73 F.4th 602
8th Cir.2023Background
- Church Mutual insured Concord Baptist’s Jefferson City property under a policy (12/3/2019–12/3/2020) containing a cooperation clause requiring a notarized proof of loss (POL) within 60 days, inspection access, and examination under oath (EUO).
- A March 27, 2020 storm damaged roofs and fencing; Church Mutual inspected, commissioned an engineering report, and issued partial payments totaling $237,852.24.
- Concord demanded appraisal (June 3, 2020) and later expanded the appraisal scope to the entire claim; Concord’s appraiser signaled an estimate > $2,000,000.
- After the revised appraisal demand (Dec. 2020), Church Mutual requested a POL, supporting documents, and an EUO; Concord failed to provide the POL or sit for an EUO and only sent a letter from counsel disputing insurer conduct.
- Church Mutual moved for summary judgment based on Concord’s failure to cooperate; the district court granted summary judgment finding a material breach, substantial prejudice, and insurer diligence. The Eighth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Concord materially breached the cooperation clause by failing to provide a POL and submit to an EUO | Concord conceded POL noncompliance for purposes of appeal and contended EUO noncompliance was not necessarily a material breach | Church Mutual argued failure to provide POL (and refusal to submit to EUO) constituted a material breach of the cooperation clause | Material breach established as to POL (Concord conceded); court need not resolve EUO issue because POL breach sufficed |
| Whether Church Mutual suffered substantial prejudice from the breach | Concord argued insurer was not substantially prejudiced | Church Mutual argued lack of POL/EUO prevented investigation into a $2M valuation and coverage issues | Court held Church Mutual suffered substantial prejudice by being denied the ability to complete its investigation |
| Whether Church Mutual exercised reasonable diligence to secure Concord’s cooperation | Concord argued factual dispute existed about insurer diligence | Church Mutual pointed to prompt requests for POL, documents, and EUO and a follow-up letter | Court found Church Mutual exercised reasonable diligence; summary judgment appropriate |
Key Cases Cited
- Avenoso v. Reliance Standard Life Ins. Co., 19 F.4th 1020 (8th Cir. 2021) (standard of review for summary judgment)
- McClune v. Farmers Ins. Co., 12 F.4th 845 (8th Cir. 2021) (elements for denying coverage based on failure to cooperate)
- Roller v. Am. Mod. Home Ins. Co., 484 S.W.3d 110 (Mo. Ct. App. 2015) (cooperation clauses permit insurer to compel examinations and courts find failure to assist can preclude coverage)
- Wiles v. Capitol Indem. Corp., 215 F. Supp. 2d 1029 (E.D. Mo. 2001) (insurer’s diligence in seeking EUO supports denial of coverage for noncooperation)