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Bassford Remele is a full service litigation firm located in Minneapolis, Minnesota. Founded in 1882, the firm represents local, national and international clients in all areas of civil litigation and dispute resolution.
Case Law Update
Date: February 26, 2010 — Minneapolis, MN
During the week of February 26, 2010, the Minnesota appellate courts released an opinion on the following topic that may be of interest to our clients:
INSURANCE LAW – APPRAISALS; DAMAGE VALUATION
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An insurance appraisal panel does not exceed its authority when it applies an insurance policy’s replacement loss formula to determine the amount actually spent to repair or replace roofing shingles.
After hail damaged townhouse roofs, the homeowners’ association sought coverage from its insurer. When neither the parties nor their appraisers could agree on the amount of loss, the parties selected a third appraiser. The selection was made pursuant to the insurance policy’s terms, which also stated that an agreement by any two of the appraisers would be binding as to the amount of loss.
After the appraisal panel issued an appraisal award of $264,154, the insurer initiated a declaratory judgment action to vacate the award, in part on grounds that the panel had exceeded its authority by awarding total roof replacement based on wear and tear and unavailability of shingles used on the original roof. The district court granted summary judgment in favor of the association.
The Minnesota Court of Appeals affirmed, holding that the appraisal panel had not exceeded its authority. At issue was policy language stating “coverage is also provided for ‘covered property’ which is not damaged but which must be removed and repaired in order to repair 'covered property’ which is damaged by a covered cause of loss.” According to the insurer, by relying on this language to make its $264,154 award, the appraisal panel made a coverage determination reserved for the court and therefore had exceeded its authority. The Court of Appeals disagreed, holding that the appraisal panel had made only a valuation determination.
QBE Insurance Corp. v. Twin Homes of French Ridge Homeowners Ass’n, __ N.W.2d __, A09-929 (Minn. Ct. App. 2/23/10).
Editorial Staff |
C. Lundberg, C. Morris, K. Putney, R.A. Williams, J.S. Andresen, M. Covin, S. Gustad, B. Sande, C. Hund, S. Sitek, T. Quick, D. Camarotto, K. Burke, J. Marquet, D. Turner, L. Pugh, M. Bradford, P. Semrow, and S. Pearson |
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