A fire in June 2018 caused extensive damage to the Lighthouse Tabernacle Church in Crothersville, Indiana. The church's insurance policy with Church Mutual provided for replacement-cost coverage, but only if the insured repaired or replaced the property 'as soon as reasonably possible after the loss.' Following the fire, the church and insurer engaged in a prolonged dispute over the cost estimates for the repairs. While the insurer paid nearly $1.7 million in actual cash value and other undisputed amounts, the church did not begin any repairs or demolition for approximately two years. Instead, the church sued for breach of contract and bad faith, arguing that the ongoing valuation dispute excused its delay. The insurer moved for summary judgment, contending that the church had failed to meet the policy's prompt-repair condition. The district court granted the motion, ruling that factual disputes over valuation were irrelevant to the church's failure to perform the contractual condition precedent.
Circuit Judge Sykes, writing for the panel, affirmed the district court's decision on two primary grounds. First, the court addressed the substantive insurance law issue. The policy explicitly conditioned replacement-cost benefits on the insured repairing or replacing the property 'as soon as reasonably possible.' The court held that the church's two-year delay in commencing repairs constituted a breach of this contractual obligation. The court rejected the church's argument that the dispute over cost estimates excused the delay, distinguishing the case from precedents where insurers delayed all payments, leaving insureds unable to act. Here, the insurer had paid the actual cash value, enabling the church to begin repairs, but the church chose to wait for a higher valuation. Second, the court addressed the procedural posture. The church raised the argument that the valuation dispute excused its delay for the first time on appeal. The court held that this argument was waived because it was not raised in the district court. The court explained that waiver is the intentional relinquishment of a known right, and a party waives arguments not advanced at summary judgment. Even if the argument were merely forfeited, the court declined to apply the civil plain-error doctrine. The court noted that plain-error review in civil cases is reserved for rare instances involving exceptional circumstances, substantial rights affected, and a miscarriage of justice. The court found that counsel's poor performance or the existence of a pure question of law did not meet this high standard, emphasizing that civil litigants are bound by their counsel's actions and should seek malpractice remedies for errors rather than appellate relief.
The decision reinforces that replacement-cost insurance policies contain strict conditions precedent that must be met promptly. Insureds cannot use valuation disputes as a shield to delay repairs indefinitely. The ruling also serves as a warning to litigants that arguments not raised at the summary judgment stage are likely waived, and the Seventh Circuit will rarely entertain unpreserved arguments under the civil plain-error doctrine. The case is remanded with instructions to enter judgment for the insurer, and no further replacement-cost payments are owed to the church.
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