In 2014, SJJ won a landmark case before the Minnesota Supreme Court that required American Family Mutual Insurance Company (“American Family”) to pay to repair property damage with reasonably matching building products. That case, Cedar Bluff Townhome Condominium Ass’n, Inc. v. American Family Mut. Ins. Co., 857 N.W.2d 290 (Minn. 2014), has been under constant attack by American Family and the insurance industry ever since.

Shorly after the Cedar Bluff decision, American Family rolled out a new exclusion for its property insurance policies that purported to bar coverage for matching building materials.  In 2015, SJJ obtained a ruling from a Minnesota District Court to invalidate that matching exclusion in Kaltenhauser v. American Family, but there have been no appellate (binding) cases addressing the issue until now.

We just learned that a related case we have been monitoring through the Federal District Court of Minnesota and to the U.S. Eighth Circuit Court of Appeals was decided. In Noonan v. American Family Mut. Ins. Co., No. 18-1393, the U.S. Court of Appeals held that American Family’s non-matching building exclusion is enforceable, and that it therefore does not have an obligation to repair property with matching materials.

This decision is likely to have significant implications for matching coverage in Minnesota and beyond. Insurance carriers will likely begin to copy American Family’s non-matching exclusion to avoid having to pay to replace damaged property with reasonably matching materials. And insurance carriers are likely to “tighten the screws” on property owners and force them to accept repairs with mismatching building materials.

But hope is not lost for property owners. Federal court decisions like Noonan may be persuasive, but they are not binding on Minnesota’s state courts. SJJ obviously disagrees with the U.S. Court of Appeals’ decision in Noonan and is working right now to ensure that Minnesota’s state courts issue more favorable decisions that respect to the rights of policyholders. Additionally, SJJ will be working hand in hand with numerous professional organizations on potential legislation to ensure that policyholders get the insurance coverage they paid for. (Other states in the Midwest have passed laws which require insurers to honor material matching, such as Iowa and Nebraska. It’s time for Minnesota to join them.)

If you have a dispute with an insurance company, then you need attorneys who understand insurance policies and insurance law on your team. You need SJJ – the Midwest’s premier policyholder-focused law firm with a track record of success at the highest levels.


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