Earlier this month a unanimous Florida appellate court joined a number of other states that have held that an all-risk policy exclusion for vandalism and malicious mischief operates to bar coverage for an arson loss.  The opinion can be found at Botee v. Southern Fid. Ins. Co., 2015 WL 477836, 2015 Fla. App. LEXIS 1566 (Fla.Dist.Ct.App., Feb. 6, 2015).

The insured, Raziya Botee, owned a single-family home that was destroyed by an arsonist on October 10, 2012.  It was undisputed that the structure had been vacant for over a month when the fire broke out.  Her homeowner’s insurer, Southern Fidelity (SFIC), denied liability because the contract of insurance excluded coverage for losses caused by “vandalism and malicious mischief, theft or attempted theft” if the dwelling had been vacant or unoccupied for more than thirty consecutive days immediately before the loss.  Ms. Botee responded by filing a declaratory judgment action against the carrier.  The trial granted summary judgment to SFIC, and an appeal followed.

The policyholder argued that the contract of insurance was ambiguous.  SFIC’s policy afforded all-risk coverage for loss to the structure under Coverage A and named perils coverage for loss to the contents under Coverage C.  The vandalism and malicious mischief exclusion was found only in the former, and the latter expressly recited that both “fire or lightning” and “vandalism or malicious mischief” were covered causes of loss.  Though the fire had resulted in no contents loss, Ms. Botee looked to the fact that the policy identified both fire and vandalism as “separate covered perils” without defining either one.  According to the insured:

the exclusion fails to explicitly list arson, a form of fire for which there is coverage separate and distinct from vandalism and malicious mischief.  As such, there is an inherent ambiguity as to the scope of the [exclusion], particularly when the insurance contract is read in its entirety as required by the rules of interpretation.  This ambiguity must be resolved in favor of coverage[.]

On February 6th, the District Court of Appeal disagreed, and it affirmed the trial court.  Judge Richard B. Orfinger looked to similarities in the dictionary definitions of the terms involved for guidance.  These recited that:  (1) “vandalism” meant “willful or malicious destruction or defacement of public or private property;” (2) “malicious mischief” meant “willful, wanton, or reckless damage to or destruction of another’s property;” and (3) “arson” meant the “willful or malicious burning of property (as a building) esp. with criminal or fraudulent intent.”  While no appellate court in Florida had addressed the issue at bar, the opinion also drew support from the fact that “most courts hold that the destruction of property by an intentionally set fire is encompassed within the terms ‘vandalism and malicious mischief,’ “ citing to decisions in Connecticut, Georgia, Illinois, Kansas, Maryland, New Mexico, New York, and Utah.  Two of the cases that Judge Orfinger cited involved an identical insuring scheme, with all-risk coverage on the structure that excluded vandalism and malicious mischief and named peril coverage on the contents that did not.  In both instances, the courts held that the absence of any contents loss meant that “it was unnecessary to read both the all-risk (structure) provision and the named perils (personal property) provision together,” and they held that the exclusion was clear and unambiguous and operated to bar coverage.

The panel also noted that those cases holding that vandalism excludes arson or that the term is ambiguous involved solely named perils coverage where the contract of insurance expressly distinguished between loss by fire and loss by vandalism.  It therefore held as follows:

As the loss in the instant case was only to the structure and not to any personal property, it is only necessary to read Coverage A and the general provisions and definitions applicable to the entire Policy.  In that context, we conclude that the plain and ordinary meanings of “vandalism” and “malicious mischief” include “arson.”  We need not read Coverage C to create an ambiguity when the vacancy exclusion in Coverage A is clear on its face.