The U.S. Court of Appeals for the Sixth Circuit affirmed a summary judgment ruling on Jan. 13, 2026, that rejected a religious organization's attempt to recover $1.3 million in code-compliance costs beyond its insurance policy's sub-limit.

In *Piatt Lake Bible Conference Association v. Church Mutual Insurance Company*, the appeals court upheld the district court's dismissal of tort claims filed by Piatt Lake Bible Conference Association (PLBCA) against its insurer. The case centered on whether Church Mutual Insurance Company's alleged representations about coverage could override explicit policy limits.

PLBCA, a nonprofit religious organization operating in Michigan since the 1940s, owned approximately 18 buildings on 3,500 acres, including the "Miracle Building" at the center of the dispute. Built in 1973, the Miracle Building was a two-story multi-purpose structure that served the organization's religious activities.

The organization held a blanket insurance policy with Church Mutual that provided building coverage up to approximately $3.5 million. However, the policy included a specific $100,000 sub-limit for code-compliance costs - expenses required to bring rebuilt structures up to current building codes.

According to the court opinion, Church Mutual had told PLBCA that it had "full replacement coverage" for its buildings. This representation became central to the dispute when the Miracle Building collapsed in March 2020.

Following the collapse, PLBCA began the process of rebuilding the structure. However, the organization soon discovered that the code-compliance costs necessary to bring the rebuilt structure up to current standards would significantly exceed the policy's $100,000 sub-limit. PLBCA alleged these costs exceeded the sub-limit by $1.3 million.

Rather than pursuing a traditional breach of contract claim, PLBCA filed suit against Church Mutual in tort, arguing that the insurer's representations about "full replacement coverage" created liability for code-compliance costs beyond the policy's explicit limits. The organization contended that Church Mutual's statements about coverage had misled them about the true scope of their protection.

The case proceeded to the U.S. District Court for the Western District of Michigan, where Church Mutual moved for summary judgment. The district court granted the motion, dismissing PLBCA's tort claims. The court apparently found that the policy's clear language regarding the $100,000 sub-limit could not be overcome by the insurer's general statements about replacement coverage.

PLBCA appealed the dismissal to the Sixth Circuit, arguing that Church Mutual's representations created obligations beyond the written policy terms. The organization likely contended that the insurer's statements about "full replacement coverage" were misleading given the significant sub-limit for code-compliance costs.

In its Jan. 13 opinion, a three-judge panel consisting of Circuit Judges Batchelder, Clay, and Ritz affirmed the district court's ruling. Circuit Judge Ritz wrote the opinion for the court, though the full reasoning is not available as the opinion was marked "Not Recommended for Publication."

The ruling represents a victory for Church Mutual and reinforces the principle that insurance policy language typically governs coverage disputes, even when insurers make general statements about the scope of protection. The decision suggests that courts will look to specific policy provisions rather than general representations when determining coverage obligations.

The case highlights common challenges faced by policyholders in understanding insurance coverage, particularly regarding sub-limits that may not be prominently disclosed. Code-compliance costs have become increasingly significant in insurance claims as building codes have evolved to require more stringent safety and environmental standards.

For religious organizations and other property owners, the ruling underscores the importance of carefully reviewing insurance policies to understand specific limits and exclusions. While insurers may describe policies in general terms as providing "full replacement coverage," the actual terms and conditions in the written policy typically control.

The decision also reflects the Sixth Circuit's approach to insurance disputes, showing deference to clear policy language over general representations. This aligns with established precedent that written insurance contracts should be interpreted based on their specific terms rather than oral or general descriptions of coverage.

PLBCA's case demonstrates the potential gap between policyholders' understanding of their coverage and the actual scope of protection provided. The $1.3 million difference between expected and actual coverage represents a substantial financial burden for the nonprofit organization.

The ruling may prompt religious organizations and other institutional property owners to more carefully review their insurance policies, particularly provisions related to building code compliance. Given the increasing costs associated with meeting modern building standards, these sub-limits can create significant coverage gaps in major loss situations.