A federal appeals court has revived an Arkansas church’s lawsuit against an insurance company that denied the congregation coverage for hail damage.
A three-judge panel of the U.S. 8th Circuit Court of Appeals issued a unanimous opinion last week in favor of the First Baptist Church of Fort Smith over Zurich American Insurance Company, reversing a lower court ruling and sending the case back for further litigation.
Circuit Judge Steven Grasz authored the panel opinion, concluding that there were “potential genuine disputes of material fact not properly litigated” at the district court level.
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Grasz said that Zurich had shifted its legal argument over the course of two briefs from being “focused solely on the lapse of time between the date of the alleged cause of loss or damage and First Baptist’s claim” to shifting to “First Baptist’s knowledge of damage of which Zurich claimed First Baptist was required to report.”
“Unlike its opening brief, which never mentioned evidence of leaks in 2016, Zurich’s reply brief discussed evidence about these leaks and argued First Baptist’s failure to notify Zurich of that 2016 ‘loss or damage’ barred coverage under the policy,” wrote Grasz.
“Consequently, First Baptist never had a fair opportunity to counter such evidence or argue the purported damage was unrelated to that for which it claimed coverage.”
Grasz said that due to “how Zurich raised the issue of First Baptist’s knowledge about past loss or damage, First Baptist was hindered in introducing evidence and advancing arguments to counter Zurich’s assertions.”
“As a result, we conclude we are left with an underdeveloped record and cannot properly analyze unvetted issues that may affect the outcome of the case,” he continued.
“We therefore reverse and remand to the district court to allow First Baptist the opportunity to respond to Zurich’s argument raised in its reply brief and to reconsider the summary judgment decision based on these arguments.”
FBC Fort Smith had insured its property with Zurich for several years, according to Insurance Business Magazine, with the church building undergoing roofing repairs between 2016 and 2018.
In January 2022, when a roofing inspection revealed hail damage that likely occurred in April 2017, FBC filed a claim with Zurich. However, the insurance company denied the claim, arguing that other factors contributed to the roof damage.
During litigation, Zurich argued that the church had failed to provide “prompt notice” of the roof damage, reported IBM, which was mandated by its policy. For its part, FBC Forth Smith claimed that it was unaware of hail damage until the 2022 inspection, but then notified Zurich right after discovering it.
