Boardwalk Apartments, L.C. v. State Auto Property & Casualty Insurance, 816 F.3d 1284

Boardwalk sued State Auto for underpayment after Building 1 burned and the coinsurance provision applied.
District court held law-and-ordinance costs were not included in replacement cost for coinsurance and excluded coinsurance/underinsurance references at trial.
Jury found Building 1 replacement cost $3.9M and complex value $6.7M, under policy limit of $7.4M, leading to no coinsurance reduction.
Boardwalk sought underinsurance relief; State Auto argued Boardwalk was underinsured triggering coinsurance.
State Auto appeals the exclusion of coinsurance references and the district court’s interpretation of “value.”
Court reverses and remands for new trial, with guidance on including law-and-ordinance costs in replacement cost and on Rule 403 evidentiary ruling.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the district court erred by excluding coinsurance evidence	State Auto; coinsurance evidence highly probative	Boardwalk; risk of confusion/prejudice	Exclusion was an abuse of discretion
Whether 'value' in coinsurance includes law-and-ordinance costs	State Auto; value excludes law-and-ordinance costs	Boardwalk; value includes law-and-ordinance costs	Value includes law-and-ordinance costs
Whether replacement cost for coinsurance aligns with replacement-cost coverage in the policy	State Auto; different contexts may use different measures	Boardwalk; Boardwalk I requires same measure	Replacement cost meaning harmonized with replacement-cost coverage

Boardwalk Apartments, L.C. v. State Auto Prop. & Cas. Ins. Co., 572 F.3d 511 (8th Cir. 2009) (interprets value to mean replacement cost including law-and-ordinance costs)
Wenrich v. Employers Mut. Ins. Cos., 132 P.3d 970 (Kan. Ct. App. 2006) (replacement-cost coverage incorporated into coinsurance provision)
SEC v. Peters, 978 F.2d 1162 (10th Cir. 1992) (treats Rule 403 evidentiary abuse standard guidance)