Shawn Pierce and Stephanie Pierce v. American Family Mutual Insurance Company
Shawn Pierce and Stephanie Pierce v. American Family Mutual Insurance Company, S.I.
- David Doty
- 0:22-cv-00052
- U.S. District Court · District of Minnesota
- 11
Counsel of record per CourtListener. Firm names are approximate and have been consolidated across spelling variants.
In Pierce v. American Family Mutual Insurance, Judge Doty granted the insurer's motion for summary judgment, ruling homeowners who missed policy deadlines cannot collect replacement-cost benefits.
Homeowners who have insurance claims involving replacement cost value provisions, particularly those with policy deadlines for notifying insurers of repair or replacement decisions and for completing repairs. The ruling also affects policyholders disputing whether equitable tolling of policy deadlines is available and how pre-award interest is calculated when appraisal is delayed.
What happened
Pierce v. American Family Mutual Insurance Company, S.I. is a dispute over how much money homeowners Shawn and Stephanie Pierce are owed after a July 2020 fire severely damaged their home and personal belongings. American Family acknowledged coverage and paid over $536,000 in actual cash value across the home and personal property claims before litigation, but the parties disagreed on whether the Pierces were also entitled to replacement cost value (a higher amount that does not deduct for depreciation) and additional interest payments.
The central dispute over the home (Coverage A) turned on a policy requirement that, to collect replacement cost value, the insured must notify the insurer within 180 days of the loss of their intent to repair or replace, and must complete replacement within one year. The Pierces did neither on time — they sold their fire-damaged home in January 2021 without telling American Family, and their replacement home was not finished within a year of the fire. The Pierces argued these deadlines should be excused because American Family caused delays, but the court found the opposite: American Family paid promptly, requested an appraisal in April 2021, and continued adjusting the claim, while the Pierces refused to participate in appraisal and only did so after the court ordered them to in August 2023. The court also rejected the Pierces' argument that a Minnesota statute barring suit-filing limitations of less than two years prohibited the policy's one-year repair/replacement deadline.
Judge David S. Doty granted American Family's motion for summary judgment and denied the Pierces' cross-motion for summary judgment, motion to amend the complaint to add a bad-faith claim, and motion to strike portions of American Family's reply brief. The court found the bad-faith claim unsupported given its rulings, and denied the motion to strike as moot.
The detailed version
- Shawn Pierce and Stephanie Pierce v. American Family Mutual Insurance Company · No. 0:22-cv-00052
- David Doty
- Dec. 11, 2025
Background
Shawn and Stephanie Pierce insured their Minnesota home through American Family Mutual Insurance Company, S.I. (American Family) under a policy effective October 1, 2019 to October 1, 2020. The policy covered fire damage to the dwelling (Coverage A) and personal property (Coverage B). On July 17, 2020, a fire severely damaged the Pierces' home and personal belongings.
American Family acknowledged coverage. It paid $329,605.25 in actual cash value (ACV — the value of property after deducting depreciation) for the dwelling on September 23, 2020, and later increased total Coverage A payments to $360,789.91. For personal property, American Family made multiple payments totaling $176,167.45. The Pierces disputed the amounts and sought more.
In April 2021, American Family demanded an appraisal under the policy's appraisal provision and Minnesota Statute § 65A.01. The Pierces named an appraiser but then delayed the process. In May 2021, American Family discovered that the Pierces had sold the fire-damaged home in January 2021 — without notifying American Family — and had signed a contract to build a new home elsewhere in November 2020. American Family notified the Pierces of their duty to preserve items for appraisal. The Pierces responded by demanding full policy limits and refusing to proceed with appraisal, asserting their losses exceeded the policy limits and rendered the dwelling a total loss that made appraisal unnecessary. American Family rejected the total loss theory and declined further payment until appraisal was completed.
The Pierces filed this lawsuit in January 2022 and filed an amended complaint in January 2023 alleging breach of the insurance policy. On August 10, 2023, the court ordered both Coverage A and Coverage B disputes to appraisal and stayed the case. The appraisal concluded in early February 2025 with the following awards: - Replacement cost value (RCV — property value without depreciation deduction) for dwelling: $568,233.80 - ACV for dwelling: $360,769.56 - RCV for non-consumables: $438,368.52 - ACV for non-consumables: $344,799.68 - RCV for consumables: $39,851.05 - ACV for consumables: $39,851.05
After the appraisal, the Pierces demanded additional RCV payments for both dwelling and personal property up to policy limits, plus pre-award interest. American Family agreed to pay an additional $244,483.26 under Coverage B plus $53,999.40 in pre-award interest for 805 days (less the $1,500 deductible), but refused additional Coverage A payments. Both parties then moved for summary judgment. The Pierces also moved to amend their complaint to add a bad-faith claim under Minnesota Statute § 604.18 and moved to strike portions of American Family's reply brief.
