The Regents v. Republic Franklin ( 2006 )


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  •                                                                                                                            Opinions of the United
    2006 Decisions                                                                                                             States Court of Appeals
    for the Third Circuit
    8-16-2006
    The Regents v. Republic Franklin
    Precedential or Non-Precedential: Precedential
    Docket No. 04-3653
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    PRECEDENTIAL
    UNITED STATES COURT OF APPEALS
    FOR THE THIRD CIRCUIT
    No. 04-3653
    THE REGENTS OF THE MERCERSBURG COLLEGE,
    Appellant
    v.
    REPUBLIC FRANKLIN INSURANCE COMPANY
    Appeal from the United States District Court
    for the Middle District of Pennsylvania
    (D.C. Civil Action No. 00-cv-00558)
    District Judge: Honorable James F. McClure, Jr.
    Argued January 9, 2006
    Before: BARRYand AMBRO, Circuit Judges
    and DEBEVOISE,* District Judge
    *
    Honorable Dickinson R. Debevoise, Senior District
    Court Judge for the District of New Jersey, sitting by
    designation.
    (Opinion filed August 16, 2006)
    Michael R. Libor, Esquire (Argued)
    Christina E. Roberts, Esquire
    Derek Eddy, Esquire
    Morgan, Lewis & Bockius
    1701 Market Street
    Philadelphia, PA 19103
    Counsel for Appellant
    Steven J. Polansky, Esquire (Argued)
    Marshall, Dennehey, Warner, Coleman & Goggin
    200 Lake Drive Easte
    Woodland Falls Corporate Park, Suite 300
    Cherry Hill, NJ 08002
    Counsel for Appellee
    OPINION OF THE COURT
    AMBRO, Circuit Judge
    This is an insurance coverage dispute arising out of a
    lightning strike and fire that damaged Keil Hall on the campus
    of Mercersburg Academy. We affirm in part and reverse in part
    2
    the judgment of the District Court.
    I. Factual and Procedural Background
    Mercersburg, the insured, is a private secondary and
    college preparatory boarding school located in Mercersburg,
    Pennsylvania. Keil Hall is a building located on the
    Mercersburg campus that was constructed over a century ago.
    It has four levels above ground and a basement containing
    mechanical equipment. The first floor of the building contains
    public spaces, including an auditorium and classrooms, while
    the second and third floors contain dormitory housing and
    common meeting areas. The fourth floor was designed and
    constructed for dormitory use as well, and had been used for
    that purpose in the past. At the time of the fire, however, that
    floor was used as attic and storage space, and was cordoned off
    from students.1
    The chimney of Keil Hall was struck by lightning on
    June 13, 1998, igniting a fire that caused extensive damage to
    the roof and fourth floor of the building, as well as smoke and
    1
    Mercersburg contends that, while the dormitory rooms
    on the fourth floor were unoccupied at the time of the fire due
    to declining enrollment, the Academy had plans to expand
    enrollment and once again use the fourth floor to house full-time
    and summer-program students.
    3
    water damage to the first, second, and third floors.
    Following the fire, Mercersburg submitted a timely claim to its
    property insurance carrier, Republic Franklin Insurance
    Company, for (1) the costs to repair the actual fire damage, (2)
    additional costs to repair the building that were made necessary
    to bring the building in compliance with applicable laws and
    various building codes, and (3) lost business income.
    Republic Franklin’s primary policy only provides
    coverage for those repairs necessary to return the property to its
    pre-fire condition. Accordingly, Mercersburg purchased a
    separate “Ordinance and Law Endorsement” to its policy. That
    Endorsement provides in relevant part:
    1. Coverage A – Coverage For Loss to the
    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
    III. Standard of Review
    2
    Mercersburg completed all renovations and repairs to
    Keil Hall in December 2000. As of this appeal, Republic
    Franklin has paid out $359,696.87 to the Academy. The total
    cost of the repairs and renovations was $2,449,073.85.
    3
    There is no dispute that the parties have diverse
    citizenship and the amount in controversy exceeds the
    jurisdictional requirement. Thus, the District Court had subject
    matter jurisdiction pursuant to 
    28 U.S.C. § 1332
    . Because
    Mercersburg appeals the final judgment of the District Court, we
    have jurisdiction under 
    28 U.S.C. § 1291
    .
    6
    Summary judgment is appropriate if there are no genuine
    issues of material fact presented and the moving party is entitled
    to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex
    Corp. v. Catrett, 
    477 U.S. 317
    , 322-23 (1986). As far as the
    former, we resolve all factual doubts and draw all reasonable
    inferences in favor of the nonmoving party. Hugh v. Butler
    County Family YMCA, 
    418 F.3d 265
    , 267 (3d Cir. 2005). “We
    exercise plenary review over summary judgment and we apply
    the same standard that the lower court should have applied.”
    Farrell v. Planters Lifesavers Co., 
    206 F.3d 271
    , 278 (3d Cir.
    2000).
