Appeals Court Sides with Arkansas Church in Insurance Dispute
A federal appeals court has revived a lawsuit filed by an Arkansas church against its insurance provider, Zurich American Insurance Company, concerning denied coverage for hail damage.
The U.S. 8th Circuit Court of Appeals last week issued a unanimous opinion in favor of First Baptist Church of Fort Smith, reversing a previous ruling by a lower court and sending the case back for further legal proceedings. Circuit Judge Steven Grasz authored the panel’s opinion.
Grasz concluded that there were “potential genuine disputes of material fact not properly litigated” at the district court level. He indicated that Zurich had changed its legal argument across two briefs. The initial argument focused on the time elapsed between the damage and the claim. The second brief discussed evidence of leaks and asserted the church’s failure to report the leaks barred coverage.
“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.” -Circuit Judge Steven Grasz
Grasz further stated that because of how Zurich raised the issue about the church’s knowledge of prior damage, First Baptist was hindered in presenting evidence and arguments to dispute Zurich’s assertions. He decided the court was left with an underdeveloped record and could not properly analyze unresolved matters that could affect the case’s outcome.
The appeals court reversed the prior decision and remanded the case, giving First Baptist the chance to respond to Zurich’s argument and reconsider the summary judgment ruling.
According to Insurance Business Magazine, FBC Fort Smith had insured its property with Zurich for a number of years. Roofing repairs were carried out on the church building between 2016 and 2018. In January 2022, a roofing inspection revealed hail damage that likely occurred in April 2017. The church then filed a claim with Zurich. The insurance company denied the claim, alleging additional factors contributed to the roof damage.
During the litigation, Zurich argued that the church did not provide “prompt notice” of the damage as mandated by the policy. First Baptist Fort Smith claimed it was unaware of the hail damage until the 2022 inspection and subsequently notified Zurich immediately.
