Bosecker v. Westfield Insurance

*771OPINION

RILEY, Judge.

STATEMENT OF THE CASE

Plaintiffs-Appéllants William L. Bosecker and Diane Bosecker (referred to-collectively below as “Bosecker”) appeal the trial court’s grant of summary judgment in favor of Defendants-Appellees Westfield Insurance Company (“Westfield”) and Sam T. Heston & Sons, Inc., d/b/a Heston Insurance Agency (“Heston”).

We affirm.

ISSUE

Bosecker raises a single issue for our review, which we restate as: whether the trial court erred in determining as a matter of law that Bosecker’s property loss was not covered by his builder’s risk policy with West-field.

FACTS AND PROCEDURAL HISTORY

Bosecker owned an apartment building and an additional structure in Evansville which he sold to Jason Bartley pursuant to a conditional sales contract. On Thursday morning, February 22, 1996, Bartley called Bosecker and told him that he could not make any more payments and that he wanted to release any interest he had in the real estate. Later that day, he delivered the apartment building keys to Bosecker. Bo-secker accepted the keys to the vacant building.

Previously, on or about February 12, 1996, Bosecker, d/b/a Bosecker Construction Company, had received certain notices from the City of Evansville, Code Enforcement Division, advising Bosecker that the apartment building was unsafe and further ordering that the building be vacated and repaired. The City advised Bosecker that failure to comply with the notice within sixty days would result in the razing of the building and the imposition of fines under Indiana’s Unsafe Building Law (Ind.Code 36-7-9-1 et seq.).

On February 22, 1996, Diane Bosecker called Heston, an independent agency. She spoke with Diana Terrell, a Heston employee, and informed her that the building needed to be insured. Terrell informed Diane that more information was needed and Diane responded that William would call with additional information on February 23, 1996. However, Terrell did determine that the building would be verbally bound under an “Apartment Policy.” William called Terrell on the afternoon of February 23, 1996, and advised her that Bosecker Construction Company had received the Department of Code Enforcement notices, that the property was uninhabitable, that the property had to be repaired by a stated deadline, and that repairs would promptly commence. Terrell relayed the information to David Abbott, Heston’s President, and Terrell and Abbott determined that the property could not be covered by an Apartment Policy because of the extensive repairs required by the Department of Code Enforcement. Pursuant to Heston’s direction on the afternoon of February 23, 1996, the property was bound by a Builder’s Policy issued by Westfield.

At approximately 2:00 a.m. on February 24, 1996, the apartment building was substantially damaged by fire. Bosecker sought to recover for his losses by filing a property loss notice with Westfield. Westfield issued a letter denying coverage. The letter noted that § A(2)(b) of the policy provided, under the heading “Property Not Covered”, that “[e]xisting buildings or structures to which improvements, alterations, repairs or additions are being made” were not covered by the policy. The letter then stated that coverage was denied, presumably because West-field believed that repairs were being made to the property at the time the fire occurred.

Bosecker filed suit to require Westfield to pay for the loss to his property. .Westfield filed a motion for summary judgment, which noted that § A(l)(a) of the policy provided coverage only for “[bjuildings or structures including foundations while in the course of construction, installation, reconstruction, or repair.” The motion alleged that Bosecker was not covered for his loss because the evidence established that he had not begun his repairs of the building before the fire occurred. The trial court granted West-field’s motion, and Bosecker now appeals.

*772 DISCUSSION AND DECISION

Upon review of the grant or denial of a summary judgment motion, we apply the same legal standard as the trial court. Erie Insurance Co. v. American Painting Co., 678 N.E.2d 844, 845 (Ind.Ct.App.1997). Summary judgment is appropriate only when there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. Ind.Trial Rule 56(C). When material facts are not in dispute, we treat the motion as a question of law. Edrington v. Rush County Bd. of Commissioners, 648 N.E.2d 397, 398 (Ind.Ct.App.1995).

The interpretation of an insurance policy is primarily a question of law for the court, and it is therefore a question which is particularly suited for summary judgment. Sutton v. Littlepage, 669 N.E.2d 1019, 1021 (Ind.Ct.App.1996), reh’g denied. Where there is an ambiguity, a policy is to be strictly construed against the insurer. Id. This is particularly true where a policy excludes or limits coverage. Id. Strict construction means that the insurer is bound by the plain and ordinary meaning of the words viewed from the standpoint of the insured. Id. (citing Tate v. Secura Insurance, 587 N.E.2d 665, 668 (Ind.1992)).

As stated above, the insurance policy between Westfield and Bosecker defines “Covered Property” to include “[b]uildings or structures including foundations while in the course of construction, installation, reconstruction, or repair.’’ (§ A(l)(a)) (emphasis supplied). Under the heading of “Property Not Covered,” the policy states that “Covered Property” does not include “[ejxisting buildings or structures to which improvements, alterations, repairs or additions are being made.” (§ A(2)(b)) (emphasis supplied). The two subsections appear to both provide and exclude coverage of a building which is being repaired.

Westfield attempts to explain the apparent ambiguity raised by a comparison of the two subsections by referring to the underlying purpose of a builder’s risk policy.1 Westfield states that “if improvements or repairs are being made to an existing building, a builder’s risk policy, like the present policy, should provide coverage for the improvements and alterations being made to the existing building, but not for the existing building itself.” Brief of Appellant at 10.

