North Bay Schools Insurance Authority v. Industrial Indemnity Co.

North Bay Schools Insurance Authority (North Bay) appeals from a judgment entered in favor of Industrial Indemnity Company and California Insurance Company (Insurers) following cross-motions for summary judgment. The question presented is whether acts of vandalism and arson committed by several people out of the public view may collectively be considered a “riot” for purposes of an insurance policy which employs, but does not define, that term. We conclude they may not; we therefore affirm the judgment.

Factual and Procedural Background

The underlying facts of this controversy are not disputed. On the afternoon and evening of January 3, 1988, several young people broke into buildings on two neighboring school campuses in the Vallejo Unified School District, ransacked them, and set fire to them. The schools are located approximately two blocks from each other.

Charles Ware declared that about 4 p.m. he and three companions went to Loma Vista Elementary School (Loma Vista). They broke a window, and one of the group climbed through to open the door for the others. They then rifled through the contents of a storage room and set several fires in the room. The fire was…

I dissent.

As the majority acknowledges, the sole dispute between North Bay Schools Insurance Authority (North Bay) and Industrial Indemnity Company *1749 and California Insurance Company (Insurers) is the meaning of the word “riot,” which is undefined in the insurance policy. The rules of interpretation of insurance contracts are settled. “Words used in an insurance policy are to be interpreted according to the plain meaning which a layman would ordinarily attach to them. Courts will not adopt a strained or absurd interpretation in order to create an ambiguity where none exists.

“On the other hand, any ambiguity or uncertainty in an insurance policy is to be resolved against the insurer and ... if semantically permissible, the contract will be given such construction as will fairly achieve its object of providing indemnity for the loss to which the insurance relates. The purpose of this canon of construction is to protect the insured’s reasonable expectation of coverage in a situation in which the insurer-draftsman controls the language of the policy. Its effect differs, depending on whether the language to be construed is found in a clause providing coverage or in one limiting…

North Bay Schools Insurance Authority (North Bay) appeals from a judgment entered in favor of Industrial Indemnity Company and California Insurance Company (Insurers) following cross-motions for summary judgment. The question presented is whether acts of vandalism and arson committed by several people out of the public view may collectively be considered a "riot" for purposes of an insurance policy which employs, but does not define, that term. We conclude they may not; we therefore affirm the judgment.

The underlying facts of this controversy are not disputed. On the afternoon and evening of January 3, 1988, several young people broke into buildings on two neighboring school campuses in the Vallejo Unified School District, ransacked them, and set fire to them. The schools are located approximately two blocks from each other.

Charles Ware declared that about 4 p.m. he and three companions went to Loma Vista Elementary School (Loma Vista). They broke a window, and one of the group climbed through to open the door for the others. They then rifled through the contents of a storage room and set several fires in the room. The fire was reported to the fire…