A federal appeals court panel upheld a $1.75 million jury verdict in favor of a Georgia church that sued its insurance company amid a dispute over storm damage coverage.
A three-judge panel of the 11th U.S. Circuit Court of Appeals ruled Monday in favor of Central Baptist Church of Albany against Church Mutual Insurance Company.
U.S. District Judge Federico A. Moreno of the Southern District of Florida, who is not a circuit court member but was sitting by designation, authored the unanimous opinion rejecting the insurer’s claim that the church misrepresented its insurance needs.
Get Our Latest News for FREE
Subscribe to get daily/weekly email with the top stories (plus special offers!) from The Christian Post. Be the first to know.
“[T]he record shows an intent by the insurance company to abandon the misrepresentation defense,” Moreno wrote.
“[A] court cannot waive a right or defense for a party. And if a defendant believes that a court has done so, it is incumbent on that party to object to the court’s alleged actions. Here, the insurance company did not object,” the judge continued.
“In fact, after counsel for the church stated that ‘there’s been no assertion whatsoever that the church committed fraud or misrepresented anything to Church Mutual,’ the insurance company told the court that its affirmative defenses were ‘withdrawn on the record.'”
The majority rejected Church Mutual’s allegation that the church benefited from a “double recovery,” which occurs when a party receives multiple awards for repairing a single issue.
“The district court reasoned that by adjusting for the increased cost of construction, the jury compensated the church for the diminished purchasing power due to inflation. We agree,” he continued.
“Inflation-adjusted damages account for the increased cost of construction and reflect the change in purchasing power due to inflation. Accordingly, the district court did not err in holding that the jury’s award did not amount to double recovery.”
Following a storm in 2014, Central Baptist Church submitted a claim to Church Mutual. The insurer estimated that the damage was minor and repairs would cost around $2,300. As such, the insurance company paid the church a little over $1,300 after the deductible was met.
However, Central Baptist sought additional opinions, and MidSouth Construction found the damage to be more extensive, necessitating a full replacement of the sprawling roof, which was estimated to cost over $1.3 million. The Howarth Group estimated it to be around $1.48 million.
Central Baptist sued Church Mutual in December 2016 for breach of contract, seeking to recover approximately $1.42 million in expenses related to their roof replacement.
During the litigation, Hurricane Michael struck the area in 2018, causing further damage to the church building, prompting the church to file a separate claim with another insurer, AmTrust North America.
Although Central Baptist did not inform Church Mutual of the second claim, the trial court decided that this did not constitute misrepresentation and the argument was withdrawn at trial.
In March 2020, following a jury trial held in the Middle District of Georgia, Central Baptist Church was awarded $1.75 million, plus a prejudgment interest reportedly around 7%.
