Lead Opinion
OPINION
The focus of this appeal is on the permissibility of preaward interest on an insurance appraisal award under Minn. Stat. § 649.09, subd. 1(b) (2016). The case presents three questions: (1) whether the recovery of preaward interest under Minn. Stat.’ § 549.09, subd. 1(b), requires a finding of an underlying breach of. contract or actionable wrongdoing; (2) whether an insured may recover preaward interest on an appraisal award for a fire insurance loss when the insurance policy contains a loss payment provision stating that the loss is not payable until an appraisal award is filed; and (3) whether an insured may recover preaward interest on an appraisal award under'the Minnesota standard fire insurance policy, Minn. Stat. § 65A.01 (2016), even though the insurer did not adopt the exact statutory language in its insurance policy. For the reasons that follow, we reverse the decision of the court of appeals.
FACTS
Respondent/cross-appellant Cincinnati Insurance Company (Cincinnati) issued appellant/cross-respondent James Poehler (Poehler) a homeowner’s insurance policy that provided replacement cost coverage for Poehler’s home and personal property. As required by statute, the policy included an appraisal clause, providing that either the insurer or the insured may demand an appraisal if they cannot agree on the amount of the loss. See Minn, Stat. § 65A.01, subd. 3. The policy also contained a statutorily-mandated loss payment provision, - providing that the loss is payable within 5 working days after the insured files an appraisal award with the insurer.
A fire damaged Poehler’s property in October 2013. Poehler promptly notified Cincinnati of the damage, and Cincinnati made its first payment on the claim a week after the fire. On December 2, 2013, Poeh-ler properly demanded an appraisal under the appraisal clause of the policy, which requires a “written request” from the demanding party. By then, Cincinnati had paid Poehler $105,394.
Cincinnati continued making payments and had paid a total of $175,663 by the time an appraisal hearing was held in June 2014. The parties authorized the appraisers to decide “all issues” involving the claim, including coverage issues. At the appraisal hearing, Poehler argued that he was entitled to an additional $170,442 beyond what Cincinnati had already paid for the loss; Cincinnati argued that Poehler was entitled to an additional $57,965. On June 23, 2014, the appraisers issued an award, determining that Poehler’s total loss was- $88,480 more than what Cincinnati had paid-by the time of the appraisal
Poehler subsequently brought a motion in Hennepin County District Court, seeking, among other relief, confirmation of the appraisal award under the Uniform Arbitration Act, Minn. Stat. §. 572B.22 (20Í6), and preaward interest under Minn. Stat. § 549.09, subd. 1(b). Cincinnati responded that confirmation of the appraisal award was unnecessary because it had already paid the full award, and it should not be required to pay preaward intérest because it had promptly complied with all the terms of the policy and the appraisal award.' The district court confirmed the appraisal award and granted Poehler pre-award interest in the amount of $14,635. In concluding that Poehler was entitled to preaward interest, the district court noted that Cincinnati had “initially undervalued Poehler’s loss by more than $88,000,” leaving him “to bear a significant portion of the burden of his loss.” The district court calculated the preaward interest from December 2, 2013, the date Poehler demanded an appraisal, to June 23, 2014, the date of the award, which was 203 days later. Based on the appraisal award and the preaward interest period, the district court calculated preaward interest as follows: “203/365 x $263,144.04 x 10% = $14,635.13.”
The court of appeals reversed, concluding that the preaward interest statute, Minn. Stat. § 549.09, subd. 1(b), “does not apply to appraisal awards pursuant to an insurance policy in the absence of an underlying breach of contract or actionable wrongdoing.” Poehler v. Cincinnati Ins. Co.,
ANALYSIS
I.
We begin with the question of whether the court of appeals erred in holding that Minn. Stat. § 549.09 requires a finding of “an underlying breach of contract or actionable wrongdoing” for the recovery of preaward interest on an insurance appraisal award, Poehler,
We review statutory interpretation issues de novo. Christianson v. Henke,
Minnesota Statutes § 549.09, subd. 1(b), states, in relevant part,
Except as othenvise provided by contract or allowed by lay), preverdict, pre-award, or prereport interest on pecuniary damages shall be computed ... from the time of the commencement of the action or a demand for arbitration, or the time of a written notice of claim, whichever occurs first, except as provided herein....
