Quade v. Secura Insurance
2011 Minn. App. LEXIS 4
| Minn. Ct. App. | 2011Background
- Storm on July 10, 2008 damaged appellants' farm buildings; policy covers storm-related direct physical loss but excludes maintenance-related damage.
- Insurer paid some claims but denied roof damage to three structures, citing deterioration and maintenance exclusion.
- Appellants sought appraisal under the policy; district court determined issue was coverage, not amount, and later compelled appraisal.
- District court granted summary judgment for insurer, concluding the dispute involved causation and amount, and ordered appraisal.
- This court reversed, holding liability and coverage questions must be resolved by the court, not via appraisal, and remanded for determination of claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appraisal was proper for the dispute | Quade contends the issue is coverage/causation, not amount of loss. | Secura argues the dispute is over the amount of storm-related loss, justifying appraisal. | Appraisal not appropriate; district court erred in ordering appraisal. |
| Whether the appraisal clause can resolve liability questions | Appraisers may consider causation within amount-of-loss, not liability. | Appraisers can determine loss amount, potentially including causation if insurance admitted some liability. | Liability and coverage determinations must be made by the court, not appraisers. |
Key Cases Cited
- Mork v. Eureka-Security Fire & Marine Ins. Co., 230 Minn. 382 (1940) (liability determinations lie with courts, not appraisers)
- Itasca Paper Co. v. Niagara Fire Ins. Co., 175 Minn. 73 (1928) (liability determinations reside in courts)
- Johnson v. Mut. Serv. Cas. Ins. Co., 732 N.W.2d 340 (Minn. App. 2007) (appraisal vs. liability delineation; liability decided by court)
- QBE Ins. Corp. v. Twin Homes of French Ridge Homeowners Ass’n, 778 N.W.2d 393 (Minn. App. 2010) (distinguishes valuation issues from coverage questions in appraisal)
- Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246 (Minn. 1998) (unambiguous policy terms; plain meaning; insured favored on ambiguity)
- Henning Nelson Constr. Co. v. Fireman’s Fund Am. Life Ins. Co., 383 N.W.2d 645 (Minn. 1986) (general contract interpretation; policy language governs)
- David A. Brooks Enters., Inc. v. First Sys. Agencies, 370 N.W.2d 434 (Minn. App. 1985) (distinction between appraisal and arbitration statutes)