    The primary legal issue here is the interpretation of the
    scope of coverage of the Ordinance and Law Endorsement.
    “The interpretation of the scope of coverage of an insurance
    contract is a question of law properly decided by the court, a
    question over which [this court] exercise[s] plenary review.”
    Med. Protective Co. v. Watkins, 
    198 F.3d 100
    , 103 (3d Cir.
    1999); McMillan v. State Mut. Life Assurance Co. of Am., 
    922 F.2d 1073
    , 1074 (3d Cir. 1990).
    Where, as here, federal jurisdiction is based on diversity
    of citizenship, we apply the choice of law rules of the state in
    which the District Court sat. St. Paul Fire & Marine Ins. Co. v.
    Lewis, 
    935 F.2d 1428
    , 1431 n.3 (3d Cir. 1991) (citing Klaxon
    Co. v. Stentor Elec. Mfg. Co., 
    313 U.S. 487
    , 496 (1941)). As
    noted, this action was filed in the Middle District of
    Pennsylvania. Under Pennsylvania choice of law rules, an
    7
    insurance contract is governed by the law of the state in which
    the contract was made. Crawford v. Manhattan Life Ins. Co.,
    
    221 A.2d 877
    , 880 (Pa. Super. 1966); see also McMillan, 
    922 F.2d at 1074
    .4 “An insurance contract is ‘made’ in the state in
    which the last act legally necessary to bring the contract into
    force takes place.” Crawford, 221 A.2d at 880. The parties
    agree that the insurance contract was ‘made’ in Pennsylvania
    and, consequently, Pennsylvania substantive law applies.
    We now consider in turn each of the District Court’s
    grounds for granting summary judgment in favor of Republic
    Franklin.
    III. Merits
    A. ADA Claim
    Mercersburg asserts that numerous accessibility upgrades
    made to Keil Hall were required to comply with the dictates of
    4
    We note that another line of Pennsylvania cases holds
    that choice of law in an insurance contract is to be determined
    by looking to the law of the state with the most significant
    relationship with the contract. See, e.g., Wilson v. Transp. Ins.
    Co., 
    889 A.2d 563
    , 571 (Pa. Super. 2005). The choice between
    these tests is not determinative here, as Pennsylvania also had
    the most significant relationship with the contract.
    8
    Title III of the ADA5 and, thus, the costs of those upgrades are
    covered under the Ordinance or Law Endorsement. The District
    Court ruled that the ADA protections afforded disabled persons
    do not apply to the dormitory space on the second, third and
    fourth floors of Keil Hall because dormitory housing is not
    considered “transient lodging” that is covered under the ADA.
    Citing 28 C.F.R. Part 36 Appendix A, Mercersburg responds
    that the ADA’s regulations specifically include dormitories as
    “transient lodging,” and hence the Endorsement covers the costs
    of accessibility modifications required by the ADA.
    Under Title III of the ADA,6 it is unlawful for a public
    5
    Title I of the ADA prohibits discrimination in
    employment and provides that rights and remedies available
    under Title VII of the Civil Rights Act of 1964 are available as
    well under Title I of the ADA. 
    Id.
     § 12117. Title II prohibits
    discrimination by a “public entity.” Id. § 12132. Finally, Title
    III—the one that applies here—prohibits discrimination in
    “public accommodations.” Id. § 12182.
    6
    The ADA’s goals are familiar: (1) to provide a clear and
    comprehensive national mandate for the elimination of
    discrimination against individuals with disabilities; (2) to
    provide clear, strong, consistent, enforceable standards
    addressing discrimination against individuals with disabilities;
    (3) to ensure that the federal Government plays a central role in
    enforcing the standards established on behalf of individuals
    with disabilities; and (4) to invoke the sweep of congressional
    9
    accommodation to discriminate against an individual on the
    basis of disability in the full and equal enjoyment of the goods,
    services, facilities, privileges, advantages, or accommodations.
    Id. § 12182(a). “Public accommodation” is defined in terms of
    12 categories,7 which the legislative history indicates “should be
    authority, including the power to enforce the Fourteenth
    Amendment and to regulate commerce, to address the major
    areas of discrimination faced day-to-day by people with
    disabilities. 
    42 U.S.C. § 12101
    (b).
    7
    Specifically,
    (A) an inn, hotel, motel, or other place of lodging,
    except for an establishment located within a
    building that contains not more than five rooms
    for rent or hire and that is actually occupied by the
    proprietor of such establishment as the residence
    of such proprietor; (B) a restaurant, bar, or other
    establishment serving food or drink; (C) a motion
    picture house, theater, concert hall, stadium, or
    other place of exhibition or entertainment; (D) an
    auditorium, convention center, lecture hall, or
    other place of public gathering; (E) a bakery,
    grocery store, clothing store, hardware store,
    shopping center, or other sales or rental
    establishment; (F) a laundromat, dry-cleaner,
    bank, barber shop, beauty shop, travel service,
    shoe repair service, funeral parlor, gas station,
    office of an accountant or lawyer, pharmacy,
    insurance office, professional office of a health
    10
    construed liberally” to afford people with disabilities “equal
    access” to the wide variety of establishments available to the
    nondisabled. S. Rep. No. 101-116, p. 59 (1989); H.R. Rep. No.
