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Lifeline Ministries Church v. Church Mutual Insurance Company

May 15, 2013

LIFELINE MINISTRIES CHURCH, PLAINTIFF-APPELLANT,
v.
CHURCH MUTUAL INSURANCE COMPANY, DEFENDANT-APPELLEE.



Appeal from the Iowa District Court for Linn County, Stephen B. Jackson Jr., Judge.

The opinion of the court was delivered by: Vaitheswaran, J.

An insured contends that the jury's answers on a special verdict form were inconsistent and that it is therefore entitled to a new trial. REVERSED AND REMANDED.

Heard by Vogel, P.J., and Vaitheswaran and Bower, JJ.

A church sought coverage from its insurer for damage sustained during a flood. Following a two-part jury/court trial, the insurer prevailed. On appeal, the church raises several arguments in support of reversal, including a contention that the jury's answers to special verdict questions were inconsistent. We find that issue dispositive, but also address the district court's construction of the insurance policy.

I. Background Facts and Proceedings

Lifeline Ministries Church in Cedar Rapids had property insurance, but not flood insurance, through its insurer, Church Mutual Insurance Company. In 2008, the Cedar River overflowed its banks and inundated the City of Cedar Rapids. Several hours before the surface waters reached the church, the sewer backed up into the church basement.

Lifeline sought coverage from Church Mutual for losses resulting from the sewer backup. When the company denied coverage, Lifeline sued for breach of contract. Both parties filed partial motions for summary judgment. The district court denied Church Mutual's motion as untimely and denied Lifeline's motion on the ground that "reasonable minds could draw different inferences and reach different conclusions . . . with regard to the question of whether [Lifeline's] damages resulted from a sewer backup." The court declined to immediately rule on the applicability of a policy exclusion, stating, "These fact issues impact the Court's construction of the policy language. Once the cause of [Lifeline's] damages has been determined by the trier of fact, the Court can, as a matter of law, determine whether exclusions relied on by [Church Mutual] apply."

The case proceeded to a jury trial. The jury completed a special verdict form, as follows:

Question No. 1: Did Lifeline prove that there was sewer back up that invaded its property through sewers or drains?

Answer "yes" or "no."

ANSWER: YES [If your answer is "no," do not answer any further questions.] [If you answer is "yes," you must answer Questions 2, 3, 4 and 5 below.]

Question No. 2: Did Lifeline prove that the sewer back up was caused by an event away from its property?

Answer "yes" or "no."

ANSWER: YES

Question No. 3: Did Church Mutual prove that the sole cause of the damage to Lifeline's property was flood, surface water, or overflow of any body of water?

Answer "yes" or "no."

ANSWER: YES

Question No. 4: Did Church Mutual prove that the sewer backup entered Lifeline's building through foundations, walls, floors, windows, cracks, roofs, or other ...


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