Church Mutual drops entities from suit
By Bob Baysinger
September 28, 2004
KANSAS CITY – Church Mutual Insurance Co., the Wisconsin-based insurer for the Missouri Baptist Convention (MBC), has filed a voluntary dismissal of three entities in its suit for declaratory judgment in the U.S. District Court for the Western District of Missouri. The dismissal applies to Windermere, Word and Way and the Missouri Baptist Foundation.
According to Mike Whitehead, MBC legal counsel, the action by Church Mutual has no effect on the convention’s claim against the insurance company for bad faith in refusing to “treat MBC equally with the three agencies that have nearly identical insurance policies.”
After messengers attending the 2001 annual meeting authorized legal action to recover five breakaway agencies, convention attorneys filed a petition for declaratory judgment in Cole County Circuit Court. When the five agencies countersued the MBC, the MBC notified Church Mutual to seek coverage of the costs of defending against the counter claims.
The company refused to pay any of the MBC defense costs, even though Church Mutual was paying defense costs for the three breakaway agencies.
“Church Mutual still has its claim against the Missouri Baptist Convention, and the MBC still has its claim against Church Mutual for bad faith in refusing to treat us equally with the three agencies,” Whitehead said.
“The voluntary dismissal is one more example of unequal treatment by Church Mutual of MBC. Their actions continue to prove our case.”
Church Mutual’s stipulation, filed Sept. 7, was filed “without prejudice to refiling.” Whitehead said this means Church Mutual is dropping its claims against the entities for now, but could rejoin the three as defendants at a later date.
Church Mutual filed the federal lawsuit last November seeking a court interpretation of the various insurance policies, seeking a declaration that Church Mutual is not obligated to pay legal fees to the the three entities or MBC.
Church Mutual provided no explanation for its voluntary dismissal. Whitehead said Church Mutual is not required by court rule to give a reason to the court why it is dismissing some parties but not others.
Church Mutual included The Baptist Home and Missouri Baptist College in its original court action. Motions were filed to dismiss both entities because neither institution carries a Church Mutual policy.
The Baptist Home was dismissed on March 31. The college’s motion to dismiss was granted on Aug. 26.
MBC attorneys were not informed in advance by Church Mutual about the voluntary dismissal action. The federal court is not required to take any action when a party files a voluntary dismissal of some parties or claims.
Tim Dollar, another member of the MBC legal team, took the deposition of John Cleary, Church Mutual vice president and general counsel, on Sept. 21. Dollar said Cleary did not seem to know the reason why Church Mutual had agreed to the dismissal. Cleary seemed to believe that the defendant agencies had filed the voluntary dismissal themselves, dropping them out of the lawsuit. When advised that Church Mutual had initiated the dismissals, Cleary claimed that he did not know what was filed with the court because it was handled by Church Mutual’s lawyers.
Cleary testified that he assumed the underlying case was over when Cole County Circuit Judge Tom Brown granted a dismissal of the petition naming churches as plaintiffs. Dollar informed Cleary that the MBC would soon refile a petition naming messengers as representatives of the convention – as suggested by the court. Cleary said he did not realize that the case would continue.
“We have been pushing for the deposition of the Church Mutual corporate representative for some time,” Whitehead said. “We have had dates promised repeatedly, only to be cancelled. We finally noticed up two company employees, and only one appeared. We intend to advise the judge of this uncooperative conduct when we take up the company’s motion for protective order.”
Church Mutual attorneys filed a motion for a protective order before Cleary’s deposition, but the court has not had time to consider the motion. At the deposition, Church Mutual’s attorney refused to allow the witness to answer numerous questions on claims of “privileged communications” between the insurer and other insureds.