    101-485, pt. 2, p. 100 (1990), U.S. Code Cong. & Admin. News
    1990, pt. 2, at pp. 303, 382-383. The ADA obligates a “public
    accommodation” only with respect to a “facility” that is “used
    as, or designed or constructed for use as,” either a place of
    public accommodation or a commercial facility. 
    28 C.F.R. § 36.102
    (b)(3)(i)-(ii). When a public accommodation or a part of
    it is altered, the Act requires that alterations be made so that
    “the altered portions of the facility are readily accessible to and
    usable by individuals with disabilities, including individuals
    care provider, hospital, or other service
    establishment; (G) a terminal, depot, or other
    station used for specified public transportation;
    (H) a museum, library, gallery, or other place of
    display or collection; (I) a park, zoo, amusement
    park, or other place of recreation; (J) a nursery,
    elementary, secondary, undergraduate, or
    postgraduate private school, or other place of
    education; (K) a day care center, senior citizen
    center, homeless shelter, food bank, adoption
    agency, or other social service center
    establishment; and (L) a gymnasium, health spa,
    bowling alley, golf course, or other place of
    exercise or recreation.
    
    42 U.S.C. § 12181
    (7).
    11
    who use wheelchairs.” 
    42 U.S.C. § 12183
    (a). If an alteration
    could affect usability of or access to an area of
    the facility containing a primary function, the
    entity shall also make the alterations in such a
    manner that, to the maximum extent feasible, the
    path of travel to the altered area and the
    bathrooms, telephones, and drinking fountains
    serving the altered area, are readily accessible to
    and usable by individuals with disabilities where
    such alterations . . . are not disproportionate to the
    overall alterations in terms of cost and scope . . . .
    
    Id.
     § 12183(a)(2).
    Given this legal landscape, our analysis of the ADA
    claim proceeds as a three-part inquiry: whether (1) Mercersburg
    Academy is a “public accommodation,” (2) the repairs and
    renovations made to Keil Hall are “alterations,” and (3) Keil
    Hall is a “facility” that is “used as, or designed for use as,”
    either “a place of public accommodation” or “a commercial
    facility.”
    The District Court held that Mercersburg satisfied the
    “public accommodation” requirement and that its repairs and
    renovations to Keil Hall were “alterations” within the meaning
    of the ADA. Each of these determinations is correct.
    Mercersburg is a “secondary school,” which by definition
    12
    makes it a “place of education,” and, accordingly, a “public
    accommodation” under 
    42 U.S.C. § 12181
    (7)(J). Moreover,
    existing regulations establish that the repairs made to Keil Hall
    were “alterations” because they included “remodeling,
    renovation, [or] reconstruction . . . .” 
    28 C.F.R. § 36.402
    (b)(1)
    (“Alterations include, but are not limited to, remodeling,
    renovation, rehabilitation, reconstruction, historic restoration,
    changes or rearrangement in structural parts or elements, and
    changes or rearrangement in the plan configuration of walls and
    full-height partitions.”). Thus, the first two steps of our three-
    step inquiry are easily satisfied.
    The third step is markedly more difficult. The District
    Court first held that the four floors of Keil Hall “should each be
    evaluated separately as to whether they are covered under the
    ADA, rather than evaluating Keil Hall as whole,” to determine
    whether the floors are “used as, or designed or constructed for
    use as,” a place of public accommodation. Employing that
    principle, the Court held that the first floor of Keil Hall was
    used as a “public accommodation” under the ADA because it
    contained classrooms, see 
    42 U.S.C. § 12181
    (7)(J) (a place of
    education), and an auditorium, see 
    id.
     § 12181(7)(D) (a place of
    public gathering), but that the second through fourth floors were
    not “public accommodations” because dormitories do not fall
    within any of the twelve categories enumerated in 
    42 U.S.C. § 12181
    (7). According to the Court, dormitories are more akin to
    residential units such as apartments and condominiums—which
    are not covered by the ADA—than transient lodging like inns,
    13
    hotels, and motels—which are covered under § 12181(7)(A).
    Mercersburg argues that the District Court erred because
    (1) private-school dormitories are “transient lodging” as defined
    by the ADA regulations and (2) dormitories are part of boarding
    schools, and, as such, are places of education. We agree.
    Although the statutory definition of “public accommodation”
    does not expressly mention private school dormitories, those
    facilities satisfy that definition under conventional principles of
    interpretation.8
    8
    Neither the District Court nor Republic Franklin was
    able to point to any authority holding that dormitories are more
    like residential facilities than “transient lodging” for ADA
    purposes. Indeed, both the Court and the insurer rely almost
    exclusively on a 13-year-old District Court opinion that is not
    on point: Independent Housing Services of San Francisco v.