We recognize that the underlying purpose of a particular type of policy may be relevant to a determination of the intent of the policy’s language. We cannot agree, however, that the purpose of a builder’s risk policy is as narrow as Westfield has described it. In fact, one expert has stated that “[a] builder’s risk policy ordinarily indemnifies a builder or contractor against the loss of, or damage to, a building he is in the process of constructing.” 1 Couch on Insurance 3d § 1:53 (1995) (emphasis supplied). The policy clearly provides coverage for a building while in the course of reconstruction or repair. The terms “reconstruction” or “repair” presuppose the existence of a building; one cannot reconstruct or repair a building that never existed. At the same time, the policy also attempts to deny coverage when an existing building is under repair. The policy is clearly ambiguous and should be strictly construed against the insurance company which drafted it.

Our determination that the insurance policy between Westfield and Bosecker is ambiguous does not automatically lead to the conclusion that the trial court erred in granting summary judgment in favor of Westfield. It leads only to the conclusion that the exclusion language of the policy cannot be used to deny coverage to Bosecker if the existing building on his property was in the course of reconstruction or repair at the time the loss occurred. The facts pertaining to whether the property was in the course of reconstruction or repair are undisputed; thus, there is no material fact in dispute and the question becomes one of law.

The parties agree that Bosecker assumed possession of the property on February 22, *7731996, acknowledged his legal duty to reconstruct or repair the property, and purchased insurance through the agency of Heston to cover the repairs. However, Westfield cites to Bosecker’s deposition statement that he did not remove any fixtures or structures from the premises or place any materials, supplies, tools, or equipment on the property. Thus, Bosecker did not take any action that is usually associated with the actual “course” of reconstruction or repair.

Bosecker cites Ira S. Bushey and Sons v. American Insurance Co., 237 N.Y. 24, 142 N.E. 340 (1923) and Patton v. Aetna Insurance Co., 595 F.Supp. 533 (N.D.Miss.1984) in support of his contention that he was in the course of reconstruction or repair at the time of the fire. In Bushey, the plaintiff shipbuilder purchased a builder’s risk policy to insure certain vessels that he intended to construct. Id. at 341. The plaintiff procured lumber required to build each vessel and piled it separately in the area where the construction was going to occur. Id. He also fabricated a portion of the lumber before it was destroyed by a fire. Id. The insurer argued that the vessels were not “in the course of completion” within the meaning of the policy “until some of the parts are joined together in a definite manner, and that the mere fabrication of some of the timbers is not construction but preparation for construction.” Id. The court noted that if the policy’s provision was “fairly susceptible of two interpretations, one of which being that contended for by the insured, it should be most strongly construed against the insurer.” Id. The court held that when the work of preparation had begun, “in a fair sense” the construction of the vessels had begun. Id.

In Patton, the plaintiff purchased a vacant house that he intended to renovate into a convenience store. 595 F.Supp. at 534. He purchased builder’s risk insurance and then proceeded to unhook the plumbing and gas lines from the house and remove the furnace and lattice work. Id. The house was destroyed by fire before any other work was done. Id. The court noted that the builder’s risk policy protected against certain types of damages occurring to the building “while in the course of construction.” Id. at 535. The insurer argued that the plaintiffs actions were merely preparatory and were not done in the course of construction. Id. The court determined that the policy was ambiguous and that it should be reasonably construed in favor of the insured. Id. It further determined that plaintiff intended to renovate the house and that renovation necessarily entails both additions to and removals from an existing structure. Id. It then held that because the parties understood that the plaintiff intended to renovate the house, it was reasonable to interpret “ ‘construction’ as encompassing alterations of any type, whether additions or removals.” Id.

The consistent factor in the two preceding eases is that the insured took some action toward his intended goal. In the present case, Bosecker took no action other than to purchase the insurance. We find that the cases cited by Bosecker are inapposite. We further find that the policy language protecting the building while it was “in the course of reconstruction or repair” cannot be fairly construed to provide protection when the plaintiff has only stated an intent to begin reconstruction or repair at some time in the future.

Bosecker notes that the “Amended Common Policy Declarations” page states that coverage of the apartment building was added on February 22, 1996. (R. 51). He further notes that the “General Conditions” page of his policy provides that Westfield would “cover ‘loss’ commencing during the policy period shown in the Declarations.” (R. 45). Bosecker contends that these provisions provide coverage irrespective of whether he had commenced reconstruction or repair of the apartment building.

We cannot agree with Bosecker’s reading of these policy provisions. Both the “Amended Common Policy Declarations” page and the “General Conditions” page provide that coverage is limited by other provisions. The pertinent limiting provision defines “covered property” as that property which is “in the course of construction, installation, reconstruction, or repair.” If there is no damage to “covered property” during the period designated on the “Amended Common Policy Declarations” page, then there is no *774requirement that Westfield pay anything to Bosecker. Conversely, if there is damage to “covered property” during the designated period, then Westfield is required to pay for the damage. The existence of “covered property” is a condition precedent to West-field’s duty to pay damages. This condition precedent leads to the conclusion that the actual accrual date of Westfield’s duty to pay may be different than the date designated in the declarations. See e.g., Newman v. National Fire Insurance Co., 152 Miss. 344, 118 So. 295, 297 (1928) (holding that “[although a policy, by its terms, is to take effect on a certain date, yet it may be shown that because of failure to comply with some condition precedent, it did not take effect until a subsequent day”).

CONCLUSION

The trial court’s grant of summary judgment in favor of Westfield was correct.

Affirmed.

RUCKER, J., concurs. BAILEY, J., dissents with separate opinion.

. The ambiguity of the language is illustrated by the conflicting positions that have been taken by Westfield. Initially, Westfield denied coverage because it believed that repairs were being made. Then, after the evidence led it to the conclusion that repairs were not being made, Westfield justified denial on the basis that the building was not in the course of reconstruction or repair.