Apparel City Sewing MacHine Co. v. Transamerica Insurance Group

This is an action to determine the coverage afforded to plaintiff and appellant Apparel City Sewing Machine Company, Inc., by an insurance policy issued by defendant and respondent Transamerica Insurance Group. The matter was submitted to the trial court for decision on the pleadings and the trial briefs filed by the parties. There is no factual dispute in the instant case.

On April 12, 1974, appellant purchased a policy of insurance from respondent which included coverage for a loss resulting from the interruption of business caused by a fire. On December 17, 1976, while said policy was in effect, there was a fire at appellant’s premises which resulted in an interruption of its business affairs. “An accountancy firm hired to compute the loss, determined that [appellant’s] gross earnings for the twelve months following the loss, had -the loss not occurred, would have been $390,744.00.” The net earnings loss resulting from the fire was computed by the same firm to be $41,603. The parties do not contest the accuracy of these figures.

Paragraph six of the business interruption form of the insurance policy issued by respondent provides: “Contribution Clause: In…