    Fillmore Center Associates, 
    840 F. Supp. 1328
     (N.D. Cal.
    1993).
    In Independent Housing Services, the Court addressed
    whether a residential facility was a public accommodation. It
    was undisputed that the facility had commercial entities
    occupying the ground floor, which fell within the purview of
    the ADA accessibility standards. But were the residential
    apartments occupying the upper floors subject to the ADA
    accessability standards? The Court examined the legislative
    history of the ADA, and concluded it was not intended to apply
    to residential facilities.
    
    42 U.S.C. § 12182
     concerns discrimination in
    14
    The ADA’s implementing regulations belie Republic
    Franklin’s contention—and the District Court’s ruling—that the
    ADA does not apply to dormitories. See Bragdon v. Abbott,
    
    524 U.S. 624
    , 646 (1998) (citing Chevron U.S.A., Inc. v.
    Natural Res. Defense Counsel, Inc., 
    467 U.S. 837
    , 844 (1984),
    and explaining that the implementing regulations and views of
    the United States Department of Justice (DOJ) as to the ADA
    are entitled to deference). The ADA Accessibility Guidelines
    (ADAAG) provide that design, construction, or alteration of
    facilities in conformance with the ADA “shall comply with the
    public accommodations. Section 12181(7)(A)
    includes “an inn, hotel, motel, or other place of
    lodging” within the definition of public
    accommodations.         However, the legislative
    history of the ADA clarifies that the “other place
    of lodging” does not include residential facilities.
    H.R. Rep. No. 101-485(II), 101st Cong., 2d Sess.
    383 (1990).
    
    Id.
     at 1344 n.14. It then concluded that “apartments and
    condominiums do not constitute public accommodations within
    the meaning of the [ADA].” Id. at 1344.
    Independent Housing Services does little to advance
    Republic Franklin’s argument that private school dormitories
    are not “transient lodging” under the ADA. We agree that
    residential facilities such as apartments and condominiums are
    not transient lodging and, therefore, not subject to ADA
    compliance. But we believe dormitory housing, which is by its
    very nature temporary, is different.
    15
    applicable provisions of Appendix A to this part (ADAAG).”
    
    28 C.F.R. § 35.151
    . Chapter 9 of Appendix A to the ADAAG
    provides guidelines for “Accessible Transient Lodging,” which
    specifically includes “Hotels, Motels, Inns, Boarding Houses,
    Dormitories, Resorts and Other Similar Places of Transient
    Lodging.” 28 C.F.R. Part 36 App. A, Ch. 9.1 (emphases
    added). Moreover, Chapter 3 of the ADAAG expressly states
    that transient lodging includes “[a] building, facility, or portion
    thereof, excluding inpatient medical care facilities and
    residential facilities, that contains sleeping accommodations.
    Transient lodging may include, but is not limited to, resorts,
    group homes, hotels, motels, and dormitories.” 28 C.F.R. Part
    36 App. A, Ch. 3.5 (emphasis added). In a nutshell, the ADA
    regulations expressly define dormitories as transient lodging
    and provide that any construction or alterations to dormitories
    occurring after January 26, 1992, must comply with the ADA
    and its guidelines. 
    28 C.F.R. § 36.402
    (b).
    Beyond the plain language of the ADA implementing
    regulations, there is an additional reason to rule that it applies
    to private-school dormitories: student housing—an integral part
    of boarding school experience—is one of the facilities,
    privileges, advantages, and accommodations of a place of
    education covered by Title III of the ADA. As a private
    secondary school, Mercersburg itself is a “public
    accommodation” that is required to comply with the ADA. 42
    U.S.C § 12181(7)(J). A school may not discriminate on the
    basis of a student’s disability nor deny a reasonable
    16
    accommodation to a disabled student. On-campus housing
    facilities such as dormitories are certainly part of the “goods,
    services, facilities, privileges, advantages, and
    accommodations” offered by schools to its students. 42 U.S.C
    § 12182(a). Thus, Mercersburg could not lawfully deny a
    disabled student a reasonable accommodation that would permit
    him or her to live in its dormitories. Indeed, the DOJ has
    consistently taken the position that all aspects of a school’s
    student activities and of the educational experience (including,
    for example, research activities and fraternity housing) are
    covered by Title III of the ADA. See DOJ, “Americans with
    Disabilities Act Technical Assistance Letters,” Doc. # 488, at
    http://www.usdoj.gov/crt/foia/talindex.htm (May 2, 1994)
    (stating that fraternity houses, owned and operated by a
    university, “like all other aspects of a university experience, are
    part of the place of education, and are covered by title III”); see
    also DOJ, “Americans with Disabilities Act Technical
    Assistance Letters,” Doc. # 128, at
    http://www.usdoj.gov/crt/foia/talindex.htm (July 8, 1992)
    (stating that research activities conducted by a university, even
    if primarily for pharmaceutical research rather than education,
    are covered by Title III as part of the university’s obligation to
    ensure “compliance with [T]itle III in all of the activities of the
    place of public accommodation that it owns or operates[, a]
    provision . . . intended to be read broadly”).9 For the same
    9
    In Bragdon v. Abbott, the Supreme Court drew guidance
    from several of the DOJ’s technical assistance letters. 
