of Appeals Office of Appellate Courts
Alexander M. Jadin, Anthony T. Smith, Timothy D. Johnson,
Roeder Smith Jadin, PLLC, Bloomington, Minnesota, for
Anthony J. Kane, Pfefferle Kane LLP, Minneapolis, Minnesota,
O. Thornsjo, Lance D. Meyer, O'Meara, Leer, Wagner &
Kohl, P.A., Minneapolis, Minnesota, for amici curiae The
Insurance Federation of Minnesota and The National
Association of Mutual Insurance Companies.
Hudson, J. Dissenting, Anderson, Stras, JJ.
Minnesota Statutes § 549.09, subd. 1(b) (2016), does not
require an underlying breach of contract or actionable
wrongdoing for the recovery of preaward interest on an
insurance appraisal award.
Absent contractual language explicitly precluding preaward
interest, an insured may recover preaward interest on an
appraisal award for a fire insurance loss, notwithstanding a
contractual loss payment provision in the policy stating that
the "[l]oss is payable within 5 working days . . .
[a]fter there is a filing of an appraisal award."
fire insurance provision that offers the insured all of the
rights and benefits required by Minn. Stat. § 65A.01
(2016), as well as additional rights and benefits, supersedes
the language set forth in the Minnesota standard fire
focus of this appeal is on the permissibility of preaward
interest on an insurance appraisal award under Minn. Stat.
§ 549.09, subd. 1(b) (2016). The case presents three
questions: (1) whether the recovery of preaward interest
under Minn. Stat. § 549.09, subd. 1(b), requires a
finding of an underlying breach of contract or actionable
wrongdoing; (2) whether an insured may recover preaward
interest on an appraisal award for a fire insurance loss when
the insurance policy contains a loss payment provision
stating that the loss is not payable until an appraisal award
is filed; and (3) whether an insured may recover preaward
interest on an appraisal award under the Minnesota standard
fire insurance policy, Minn. Stat. § 65A.01 (2016), even
though the insurer did not adopt the exact statutory language
in its insurance policy. For the reasons that follow, we
reverse the decision of the court of appeals.
Cincinnati Insurance Company (Cincinnati) issued
appellant/cross-respondent James Poehler (Poehler) a
homeowner's insurance policy that provided replacement
cost coverage for Poehler's home and personal property.
As required by statute, the policy included an appraisal
clause, providing that either the insurer or the insured may
demand an appraisal if they cannot agree on the amount of the
loss. See Minn. Stat. § 65A.01, subd. 3. The
policy also contained a statutorily-mandated loss payment
provision, providing that the loss is payable within 5
working days after the insured files an appraisal award with
damaged Poehler's property in October 2013. Poehler
promptly notified Cincinnati of the damage, and Cincinnati
made its first payment on the claim a week after the fire. On
December 2, 2013, Poehler properly demanded an appraisal
under the appraisal clause of the policy, which requires a
"written request" from the demanding party. By
then, Cincinnati had paid Poehler $105, 394.
continued making payments and had paid a total of $175, 663
by the time an appraisal hearing was held in June 2014. The
parties authorized the appraisers to decide "all
issues" involving the claim, including coverage issues.
At the appraisal hearing, Poehler argued that he was entitled
to an additional $170, 442 beyond what Cincinnati had already
paid for the loss; Cincinnati argued that Poehler was
entitled to an additional $57, 965. On June 23, 2014, the
appraisers issued an award, determining that Poehler's
total loss was $88, 480 more than what Cincinnati had paid by
the time of the appraisal hearing. Cincinnati paid the
appraisal award in full on July 9, 2014.
subsequently brought a motion in Hennepin County District
Court, seeking, among other relief, confirmation of the
appraisal award under the Uniform Arbitration Act, Minn.
Stat. § 572B.22 (2016), and preaward interest under
Minn. Stat. § 549.09, subd. 1(b). Cincinnati responded
that confirmation of the appraisal award was unnecessary
because it had already paid the full award, and it should not
be required to pay preaward interest because it had promptly
complied with all the terms of the policy and the appraisal
award. The district court confirmed the appraisal award and
granted Poehler preaward interest in the amount of $14, 635.
In concluding that Poehler was entitled to preaward interest,
the district court noted that Cincinnati had "initially
undervalued Poehler's loss by more than $88, 000, "
leaving him "to bear a significant portion of the burden
of his loss." The district court calculated the preaward
interest from December 2, 2013, the date Poehler demanded an
appraisal, to June 23, 2014, the date of the award, which was
203 days later. Based on the appraisal award and the preaward
interest period, the district court calculated preaward
interest as follows: "203/365 x $263, 144.04 x 10% =
court of appeals reversed, concluding that the preaward
interest statute, Minn. Stat. § 549.09, subd. 1(b),
"does not apply to appraisal awards pursuant to an
insurance policy in the absence of an underlying breach of
contract or actionable wrongdoing." Poehler v.
Cincinnati Ins. Co., 874 N.W.2d 806, 807 (Minn.App.
2016). Poehler sought review of the court of appeals'
decision and Cincinnati requested conditional cross-review.
We granted both parties' petitions.
begin with the question of whether the court of appeals erred
in holding that Minn. Stat. § 549.09 requires a finding
of "an underlying breach of contract or actionable
wrongdoing" for the recovery of preaward interest on an
insurance appraisal award, Poehler, 874 N.W.2d at
807. Poehler contends that the court of appeals'
interpretation of section 549.09 is contrary to the
statute's plain language and legislative purpose, as well
as the court of appeals' prior decisions. In response,
Cincinnati argues that under section 549.09 preaward interest
is only provided for awards of "damages, " and
Minnesota courts have defined "damages" solely as
compensation for wrongdoing. We conclude that the court of
appeals erred in its interpretation of the statute, because
Minn. Stat. § 549.09 does not require a finding of
wrongdoing for the recovery of preaward interest on appraisal
review statutory interpretation issues de novo.
