Batiz v. Fire Insurance Exchange, 800 N.W.2d 726

Fire insurance dispute arising from a July 22, 2008 fire damaging Batiz's residential rental property; Batiz insured with Fire Insurance Exchange under a policy containing Loss Settlement and Replacement Cost provisions.
Loss Settlement provides that if not repaired at the original location, payment is the lesser of the policy limit or actual cash value; if repaired at the same location, payment is the lesser of the policy limit, replacement cost, or amount actually spent to repair/replace, with depreciation rules and a deductible.
Exchange determined repair/replace costs at $35,820.33 and paid Batiz $33,182.08 (actual cash value minus recoverable depreciation and deductible).
Batiz invoked the policy appraisal provision; appraisers chosen by Batiz (Thompson) and Exchange (Kolbeck) selected an umpire (Ihlen); appraisers issued valuations ($101,999.18 and $38,056.71) and a disputed final appraisal note by Ihlen; Thompson did not sign the final appraisal.
Exchange tendered additional amounts reflecting Ihlen’s appraisal; Batiz did not cash subsequent checks and sued in declaratory judgment to interpret the policy; the circuit court granted summary judgment for Exchange and dismissed Batiz's action without prejudice; this Court affirms and remands.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the policy’s “actual cash value” and “amount of loss” are ambiguous.	Batiz says terms are ambiguous and declaratory relief is appropriate.	Exchange contends terms are unambiguous and govern payment.	No ambiguity; terms unambiguous and controlled by Loss Settlement provision.
Whether the appraisal process determines the amount of loss and resolves the dispute.	Appraisers/umpire should set the amount of loss as final.	Appraisal does not bind payment until repairs are completed; disputes are premature.	Appraisal does not control now; issue is premature because no repairs have occurred.
Whether Batiz is entitled to future unknown damages beyond actual cash value before repairs.	Batiz seeks one-sum payment for all losses, including unknowns.	Policy pays actual cash value until repair; unknown costs may be claimed later if repairs occur.	Policy allows paying actual cash value now; recovery of additional costs depends on later repairs.
Whether the case should be remanded for further consideration of the appraisals upon remand.	Credibility and valuation disputes should be resolved on remand.	No need to resolve appraisals now; leave issues for later when repairs occur.	Remand permitted for Batiz to challenge actual cash value if repairs commence; further disputes may be addressed after remand.

W. Nat’l Mut. Ins. Co. v. Decker, 791 N.W.2d 799 (2010 SD 93) (insurance contract interpretation; ambiguity assessment; de novo review)
Auto-Owners Ins. Co. v. Hansen Hous., Inc., 604 N.W.2d 504 (SD 2000) (ambiguity and interpretation in SD insurance contracts)
Nat’l Sun Indust., Inc. v. S.D. Farm Bureau Ins. Co., 596 N.W.2d 45 (SD 1999) (policy interpretation and ambiguity standards in SD)