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Christi Bay Temple v. Guideone Specialty Mutual Insurance Co., et al

The issue on appeal is whether a church lacked capacity to sue its insurance carrier for breach of contract. The defendant insurance carrier moved to abate and later to dismiss the action, arguing that the church lacked capacity because it was a nonprofit corporation that had lost its charter. The court of appeals agreed, affirming the trial court's judgment dismissing the underlying suit. The church maintains, however, that it has never operated as a nonprofit corporation but rather is an unincorporated religious association. Because there is no evidence that the church ever functioned as a corporation or otherwise lacked capacity to sue its insurance carrier for breach of contract, the court of appeals' judgment is reversed, and the case is remanded to the trial court for further proceedings. Texas Supreme Court, No. 09-0683, 12-03-2010

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The issue on appeal is whether a church lacked capacity to sue its insurance carrier for breach of contract. The defendant insurance carrier moved to abate and later to dismiss the action, arguing that the church lacked capacity because it was a non-profit corporation which had lost its charter. The court of appeals agreed, affirming the trial court’s judgment dismissing the underlying suit. ___ S.W.3d ___. The church maintains, however, that it has never operated as a non-profit corporation but rather is an unincorporated religious association. Because there is no evidence that the church ever functioned as a corporation or otherwise lacked capacity to sue its insurance carrier for breach of contract, we reverse the court of appeals’ judgment and remand the case to the trial court for further proceedings.

Christi Bay Temple of Corpus Christi, Texas, is a member church of the Pentecostal Church of God. Operating as an unincorporated religious association, the trustees of the church acquired title to property for its ministry in 1976. This property sustained water damage in 2001. GuideOne Specialty Mutual Insurance Company insured the property at the time of the loss. Although GuideOne accepted coverage, the church was ultimately dissatisfied with the adjustment of its claims and sued for additional damages.

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