Appeals court reverses insurer’s win in lack of cooperation dispute
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The 8th U.S. Circuit Court of Appeals on Friday overturned an insurer’s summary judgment win after finding a federal judge in Missouri erred when ruling that a building materials supplier violated a cooperation clause.
The three-judge appeals court panel said in Cardinal Building Materials Inc. v. Amerisure Insurance Co. that reversal was warranted because the insurer was unable to identify a policy term Cardinal failed to comply with when seeking coverage for additional damages to its building in Bridgeton, Missouri.
A tornado damaged the facility in 2013, and Amerisure paid Cardinal more than $1.5 million for the claim.
In 2014, Cardinal sought additional coverage under Amerisure’s policy and submitted a spreadsheet to the insurer listing various losses. Cardinal’s insuring agreement included a cooperation clause requiring the policyholder to perform all acts required by the policy, court records show.
Amerisure requested additional information from Cardinal about the losses, and the policyholder provided hundreds of pages of poorly organized documents supporting its request, according to court documents. Cardinal sued Amerisure shortly after receiving a letter from the insurer stating it would have a coverage decision after it received documents from two other businesses.
A federal judge in St. Louis dismissed Cardinal’s claim for unjust enrichment and awarded summary judgment to Amerisure on the policyholder’s claims for breach of contract and vexatious refusal to pay claims. The judge concluded that Cardinal was violating the policy’s cooperation provision.
The appeals court panel said Cardinal’s disorganized responses to Amerisure’s document requests did not constitute a violation of the cooperation clause.
Representatives for the parties did not respond to requests for comment.
