A federal jury in Denver has found roofing contractor Skyyguard Corp. committed fraud in an insurance claim tied to a 2018 hailstorm at Calvary Baptist Church and ordered the company to pay $1.2 million in damages. The late May verdict, returned after a one-week civil trial, also found the firm liable for negligent misrepresentation, breach of contract, and intentional interference.
Jurors awarded $1.2 million and required repayment of claim funds; the insurer says it already paid out, a combination that lawyers say could push Skyyguard’s total exposure above $2 million. As first reported by BusinessDen, the lawsuit grew out of post-storm repairs and an appraisal process that sent the claim’s value soaring.
How The Appraisal Fight Heated Up
The dispute started after a June 18, 2018, hailstorm damaged the church’s roof. Skyyguard later pushed a September 23, 2019, estimate of about $1.81 million for a full replacement, even though a subcontractor’s earlier quote came in at roughly $734,755. Federal court filings show the appraisers ultimately issued an award of about $1.43 million in replacement cost value, and that Church Mutual paid more than $1 million on the claim before it moved to claw money back. Those same records show Skyyguard paid a subcontractor about $768,932 for the work, leaving a sizable gap between what was billed and what the job actually cost, according to GovInfo.
Verdict And Company Response
Jurors concluded that Skyyguard and its chosen appraiser steered the appraisal in a way that inflated the claim and interfered with Church Mutual’s contract rights. Skyyguard’s co-founder has said the company disagrees with the verdict and remains confident it will win on appeal, according to Claims Pages.
What’s Next For The Parties
Church Mutual says it paid about $1.09 million after the appraisal award and is now seeking to get that money back. Spencer Fane attorney Jeremy Moseley told industry reporters he expects the final judgment, including repayment, interest, and any punitive amounts, to top $2 million. Industry coverage has noted the case as an example of growing insurer concern about contractors, public adjusters and appraisers who drive claims into high-dollar appraisal outcomes, according to Business Insurance.
Legal Implications For Contractors And Carriers
The litigation turned on whether misrepresentations by third-party contractors or appraisers can be imputed to an insured under a policy’s fraud clause, and the court allowed Church Mutual’s counterclaims for recoupment and unjust enrichment to move forward. Those procedural rulings, combined with the jury’s fraud finding, could spur more insurers to probe appraisal awards closely and pursue contractors directly if discovery suggests inflated estimates, according to GovInfo.
Both sides acknowledge that the legal wrangling is not over. The insurer is set to press for repayment and interest, while Skyyguard has signaled it will appeal the verdict. The case is already turning heads in the storm repair world, where the limits of appraisal, contractor conduct, and insurer recoupment claims are getting fresh scrutiny, according to Claims Pages.
