By Vicki Brown, Word&Way News Writer
The Missouri Baptist Convention's insurance carrier may have to cover at least some of the costs of legal action the MBC brought against five related institutions.
Church Mutual Insurance Co. lost its bid to avoid covering any costs the convention incurred or would incur in its effort to force The Baptist Home, Missouri Baptist University, the Missouri Baptist Foundation, Windermere Baptist Conference Center and Word&Way to rescind new charters the entities filed in 2000 and 2001.
Senior U.S. District Judge Scott Wright has ruled that Church Mutual must cover the MBC's costs for defending itself against counterclaims.
The convention, through its Executive Board and six churches, filed legal action against the five entities after trustees changed each entity's charter to allow their respective boards to become self-electing. The entities subsequently filed counterclaims against the Executive Board and churches.
The MBC appealed a decision by Cole County Circuit Judge Thomas Brown to dismiss the case. While that appeal was pending, the convention filed a second lawsuit against the entities, substituting five individual messengers for the six churches.
The six churches included First Baptist churches of Arnold, Bethany and Branson; Concord Baptist Church, Jefferson City; Oakwood Baptist Church, Kansas City; and Springhill Baptist Church, Springfield.
In November 2003, Church Mutual filed suit against the convention, the six churches, the five entities and Matt Blunt, then as Missouri Secretary of State.
The company dropped proceedings against those it did not insure — The Home, the university, Concord Baptist, First Baptist churches of Arnold and Branson, and the secretary of state. Later, Church Mutual voluntarily dismissed the remaining agencies from the suit.
Church Mutual claimed it never offered to defend the MBC or the churches in the action. However, the company paid the convention $5,000 on Sept. 11, 2003.
In his order, Judge Wright called the payment "inconsistent" with the company's claims. "Implicit in plaintiff Church Mutual's payment of legal defense coverage is a finding that the counterclaims at issue constitute a 'suit' to which the insurance policy applies," the judge wrote.
Church Mutual claimed that the entity counterclaims did not trigger policies for the convention and the churches because the institutions did not seek monetary damages. Any damages would be considered a "loss" under the policies' terms.
However, Judge Wright noted that the counterclaims do seek reimbursement of attorneys' fees and costs, and would be considered a "loss" for the MBC and churches.
The court also ruled that the MBC lawsuit against the agencies and the subsequent counterclaims are based on a convention action or failure – to name trustees it chooses, rather than those the entities choose. The policies cover "any acts, omissions or failures of the insured," the judge said.
Although Judge Wright's order requires Church Mutual to defend against the counterclaims, it did not spell out how much of the costs the MBC has incurred are due to its own claim or to its defense.
As of March 2004, the last financial report to which Word&Way had access, the convention had spent more than $1 million to force the five entities to rescind their new charters. (08-25-05)
