Trout Brook South Condominium Ass'n v. Harleysville Worcester Insurance
995 F. Supp. 2d 1035
D. Minnesota2014Background
- Trout Brook South Condominium Association seeks coverage for hail damage to 18 buildings in Elk River, Minnesota under a Harleysville policy covering direct physical loss and replacement cost.
- Harleysville initially paid for non-shingle roof damage; Haag Engineering later evaluated shingles damage; First Rate Construction proposed full roof replacement costing over $800,000.
- An appraisal panel in July 2011 awarded an additional $81,765.50, but the award did not specify whether it covered full roof replacement or only damaged shingles.
- Color-matching issue arose after Certain Teed discontinued XT-25 weathered wood shingles; Trout Brook argued non-matching shingles require full roof replacement.
- Harleysville maintained the policy requires payment only for property with direct physical loss and that replacement cost is subject to like-kind/quality materials, while Trout Brook argued color matching constitutes a loss that triggers replacement.
- Plaintiff then filed suit in Minnesota state court asserting coverage for full roof replacement and breach of contract; the action was removed to federal court; discovery revealed availability and quality concerns with 2009 XT-25 shingles located by Harleysville’s witness.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the appraisal award bar current claims? | Award addressed only cost of loss, not matching issue. | Appraisal conclusively resolved damages. | No; issues exceed appraisal scope; not time-barred. |
| Does policy require full roof replacement due to unavailable color-matching shingles? | Policy requires replacement if matching shingles unavailable. | Only direct physical loss to covered property is payable; color irrelevant. | Genuine issue of material fact; jurors to resolve color-matching obligation. |
| Are 'like kind and quality' and 'similar materials' interpretations ambiguous for color matching? | Color and matching are within the scope of 'like kind and quality'. | Color is not tied to physical makeup; not required by policy. | Ambiguous terms; jury must decide whether matching shingles are required. |
| Is Harleysville estopped from relying on the 90-day limitation for challenging the appraisal? | Harleysville extended the period and did not timely challenge. | 90-day period governs; estoppel not shown. | Issue of estoppel; genuine factual dispute. |
Key Cases Cited
- Nat’l Union Fire Ins. Co. of Pittsburgh v. Terra Indus., Inc., 346 F.3d 1160 (8th Cir. 2003) (policy interpretation is a court question, not appraisal)
- Lott v. State Farm Fire & Cas. Co., 541 N.W.2d 304 (Minn. 1995) (ambiguity resolved in insured’s favor)
- Quade v. Secura Ins., 814 N.W.2d 703 (Minn. 2012) (appraisers decide loss amount; liability reserved for court)
- Weitz Co., LLC v. Lloyd’s of London, 574 F.3d 885 (8th Cir. 2009) (summary judgment standard; insurance disputes)
- Carlson v. Allstate Ins. Co., 749 N.W.2d 41 (Minn. 2008) (policy terms interpreted by ordinary meaning; ambiguity favors insured)