Except as otherwise provided by contract or allowed by law, preverdict, pre-award, or prereport interest shall not be awarded on the following:
(1) judgments, aioards, or benefits in workers’ compensation cases, but not including third-party actions;
(2) judgments or awards for future damages;
(3) punitive damages, fines, or other damages that are noncompensatory in nature;
(4) judgments or awards not in excess of the amount specified in section 491A.01; and
(5) that portion of any verdict, award, or report which is founded upon interest, or costs, disbursements, attorney fees, or other similar items added by the court or arbitrator.
(Emphasis added.)
Section 549.09 plainly and unambiguously provides preaward interest on “pecuniary damages”—including those awarded in insurance appraisals—that are not otherwise excluded by the statute.
In determining whether a statute is ambiguous, we give technical words and phrases their special or defined meaning, and other words and phrases their plain and ordinary meaning. In re Welfare of
Because we conclude that the term “damages” does not have a technical meaning, we interpret it according to its plain and ordinary meaning. In determin
In addition, unless otherwise provided by contract or law, subdivision 1(b)(3) of section 549.09 precludes the recovery of preaward interest on “damages that are noncompensatory in nature.” Minn. Stat. § 549.09, subd. 1(b)(3). In other words, section 549.09 provides preaward interest on all awards of compensatory damages that are not excluded by the statute. See Lessard v. Milwaukee Ins. Co.,
Accordingly, we hold that Minn. Stat. § 549.09, subd. 1(b), unambiguously provides for preaward interest on all awards of pecuniary damages that are not specifically excluded by the statute, and does not restrict the recovery of preaward interest to cases or matters involving wrongdoing or a breach of contract. Because we conclude that the statutory language is unambiguous, we do not explore the spirit or purpose of the statute. See Caldas,
II.
Having decided that Minn. Stat. § 549.09 provides for preaward interest on insurance appraisal awards regardless of the existence of wrongdoing, we next address whether the loss payment provision in Cincinnati’s insurance policy precludes Poehler from recovering preaward interest on the appraisal award.
The prejudgment interest statute states that the date on which preaward interest begins to accrue is determined according to the schedule contained in the statute “[e]xcept as otherwise prpvided by contract or allowed by law.” Minn. Stat. § 549.09, subd. 1(b). Cincinnati argues that the loss payment provision in its insurance
As required by Minn. Stat. § 65A.01, Cincinnati included in its insurance policy a loss payment provision, which states,
10. Loss Payment
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Loss is payable within 5 working days-.
a. Prom the receipt of the agreement by “us” or, if later, from the date of “your” performance of any conditions set by such agreement; or
b. After there is an entry of a final judgment; or
c. After there is a filing of an appraisal award with “us”.
(Emphasis added.)
We have never addressed whether an insurance policy provision governing when payments for loss are due precludes the insured from recovering preaward interest. But two recent cases in the Minnesota federal district court have dealt with this question and reached opposite conclusions.
In Housing & Redevelopment Authority of Redwood Falls v. Housing Authority Property Insurance (“Redwood Falls”), No. 14-CV-4741 (PAM/HB),
Redwood Falls held that the insured was not entitled to preaward interest on the appraisal award because the insured was “not entitled to interest on the award before [the insurer] was obligated to make the payment.” Id. at 3. In reaching this conclusion, the court reasoned that the insurance policy implicitly addressed when any preaward interest would start accruing based on when the insurer was contractually obligated to pay the loss. Id. The court stated that section 549.09 was intended to compensate the plaintiff for the loss of use of his money, and the statute assumed that “the plaintiff previously had a right to the money and the defendant wrongfully withheld the money.” Redwood Falls,
On the other hand, in a Report and Recommendation of United States Magistrate Judge, Eden Homeowners Ass’n, Inc. v. American Family Mutual Insurance Co. (“Eden”), No. 15-CV-3527 (RHK/HB) (D. Minn. Dec. 22, 2015), a U.S. Magistrate Judge reached the opposite conclusion on similar facts, and her conclusion was adopted by the federal district court, Order Adopting Report and Recommendation, Eden, No. 15-CV-3527 (RHK/HB) (D. Minn. Jan. 11, 2016). In this instance, the insurance policy was between a townhome association and its property insurer. Report and Recommendation, No. 15-CV-3527 at 2. The dispute arose after a hail storm damaged the siding on some of the townhomes. Id. The insurance policy required the insurer to pay a covered loss within 5 business days after (1) receiving the proof of loss and (2) an appraisal award has been made. Id. As of the date the case was removed to the federal court, the insurer had not paid any of the appraisal award. Id. at 5.
