A three-judge panel of the 11th U.S. Circuit Court of Appeals has upheld a $1.75 million jury verdict in favor of Central Baptist Church of Albany, Georgia. The church sued its insurance company, Church Mutual Insurance Company, over storm damage coverage.
The ruling was issued on Monday, with U.S. District Judge Federico A. Moreno of the Southern District of Florida, sitting by designation, authoring the opinion that rejected the insurer's claims of misrepresentation by the church.
Judge Moreno, in his unanimous opinion, rejected Church Mutual’s argument that the church benefited from a “double recovery,” which occurs when a party receives multiple awards for the same damage.
He explained, “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,” adding, “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.”
The dispute began after a storm in 2014 when Central Baptist submitted a claim for storm damage. The insurer initially estimated the damage as minor, valuing repairs at around $2,300, and paid the church just over $1,300 after the deductible.
However, further evaluations by MidSouth Construction revealed the damage was much more extensive, with estimates requiring over $1.3 million for a full roof replacement, and The Howarth Group estimating approximately $1.48 million.
In December 2016, Central Baptist sued Church Mutual for breach of contract, seeking to recover about $1.42 million for the roof replacement. During the legal proceedings, Hurricane Michael struck in 2018, causing additional damaged to the church. The church filed a separate claim with another insurer, AmTrust North America.
Although the church failed to inform Church Mutual about this second claim, the trial court decided that this did not constitute misrepresentation, and the church's argument regarding this was withdrawn at trial.
Following a jury trial in March 2020 in the Middle District of Georgia, the church was awarded $1.75 million, along with prejudgment interest of about 7%.