    524 U.S. 17
    reasons, the DOJ has taken the position that student housing is
    covered by Title III of the ADA. See 
    id.,
     “United States’ Brief
    as Amicus Curiae in Opposition to Emory University’s Motion
    to Dismiss,” at http://www.ada.gov/briefs/barkopbr.pdf (stating
    that “student housing owned and operated by a private
    university is covered by [T]itle III of the ADA as a facility,
    privilege, advantage, and/or accommodation of a place of
    education”).10 In this context, we hold that the ADA applies
    624, 646 (1998).
    10
    The DOJ filed an amicus brief in an ADA case pending
    in the United States District Court for the Northern District of
    Georgia, Barker v. Emory University, No. 02-CV-2450-CC.
    DOJ, “United States’ Sur-Reply Brief as Amicus Curiae in
    Opposition to Emory University’s Motion to Dismiss,” at
    http://www.ada.gov/briefs/barkerbr.pdf.          The plaintiffs, a
    student at the Emory University School of Law and a disability
    rights advocacy group, sued Emory claiming that a number of
    facilities on its campus are inaccessible, including a new student
    apartment complex owned and operated by the University.
    Emory asked the Court to dismiss the case, arguing that the
    apartment complex and other dormitories on campus are not
    covered by Title III of the ADA because they are “strictly
    residential.”      The Government disagreed, unequivocally
    advancing the position that campus housing is covered by Title
    III of the ADA. According to the DOJ,
    Emory [wa]s obligated to ensure that all admitted
    students have ‘full and equal enjoyment of the
    goods, services, facilities, privileges, advantages,
    18
    or accommodations’ that it provides . . . These
    include its residential housing program.
    
    Id. at 2
    .
    The DOJ emphasized that “the categories of places of
    public accommodation [should be read] broadly” and “student
    housing is covered by the ADA under the broad category of a
    place of education.” 
    Id. at 5, 6
    .
    . . . Emory argues that dormitories are only
    covered by Title III if they offer short-term stays,
    because dormitories are listed in the heading of
    section 9.1 of the Department’s ADA accessibility
    standards: “Hotels, Motels, Inns, Boarding
    Houses, Dormitories, Resorts and Other Similar
    Places of Transient Lodging.” 28 C.F.R. Pt. 36
    App. A § 9. Emory’s argument fails, however,
    because Emory has neglected to distinguish the
    issue of whether an entity is covered by title III
    from the subsequent inquiry about what standards
    apply to a particular covered entity. . . . The
    Department’s position that dormitories are
    covered as places of education is not inconsistent
    with the fact that the standards mention
    dormitories as a type of transient lodging: to the
    contrary, the reference to dormitories in the
    standards is a clear indication that coverage of
    such facilities was anticipated by the drafters of
    the regulation.
    Id. at 6-7 (emphasis added). Moreover, “[t]he length of a
    student’s stay in college housing is irrelevant because student
    19
    to private-school dormitories and, therefore, to all four floors of
    Keil Hall.11
    housing is covered by the ADA under the broad category of a
    place of education.”
    11
    Although it ruled that the first floor of Keil Hall was
    subject to the demands of the ADA, the District Court went on
    to conclude that Republic Franklin was not liable for the
    renovation costs on that floor, stating:
    Because Mercersburg was required to ensure that
    the first floor complied with ADA prior to the
    fire, the Ordinance or Law [E]ndorsement was not
    triggered. Accordingly, Republic is not liable for
    the expenses related to the repairs made to the
    first floor as required by the ADA.
    Mercersburg argues that the Endorsement does not
    contain any “trigger” requirement. According to the Academy,
    the Endorsement provides coverage for loss to undamaged
    portions of the building caused by enforcement of any law or
    ordinance regulating the construction or repair of buildings that
    is in force at the time of the loss. Thus, in Mercersburg’s view
    the ADA—a law in force at the time of the loss—required it to
    provide “maximum accessability” to the disabled when making
    its alterations to Keil Hall.
    We disagree. Coverage A of the Endorsement will pay
    for “loss to the undamaged portion of the building caused by
    enforcement of any ordinance or law that . . . is in force at the
    time of loss.” (Emphasis added.) Although “loss” is not
    specifically defined in the policy, it provides the “trigger” that
    20
    In light of our disagreement with the District Court as to
    the applicability of the ADA to dormitories, one question
    remains: whether any post-fire renovations made to the
    undamaged portions of Keil Hall were demanded by the ADA.
