Submitted: February 7, 2017
from United States District Court for the District of
Minnesota - Minneapolis
LOKEN, COLLOTON, and KELLY, Circuit Judges.
COLLOTON, CIRCUIT JUDGE.
Insurance Company appeals the district court's order
granting summary judgment in favor of its insured, Mark and
Patricia Herll, in a dispute concerning damage from a
hailstorm to windows in the Herlls' home. The parties
could not agree on a loss amount for the damage, so they
submitted the loss determination to an appraisal panel in
accordance with the policy. The panel issued an appraisal
award, but the parties then disputed the meaning of the
award. The district court ruled that the appraisal award
unambiguously favors the Herlls' interpretation, but we
conclude that the award is ambiguous, and that the court
should have returned the matter to the appraisal panel for
the Herlls' home was damaged in a wind and hailstorm,
they submitted a claim to Auto-Owners. When a dispute arose
concerning the amount of loss, the parties submitted the loss
determination to a three-member appraisal panel in accordance
with the Herlls' policy. That policy provides in
Each party will select an appraiser and notify the other of
the appraiser's identity within 20 days after the
[written] demand [for an appraisal] is received. The
appraisers will select a competent and impartial umpire. . .
. The appraisers shall then appraise the loss, stating
separately the actual cash value and loss to each item. If
the appraisers submit a written report of an agreement to
[Auto-Owners], the amount agreed upon shall be the actual
cash value or amount of loss. If they cannot agree, they will
submit their differences to the umpire. A written award by
two will determine the actual cash value or amount of loss.
panel received evidence and issued an "Appraisal
award is a one-page typed form with spaces for handwritten
entries. The top portion of the form sets forth the name of
the insurance company, the insured, the property affected,
and the date and cause of loss. Written in the space for
"Cause" is "storm-wind & hail" and on
the line for "Loss Date" is "8-26-2013."
The parties agree that the date is mistaken, and that the
correct loss date is August 6, 2013.
next part of the form sets forth three columns to be
completed by the appraisers: "Item, " "Loss
Replacement Cost, " and "Loss Actual Cash
Value." The handwritten award lists two items. The first
is "Dwelling-All but front & right window related
loss." For this item, the form states a replacement cost
value of $116, 208 and an actual cash value of $81, 345.60.
second item is described as follows: "Dwelling-front
& right window related loss an additional. We question
the # of losses here." For this item, the form lists a
replacement cost value of $60, 000 and an actual cash value
of $42, 000.
the blanks for the "Loss Replacement Cost" and
"Loss Actual Cash Value" corresponding to each
listed item, the form includes blanks for total amounts. To
the left of these blanks is the pre-printed word
"ALL." In the two blanks corresponding to
"ALL, " the appraisers wrote "$ see
above" and "$ see above."
the portion of the form where the amounts are listed, there
is a space designated for "CLARIFICATIONS IF ANY."
In that space, the award states in handwriting: "GROSS
LOSS." At the bottom of the award form is a typed
certification stating: "We certify that we have
conscientiously and impartially performed the duties assigned
to us in accord with the appraisal provisions of the policy
and do hereby award the amounts established above for the
described loss." The award is signed by one of the two
appraisers and the umpire.
promptly issued a check to the Herlls for the actual cash
value of the first item listed, less a deductible amount, and
that portion of the award is not in dispute. As to the second
item, however, both parties promptly requested clarification
from the appraisal panel about whether the ...