The court awarded preaward .interest starting from the date on which the insured provided written notice of its claim to the insurer. Id, at 16. According to the court, the insurer erred in “presuming] that the date on which preaward interest began to accrue and the date on which it was obligated to pay a covered loss must be the same.” Id, at 15. The court reasoned that a loss payment provision “governs only when [the insurer] must pay the amount of a covered loss; it (foes not speak to when interest begins to accrue on that amount or when such interest must be paid.” Id. In addition, “the insurance policy is silent as to when interest begins to accrue,” and “[t]o find that the loss payment provision establishes the interest accrual date is inconsistent with the basic principles of contract law.” Id. The court concluded by stating:
The parties here were free to contract regarding when interest would begin to accrue on an unpaid covered loss, but they did not. Thus, § 549.09’s conditional phrase “except as otherwise provided by contract” was never triggered, and § 549.09 alone governs the date on which interest began to accrue. Moreover, [the insurer’s position that preaward interest did not start to accrue until five days after the date of the appraisal award is nonsensical. By definition, preaward interest begins to accrue before an award is issued.
Id. (footnote omitted).
Neither decision is binding on us, but we are persuaded by the reasoning in Eden. The loss payment- provision in Cincinnati’s insurance policy governs only when a covered loss is payable; it does not speak to when interest begins to accrue, which can be months or even years before the payment is due. And the policy does not explicitly prohibit preaward interest on appraisal awards. According to the statute, Cincinnati was free to contract with Poeh-ler on the accrual of interest, but it did not. Accordingly, the conditional phrase in Minn. Stat. § 549.09, “[e]xcept as otherwise provided by contract,” was never triggered and Cincinnati’s policy does not preclude Poehler from recovering preaward interest.
III.
Cincinnati also argues that Poeh-ler is precluded from recovering preaward interest on his appraisal award by the loss payment provision in Minn. Stat. § 65A.01, which contains Minnesota’s standard fire insurance policy. According to Cincinnati, section 65A.01 governs, the situation here, and the “fe]xcept as otherwise ... allowed by law” language in Minn. Stat. § 549.09,
In response, Poehler maintains that section 65A.01’s loss payment provision is not part of Cincinnati’s insurance policy and does not apply here, because in contracting with Poehler, Cincinnati replaced the statutory provision with a “broader, less restrictive, and more ‘homeowner friendly’ ” provision as permitted by the statute. Poehler also contends that, even if we decide that the statutory loss payment provision applies, it does not preclude pre-award interest on the appraisal award; it merely caps Cincinnati’s maximum liability exposure. We conclude that the loss payment provision in section 65A.01 does not apply here, and therefore we need not address the effect of section 65A.01’s loss payment provision on preaward interest for appraisal awards.
Minnesota Statutes § 65A.01 requires that certain terms and conditions be included in fire insurance policies in Minnesota. According to the statute, a fire insurance policy must provide the specified coverage and conform to all provisions, stipulations, and conditions in the statute, “except as provided in [other sections of the law] and other statutes containing specific requirements that are inconsistent with the form of this policy.” Minn. Stat. § 65A.01, subd. 1. Section 65A.01 also states, however, that an insurance policy providing coverage against fire may be issued without incorporating the exact language of the statute, provided:
Such policy or contract shall, with respect to the peril of fire, afford the insured all the rights and benefits of the Minnesota standard fire insurance policy and such additional benefits as the policy provides; ... such policy or contract is complete as to its terms of coverage; and, the commissioner is satisfied that such policy or contract complies with the provisions hereof.”
Id. at subd. 1 (emphasis added). And with regard to loss payment, section 65A.01 provides the following standard clause:
The amount of loss for which this company may be liable shall be payable 60 days after proof of loss, as herein provided, is received by this company and ascertainment of the loss is made either by agreement between the insured and this company expressed in writing or by the filing with this company of an award as herein provided. It is moreover understood that there can be no abandonment of the property insured to the company, and that the company will not in any case be liable for more than the sum insured, with interest thereon from the time when the loss shall become payable, as above provided.
