When Are You Stopped From Bringing a Contract Cl

In the case of Church on Rock North vs. Church Mutual Insurance Company, Church on Rock North (“North Church”) is suing its insurance company Church Mutual Insurance Company (“CMIC”) for breach of contract because CMIC did not completely pay for damages that were covered under the insurance policy. The church was struck by lightning during a storm, causing damage to its building. At first, the parties were able to agree on the costs for some, but not all of the damages. The North Church brought this case regarding the amount that was in dispute. When CMIC learned of the lawsuit, it started its appraisal process in an attempt to reach an equitable solution and avoid litigation. During the appraisal process, CMIC had the case dismissed without prejudice so they could have more time to work out a solution, while North Church still retained the ability to renew the charges.

After the appraisal was completed, CMIC paid what they believed was a reasonable price for the remaining damage, based on the findings of the appraisal. After the payment was made, North Church reopened the lawsuit because it felt that it still was not fairly compensated. CMIC then filed a motion for summary judgment. This motion tells the court there is no question of fact and therefore the case can be immediately decided based on the information already supplied to the court and applicable law. If the person that brings the motion loses, the case is not over, instead it continues later, as a regular trial. CMIC’s claim is that because of the appraisal, North Church can no longer sue for breach of contract.

Winning Summary Judgement
According to the court, there are three facts that CMIC must prove in order to win this summary judgment case. Whether the facts are proven is based on a combination of: local case decisions, local laws and regulations and the contract at the base of the suit. First, CMIC must show that there was a binding and enforceable appraisal award. CMIC was unable to prove this element primarily to wording within its own contract. The court noted various sections of the contract that stated that an appraisal agreement was not a settlement and that the person insured, in this case North Church, still retains the right to sue after an appraisal. Second, CMIC must show that they paid the award in a timely manner. Both sides disagreed as to whether payment was fully made at the time of trial. CMIC lost this claim because more evidence was needed to make a decision. And finally, CMIC must show that North Church accepted payment of the award, knowing that it would mean that it could no longer sue. CMIC only had evidence that North Church received the appraisal payment. According to a previous breach of contract case, receipt of payment is not enough; there must be evidence of acceptance in order to stop a lawsuit. The court also felt that the language of the insurance policy made it unclear that accepting the appraisal restricted the ability to sue later. Since CMIC did not prove any of the necessary elements, it lost its summary judgment and the case will continue with its next step.

Litigation is complicated, costly and time consuming. Before bringing a breach of contractsuit, you should know all aspects of the contract. You must be sure of each party’s responsibilities before you can claim that someone did not perform properly. Contracts can be long and complicated, having an attorney to help review can help you find and understand details of the contract that could become important factors in deciding on how to ultimately handle the case. If you have any contract questions, consider calling our Long Island business lawyer for assistance.

See Related Blog Posts:
Through Multiple Trials, Breach of Contract Case Affirmed
Martha Stewart's Company Sued for Breach of Contract