    There are two standards of compliance under the ADA: the
    new construction standard and the alteration standard. New
    construction is the highest standard,12 and it applies to public
    Republic Franklin claims.         When voluntary repairs are
    undertaken to undamaged portions of the building, there may be
    costs imposed by enforcement of a law or ordinance, but those
    costs are not a “loss.” Only when some actual Covered Cause
    of Loss has caused damage to the building, the repair of which
    must legally be accompanied by changes to the undamaged
    portion of the building, can the law or ordinance be said to have
    caused a “loss.” Similarly, Coverage C of the Endorsement
    refers to “the increased cost to repair, rebuild, or construct the
    property” (emphasis added) only when a Covered Cause of Loss
    has occurred “to covered Building property.” This phrasing,
    which directly links the rebuilt property to the damaged
    property, does not mention voluntary reconstruction of
    undamaged portions and should not be taken to refer to them.
    12
    See ADA Preamble to Regulation on Nondiscrimination
    on the Basis of Disability by Public Accommodations and in
    Commercial Facilities (“Title III Preamble”), Pt. 36, App. B, at
    645 (“In striking a balance between guaranteeing access to
    individuals with disabilities and recognizing the legitimate cost
    concerns of businesses and other private entities, the ADA
    establishes different standards for existing facilities and new
    21
    accommodations designed or constructed after January 26,
    1992, and to the portion of a facility altered after that date. See
    
    42 U.S.C. § 12183
    (a); H.R. Rep. No. 101-485(III) at 60,
    reprinted at 1990 U.S.C.C.A.N. 445, 483 (explaining that
    “[b]ecause it costs far less to incorporate accessible design into
    the planning and construction of new buildings and of
    alterations [as compared to retrofitting existing structures], a
    higher standard of ‘readily accessible to and usable by’ persons
    with disabilities has been adopted in the ADA for new
    construction and alterations”); and 28 C.F.R. Part 36, App. B,
    Section 36.402 (stating that, with respect to altered portions,
    “[t]his part does not require alterations; it simply provides that
    when alterations are undertaken, they must be made in a
    manner that provides access”) (emphasis added); see also
    Brother v. CPT Investments, Inc., 
    317 F. Supp. 2d 1358
    , 1370
    (S.D. Fla. 2004) (stating that the ADA does not require
    alterations). The new construction standards are contained in
    28 C.F.R. Part 36, and, as discussed above, the ADAAG are set
    forth in Appendix A of Part 36.
    Existing facilities also must comply with the ADA, but
    that obligation is governed by the barrier removal provision.13
    construction.”).
    13
    The ADA’s barrier removal provision requires the
    removal of structural barriers in existing facilities when it is
    “readily achievable.” 
    42 U.S.C. § 12182
    (b)(2)(A)(iv). This is
    22
    Of course, if existing facilities are altered, they must conform to
    the alteration standard, which requires that alterations, as well
    as the path of travel to “primary function” areas, be made
    readily accessible to disabled individuals. 
    42 U.S.C. § 12183
    (a)(2).14 “Areas containing primary functions refer to
    so when it is “easily accomplished and able to be carried out
    without much difficulty or expense.” 
    Id.
     § 12181(9).
    Compliance with the ADA’s barrier removal provision may
    require, for example, the installation of a concrete ramp, a
    widened exterior door, or the modification of an existing public
    restroom. 
    28 C.F.R. § 36.304
    (b). Where those public
    accommodations can demonstrate that barrier removal is not
    “readily achievable,” they must try other methods that are. 
    28 C.F.R. § 36.305
    (a).
    14
    In relevant part, 
    42 U.S.C. § 12183
    (a) provides:
    [D]iscrimination for purposes of section 12182(a)
    of this title includes . . .
    (2) with respect to a facility or part thereof that is
    altered by, on behalf of, or for the use of an
    establishment in a manner that affects or could
    affect the usability of the facility or part thereof,
    a failure to make alterations in such a manner
    that, to the maximum extent feasible, the altered
    portions of the facility are readily accessible to
    and usable by individuals with disabilities,
    including individuals who use wheelchairs.
    Where the entity is undertaking an alteration that
    affects or could affect usability of or access to an
    23
    those portions of a place of public accommodation where
    significant goods, services, facilities, privileges, advantages or
    accommodations are provided.” H. Rep. No. 485, 101st Cong.,
    2d Sess., pt. 2, at 112 (1990), reprinted in 1990 U.S.C.C.A.N.
    445, 486. As a practical example, “the path of travel to . . .
    bathrooms, telephones, and drinking fountains [must be] . . .
    readily accessible to and usable by individuals with disabilities.”
    
    Id. at 394
    . As our Court has observed,
    while Congress chose not to mandate full
    accessibility to existing facilities, it required that
    subsequent changes to a facility be undertaken in
    a non-discriminatory manner. The use of such
    changes must be made available to all. The
    area of the facility containing a primary function,
    the entity shall also make the alterations in such a
    manner that, to the maximum extent feasible, the
    path of travel to the altered area and the
    bathrooms, telephones, and drinking fountains
    serving the altered area, are readily accessible to
    and usable by individuals with disabilities where
    such alterations to the path of travel or the
    bathrooms, telephones, and drinking fountains
    serving the altered area are not disproportionate to
    the overall alterations in terms of cost and scope
    (as determined under criteria established by the
    Attorney General).