Id. at subd. 3 (emphasis added).
As we note in Part II of this opinion, the loss payment provision in Cincinnati’s insurance policy does not contain the exact language provided in Minn. Stat. § 65A.01, subd. 3. Among other things, Cincinnati’s loss payment provision provides a shorter payment schedule—5 days as opposed to 60 days—and does not contain the statutory language, “with interest thereon from the time when the loss shall become payable,” id.
We have stated that “[u]se of the statutory [fire insurance] form is mandato
In Krueger, the court of appeals held that the district court had erred in directing a verdict in favor of the insurance company based on a provision in Minn. Stat. § 65A.01.
We agree with Krueger that section 65A.01 should not be used “as a sword for the insurer,” and that the statute is not applicable when the parties have agreed to an insurance policy that affords the insured the minimum coverage required by the statute. Here, Cincinnati’s insurance policy afforded Poehler the basic rights and benefits mandated by the law. See Minn. Stat. § 65A.01. To the extent that the provision in Cincinnati’s policy provided a shorter payment schedule than the statutory provision and omitted the “interest” language in section 65A.01, the policy provision offered greater benefits and broader coverage to the insured. Nothing required Cincinnati to provide a shorter payment schedule; it had the opportunity to include the statutory interest language in its policy, but did not do so. Thus, we conclude that the loss payment provision in Cincinnati’s policy governs over the loss payment provision set forth in Minn. Stat. § 65A.01, and we should not look to the statute to determine the extent of Poehler’s coverage. Because the standard fire insurance policy is not applicable here, Poehler is not precluded from recovering preaward interest on the appraisal award.
For the foregoing reasons, we reverse the decision of the court of appeals.
Reversed.
Notes
. Although the policy provides that the loss became payable within 5 working days after the filing of an appraisal award and Cincinnati paid the loss more than 5 working days after the filing of the appraisal award, the district court noted that Poehler had not argued that Cincinnati was late in paying the loss under the loss payment provision of the policy.
. The dissent argues that "the parties’ appraisal proceeding does not trigger a right to preaward interest,” and by allowing Poehler to recover preaward interest on his appraisal award, we have “ignor[ed] the mandatory triggers for preaward interest” in Minn. Stat. § 549.09, subd. 1(b). However, in calculating preaward interest, the district court found that the statutory preaward interest began accruing on the date that Poehler demanded an appraisal—a demand that the insurance policy required in writing. In other words, the district court found that Poehler’s demand for appraisal was the triggering event. Notably, Cincinnati never challenged the validity of Poehler’s demand for appraisal or argued that the demand was not in writing. Nor has Cincinnati contended that Poehler’s demand for appraisal was not a triggering event. Because the parties have not challenged this finding of the district court, the triggering-event issue raised by the dissent is not properly before us.
. The cases and secondary literature cited by Cincinnati deal exclusively with factual scenarios or areas of law that involve wrongdoing. Accordingly, the authors of these sources contemplated a meaning of "damages” only in contexts that involve wrongdoing.
. Cincinnati also contends that “[i]f ‘loss of use of money' is the basis for an award of [preaward] interest in this case, it must be recognized that Poehler did not have a ‘loss of use’ of more than $100,000 of the ultimate appraisal award.” Accordingly, Cincinnati maintains that the district court erred in awarding interest on the full amount of the appraisal award, $263,144, without deducting the $105,394 Cincinnati had already paid to Poehler by December 2, 2013, when Poehler demanded an appraisal. Poehler does not respond to this argument in his reply brief. We acknowledge that it is anomalous for the district court to have awarded preaward interest on the full amount of the appraisal award, but wé need not address this issue because it is not properly before us on appeal.
Cincinnati did not object to Poehler's proposed calculation of preaward interest based on the full amount of the appraisal award in the district court. Cincinnati raised this calculation issue before the court of appeals, but the court of appeals ultimately did not need to
Dissenting Opinion
DISSENT
(dissenting).
