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Causality can be established in Minnesota assessments | Property Insurance Law Team Blog



Causality can be determined by an assessment panel in Minnesota. The controversy was about a hailstorm where the insurance company denied that any damage was caused by the hailstorm. The insurance company refused to go to the assessment and submitted a lawsuit to get a declaration of no coverage. The policyholder objected and requested that the court compel an assessment to determine the amount of damage caused by the hailstorm.

The Federal Court of Justice formulated the disputed question as follows: 1

Axis claims that the assessment provision has not been triggered because this is a coverage dispute and not a disagreement about the "amount of the loss." Condor contends that an assessment to determine the amount of the loss necessarily and correctly includes a determination of the cause of the loss, according to Minnesota law. If the assessment concludes that a storm outside the insurance period caused the damage, it will determine that the amount of the loss is $ 0. even when there are coverage issues around the cause of the loss because "an appraiser's assessment of" the size of the loss "necessarily involves determining the cause of the loss and the amount it would cost to repair the loss. & # 39; … The parties in Quade agreed that a covered event ̵

1; a windstorm – caused some damage, but disagreed on the extent of the damage caused by the covered event …. When a case includes both issues of coverage and the size of the loss, the court withdrew concluded that it is appropriate for valuers to "distribute damages between covered and excluded hazards" and to examine and the cause of the damage to "distinguish loss due to. to a covered event from an existing condition of a property … ”

Courts in this district have invoked Quade to force an assessment even when there is a dispute as to whether any damage was caused of a covered event. See, e.g., Condominiums of Shenandoah Place v. Secura Ins. No. 15-cv-165, 2016 WL 614381 (D. Minn. 6, Feb. 16, Feb. assessment where the parties disputed whether wind and hail damage to buildings was caused by a storm within the covered insurance period). Likewise, the parties do not dispute that there is hail damage to the roofs of certain buildings at Promenade Oaks. The dispute is rather about whether the damage existed before the alleged loss date and thus whether it was caused by a storm that occurred within the covered insurance period. As such, the court finds that Quade is applicable and it is appropriate to allow a valuer to "separate [any] loss due to a covered event from [the] the already existing condition of the property.

On appeal, federal appellate court upheld the lower court's ruling: 2

The insurance policy in this case states that whenever Axis and Condor disagree on … the amount of the loss, either of them can request an assessment of the loss in writing. & # 39; Focus here is & # 39; on the meaning of the phrase & # 39; loss amount & # 39 ;. & # 39; Quade v. Secura Ins. 814 NW2d 703, 706 (Minn. 2012).

The Minnesota The Supreme Court interpreted this exact phrase almost a decade ago in the Quade except that there was disagreement about how much damage a windstorm had caused.Id., At 704-05. [the] the valuer's assessment of " the size of the loss "necessarily includes a determination of the cause of the damage."

Just as in ] Quade the dispute here is about "the amount of the loss." If the previous storm caused the damage, as Axis claims, the amount of the loss will be zero because the insurer would have no "liability" under the agreement…. If, on the other hand, a storm within the insurance period caused the damage, as Condor claims, Axis & # 39; liability & # 39; to be greater than zero.

This latest case consolidated previous Minnesota state laws that indicate that causation can be determined by an assessment panel. For those who wish to study this subject further, Attorney Ashley Harris of the Merlin Law Group has written extensively on this subject listed in Ashley Harris Cited by the Iowa Supreme Court on Causal Issues in Assessment Procedures .

. [114]. Thought For The Day

When I played in Minnesota, Green Bay, the northern cities, Buffalo, they wanted those championship games at home. It would be an advantage to be there with his fans and the cold weather and all that. But when you have a Super Bowl, and these are the two best teams, you want ideal conditions. You want to play a great game.
—Tony Dungy
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1 Axis Surplus Ins. Co. v. Condor Corp. No. 20-789, 2020 WL 7974330 (D. Minn. Oct. 8, 2020).
2 Axis Surplus Ins. Co. v. Condor Corp. No. 21-1022, – F.4: e -, 2021 WL 5774499 (8th omr. 7 Dec. 2021).


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