U.S. Court of Appeals Rules that Minnesota Appraisal Panels Must Determine the Cause of Loss

SJJ attorneys Tim Johnson and Brad Hammond recently obtained a victory with the 8th Circuit Court of Appeals in a decision confirming the authority of an appraisal panel to determine the cause of loss in a disputed insurance claim. Axis Surplus Insurance Company v. Condor Corporation, No. 21-1022 (8th Cir. December 7, 2021).

The crux of the case was that the insurance company disputed the cause of the loss asserted by the policyholder for hail damage at its apartment complex. The insurance company asserted that the hail damage at the property was from a prior storm before the insurance policy was in effect. The policyholder believed the damage was from a recent storm. When the policyholder demanded appraisal to resolve the dispute, the insurance company refused.

The matter went before the U.S. District Court. SJJ argued, based on roughly 100 years of cases in Minnesota, that the appraisal panel can and must resolve the dispute.  The Trial Court agreed with SJJ and ordered the insurance company to participate in appraisal.  The insurance company appealed.

At the United States Court of Appeals, a panel of three judges also agreed with SJJ and held that when a dispute “involves separating loss due to a covered event . . . from a property’s preexisting condition, the question is one for the [appraisal panel].”  This is an important case for every Minnesota policyholder.  Even when an insurance company denies a covered loss occurs, the policyholder can resolve that through the speedy and inexpensive appraisal process instead of in court.