James Poehler suffered a serious loss from a fire that occurred at his home. His insurance carrier, Cincinnati Insurance Company, promptly paid, him to compensate him for his loss. A dispute developed over the total amount of Poehler’s loss; the dispute was ultimately resolved by an award made in an appraisal process governed by statute and contract. Cincinnati paid the amount awarded to Poehler through the appraisal process.
This is where matters stood for four months. Then, Poehler moved the district court to confirm the already-paid appraisal award and to grant preaward interest‘in the approximate amount of $18,000. The district court confirmed the appraisal award but declined to enter judgment because the award had already been paid.’ The district court also granted preaward interest, calculated from the date that Poehler demanded the appraisal. The court of appeals reversed on the preaward interest issue. Because I agree with the court of appeals that preaward interest is not permitted under these circumstances, I would affirm.
More specifically, I conclude that the court has interpreted the governing statute, Minn. Stat. § 649.09, subd. 1(b) (2016), in a way that is inconsistent with its plain and unambiguous language. Section 549,09, subdivision 1(b) simply does not contemplate an appraisal award as an event that triggers .the accrual of preaward -interest. Accordingly, the question of whether an insured is entitled to interest on an- appraisal award is governed -instead by either: one, the language of the insurance policy, or two, Minnesota’s standard fire insurance policy, Minn. -Stat § 65A.01 (2016).
In addition, even' if there were some theory to get around the plain language of the statute and conclude that appraisal awards are generally contemplated by the statute, the language of section 549.09, subdivision 1(b) expressly provides that the recovery of preaward interest is permitted “[ejxcept as otherwise provided by contract” (emphasis added), such as a loss payment provision in an insurance contract, “or allowed by law,” such as Minnesota’s standard fire insurance policy set forth in Minn, Stat. § 65A.01, subd. 3. Here, the loss payment provision in the insurance contract between Poehler and Cincinnati bars Poehler’s recovery of pre-award interest. For these reasons, I respectfully dissent. -
•I.
I turn first to the language of Minn. Stat. § 549.09, subd. 1(b). “We review questions of statutory interpretation de
The court concludes that “[sjection 549.09 plainly and unambiguously provides preaward interest on ‘pecuniary damages’—including those awarded in insurance appraisals—that are not otherwise excluded by the statute.” This broad statement suggests that the mere mention of the phrase “pecuniary damages” is sufficient to bring appraisal awards within the coverage of the statute. That is incorrect because the parties’ appraisal proceeding does not trigger a right to preaward interest.
It is undisputed that .Poehler. did not
But, critically, there is no mention of an “appraisal” in the statute’s list of triggering events for preaward interest. The statute states that arbitration triggers pre-award interest based on a specific event: the demand for arbitration. By contrast, the statute does not even mention appraisals, let alone distinguish between the demand for an appraisal and the appraisal award as the trigger for preaward interest. There are just too many details missing to read the statute as the majority does and the district court did.
Moreover, the record lacks any details about Poehler’s demand for an appraisal, so we cannot conclude that it was “written” or a “notice of claim.”
By ignoring the mandatory triggers for preaward interest, the district court and now this court violate the interpretive canon expressio unius est exclusio alterius, which means “the expression of one thing is the exclusion of another.” Finn v. Alliance Bank,
Accordingly, Poehler’s claim fails on this ground alone, and I would therefore affirm the decision of the court of appeals without proceeding any further. But the court decides otherwise and moves on to analyze Poehler’s specific contract with Cincinnati. Because the court’s analysis of the insurance policy between Poehler and Cincinnati is also flawed, I consider this issue as well.
II.
Preaward interest is available on pecuniary damages for certain awards, verdicts, and judgments once a triggering event has occurred. Minn. Stat. § 549.09, subd. 1(b). But, even when a triggering event occurs, preaward interest still may be unavailable. Specifically, preaward interest is available “[ejxcept as otherwise provided by contract or allowed by law.” Id.
Poehler and the court fail to recognize that even if we assume that appraisal awards lead to a triggering event under section 549.09, we must first determine whether a contract either restricts or excludes the recovery of preaward interest before deciding whether a party or an individual is entitled to preaward interest. Here, the contract excludes the recovery of preaward interest.
The availability of preaward interest is dependent on the terms of the insurance policy itself, which by statute can incorporate additional or different terms so long as the terms do not fall below the floor set by Minnesota’s standard fire insurance policy. Minn. Stat. § 65A.01, subd. 3. The insurance policy in this case contains just such a term, making losses payable by Cincinnati beginning only 5 days after an appraisal award.
