8th Circuit: Failure to Cooperate Doomed Church’s Storm Damage Claim

A church that refused to submit a proof of loss or agree to make a representative available for an examination under oath can’t expect its insurer to pay a $2 million storm damage claim.

A panel of the 8th Circuit Court of Appeals on Thursday affirmed a District Court decision granting summary judgment in favor of Church Mutual Insurance Co., dismissing a lawsuit filed by Concord Baptist Church of Jefferson City, Missouri.

“The undisputed facts demonstrate that Church Mutual has satisfied all elements necessary to deny coverage based on Concord Baptist’s failure to cooperate in the investigation of its claim,” the panel opinion says.

Concord Baptist’s property was damaged by wind and hail during a storm on March 27, 2020. The church submitted a claim to Church Mutual for damage to the roofs of each building on the property — a church, a worship center, storage barn and three retail buildings.

Crawford & Co., Church Mutual’s adjuster, examined the damage the next month. The insurer also hired an engineer to assist in the damage payment. Church Mutual issued two payments to the church totaling $237,852.24.

The Concord Baptist was not satisfied and demanded an appraisal of the damages to the roofs of the church and worship center. Church Mutual asked the church to submit any documentation supporting its claim, but the church did not respond.

Church Mutual learned that Concord Baptist’s appraiser intended to submit an estimate that damages were more than $2 million. The insurer sent a letter instructing the church to limit the appraisal to specific portions of the church roof and worship center roof. The policy excluded “cosmetic damage” that did not threaten the function of the structure.

The church sent a revised demand for appraisal of all the damages it claimed were caused by the storm. Church Mutual asked Concord Baptist to send a notarized proof of loss form and provide a representative to submit to an examination under oath.

The carrier also reminded the church that its insurance policy required it to cooperate with the claims examination. The church’s attorney responded with a letter that accused Church Mutual of engaging in “delaying tactics.”

The church filed a lawsuit in Missouri state court in February 2021. Church Mutual removed the case to federal court. Magistrate Judge Willie J. Epps, Jr. with the Western District of Missouri denied Concord Baptist’s request for appraisal.

Later, Epps granted Church Mutual’s motion or summary judgment, finding that Concord Baptist had breached the cooperation clause in its insurance policy by failing to submit a proof of loss form, provide supporting documentation, or submit to an examination under oath. The judge also found that Church Mutual suffered substantial prejudice because Concord Baptist had failed to submit documents that it needed to properly investigate the claim.

Concord Baptist appealed the ruling.

The appellate panel said Concord Baptist admitted that it breached the terms of the policy by failing to submit a proof of loss or submitting to an examination under oath. The facts also show that the insurer suffered substantial prejudice as a result.

“Submitting the POL and submitting to an EUO would have allowed Church Mutual to understand the basis for Concord Baptist’s claim and would have provided Church Mutual with the opportunity to further investigate the validity of the claim and any underlying coverage issues,” the opinion says.

Top photo courtesy of Concord Baptist Church in Jefferson City.