    24
    emphasis on equal treatment is furthered, as well,
    by an expansive, remedial construction of the
    term “usability.” Usability should be broadly
    defined to include renovations which affect the
    use of a facility, and not simply changes which
    relate directly to access.
    Kinney v. Yerusalim, 
    9 F.3d 1067
    , 1973 (3d Cir. 1993). It is
    clear, then, that to the extent the ADA—a law in force at the
    time of the fire—regulated the alterations to Keil Hall (a public
    accommodation) after the fire and required the Academy to
    make paths and travel accessible to the primary-function areas
    on each floor of Keil Hall, the plain language of the Ordinance
    and Law Endorsement covers Mercersburg’s costs of complying
    with the ADA.
    With this backdrop, we part with the District Court in
    two respects. First, because dormitories are “transient lodging”
    and Mercersburg is a “place of education,” we conclude that the
    dormitory floors of Keil Hall are public accommodations within
    the meaning of the ADA. Second, because the Endorsement
    requires the insurer to cover alterations to the undamaged
    portions of Keil Hall caused by enforcement of the ADA,
    Republic Franklin may be liable for certain expenses not
    directly caused by the fire. Of course, any alterations,
    renovations and/or improvements made to any floor of Keil Hall
    that were not mandated by the ADA (i.e., discretionary
    alterations) do not fall within the scope of coverage of the
    25
    Endorsement, and, as a result, do not obligate the insurer.
    Given that the ADA applies to all four floors of Keil Hall, it is
    for the District Court to determine on remand specifically which
    renovations (if any) undertaken by Mercersburg in its repair of
    Keil Hall were mandated by the ADA—an issue the Court did
    not reach in its memorandum opinion. Therefore, we reverse
    the District Court’s grant of summary judgment in favor of
    Republic Franklin on Mercersburg’s ADA claim and remand
    the case for proceedings not inconsistent with this analysis.
    B. PHA Claim
    Mercersburg also contends that, much like the ADA, the
    Universal Accessibility Standards promulgated under the
    Pennsylvania Handicapped Act (PHA), 
    71 Pa. Cons. Stat. § 1455.1
     et seq. (2000); 
    34 Pa. Code § 60.1
     et seq., required the
    accessability upgrades, including the installation of an elevator,
    to Keil Hall. The District Court held that the PHA did not
    require modifications to Keil Hall because the repairs required
    by the fire total less than 30% of the building’s value.
    The PHA requires that certain structural improvements
    be made to maximize accessibility and usability by persons with
    physical handicaps. 
    71 Pa. Cons. Stat. § 1455.1
    . Unlike the
    ADA, the PHA generally applies to “buildings used by the
    public” rather than to certain enumerated “public
    accommodations.” 
    Id.
     § 1455.1b. Moreover, the PHA
    expressly applies to “schools” and “dormitories.” Id.
    26
    Under it, when an existing private building is remodeled,
    the remodeling must be done to ensure that the remodeled area
    is “accessible to and usable by persons with physical handicaps”
    to a degree based on the proportional cost of the remodeling to
    the overall worth of the building. Id. § 1455.1c(b)(1). If the
    construction cost of the remodeling is less than 30% of the
    value of the building, only the remodeled area or areas shall be
    made accessible to and usable by persons with physical
    handicaps. An accessible route to the remodeled area or areas
    is not required. Id. § 1455.1c(b)(1)(i). If “the construction cost
    of the remodeling is greater or equal to 30 percent but less than
    50 percent of the worth of the building, the remodeled area or
    areas shall be made accessible to and usable by persons with
    physical handicaps, and an accessible route to the remodeled
    area or areas shall be provided.” Id. § 1455.1c(b)(1)(ii). If the
    construction cost is 50 percent or more of the value of the
    building, the entire building must be made accessible to and
    usable by handicapped persons. Id. § 1455.1c(b)(1)(iii). For
    purposes of the latter two subsections, construction made over
    a three-year period may be calculated as the construction cost.
    Id. § 1455.1c(b)(1)(iv).
    The same analytical framework applicable to the ADA
    claim, discussed above, necessarily applies to Mercersburg’s
    PHA claim. Simply stated, the lightning strike only damaged
    certain portions of Keil Hall; when those portions were
    remodeled, Mercersburg was required to comply with the PHA;
    Republic Franklin, in turn, was obligated to pay for that
    27
    remodeling (which it has done); it was only obligated to pay for
    further remodeling to undamaged portions of Keil Hall if that
    remodeling was required by an ordinance or law.