“[T]he extent of liability of an insurer is governed by the contract” entered into with the insured, Bobich v. Oja,
The court contends that we “have never addressed whether an insurance policy provision governing when payments for loss are due precludes the insured from recovering preaward interest.” This is not entirely correct. We have determined that when a policy provides for arbitration or an appraisal, interest does not begin to accrue until an award is made because until that time, the insurer has not defaulted on a payment obligation. Schrepfer v. Rockford Ins. Co.,
The logic of this reasoning is obvious. Preaward interest compensates for loss of the use of money occasioned by the defendant’s conduct. Lienhard v. State,
Other states, in addition to Minnesota, recognize that an insured is not entitled to interest from the date of loss; rather, interest is calculated once the loss becomes payable.
[Wjhere a policy insuring against fire loss provides, either affirmatively, that the loss shall be payable á certain number of days (ordinarily 60) after the insured has furnished proofs of loss, or negatively;. that the loss shall not be payable until' such a number of days have elapsed, the principal payable under the policy will not bear interest for any time before the period so provided has expired, but will bear interest from that time.
Kristine Cordier Karnezis, Annotation, Insured’s Right to Recover from Insurer Prejudgment Interest on Amount of Fire Loss,
In such states, two factors are considered when determining the point at which interest begins accruing on an unpaid property insurance claim. First, “[a]t which point did the claim become sufficiently certain to invoke the rule that interest should be paid on claims that are liquidated or susceptible to computation?” 12 Couch on Insurance § 178.34. Second, “[a]t which point is the insurer required— by the policy, by an applicable statute, or by basic equity if neither policy nor statute address the pointr—to make payment of claims'?”
Under the first factor here, Poehler’s claim became sufficiently certain after the appraisers issued the award on June 23, 2014, determining that Poehler’s loss exceeded the payments made by Cincinnati in the amount of $88,480. Indeed, the district court determined that, before this date, Poehler’s communications with Cincinnati in October 2013 did not provide sufficient information to constitute a written notice of claim. There is no other evidence in the record to suggest that Poeh-ler’s claimed loss was sufficiently certain before the date of the appraisal award. Under the second factor, Cincinnati is required by its policy to make payment on claims 5 working days after the appraisal award is filed with Cincinnati. Thus, the loss became payable 5 working days after the appraisal award was filed, and Cincinnati became legally obligated to pay interest beginning on that date.
Accordingly, Cincinnati is liable for interest to Poehler from the time when the loss became payable under the contract, 5 working days after the appraisal award was filed with Cincinnati.
For these reasons, I respectfully dissent.
. I acknowledge that the statute provides for preaward interest only on "pecuniary damages.” Minn. Stat. § 549.09, subd. 1(b). Because I conclude that the parties’ appraisal proceeding did not trigger a right to pre-award interest, I would conclude that it is unnecessary to define the scope of the phrase "pecuniary damages.” I note, however, that the decisions the court relies.on to illustrate the plain and ordinary meaning of "damages” involved a formal judicial proceeding or binding arbitration, neither of which occurred here. See Ray v. Miller Meester Advert., Inc.,
. The court asserts, incorrectly, that this "triggering-event issue” is not properly before the .court.'But, in his petition for review, Poehler specifically requested that the court answer a “question of statewide significance; Under what circumstances does Minnesota’s preaward interest statute, Minn. Stat. § 549,09, apply to insurance ■ appraisal awards?” We granted review without modifying this question. To answer this question, the court must interpret section 549.09, which contains a list of predicate, or triggering, events. Accordingly, answering the question on which we granted review requires us to determine whether an insurance appraisal award is an event that triggers the accrual of preaward interest.
. The court contends that my interpretation ignores the exceptions to the availability of preaward interest listed in subdivision 1(b)(1)-(5), To the contrary, if one of the three triggering events occurs, then a court must determine whether the type of award/ verdict, or judgment is excluded by subdivision 1(b)(1)-(5). Minn. Stat. § 549.09, subd. 1(b).