Legal Analysis
Standard of Review
Summary judgment (a ruling in one party's favor before trial based on undisputed facts) is appropriate when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law under Federal Rule of Civil Procedure 56(a). The court views evidence in the light most favorable to the non-moving party.
Issue 1: RCV for Dwelling (Coverage A)
The policy's replacement cost value provision states that to collect RCV after receiving an ACV settlement, the insured must: (1) notify American Family within 180 days of the loss of the decision to repair or replace, and (2) complete repair or replacement within one year of the date of loss.
The court found no genuine dispute that the Pierces failed to comply with either requirement. They did not notify American Family of their decision to replace the home until American Family discovered the sale on its own in May 2021 — ten months after the loss — and the replacement home was not completed within one year of the fire.
Equitable Tolling Argument Rejected
The Pierces argued the deadlines should be tolled (paused) because American Family caused the delay. The court acknowledged that under Minnesota law, an insurer can be barred from enforcing a policy time limit if it caused the delay, citing New Oil Christian Center v. Guideone Mutual Insurance Co. and Axis Surplus Insurance Co. v. Condor Corp. However, the court found that here, American Family acted promptly — paying ACV within two months of the fire, requesting appraisal in April 2021, and continuing to adjust the claim — while the Pierces were the ones who delayed by selling the home without notice, refusing appraisal, and only participating when the court compelled them to do so more than two years after American Family first requested it.
Statute Argument Rejected
The Pierces argued that Minn. Stat. § 65A.01, which sets a two-year limitations period for filing insurance coverage suits, prohibits the policy's one-year repair/replacement deadline. The court rejected this, holding that the statute governs when suit must be filed, not the specific terms of insurance policies.
ACV Settlement Timing Argument Rejected (Footnote)
The Pierces separately argued the RCV provision did not apply until American Family had paid all ACV amounts owed. The court disagreed, reading the plain policy language — which triggers the RCV provision upon receipt of "an actual cash value settlement" — to not require completion of all ACV payments before the RCV provision is implicated.
Issue 2: Pre-Award Interest
American Family had already paid $53,999.40 in pre-award interest for 805 days under Coverage B. The Pierces sought an additional $56,749.68 covering 864 days during which appraisal was delayed due to their refusal to participate. The court found it would be inequitable to award interest for the delay the Pierces themselves caused. The court also cited Axis Surplus Insurance Co. v. Condor Co., 19 F.4th 1062 (8th Cir. 2021), which affirmed that appraisal should proceed regardless of an underlying coverage dispute, undermining the Pierces' argument that a coverage question had to be resolved before appraisal could proceed.
Issue 3: Debris Removal Interest
The Pierces sought $9,329.28 in pre-award interest on a debris removal claim. Both parties agreed that such interest applies specifically to appraisal awards under Minn. Stat. § 549.09(b) and Poehler v. Cincinnati Insurance Co., 899 N.W.2d 135 (Minn. 2017). Because the appraisal panel did not award any debris removal amount, the court held pre-award interest on debris removal was not applicable.
Issue 4: Policy Deductible
The Pierces argued they should not have to pay the $1,500 deductible under Coverage B. The policy expressly states American Family will pay "only that part of a covered loss over any deductible which applies." The court held the plain language required the Pierces to pay the deductible and they were not entitled to recover it.
Issue 5: Motion to Amend Complaint (Bad Faith Claim)
The Pierces sought leave to amend their complaint to add a punitive damages claim under Minn. Stat. § 604.18, which allows such claims when an insurer denies benefits without a reasonable basis. The court denied the motion because, given its rulings above, the record did not support a bad-faith claim.
Issue 6: Motion to Strike / Sur-Reply
The Pierces moved to strike certain portions of American Family's summary judgment reply brief, or alternatively, to file a sur-reply. The court denied this motion as moot.
Disposition
The court: (1) denied plaintiffs' motion for summary judgment and motion to amend; (2) granted defendant's motion for summary judgment; and (3) denied the motion to strike. Judgment is to be entered accordingly.
Read the full 11-page opinion on CourtListener, the free public archive maintained by the Free Law Project.