After a hard-fought three-day trial in Southeast Missouri, Watters Wolf Bub Hansmann Attorneys Tim Wolf, Katie McCarthy and Katharine Bauer secured a complete defense verdict in an insurance coverage dispute arising from the devastating tornado that struck Dexter, Missouri in May 2024 and was declared a natural disaster by the federal government.
Plaintiff Dimension Church filed suit for breach of contract and vexatious refusal against Church Mutual Insurance Company claiming its building was a total loss and approximately $2.4 million in damages. Following the tornado, Plaintiff performed no repairs and minimal remedial work on the building and instead left it sitting open to the elements for over a year before Plaintiff voluntarily chose to demolish it.
Four months before the tornado occurred, the insurance policy had been cancelled by Church Mutual for non-payment of premium. Despite the cancellation notice being sent to Plaintiff’s last known mailing address on file with Church Mutual, Plaintiff argued that it did not receive the cancellation notice because it was sent to an “incomplete” address, and as a result, the policy was not properly cancelled.
The parties filed cross-motions for summary judgment in the United States District Court for the Eastern District of Missouri, and Judge Stephen Limbaugh Jr. initially entered partial summary judgment in favor of Plaintiff on its breach of contract claim, finding that Church Mutual had not mailed the cancellation notice to the last known mailing address and leaving the issue of damages for a jury.
Believing strongly in its position and the evidence, Church Mutual took a risk and filed a Motion for Reconsideration of the Court’s partial summary judgment order, pointing out that in granting Plaintiff partial summary judgment, the Court weighed conflicting evidence and made impermissible factual determinations. Church Mutual’s risk paid off when Judge Limbaugh granted reconsideration and reversed his prior order. At the same time, Judge Limbaugh also granted summary judgment in Church Mutual’s favor on Plaintiff’s claim for vexatious refusal, concluding that Church Mutual acted reasonably in denying Plaintiff’s claim given the genuine dispute as to the existence of the policy and the extent of any potentially covered damages.
Prior to trial, the Court requested additional briefing regarding the measure of damages Plaintiff could recover given its claim that the building was a total loss and its decision to demolish the building rather than perform any remediation or repairs. Plaintiff argued that under Missouri’s Value Policy Statute, R.S.Mo. § 379.140, because the building was a total loss, it is entitled to the full limits of replacement cost coverage under the insurance policy even though it did not replace any damaged property. Church Mutual argued that the Value Policy Statute, which was amended in 2021, did not apply to Plaintiff’s claim for replacement cost coverage, and in any event, Plaintiff’s failure to mitigate its losses and protect its property from further damage precluded its building from being a “total loss,” as defined by the statute.
After extensive pre-trial briefing, the Court agreed with Church Mutual and held that Missouri’s Value Policy Statute did not apply to Plaintiff’s claim under a replacement cost policy, and as a result of the Court’s decision, Plaintiff would actually have to prove the nature and extent of its damages at trial and also prove that such damages were covered under the insurance policy, rather than simply being able to receive the full policy limit regardless of the cause of damage.
The trial proceeded on liability and damages only for Plaintiff’s breach of contract claim. Ultimately, the case came down to a fundamental issue: Did Church Mutual properly cancel the policy for nonpayment of premium before the tornado occurred?
In deciding this issue, the seven-person jury was asked to judge the credibility of the witnesses for themselves, setting aside any bias for or against either party, and decide the case based on the facts and the law presented in the courtroom.
After hearing three days of witness testimony and the parties’ arguments, the jury did exactly what they were asked to do and returned a unanimous verdict in favor of Defendant Church Mutual after deliberating for only an hour.
Trials, and litigation generally, rarely follow a straight line. As attorneys, we are often faced with adverse rulings, difficult strategic decisions, and unpredictable outcomes. Sometimes it may seem like the deck is stacked against us. Yet, the extensive preparation, legal expertise, collaboration, and persistence our WWBH team brings to each case is unmatched, and we are honored to use these skills and drive to ensure the right outcome – whether at trial or earlier – for each of our clients.