Hennepin County District Court File No. 27-CV-17-16316
Alexander M. Jadin, Timothy D. Johnson, Jeffrey J. Woltjen,
Smith Jadin Johnson, PLLC, Bloomington, Minnesota (for
G. Williams, William L. Moran, Lehoan T. Pham, C. Todd
Koebele, HKM, P.A., St. Paul, Minnesota (for respondent)
Considered and decided by Halbrooks, Presiding Judge;
Bratvold, Judge; and Klaphake, Judge. [*]
90-day limit to file a motion to modify an arbitration award
under Minn. Stat. § 572B.24(a) (2018) does not apply to
an insured's request for preaward interest following an
insurance appraisal panel determines the amount of loss under
the policy and lacks authority to grant preaward interest
under Minn. Stat. § 549.09, subd. 1(b) (2018).
Sheila and William Oliver challenge the district court's
judgment denying their motion to grant preaward interest from
their insurer, respondent State Farm Fire and Casualty
Insurance Company (State Farm), for damages awarded by an
appraisal panel. The district court characterized the
Olivers' motion as a motion to modify the appraisal award
and denied the motion as untimely.
reverse the district court's decision for three reasons.
First, the Olivers were unambiguously entitled to preaward
interest for pecuniary damages awarded by the appraisal panel
and may claim preaward interest without proving wrongdoing by
the insurer or breach of contract. Poehler v. Cincinnati
Ins. Co., 899 N.W.2d 135, 140-41 (Minn. 2017)
(interpreting and applying Minn. Stat. § 549.09, subd.
1(b)). Second, Minnesota caselaw establishes that an
appraisal panel determines the amount of loss under the
insurance policy. Consequently, an appraisal panel lacks
authority to grant preaward interest, which is a statutory
right that arises independent of the insurance policy.
the district court erred in applying a 90-day filing deadline
to the Olivers' motion. Precedent establishes that the
Minnesota Uniform Arbitration Act (MUAA), Minn. Stat.
§§ 572B.01-.31 (2018), applies to insurance
appraisal awards, in addition to arbitration awards. And,
under the MUAA, Minn. Stat. § 572B.24(a) requires that a
party seeking to modify an arbitration award on specified
grounds must do so within 90 days of an arbitrator's
decision. Because an appraisal panel's authority is
limited to determining amount of loss under the policy, a
motion to modify an appraisal award may not include a request
for preaward interest, which arises from statute and not the
policy. We conclude that section 572B.24 does not apply to
the Olivers' motion for preaward interest.
we reverse the district court's decision denying the
Olivers' motion for preaward interest and remand to the
district court for proceedings consistent with this opinion.
11, 2015, a fire occurred at the Olivers' home in Edina.
On May 20, 2015, the Olivers submitted a claim to State Farm
under their homeowners' insurance policy. The parties
were "unable to agree on the measurement of the
loss." In January 2016, the Olivers sent State Farm an
email demanding an appraisal under the terms of the insurance
policy.The Olivers' email did not include a
request for preaward interest.
March 14, 2016, after hearing testimony and receiving
evidence from the parties, the appraisal panel issued an
award in favor of the Olivers; the total award was $1, 143,
778.39. State Farm paid the appraisal award.
August 8, 2017, in a letter to State Farm, the Olivers
demanded $94, 009.18 in preaward interest. State Farm refused
to pay preaward interest "based on the two-year
limitation clause provided in the [Olivers']
October 25, 2017, the Olivers filed a motion in district
court requesting that the court (1) confirm the appraisal
award under Minn. Stat. § 572B.22, and (2) grant
preaward interest on the appraisal award under Minn. Stat.
§ 549.09, subd. 1(b). The Olivers argued that Minnesota
law "unambiguously provide[s] for preaward interest on
insurance appraisal awards." The Olivers also contended,
based on the language in section 549.09, that
"[i]nterest accrues from the date of the first written
notice of the claim" through the date of the appraisal
award. The first written notice of the Olivers' claim
occurred on May 20, 2015, and the appraisal award was issued
on March 14, 2016. Because there were 300 days between the
dates of the first written notice and the appraisal award,
the Olivers argued that State Farm owed them $94, 009.18 in
preaward interest, after applying the statutory interest
rate. Finally, the Olivers asserted that, because their claim
to preaward interest was a statutory right, it was not
subject to the homeowners' policy's "limiting
language," and therefore, that they did not have to
request preaward interest within the two years specified in
Farm opposed the Olivers' request on three grounds.
First, State Farm argued that the Olivers' request
amounted to a new legal action that had to be dismissed for
insufficient service of process because no summons and
complaint were served. Second, State Farm argued there was no
award to confirm because it had already paid the appraisal
award. Third, State Farm argued that the Olivers' claim
was untimely because it was made more than two years after
the date of loss, contrary to the policy's requirement,
and filed more than 90 days after notice of the appraisal
award, contrary to Minn. Stat. § 572B.24.
district court issued an order granting the Olivers'
motion to confirm the award in the amount of $1, 143, 778.39.
With regard to the preaward-interest request, the district
court agreed with State Farm that the Olivers had made a
motion to modify the appraisal award under the MUAA. Because
the Olivers proceeded under the MUAA, the district court
reasoned that their request was "subject to its
limitations" and not "obviate[d] [from] the need to
seek [preaward interest] in an appropriate procedural
fashion." Because the Olivers failed to comply with the
90-day filing deadline in section 572B.24(a), the district
court denied their motion for preaward interest.
Olivers asked for leave to file a motion for reconsideration,
arguing that the district court incorrectly characterized
their motion as a motion to modify because their motion for
preaward interest under section 549.09 did not require a
modification of the award. The Olivers also argued that the
appraisal panel was not authorized to grant preaward
interest, which can only be decided by the ...