Christianson v. Henke, 831 N.W.2d 532, 535 (Minn.
2013). In interpreting a statute, we first "determine
whether the statute's language, on its face, is
ambiguous." Id. at 536 (citation omitted)
(internal quotation marks omitted). "A statute is only
ambiguous if its language is subject to more than one
reasonable interpretation." Id. at 537. If we
determine that a statute is clear and unambiguous, our
"role is to enforce the language of the statute and not
explore the spirit or purpose of the law." Caldas v.
Affordable Granite & Stone, Inc., 820 N.W.2d 826,
836 (Minn. 2012).
Minnesota Statutes § 549.09, subd. 1(b), states, in
relevant part, Except as otherwise provided by contract
or allowed by law, preverdict, preaward, or prereport
interest on pecuniary damages shall be computed . .
. from the time of the commencement of the action or a demand
for arbitration, or the time of a written notice of claim,
whichever occurs first, except as provided herein. . . .
Except as otherwise provided by contract or allowed by law,
preverdict, preaward, or prereport interest shall not be
awarded on the following:
(1) judgments, awards, or benefits in workers'
compensation cases, but not including third-party actions;
(2) judgments or awards for future damages;
(3) punitive damages, fines, or other damages that are
noncompensatory in nature;
(4) judgments or awards not in excess of the amount
specified in section 491A.01; and
(5) that portion of any verdict, award, or report
which is founded upon interest, or costs, disbursements,
attorney fees, or other similar items added by the court or
549.09 plainly and unambiguously provides preaward interest
on "pecuniary damages"-including those awarded in
insurance appraisals-that are not otherwise excluded by the
statute. The statute, however, does
not define "pecuniary" or "damages, "
Minn. Stat. § 549.09, nor have we interpreted either
term in the context of the statute. The parties here dispute
the definition of "damages."
determining whether a statute is ambiguous, we give technical
words and phrases their special or defined meaning, and other
words and phrases their plain and ordinary meaning. In re
Welfare of J.J.P., 831 N.W.2d 260, 264, 266 (Minn.
2013). Although Cincinnati contends that "damages"
is a legal term that is defined as compensation for
wrongdoing only, we have held that the term
"damages" does not have an accepted technical
meaning in the insurance industry. Minn. Min. & Mfg. Co. v. Travelers
Indem. Co., 457 N.W.2d 175, 179 (Minn. 1990).
we conclude that the term "damages" does not have a
technical meaning, we interpret it according to its plain and
ordinary meaning. In determining the plain and ordinary
meaning of undefined words or phrases in a statute, we may
consult the dictionary definitions of those words and apply
them in the context of the statute. See Shire v.
Rosemount, Inc., 875 N.W.2d 289, 297 (Minn. 2016). In
general, dictionaries define "damages" as
compensation for loss, injury, or wrong. For example,
Webster's defines "damages" as
"the estimated reparation in money for detriment or
injury sustained: compensation or satisfaction imposed by law
for a wrong or injury caused by a violation of a legal
right." Webster's Third New International
Dictionary of the English Language Unabridged
571 (2002). The American Heritage Dictionary defines
"damages" as "[m]oney required to be paid as
compensation for an injury or wrong." The American
Heritage Dictionary of the English Language 457 (5th ed.
2011). New Oxford defines "damages" as
"a sum of money claimed or awarded in compensation for a
loss or an injury." New Oxford American
Dictionary 439 (3d ed. 2010). Thus, the ordinary meaning
of "damages" is not limited to compensation for
wrongdoing only; rather, it extends to compensation for any
injury suffered, whether wrongful or not.
addition, unless otherwise provided by contract or law,
subdivision 1(b)(3) of section 549.09 precludes the recovery
of preaward interest on "damages that are
noncompensatory in nature." Minn. Stat. § 549.09,
subd. 1(b)(3). In other words, section 549.09 provides
preaward interest on all awards of compensatory
damages that are not excluded by the statute. See
Lessard v. Milwaukee Ins. Co., 514 N.W.2d 556');">514 N.W.2d 556, 558
(Minn. 1994). The statute does not define
"noncompensatory" or "compensatory."
Minn. Stat. § 549.09. We have stated that "[i]n the
absence of a statute defining compensatory damages, it is
clear that compensatory damages are generally synonymous with
actual damages." Phelps v. Commonwealth Land Title
Ins. Co., 537 N.W.2d 271');">537 N.W.2d 271, 275 (Minn. 1995). And we have
defined "actual damages" as "[a]n amount
awarded to a complainant to compensate for a proven injury or
loss; damages that repay actual losses." Ray v.
Miller Meester Advert., Inc., 684 N.W.2d 404');">684 N.W.2d 404, 407 (Minn.
2004) (citing Damages, Black's Law
Dictionary (7th ed. 1999)). Therefore, even the
definitions of "compensatory damages" and
"actual damages" do not indicate that section
549.09 can be reasonably interpreted to condition the
recovery of preaward interest on a finding of wrongdoing.
we hold that Minn. Stat. § 549.09, subd. 1(b),
unambiguously provides for preaward interest on all awards of
pecuniary damages that are not specifically excluded by the
statute, and does not restrict the recovery of preaward
interest to cases or matters involving wrongdoing or a breach
of contract. Because we conclude that the statutory language