    The question, then, is whether the PHA required any
    further remodeling. As explained above, the answer to that
    inquiry depends on a factual determination and the cost of
    remodeling compared to the worth of Keil Hall. Specifically,
    if the repairs required by the fire total less than 30% of Keil
    Hall’s total value, the PHA requires no further modifications
    and it follows that Republic Franklin is not obligated to cover
    the cost of any further modifications. The converse is also true:
    if the repairs required by the fire total exceed 30% of Keil
    Hall’s total value, then the PHA demands further modifications
    and it follows that Republic Franklin must cover all or some of
    the portion of the cost of those modifications under the
    Ordinance and Law Endorsement.
    Both sides agree that the total value of Keil Hall is
    $1,900,000. Moreover, during oral argument, counsel for
    Mercersburg agreed that the aggregate cost of repair to Keil
    Hall caused by the fire totals substantially less than 30% of the
    total value of the building. As a result, the PHA required no
    further modifications to Keil Hall. Accordingly, we affirm the
    District Court’s grant of summary judgment in favor of
    Republic Franklin on the PHA claim.
    28
    C. Building Codes
    Finally, Mercersburg contends that the Ordinance and
    Law Endorsement provides coverage for renovations it made to
    undamaged portions of Keil Hall pursuant to, inter alia, the
    International Mechanical Code, 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, Refrigeration and Air-
    Conditioning Engineers. It is undisputed that the Borough of
    Mercersburg, in which the Academy is located, has adopted
    none of the foregoing codes nor any other building codes.
    Relying on that fact, the District Court held that the terms “law”
    and “ordinance” in the Endorsement should be afforded their
    ordinary meaning. As such, it refused to construe those terms
    to include building codes or standards adopted by private
    organizations but not adopted by a governmental body having
    authority to do so here.
    The basic principles of law governing insurance policy
    interpretation are well-settled in Pennsylvania. E. Associated
    Coal Corp. v. Aetna Cas. & Surety Co., 
    632 F.2d 1068
    , 1075
    (3d Cir. 1980). The goal of interpreting an insurance policy,
    like the goal of interpreting any other contract, is to determine
    the intent of the parties. It begins where it must—the language
    of the policy. Madison Constr. Co., 735 A.2d at 106 (“The
    polestar of our inquiry . . . is the language of the insurance
    policy.”).
    29
    The task of interpreting [an insurance] contract is
    generally performed by a court rather than by a
    jury. The goal of that task is, of course, to
    ascertain the intent of the parties as manifested by
    the language of the written instrument. Where a
    provision of a policy is ambiguous, the policy
    provision is to be construed in favor of the
    insured and against the insurer, the drafter of the
    agreement. Where, however, the language of the
    contract is clear and unambiguous, a court is
    required to give effect to that language.
    Gene & Harvey Builders v. Pa. Mfrs. Ass’n, 
    517 A.2d 910
    , 913
    (Pa. 1986) (quoting Standard Venetian Blind Co. v. Am. Empire
    Ins. Co., 
    469 A.2d 563
    , 566 (Pa. 1983)) (additional citations
    omitted).
    Contractual language is ambiguous “if it is reasonably
    susceptible of different constructions and capable of being
    understood in more than one sense.” Hutchison v. Sunbeam
    Coal Co., 
    519 A.2d 385
    , 390 (Pa. Super. Ct. 1986); see also
    Madison Constr. Co. v. Harleysville Mut. Ins. Co., 
    735 A.2d 100
    , 106 (Pa. 1999). Courts should not, however, distort the
    meaning of the language or strain to find an ambiguity. Steuart
    v. McChesney, 
    444 A.2d 659
    , 663 (Pa. Super. Ct. 1982).
    Mercersburg asks us to rule that the plain and ordinary
    meaning of “law” and “ordinance” in the Endorsement is
    30
    broader than the interpretation given by the District Court. We
    need not reach this issue. This is because, even if the District
    Court did read those terms too narrowly, that determination does
    not resolve the larger controversy before us: whether the “loss to
    undamaged portion[s]” of Keil Hall was “caused by enforcement
    of any” of the codes. This inquiry must be answered no. Unlike
    the ADA and PHA, Mercersburg fails to point out any provisions
    of the building codes that mandated or required it to do any
    upgrades, renovations, etc., to the undamaged portions of Keil
    Hall. Certainly, Mercersburg’s discretionary decision to renovate
    undamaged portions of Keil Hall triggered the application of the
    building codes as to that renovation, but critically important is
    that the building codes themselves did not trigger those
    renovations. This distinguishes Mercersburg’s building codes
    claims from its ADA and PHA claims. As a result, we affirm the
    District Court’s determination (albeit on different grounds than
    the District Court) that the Ordinance and Law Endorsement does
    not provide coverage for renovations it made to undamaged
    portions of Keil Hall in hypothetical compliance with codes not
    mandating those renovations.
    VI.    Conclusion
    We reverse the District Court’s summary judgment ruling
    dismissing Mercersburg’s ADA claim and remand that claim for
    proceedings not inconsistent with this opinion, but affirm its
    summary judgment rulings dismissing Mercersburg’s PHA and
    building codes claims.
    31