Opinion ID: 3019938
Heading Depth: 3
Heading Rank: 1

Heading: Coverage A – Coverage For Loss to the

Text: Undamaged Portion of the Building. If a Covered Cause of Loss occurs to covered Building property[,] . . . we will pay for loss to the undamaged portion of the building caused by enforcement of any ordinance or law that: (a) requires demolition of parts of the same property not damaged by a Covered Cause of Loss; (b) regulates the construction or repair of buildings, or establishes zoning or land use requirements at the described premises; and (c) is in force at the time of loss. ... 4 3. Coverage C – Increased Cost of Construction Coverage. If a Covered Cause of Loss occurs to covered Building property[,] . . . we will pay for the increased cost to repair, rebuild or construct the property caused by enforcement of building, zoning or land use ordinance or law. If the property is repaired or rebuilt, it must be intended for similar occupancy as the current property, unless otherwise required by zoning or land use ordinance or law. The insurer’s failure to reimburse the Academy for all of its costs incurred as a result of the fire prompted it to file a complaint in United States District Court for the Middle District of Pennsylvania alleging breach of contract and bad faith. Specifically, Mercersburg contended that the Ordinance and Law Endorsement required Republic Franklin to pay for repair and renovation costs required by the Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12101-12213, the Pennsylvania Handicapped Act and Universal Accessibility Standards promulgated thereunder, 71 Pa. Cons. Stat. § 1455 et seq. (2000) & 34 Pa. Code § 60.1 et seq., as well as other Pennsylvania statutes and national building codes (including the International Mechanical Code, the Building Officials and Code Administrators International, Inc. Code, the National Electric Code, the International Plumbing Code and the standards of the American Society of Heating, Refrigerating and Air-Conditioning Engineers). 5 After extensive factual and expert discovery, the parties settled, resolving all disputes except those related to the Ordinance and Law Endorsement claim.2 Republic Franklin’s motion for summary judgment on those claims was granted by the District Court. It held that (1) the ADA did not apply because the dormitory space in Keil Hall was not a “public accommodation” within the meaning of that statute, (2) the PHA also did not apply because the costs of the fire damage did not reach the threshold cost to trigger coverage under the Act, and (3) nationally recognized standards of design and construction and Pennsylvania laws that require private schools to meet certain basic safety standards were inapplicable because the Borough of Mercersburg had not officially adopted any building code. This appeal followed.3