Garlyn, Inc. v. Auto-Owners Insurance Co.
814 N.W.2d 709
Minn. Ct. App.2012Background
- Polzin Glass provided auto-glass repair/replacement services to Auto-Owners insureds who assigned the claims to Polzin.
- Polzin submitted 140 invoices to Auto-Owners between Feb 2004 and May 2008; Auto-Owners paid 67 in full and paid less on 73 claims based on policy limits.
- Polzin filed a declaratory judgment action; district court consolidated the 73 disputed claims for arbitration.
- Arbitrator awarded Polzin $30,929.83 plus preaward interest in the consolidated award.
- Auto-Owners moved to vacate the award; district court denied; Polzin appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did arbitrator exceed authority on breach determination? | Polzin: arbitrator correctly found Auto-Owners breached the contract by failing to pay the necessary costs. | Auto-Owners: arbitrator erred by interpreting policy; misapplied law. | Arbitrator did not exceed authority; findings of fact upheld. |
| Did arbitrator exceed authority by awarding preaward interest? | Polzin: consolidation does not erase per-claim limits; preaward interest may be required by statute. | Auto-Owners: preaward interest disallowed by Minn. Stat. § 549.09 when claims under threshold. | Arbitrator exceeded authority; preaward interest improperly awarded. |
Key Cases Cited
- Weaver v. State Farm Ins. Cos., 609 N.W.2d 878 (Minn. 2000) (arbitrators limited to questions of fact; law reviewed de novo)
- Barneson v. W. Nat’l Mut. Ins. Co., 486 N.W.2d 176 (Minn.App. 1992) (arbitrator findings of fact are conclusive)
- Gilder v. Auto-Owners Ins. Co., 659 N.W.2d 804 (Minn.App. 2003) (no-fault questions: legal questions reviewed de novo)
- Johnson v. Am. Family Mut. Ins. Co., 426 N.W.2d 419 (Minn. 1988) (arbitrators exceed authority when deciding coverage issues)
- Glass Serv. Co., Inc. v. Progressive Specialty Ins. Co., 603 N.W.2d 849 (Minn.App. 2000) (interpretation of policy language; ‘necessary’ cost)
- Ill. Farmers Ins. Co. v. Glass Serv. Co., 683 N.W.2d 792 (Minn. 2004) (consolidation does not destroy individual claim character)
- W. Nat’l Ins. Co. v. Thompson, 797 N.W.2d 201 (Minn. 2011) (coverage disputes typically for courts, not arbitrators)
- Liberty Mut. Ins. Co. v. Sankey, 605 N.W.2d 411 (Minn.App. 2000) (arbitrator’s findings of fact final)