005 UT 36, ¶ 19, 116 P.3d 323 (quotations and citations omitted); see also Utah R. Civ. P. 56(c). "On a motion for summary judgment, a trial court should not weigh disputed evidence, and its sole inquiry should be whether material issues of fact exist." Draper City v. Estate of Bernardo, 888 P.2d 1097, 1100 (Utah 1995). In reviewing the trial court's granting of a motion for summary judgment, " 'we view the facts, and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party'" McEwan v. Mountain Land Support Corp., 2005 UT App 240, ¶ 10, 116 P.3d 955 (quoting GNS P'ship v. Fullmer, 873 P.2d 1157, 1159 (Utah Ct.App.1994)).

The known cireumstances surrounding the cause of the fire at the Property are simple and undisputed.4 The fire started on July 3 in some debris on the exterior porch of an uninhabited building. There were no witnesses. No accelerants were found at the scene of the fire, and the debris was consistent with other debris on the Property and did not appear to have been especially placed as fuel for the fire. The door to the Property was ajar when the fire started, giving access to the interior of the Property.

¶ 17 Viewed in the light most favorable to the Homeowners, this evidence could support various theories of causation that would not necessarily rise to the level of vandalism or malicious mischief. The fire may have been the result of a carelessly dropped cigarette or match. Given the July 3 date of the fire, there is also the possibility that the fire may have been ignited by fireworks which were then consumed in the blaze. While none of these theories may be particularly persuasive, we are not permitted to weigh the evidence in reviewing a summary judgment determination.

¶ 18 Further, there are inferences that can be drawn from the facts that tend to support the Homeowners' position. The absence of an accelerant, while hardly dispositive, is certainly consistent with an accidental fire. The fire's origin on an exposed porch also seems to support some reasonable inference against arson, as an arsonist might have taken advantage of the open door to the Property to start the fire within the shelter and concealment of the building.

¶ 19 Because the evidence, viewed in the light most favorable to the Homeowners, supports the possibility that the fire damage to the Property was accidental rather than the result of vandalism or malicious mischief, the trial court erred when it entered summary judgment in favor of Bear River on this issue.5

CONCLUSION

¶ 20 The clear contractual language of the policy excludes losses to vacant structures caused by "vandalism and malicious mischief." The intentional damaging or destruction of property by fire, generally referred to as arson, is merely one form of vandalism or malicious mischief, and is thereby excluded

*803as a covered loss under the policy. However, in this case, whether the fire that damaged the Property was the result of vandalism or malicious mischief is a disputed factual question that precludes summary judgment in favor of either party. Accordingly, the trial court's order granting Bear River's Motion for Summary Judgment is reversed, and this matter is remanded for further proceedings consistent with this opinion.

€21 I CONCUR: Carolyn B. McHugh, Judge.