The church filed a counterclaim for vexatious refusal and bad faith.

GuideOne moved for summary judgment, relying on a policy exclusion that provided:

We will not pay for loss or damage caused by or resulting from any of the following . . . Faulty, inadequate or defective . . . (2) Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction . . . or (4) Maintenance; of part or all of any property on or off the described premises.

For its part, the church contended that the policy, when read as a whole, was ambiguous as to whether coverage existed for its claim. Specifically, the church relied on the following language from the policy's additional coverages section:

If a Covered Cause of Loss occurs to covered Building property, and causes the enforcement of any ordinance or law that (a) is in force at the time the cause of loss occurs, and (b) regulates the demolition, repair or reconstruction of that building, or establishes zoning or land use requirements at the described premises, we will pay: . . .

Invoking this provision, the church argued that Mr. Kiepper's allegedly defective work on the organ created safety hazards in violation of various mechanical and electrical codes and ordinances. Thus, the church argued, when comparing the exclusion language with the additional coverages language, an ambiguity resulted that had to be resolved in the church's favor.

The District Court's Decision

The court, applying Missouri law, granted the insurer's motion.

In its decision, the court explained that the church admitted that the damage to its organ had resulted from defective repair and maintenance work and it found that the “plain language” of the exclusion “clearly” stated that coverage did “not extend to such damage.”

The church's claim, the court ruled, fell “squarely within” the exclusion and was “not a covered cause of loss.”

The court added that although the church generally was correct that the exclusion had to be read in the context of the entire policy, there was no ambiguity in the policy as a whole. The additional coverages section, the court said, did not apply here but only provided coverage for expenditures required to comply with an ordinance after a covered loss had occurred – a covered loss was a prerequisite.

The court concluded that GuideOne did not undertake to guarantee the work of third party contractors.

The case is Guideone Mutual Ins. Co. v. Cote Brilliante Presbyterian Church, No. 4:18-CV-00738-AGF (E.D. Mo. April 2, 2019). Attorneys involved include: For Guideone Mutual Insurance Company, Plaintiff: Merry Margaret Tucker, LEAD ATTORNEY, GUIDEONE, Des Moines, IA; Sean Patrick Dolan, LEAD ATTORNEY, EVANS AND DIXON, St. Louis, MO. For Cote Brilliante Presbyterian Church, Defendant: Thayer L. Weaver, LEAD ATTORNEY, TLW AND ASSOCIATES, LLC, St. Louis, MO.