WALTER D. MCLAURIN, CHARLES MAGEE, ELBERT MCLAURIN and E.J. FLOWERS, TRUSTEES OF FRIENDSHIP BAPTIST CHURCH, Plaintiffs,
CHURCH MUTUAL INSURANCE COMPANY, A FOREIGN INSURANCE CORPORATION, Defendant.
MEMORANDUM OPINION AND ORDER
KEITH STARRETT, District Judge.
This matter is before the Court on the Defendant Church Mutual Insurance Company's ("Church Mutual") Motion for Partial Summary Judgment on Plaintiffs' Bad Faith Claim . Having considered the filings of the parties, arguments of counsel at hearing, the record, and the applicable law, the Court finds that the motion should be denied.
This is a dispute over property insurance coverage for damage to a church roof. On or about September 1, 2009, Church Mutual issued Insurance Policy No. 0160951-21-106985 (the "Policy") [48-1] to Friendship Baptist Church ("Friendship Baptist"). Friendship Baptist is located at 27 Friendship Road, Collins, Mississippi, 39428 (the "Property" or "Insured Premises"). The Policy provides property coverage for the Insured Premises from September 1, 2009, to September 1, 2012.
On May 9, 2012, Friendship Baptist, by and through Trustee Charles Magee ("Trustee Magee"), reported a loss under the Policy. Friendship Baptist claimed that the interior ceiling sheetrock was water-stained, falling in, and cracking as a result of roof damage caused by a windstorm. Also on May 9, Church Mutual retained Phillips & Associates, Inc. ("PAI"), a third-party adjuster, to assist in the adjustment of the claim and investigation of the loss.
Minnie Durfee, the PAI adjuster, inspected the Insured Premises on May 11, 2012. Trustee Magee and Sammy Davis, Friendship Baptist's contractor and the owner of Davis Building, Inc., attended the inspection. Ms. Durfee issued a written report to Church Mutual following her inspection. ( See PAI Report [19-2].) The "CAUSE & ORIGIN" section of the report states:
The loss appears to have occurred approximately 3 months ago when storms with tornado like winds came through the area. After these storms came through there was very little rain in the area until around 4/28/2012 when the insured noticed water stains on the ceiling in the Foyer and Sanctuary. Upon further inspection they found damage to the king poles in the attic. The damage was caused by windstorm which came through the area and appears to have lifted the roofing slightly causing the king poles to separate from the rafters in the attic over the Sanctuary.
During our inspection we also found cracks in the sheetrock ceiling along the tape line throughout the Sanctuary. In addition there were two or three water stains to the ceiling in the Sanctuary and two stains to the ceiling in the Foyer/Entry.
Inspection of the roofing on the exterior of this building found two areas along the east slope over the sanctuary where the shingles were pulled up and did not sit back down and seal properly. Photographs of the damages are attached for your review.
(PAI Report [19-2] at p. 2.) Ms. Durfee further provided that Mr. Davis presented a bid to complete the following repairs for $2, 400.00: (1) repair all damaged trusses over the sanctuary; (2) install batting in the sanctuary over cracks in sheetrock; and (3) repair sheetrock in other places. Mr. Davis also advised Ms. Durfee that he had consulted with a structural engineer regarding the best way to repair the trusses in the attic. It appears that neither Ms. Durfee nor Mr. Davis is an engineer.
On May 17, 2012, Friendship Baptist again contacted Church Mutual regarding its claim. Trustee Magee reported that Friendship Baptist had retained an engineer to inspect the initial repairs and provide guidance as to the best method of completing the remaining, necessary repairs. Trustee Magee also reported that the engineer advised that all of the roof trusses needed to be replaced. The estimated cost of replacing all the trusses was $170, 000.00. In light of this information, Church Mutual hired an engineering firm, Donan Engineering, Inc. ("Donan"), to inspect the Property.
A representative of Donan, Charles C. Rutter (a licensed professional engineer), inspected the Insured Premises on May 31, 2012. Mr. Rutter issued a written report regarding the inspection on June 11, 2012. ( See Donan Report [48-2].) This report provides that the "purpose of the study was to determine the cause and origin of the truss separation." (Donan Report [48-2 at ECF p. 2].) Mr. Rutter observed visible cracks in the drywall of the church sanctuary and a broken beam in one of the scissor trusses. He also found that a picture of one of the trusses, taken prior to stabilization efforts, showed "the separation of the trusses center web member from the upper chords...." (Donan Report [48-2 at ECF pp. 3-4].) Mr. Rutter did not observe evidence of wind damage, such as uplifted shingles on the church roof or movement of a prefabricated metal carport on the north end of the Property. Mr. Rutter concluded that "[s]ufficient evidence is present to indicate the reported failure of the scissor truss." (Donan Report [48-2 at ECF p. 5].) He further determined:
The failure of the scissor trusses above the church's sanctuary roof is not the result of a wind event. A detailed analysis of individual truss joints and knowledge of the proper design loads is necessary to determine if the failures are the result of a design error, a truss manufacturing error, or due to overloading.
(Donan Report [48-2 at ECF p. 6].)
On June 21, 2012, Church Mutual issued its preliminary denial of coverage and forwarded a copy of the Donan Report to Friendship Baptist. ( See Doc. No. [48-3].) Church Mutual advised that no coverage existed for the claim in light of Donan's finding that the truss failure was not the result of a wind event, and the exclusion under the Policy for "loss or damage resulting from wear and tear, deterioration, settling, cracking, shrinking or expansion...." (Doc. No. [48-3].) Notwithstanding its preliminary denial of coverage, Church Mutual retained Luckett & Farley, another engineering firm, to perform a truss analysis. This action was taken in light of the above-quoted recommendation in the Donan Report [48-2].
A representative of Luckett & Farley, Atul Mashruwala (a licensed professional engineer), issued a written report on August 22, 2012. ( See L&F Report [48-4].) The report indicates that the scope of Luckett & Farley's work consisted of "[e]valuating the truss connection against applicable Building Code-prescribed minimum design loads to determine the adequacy to support such loads." (L&F Report [48-4] at p. 1.) The report concludes that "the connection between the truss plate and the vertical web member capacity is exceeded with the allowed design loads for code prescribed minimum loading, therefore we cannot directly attribute this failure to an excessive wind event. It appears that the truss connection plate was undersized." (L&F Report [48-4] at p. 2.)
On September 4, 2012, Church Mutual notified Friendship Baptist of its final coverage determination. ( See Doc. No. [48-6].) This notification advised of the findings in the L&F Report, and quoted the following Policy provisions in support of the determination that there was no coverage:
We will not pay for loss or damage caused by or resulting from any of the following 1. through 3. but if an excluded cause of loss that is listed in 1. through 3. results in a Covered Cause of Loss, we will pay for ...