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Clover Leaf Farm Condominium v. Country Mutual Insurance Co.

United States District Court, D. Minnesota

March 4, 2019

Clover Leaf Farm Condominium, Plaintiff,
v.
Country Mutual Insurance Company, Defendant.

          Amanda K. Linden, Esq., Smith Jadin Johnson, PLLC, and Timothy D. Johnson, Esq., Roeder Smith Johnson, PLLC, counsel for Plaintiff.

          Blake Phillip DeRosier, Esq., Leatha G. Wolter, Esq., and M. Gregory Simpson, Esq., Meagher and Geer, PLLP, counsel for Defendant.

          MEMORANDUM OPINION AND ORDER

          DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         Plaintiff Clover Leaf Farm Condominium (“Clover Leaf”), a common interest community comprised of 13 residential condominiums, sustained hail damage to its condominiums' exteriors. Clover Leaf submitted a claim to its insurer, Defendant Country Mutual Insurance Company (“Country”), but the parties were unable to agree upon the amount and scope of the condominiums' repairs. They elected to resolve the dispute through a binding appraisal (“Appraisal”). The appraisal panel issued an award (“Award”), however the parties dispute the scope of the Award. The Court now considers Clover Leaf's Motion to Confirm Appraisal Award and for Partial Summary Judgment (Doc. No. 14 (“Clover Leaf Motion”), and Country's Motion for Summary Judgment (Doc. No. 16).

         For the reasons discussed below, the Court grants the Clover Leaf Motion to the extent it seeks to remand the Award to the appraisal panel for clarification, and denies Country's Motion for Summary Judgment.

         BACKGROUND

         Clover Leaf consists of 13 residential condominiums (the “Property”) located in Anoka County, Minnesota. (Doc. No. 18 (“Clover Leaf Memo.”) at 1.) The Property was insured under a policy (“Policy”) issued by Country. (Doc. No. 1, Ex. A (“Compl.”) ¶ 4.) On or about June 11, 2017, the Property was damaged by a hail storm (the “Loss”). (Id. ¶ 5.) Clover Leaf notified Country of the Loss and made a claim for damages on June 12, 2018. (Doc. No. 8 (“Stip.” ¶ 4.) Country investigated the Loss to create an estimate of the cost to repair the Property. (Doc. No. 20 (“Country Memo.”) at 4.)

         On July 19, 2017, Country issued four actual cash value (“ACV”) payments to Clover Leaf totaling $370, 728.79.[1] (Doc. No. 25 (“Elliot Decl.”) ¶ 5, Ex. A.) On September 11, 2017, Country issued three RCV payments totaling $183, 764.02 after roof repairs were completed.[2] (Id. ¶ 6, Ex. B; Country Memo. at 4-5.) For the next several months, Clover Leaf and Country disagreed on the amount and scope of remaining repairs. (Country Memo. at 5.) Each party relied on a competing estimate to support its position. (See Elliot Decl. ¶¶ 8-9, Ex. D (“Country Estimate”), Ex E. (“Clover Leaf Estimate”).) The Country Estimate calculated that the ACV and RCV to restore the Property was $736, 320.99 and $893, 395.61, respectively. (See Country Estimate.) The Clover Leaf Estimate calculated that the RCV was $1, 388, 907.86; it did not calculate an ACV. (See Clover Leaf Estimate.) Both estimates were comprehensive with respect to the repairs necessary to restore the Property. (See generally Country Estimate and Clover Leaf Estimate.)

         In early 2018, Clover Leaf submitted a written demand for appraisal pursuant to the Policy's appraisal provision.[3] (Clover Leaf Memo. at 3; Country Memo. at 5.) The provision provides:

If we and you disagree on the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire . . . . The appraisers will state separately the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding.

(Policy at 97.) Country and Clover Leaf dispute whether they reached an agreement with respect to several categories of damages prior to the appraisal. (Compl. ¶ 11; Elliot Decl. ¶ 19.) Country contends that it gave its appraiser the entire Country Estimate without instructions to exclude certain items because the parties had not agreed to do so.[4] (Elliot Decl. ¶ 19.) Clover Leaf argues that the parties were in agreement with respect to everything except the cost of siding.[5] (Compl. ¶ 7.)

         The appraisal occurred on June 15, 2018. (Stip. ¶ 4.) The appraisal panel issued an Award which provided an ACV amount of $416, 000 and an RCV amount of $520, 000. (Elliot Decl. ¶ 20, Ex. O (“Award”).) The panel specified that the award did not include the cost to repair roof coverings because the work had already been completed and payment issued. (Id.) Clover Leaf argues that the Award applies only to siding. (Compl. ¶ 13.) Country argues that the Award encompasses all aspects of the Loss except the roof coverings. (Doc. No. 28 (“Country Opp.”) at 2.) Each party requests the Court to confirm the Award according to its interpretation. (Compl. ¶¶ 22-29.)

         Clover Leaf argues that because siding was the only issue in dispute, no other issues were appraisable.[6] (Clover Leaf Memo. at 9) (citing Minn. Stat. § 65A.01, subd. 3, to support that only disputed amounts go before the appraisal panel). Clover Leaf contends that Country specifically acknowledged the limited scope of the dispute. (Clover Leaf Memo. at 12.) It cites a correspondence dated April 26, 2018 where Country stated, ‚ÄúCountry objects to an appraisal of loss regarding the amount of loss associated with the cost to repair the buildings' siding . . . Country further objects to an appraisal of loss regarding the ...


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