Clover Leaf Farm Condominium v. Country Mutual Insurance Company
- Donovan Frank
- 0:18-cv-02838
- U.S. District Court · District of Minnesota
- 10
In Clover Leaf v. Country Mutual, Judge Frank granted Clover Leaf’s motion in part and denied it in part, remanding the award for clarification and denying Country’s summary-judgment motion.
Clover Leaf Farm Condominium and Country Mutual Insurance Company are affected by the ruling; the appraisal panel must clarify the scope of its award.
What happened
Clover Leaf Farm Condominium v. Country Mutual Insurance Company involved hail damage to 13 condominiums insured by Country Mutual. The parties disagreed about the amount and scope of repairs and used a binding appraisal process. The appraisal panel issued an award, but the parties disagreed about what the award covered.
Clover Leaf argued that the award covered only siding, while Country Mutual argued that it covered all disputed damage except roof coverings. Clover Leaf asked the court to confirm its interpretation or, alternatively, send the award back to the appraisal panel for clarification. Country Mutual asked for summary judgment based on its interpretation of the award.
Judge Donovan W. Frank found that the award was ambiguous because it referred to “disputed items” without identifying them and could reasonably be understood in more than one way. The court granted Clover Leaf’s motion in part and denied it in part, sending the award back to the appraisal panel to clarify its scope; it denied Country Mutual’s summary-judgment motion in its entirety.
The detailed version
- Clover Leaf Farm Condominium v. Country Mutual Insurance Company · No. 0:18-cv-02838
- Donovan Frank
- Mar. 4, 2019
Background
Clover Leaf Farm Condominium is a common-interest community consisting of 13 residential condominiums in Anoka County, Minnesota. A hailstorm damaged the exteriors on or about June 11, 2017. Clover Leaf submitted an insurance claim to Country Mutual Insurance Company under a policy covering the property.
The parties disagreed about the amount and scope of the remaining repairs. They elected to use the policy’s binding appraisal procedure, under which each side selects an appraiser and the appraisers select an umpire. The appraisal panel issued an award stating an actual cash value of $416,000 and a replacement cost value of $520,000. Actual cash value accounts for depreciation; replacement cost value does not. The panel stated that roof-covering costs were excluded because the roofs had already been repaired and paid for.
The Parties’ Positions
Clover Leaf contended that the appraisal concerned only the cost of siding, although it also identified overhead and profit as disputed. It sought confirmation of the award under its interpretation and claimed that Country Mutual had not paid the award or an agreed amount for other repair categories. Clover Leaf alternatively asked the court to send the award back to the appraisal panel for clarification or to vacate it.
Country Mutual contended that the award covered all aspects of the loss except roof coverings. It argued that the award’s reference to the “total valuation” of the disputed items was clear and that the record did not support Clover Leaf’s claim that other repair categories had been excluded. Country Mutual also argued that it had satisfied its obligations under the policy and award and sought summary judgment.
Court’s Analysis
The court applied the Minnesota Uniform Arbitration Act, which governs review and confirmation of insurance appraisal awards. Under Minnesota law, an appraisal award is ambiguous when it is reasonably susceptible to more than one interpretation. When an award is ambiguous, the court may return it to the appraisal panel for clarification rather than summarily confirm it or decide which interpretation is correct.
The court found the award ambiguous. Although the award referred to the total valuation of “disputed items” and excluded roof-covering costs, it did not identify which items were disputed. The court concluded that both parties’ interpretations had support in the record and that the award could reasonably be read in more than one way.
Disposition
The court granted Clover Leaf’s Motion to Confirm Appraisal Award and for Partial Summary Judgment in part and denied it in part. It granted the motion to the extent Clover Leaf sought to remand the award to the appraisal panel to clarify the award’s parameters, and denied the motion in all other respects. The court denied Country Mutual’s Motion for Summary Judgment in its entirety.
Because the award was being returned for clarification, the court did not address whether to vacate the award or confirm it under either party’s interpretation. It also stated that Clover Leaf’s related claims were premature at that time.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.