SJJ notched a victory at the Minnesota Supreme Court in Cedar Bluff Townhome Condominium Association, Inc. v. American Family Mutual Insurance Company, a landmark insurance coverage case concerning an insurance policyholder’s right to have their property repaired with matching building products.

Attorneys Curt Roeder and Anthony T. Smith represented Cedar Bluff Townhome Condominium Association, a 20-building townhome association that made an insurance claim to American Family Mutual Insurance Company for hail damage to the siding on each of its buildings. Replacement panels were available from the same manufacturer with the same specifications, but the panels were not available in the same color. The insurance policy required American Family to repair or replace “damaged property with other property … [o]f comparable material and quality. A dispute arose as to whether this language required American Family to replace all siding, even undamaged siding, in order to provide a color match.

Because Cedar Bluff and American Family were unable to agree on the amount of the loss, Cedar Bluff demanded an appraisal, as provided for in the policy. After holding a hearing, at which it received evidence, heard arguments, and inspected the buildings, the appraisal panel found that the original siding on the buildings could be ” ‘matched’ in terms of the same siding being commercially available from the same manufacturer and with the same model name, . . . texture, size and installation methods,” but “could not be matched in terms of color.” Based on the color difference, the panel concluded that “there was not a reasonable match available for the existing siding materials.” The panel then issued an award for “a total replacement of the siding” in the amount of $361,108 for the replacement cost of property of comparable material and quality.

American Family refused to pay the appraisal award because it believed the award was based on the appraisal panel’s unauthorized coverage determinations. Cedar Bluff subsequently filed a lawsuit in district court seeking to confirm the appraisal award. American Family counterclaimed, seeking a declaratory judgment that the appraisal panel exceeded its authority. The district court then issued an order stating that the appraisal panel exceeded its authority, and that American Family did not have to pay the award.

On behalf of Cedar Bluff, Curt and Tony appealed the district court’s decision. The Minnesota Court of Appeals reversed the district court, and held that the appraisal panel had the authority to consider the availability of matching replacement products in determining the value of a property insurance claim.

American Family then appealed to the Minnesota Supreme Court. The Supreme Court held that the district court erred when it refused to confirm the appraisal panel’s award. In doing so, it held that American Family’s insurance policy language requiring repairs to be made with “comparable material and quality” means “a reasonable color match between new and existing siding when replacing damaged siding.” The Supreme Court also held that American Family’s insurance policy covered Cedar Bluff’s buildings, not individual siding boards. As such, Cedar Bluff’s buildings suffered a direct physical loss as a result of the color mismatch resulting from the inability to replace the hail-damaged siding panels with siding of “comparable material and quality.”

The takeaway from Cedar Bluff is that insurance companies are obligated to provide their policyholders, including condominium and townhome associations, with “comparable” replacement products, including a reasonable color match. This has broad insurance coverage implications for property damage claims in Minnesota. It strengthens the rights of property insurance holders, who now do not have to settle for repairs with mismatched materials from their property insurance companies.

If your insurance carrier refuses to pay to repair your damaged property with matching products, contact us. We may be able to help.

Download the Minnesota Supreme Court decision here.
Cedar Bluff SC.pdf


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