Smith v. State Farm Fire and Casualty Company
- Paul Magnuson
- 0:20-cv-01605
- U.S. District Court · District of Minnesota
- 4
In Smith v. State Farm, Judge Magnuson denied State Farm’s summary-judgment motion, granted Smith’s, and ordered payment under the appraisal award.
Mark Smith and State Farm Fire and Casualty Company; State Farm was ordered to pay Smith $46,679.38 in preaward interest and $2,706 in irrigation-system replacement cost.
What happened
Mark Smith’s home was insured by State Farm Fire and Casualty Company. After lightning damaged property at the home, an appraisal panel determined the amount of the loss. State Farm paid some amounts but refused to pay replacement costs for the irrigation system because Smith replaced it after the policy’s two-year deadline.
The parties asked the court to decide whether State Farm owed the irrigation-system replacement costs and how much interest it owed before the award. The court said State Farm had agreed to be bound by the appraisal panel’s decision and could not use summary judgment to reopen issues the panel had already decided.
The court denied State Farm’s motion for summary judgment, granted Smith’s motion, and ordered State Farm to pay $46,679.38 in preaward interest and $2,706 for the irrigation system. Judge Paul A. Magnuson entered the order.
The detailed version
- Smith v. State Farm Fire and Casualty Company · No. 0:20-cv-01605
- Paul Magnuson
- May 11, 2022
Background
State Farm insured Mark Smith’s home in Lino Lakes, Minnesota. Lightning struck at or near the home on July 20, 2018, damaging personal property, electronics, appliances, and other equipment. After the parties investigated the loss, Smith sued over the amount State Farm would pay and moved to require an appraisal. State Farm agreed to submit the dispute to an appraisal panel.
The panel awarded $98,038.99 in actual cash value and $163,398.32 in replacement cost value. State Farm paid the full actual cash value. Smith later replaced the home’s irrigation system on July 20, 2021. The panel determined that the irrigation-system loss was $6,765. State Farm paid $4,059 in actual cash value but refused to pay the remaining $2,706 in replacement cost value, citing the policy’s requirement that the system be repaired within two years. State Farm also paid $61,510.87 in replacement cost value for other property that Smith timely repaired or replaced.
Issues and Analysis
The parties filed cross-motions for summary judgment, asking the court to decide whether State Farm owed the irrigation-system replacement cost and the amount of preaward interest. Summary judgment is a decision without a trial when there is no genuine dispute over a fact that could affect the result and one party is entitled to judgment under the law.
The court held that the parties had agreed to submit Smith’s claim to the appraisal panel and to be bound by the panel’s decision. State Farm challenged the panel’s decisions concerning preaward interest and the irrigation-system replacement cost, but it did not argue that the panel had exceeded its authority. The court therefore concluded that State Farm was bound by the award and that its motion improperly sought to relitigate issues the panel had already decided.
Disposition
The court denied State Farm’s Motion for Summary Judgment and granted Smith’s Motion for Summary Judgment. It ordered State Farm to pay Smith $46,679.38 in preaward interest under Minnesota Statute § 549.09, subdivision 1(c)(2), and $2,706 in replacement cost value for the irrigation system, consistent with the appraisal award. Judge Paul A. Magnuson ordered that judgment be entered accordingly.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.