Blue Earth County District Court. File No. C9-01-1282.
Considered and decided by Minge, Presiding Judge; Toussaint, Chief Judge;
and Kalitowski, Judge.
A "suit" refers to any proceeding by a party or parties against another in a court of general jurisdiction; it does not include arbitration.
The opinion of the court was delivered by: Toussaint, Chief Judge
On appeal from an order confirming an arbitration award, appellant North Star Mutual Insurance Company argues that respondent Vaubel Farms's request for appointment of an appraiser was untimely because it occurred nearly three years after the loss, and the terms of the policy explicitly required any "suit" to be commenced within two years. Because we conclude the language of the contract reflects an arbitration clause and because arbitration is not barred by the two-year contractual limitation period for "suits," we affirm.
Respondent Vaubel Farms entered into a combination insurance package policy with Shelby Farmers Mutual Fire Insurance Company and appellant North Star Mutual Insurance Company in 1997. North Star was Vaubel's insurer for windstorm damage, and drafted the windstorm insurance agreement between the two parties. At issue are two clauses in the policy conditions, one preventing Vaubel from commencing any "suit to recover for any property claim" after two years, the other labeled "arbitration," which reads as follows:
16. Arbitration. If [Vaubel] or [North Star] fail to agree on the actual cash value of an item or amount of loss on written demand by either party, the insured and the company shall each, within twenty (20) days of the demand, select a competent and disinterested appraiser and notify the other party of the appraiser's identity. If either party fails to select an appraiser within the time provided, the presiding judge of the district court in the county in which the loss occurred shall appoint an appraiser to represent that party. The appointment shall be made upon application to the court by the party not failing to make the required selection and upon five (5) days written notice to the other party. The appraisers appointed pursuant to this section shall make a good faith effort to select a competent and disinterested umpire. If the appraisers fail to agree upon an umpire within fifteen (15) days of their appointment, the presiding judge of the district court... shall appoint an umpire upon application by either party and five (5) days written notice to the other party. The appraisers shall appraise the loss, stating separately actual value and loss to each item. If the appraisers fail to agree, they shall submit their differences to the umpire whose decision shall control to the extent of the differences between the appraisers. An award in writing, approved by the appraisers or by an appraiser and the umpire... shall be conclusive evidence of the actual value and loss to an item.
On May 15, 1998, while this policy was in effect, Vaubel sustained wind damage to a hog-finishing barn. Vaubel subsequently notified North Star of the damage, and North Star agents then preliminarily investigated the matter. North Star did not take further action on the claim, however, because Vaubel failed to respond to requests for invoices, bills, and statements relating to the damage.
On April 10, 2001, nearly three years after the damage occurred, Vaubel sent North Star a letter detailing the damage and assessing total losses of $62,839.71. North Star declined to honor the claim, citing the two-year limit to all "suits," and noted that it "would appear to be beyond the limit of time within which [the claim] may be appropriately pursued."
Vaubel then demanded arbitration and, after North Star failed to cooperate, moved the district court to compel arbitration, claiming that North Star refused to appoint an arbitrator/appraiser pursuant to the aforementioned "arbitration" clause. North Star moved for summary judgment, again claiming the "suit" was barred by the policy's two-year limitation period. It also argued that the policy did not provide for arbitration, even though it contained a clause labeled as such, and instead merely provided an appraisal clause that could not be pursued after the two-year limitation.
After a hearing, the district court determined that all ambiguities should be construed against North Star, the drafter of the agreement, that the policy contained an arbitration clause, and that arbitration did not fall within the contractual time limitation on "suits." It therefore denied North ...