Articles Posted in Minnesota Supreme Court

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At issue in this case was the permissibility of preaward interest on an insurance appraisal award under the preaward interest statute, Minn. Stat. 549.09, subd. 1(b). Cincinnati Insurance Company issued James Poehler a homeowner’s insurance policy that provided replacement cost coverage for Poehler’s home and personal property. After a fire damaged Poehler’s property, Poehler demanded an appraisal under the appraisal clause of the policy. The appraisers issued an award, determining that Poehler’s total loss was more than what Cincinnati had paid by the time of the appraisal hearing. The district court confirmed the appraisal award and granted Poehler preaward interest. The court of appeals reversed, concluding that the preaward interest statute does not apply to appraisal awards pursuant to an insurance policy in the absence of “an underlying breach of contract or actionable wrongdoing.” The Supreme Court reversed, holding (1) section 549.09 does not require a finding of wrongdoing for the recovery of a reward interest on appraisal awards; (2) the loss payment provision in Cincinnati’s insurance policy did not preclude Poehler from recovering preaward interest on the appraisal award; and (3) the loss payment provision in Minn. Stat. 65A.01, the Minnesota standard fire insurance policy, did not apply in this case. View "Poehler v. Cincinnati Insurance Co." on Justia Law

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Appellant suffered injuries after being hit by another driver. The at-fault driver’s liability insurer paid Appellant $100,000, the full amount available under the policy. Appellant made a settlement demand on State Farm, with whom he had an underinsured-motorist policy that also had a $100,000 coverage limit. State Farm offered less than $30,000 to settle the claim. Appellant filed a complaint against State Farm alleging breach of contract and claiming that he was entitled to the full amount recoverable under the policy. The district court ultimately entered judgment in the amount of $98,800. Thereafter, Appellant amended his complaint to add a claim under Minn. Stat. 604.18, which authorizes the award of “taxable costs” when an insurer denies benefits without a reasonable basis. The district court concluded that State Farm had denied Appellant insurance benefits without a reasonable basis. The court then determined that the “proceeds awarded” to an insured under section 604.18 are capped by the insurance policy limit. The court of appeals affirmed after determining that the state was ambiguous. The Supreme Court affirmed, holding that section 604.18 unambiguously caps “proceeds awarded” at the amount recoverable under the insurance policy. View "Wilbur v. State Farm Mutual Automobile Insurance Co." on Justia Law

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American Family Insurance Company (American Family) issued automobile insurance policies to policyholders that were later injured in automobile accidents. The policy contained an anti-assignment clause, but, in order to obtain medical treatment, the policyholders assigned their interests in basic economic loss benefits to their medical provider, Stand Up Multipositional Advantage MRI, P.A. (Stand Up). Stand Up filed suit against the policyholders, their attorneys, and American Family for failing to make payment directly to Stand Up in accordance with the assignments. The district court granted summary judgment for the defendants, concluding that the anti-assignment clause was unenforceable, and therefore, the assignments to Stand Up were valid. The court of appeals reversed. The Supreme Court affirmed, holding that the anti-assignment clause was valid and precluded the assignments the policyholders made to Stand Up. View "Stand Up Multipositional Advantage MRI, P.A. v. American Family Insurance Co." on Justia Law

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Appellant, who was injured in a car accident, sought basic economic loss benefits under Minnesota’s No-Fault Automobile Insurance Act from his insurer, Founders Insurance Company. An arbitrator awarded Appellant $19,128 in basic economic loss benefits. The district court confirmed the arbitration award. The court of appeals reversed, concluding that the Founders was not required to provide basic economic loss coverage because Founders was an out-of-state insurer that did not write motor vehicle insurance in Minnesota. The Supreme Court reversed, holding that Minn. Stat. 65B.50(2) requires an out-of-state insurer to provide no-fault benefits to its insured when its insured is in an accident in Minnesota and the insured vehicle is in Minnesota, even if the insurer is not licensed by the state to issue motor vehicle insurance. View "Founders Insurance Co. v. Yates" on Justia Law

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Respondent suffered a work-related back injury. Respondent and her employer entered into a “full, final, and complete” settlement of Respondent’s claims for workers’ compensation benefits related to that injury. Respondent later filed a claim petition seeking additional benefits for the back injury, alleging a lumbar spine injury with consequential depression and anxiety. The employer moved to dismiss the petition on the ground that Respondent was first required to bring a motion to vacate the existing settlement agreement before bringing a new claim. The workers’ compensation judge denied the motion, concluding that the settlement agreement did not foreclose a later claim for consequential psychological injury. The Workers’ Compensation Court of Appeals affirmed, concluding that the settlement agreement did not foreclose claims from the same incident that were not mentioned in the agreement without evidence that those claims were contemplated by the parties at the time they entered into the agreement. The Supreme Court reversed, holding that the language of the settlement agreement was sufficient settle conditions and complications that arise out of, and are a consequence of, Respondent’s workers’ compensation injury. View "Ryan v. Potlatch Corp." on Justia Law

