Appeals Court rejects Christian conference property’s $1.3 million lawsuit against insurer
Quick Summary
- Appeals court rejects $1.3 million lawsuit by Michigan-based Christian retreat organization against its insurer.
- Court affirms lower court ruling that insurance policy capped coverage for code compliance costs at $100,000.
- Retreat organization incurred over $1 million in expenses after a building collapse in March 2020.
An appeals court panel has affirmed a lower court ruling against a Michigan-based Christian retreat organization in its $1.3 million lawsuit against its insurance company.
Last month, a three-judge panel of the United States Court of Appeals for the Sixth Circuit issued a decision in the case of Piatt Lake Bible Conference Association v. Church Mutual Insurance Company.
The Piatt Lake Bible Conference Association claimed that Church Mutual was obligated to cover all code-compliance costs for reconstructing a building on its property that had collapsed.
PLBCA alleged that Church Mutual led them to believe the company was liable for code-compliance costs exceeding the $100,000 policy limit, which totaled approximately $1.3 million. The insurance company, however, capped its coverage at $100,000.
Circuit Judge Kevin G. Ritz authored the unanimous opinion, writing that “the unambiguous, undisputed terms of the policy limited code-compliance coverage to $100,000.”
“Any representation suggesting that PLBCA held code-compliance coverage exceeding $100,000 directly contradicted the unambiguous language, so reliance on any such representation would be unreasonable,” Ritz wrote.
“Here, even if the unambiguous terms of the policy did not make reliance unreasonable, PLBCA has not shown that it actually relied on any Church Mutual conduct to provide code-compliance coverage beyond the $100,000 policy cap.”
Ritz concluded that PLBCA “has not shown that Church Mutual owed a separate-and-distinct duty to advise” and failed to demonstrate “that it reasonably relied on Church Mutual’s alleged misrepresentations.”
In March 2020, the Miracle Building collapsed due to excessive snow and ice. As part of the effort to rebuild it, PLBCA incurred over $1 million in expenses to bring the new building into compliance with applicable codes.
PLBCA alleged that Church Mutual had agreed to cover these costs despite its official paperwork. When this did not happen, the retreat association filed suit in 2023.
In July of last year, U.S. District Judge Robert Jonker for the Western District of Michigan, Northern Division granted a summary judgment in favor of Church Mutual.
Jonker concluded that while PLBCA “is understandably disappointed in what ended up happening in this case,” the “record reflects that the association largely understood that replacement cost coverage only covered what was already built.”
“The policy language expressly excluded the added rebuild costs of code compliance from the definition of replacement cost, and Church Mutual never said anything to the contrary. Code compliance costs simply did not come up,” he continued.
“To the extent the association believed that replacement cost coverage would cover everything necessary to rebuild, despite unambiguous policy language to the contrary, such a belief was not grounded in any misrepresentation or inaccurate advice from Church Mutual.”
