Cincinnati Insurance Company v. Rymer Companies, LLC

Background

Rymer Companies, LLC, also known as Rymer Companies, Inc., and Cannon Falls Mall, Inc. owned a mall that was damaged by a storm. Rymer submitted an insurance claim to Cincinnati Insurance Company. An appraisal panel awarded $23,226 for an item described as “Mall roof repair.”

Rymer later applied for a building permit to repair portions of the roof. Goodhue County denied the application because the roof was wet. Rymer argued that the denial triggered an ordinance-or-law provision requiring Cincinnati to pay the cost of replacing the entire roof.

In an earlier round of this case, the Eighth Circuit held that Rymer’s covered loss had to require repairs that could not be made without additional costs imposed by a law that was not enforceable until the covered loss required repairs. The Eighth Circuit also noted that the appraisal award might have covered repairs to the field of the roof. On remand, the district court directed the appraisal panel to clarify whether the original loss included any repair or involvement of the roof itself.

The appraisal panel answered no to questions asking whether the award covered repairs or damage to the surface of the mall’s roof. Rymer remained concerned about inconsistencies between the original award and the clarification, including the difference between the parties’ estimates for cap-flashing repairs and the amount awarded. The court allowed the parties to depose the appraisal panel so Rymer could investigate possible grounds for vacating the clarification.

Motions and Analysis

Rymer moved for summary judgment, arguing that the appraisal award should be interpreted using the appraisers’ deposition testimony. Cincinnati moved to confirm the appraisal award.

The court explained that an appraisal award that is unambiguous must be enforced unless it resulted from fraud, malfeasance, or other wrongdoing. The original award had been ambiguous because it did not explain the extent of the repair or the damage supporting the loss amount. The panel’s clarification resolved the relevant ambiguity by stating that the award did not cover the roof-field repairs described in Rymer’s permit application.

The court rejected Rymer’s attempt to use the deposition testimony to interpret the award. It explained that the earlier order authorizing depositions allowed Rymer to investigate possible wrongdoing that could support vacating the award; it did not authorize testimony to interpret the award. The court also stated that Rymer identified no authority allowing extrinsic evidence to interpret an appraisal award and that an unambiguous award must be interpreted and enforced according to its plain text.

Rymer expressly stated that it was not asking the court to vacate, modify, correct, or otherwise change the appraisal award. Because Rymer did not bring a motion to vacate, cite applicable law, or identify record facts supporting vacatur, the court concluded that Rymer could not meet the substantial burden required to set aside the award. The court also declined to vacate the award on its own, noting that no party had presented that issue and that Cincinnati had not had a meaningful opportunity to respond to vacatur on the merits.

Ruling

Judge Eric C. Tostrud ordered that: (1) Defendants’ motion for summary judgment was DENIED; (2) Cincinnati’s motion to confirm the arbitration award was GRANTED; and (3) the action was DISMISSED with prejudice. Judgment was ordered to be entered accordingly.