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In 2007, Appellant was injured in a motor vehicle collision. After settling her primary uninsured motorist (UM) claim, Appellant sought excess UM benefits from an American Family Mutual Insurance Group policy that covered her vehicle. American Family denied the claim. In 2013, Appellant filed a lawsuit seeking excess UM benefits from American Family. The district court granted summary judgment in favor of American Family, concluding that the excess UM claim was barred by the six-year statute of limitations for contract actions and that Appellant’s claim accrued on the date of the accident. The court of appeals affirmed. The Supreme Court affirmed, holding that claims for excess UM benefits accrue on the date of the accident, and therefore, summary judgment was properly granted in favor of American Family. View "Hegseth v. Am. Family Mut. Ins. Group" on Justia Law

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Appellants’ homeowners insurance policy with State Farm Fire and Casualty Company provided that State Farm will be only the “actual cash value” at the time of the loss of damaged property. Appellants brought a putative class action lawsuit against State Farm, claiming that State Farm breached the terms of Appellants’ policy when it calculated the actual cash value of damaged property. Specifically, Appellants alleged that State Farm’s practice of depreciating embedded labor costs breached State Farm’s duty to indemnify the insured for the actual cash value of the damaged property. The district court certified a question regarding the issue to the Supreme Court. The Court answered that, absent specific language in the insurance policy that identifies the method of calculating actual cash value, the trier of fact may consider, among many other factors, embedded-labor-cost depreciation when such evidence logically tends to establish the actual cash value of a covered loss. View "Wilcox v. State Farm Fire & Cas. Co." on Justia Law

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Respondents, Angela Lennartson and Katie Foss, were involved in separate car accidents and recovered damages in their respective negligence actions. Subsequently, each respondent was awarded no-fault benefits from their insurer, State Farm, in arbitration proceedings under the Minnesota No-Fault Insurance Act (No-Fault Act). State-Farm moved to vacated the arbitration awards, arguing, inter alia, that collateral estoppel barred the no-fault arbitrations. The district court granted State Farm’s motion to vacate in Lennartson’s case and denied it in Foss’s case. The cases were consolidated on appeal. The court of appeals affirmed the decision in favor of Foss and reversed the decision against Lennartson, concluding that neither the No-Fault Act nor collateral estoppel barred the arbitrators’ awards of no-fault benefits to Respondents.The Supreme Court affirmed, holding (1) the No-Fault Act does not bar an insured from recovering no-fault benefits for medical expenses previously recovered in a negligence action; and (2) collateral estoppel does not bar an insured from seeking medical-expense or income-loss benefits in no-fault arbitration recovering damages for the same expenses or losses in a negligence action. View "State Farm Mut. Auto. Ins. Co. v. Lennartson" on Justia Law

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An insurance company (Insurer) issued a policy of insurance on a building. A bank (Bank) was named in the policy as mortgagee. The policy contained a standard mortgage clause and a vacancy clause. The building was later vandalized, and Bank made a claim on the property. Insurer denied the claim under the vacancy clause. Bank sued for breach of the insurance contract. The district court summary judgment in favor of Insurer, concluding that Insurer was not liable to Bank because there was never any coverage offered for a vacant building. The court of appeals reversed, concluded that, under the standard mortgage clause, Bank was entitled to recover. The Supreme Court reversed, holding that, when a property insurance policy contains both a vacancy clause and a standard mortgage clause, a mortgagee has coverage for vandalism damage to a vacant building only if the building was vacant because of the acts of the owner or if the owner failed to comply with the terms of the policy and the mortgagee was unaware of the acts or failure. Remanded. View "Commerce Bank v. West Bend Mut. Ins. Co." on Justia Law

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A subcontractor on a public project filed suit against the general contractor and an insurance company that provided a payment bond seeking to recover money owed under the subcontract after the general contractor defaulted. The subcontractor asserted a payment-bond claim against the insurance company and breach of contract, unjust enrichment, and other claims against the general contractor. The insurance company filed a motion for summary judgment on the payment-bond claim because the subcontractor mailed its pre-suit notice of claim to the general contractor listed on the subcontract rather than the address listed on the payment bond. The district court denied the motion and granted judgment against the insurance company. The court of appeals reversed. The Supreme Court affirmed, holding (1) pursuant to Minn. Stat. 574.31(2)(a), a claimant must serve notice on the contractor at its address as stated in the bond as a prerequisite to filing suit; and (2) the subcontractor in this case did not comply with the statutory notice requirements. View "Safety Signs, LLC v. Niles-Wiese Constr. Co., Inc." on Justia Law