The United States Court of Appeals for the Eighth Circuit has reversed a summary judgment decision in favor of Zurich American Insurance Company, sending the case back to district court for further proceedings. The dispute arose after First Baptist Church in Fort Smith, Arkansas, sued Zurich for denying its hail damage claim, alleging breach of contract and bad faith.
First Baptist Church had insured its property with Zurich American Insurance Company for several years. The church’s buildings, which had undergone various roofing repairs between 2016 and 2018, suffered additional leaks. In January 2022, a roofing inspection revealed hail damage, prompting First Baptist to file a claim with Zurich, alleging the damage occurred on April 28, 2017. Zurich denied the claim, citing wear and tear, lack of maintenance, and insufficient evidence of hail damage from the specified date almost five years earlier.
During litigation, expert testimony conflicted over the cause and timing of the damage. Zurich argued First Baptist failed to provide prompt notice of the damage as required by its policy, while First Baptist maintained it was unaware of hail damage until 2022 and notified Zurich immediately afterward.
The district court granted summary judgment to Zurich, concluding that First Baptist knew of damage as early as 2016 and failed to notify the insurer within a reasonable timeframe. However, the Eighth Circuit found that Zurich introduced critical evidence in its reply brief, depriving First Baptist of a fair chance to respond. The appellate court ruled that genuine disputes of material fact remain regarding the cause and timing of the damage, necessitating further proceedings.
In 2017, Fort Smith, Arkansas, experienced several hailstorms. Notably, on May 27, 2017, the area was impacted by hailstones up to 2.75 inches in diameter. National Weather Service records indicate that any specific location in the Fort Smith area can expect to receive hail an average of two times each year.
The case now returns to the district court for reconsideration, allowing First Baptist the opportunity to challenge Zurich’s assertions and present additional evidence.
The outcome of the remand could have broader implications for policyholders seeking coverage for delayed damage claims. With the bad faith claim also reinstated, First Baptist now has another chance to attempt to prove that Zurich wrongfully denied its claim.