. Often, and unfortunately with resulting confusion, the terms "appraisal” and "arbitration” are used interchangeably. See 15 Steven Plitt, et al., Couch on Insurance 3d § 209:8 (3d ed. 2005). An appraisal is an informal and limited non-judicial proceeding. Id. "Arbitration is a more far-reaching proceeding, by which the parties agree to have a neutral person or persons resolve a disputed matter.” Id. at § 209:4. Arbitrators "act quasi-judicially and may receive the evidence or views of a party to the dispute only in the presence, or on notice to, the other side, and may adjudge the matters to be decided only on what is presented to them in the course of an adversary proceeding.” 4 Am. Jur. 2d Alternative Dispute Resolution § 3 (2007). Given these distinctions between the limited appraisal process and the more formal, quasi-judicial arbitration, "the statutes, rules and procedures applicable to arbitration do not always apply." 15 Couch on Insurance § 209:8 (emphasis added); see also id. at § 209:9 ("[P]rin-ciples governing arbitration and award do not necessarily extend to appraisals.”). Further, “an appraisal typically does not resolve the entire controversy between the parties to the insurance contract, [therefore] a judge is without authority to enter judgment on the appraiser’s award without the consent of the parties," Id. at § 209.10.
. The court's assertion that the district court could create a triggering event, i.e., "Poeh-ler’s demand for appraisal,” conflicts with the plain language of the statute. See supra note 2. As discussed above, section 549.09, subdivision 1(b) lists three triggering events, and a demand for appraisal clearly is not one of them.
. Minnesota’s standard fire insurance policy statute provides that when the insured and insurer cannot agree on the actual cash value or amount of loss, then either may submit a written, demand for appraisal. Minn. Stat. § 65A.01, subd. 3. Upon written demand, each must select a “competent and disinterested appraiser and notify the other of the appraiser selected within 20 days of [the written] demand.” Id. If either fails to select an appraiser within the timeframe provided, then an appraiser may be appointed by a judge. Id. The appraisers must then select an umpire, and if they fail to do so, an umpire may be appointed by a judge. Id. After an umpire is selected or appointed, the appraisers must then “appraise the loss, stating separately actual value and loss to each item.” Id. If they fail to agree, they must submit their differences to the umpire. Id. When filed with the company, a written itemized award by any two appraisers determines the amount of actual loss and value. Id. The insured and the company each pay the expenses of the appraiser they selected, and the umpire is paid by each side equally. Id.
. The decision in Eden Homeowners Ass'n, Inc. v. American Family Mutual Insurance Co., No. 15-CV-3527 (RHK/HB) (D. Minn. Dec. 22, 2015), which the court concludes is persuasive, is distinguishable for at least two reasons. First, the insurer "had not paid any of the appraisal award” by the time the case was before the magistrate jpdge. Id. at 5. Thus, the insurer in that case could not, in contrast to Cincinnati, claim to have complied with its contractual obligations. Second, the magistrate judge concluded that an insured is "entitled to use of [the] money" when the insured files a notice of claim under section 549.09. Id. at 13-14 (quoting Nelson v. Ill. Farmers Ins. Co.,
. Minnesota’s federal district courts also have followed this approach, relying on Minnesota law. See Bellanca Aircraft Corp. v. Fireman’s Fund Ins. Co.,
.Plitt observes that a "practitioner should ■ first review the policy to determine whether there is any explicit or implicit policy provision that may apply. Absent a policy provision, the practitioner should review any applicable statute or common law rules to determine the commencement date.” 12 Couch on Insurance § 178.34, Plitt further .. notes that "[a]s a general proposition, interest upon a loss payable under an insurance policy is not recoverable before,, but is recoverable, from the time when, the payment of the principal—the claim by the insured—is due under the terms of the policy." Id. (emphasis added).
. The court also concludes that it cannot address the "anomalous” result of awarding Poehler preaward interest on over $100,000 that Cincinnati paid to Poehler before the appraisal award was made because Cincinnati failed to raise this objection below or before us. I cannot agree. Cincinnati has argued throughout these proceedings that Poehler is not entitled to payment of preaward interest for money that was timely paid to him. Therefore, Cincinnati’s argument before both the court of appeals and here that Poehler is not entitled to preaward interest places the determination of the proper calculation for pre-award interest properly before our court.
Dissenting Opinion
(dissenting).
I join Part II of Justice Anderson’s dissent.