Title: COLORADO CASUALTY INSURANCE COMPANY, a Colorado corporation V. DONALD L. SAMMONS, Individually and as trustee of the Sammons Family Living Trust

State: wyoming

Issuer: Wyoming Supreme Court

Document:

COLORADO CASUALTY INSURANCE COMPANY, a Colorado corporation V. DONALD L. SAMMONS, Individually and as trustee of the Sammons Family Living Trust2007 WY 75157 P.3d 460Case Number: 06-239Decided: 05/10/2007
APRIL TERM, A.D. 2007

 
 
COLORADO CASUALTY INSURANCE COMPANY, aColorado corporation,

 
 
Appellant

(Defendant),

 
 
v.

 
 
DONALD 
L. SAMMONS, Individually and as trustee of the Sammons Family Living 
Trust,

 
 
Appellee

(Plaintiff).

 
 
Appeal 
from the DistrictCourtofAlbanyCounty

 
 

Representing 
Appellant:

John A. 
Coppede of Hickey & Evans, LLP, Cheyenne, Wyoming; and Brian J. Spano and 
Stephen E. Csajaghy of Rothgerber Johnson & Lyons LLP, Denver, 
Colorado.  Argument by Mr. 
Spano.

 
 

Representing 
Appellee:

James W. 
Britt, Chris A. Mattison, Cathleen H. Heintz, and Alan Epstein of Hall & 
Evans, L.L.C., Denver, 
Colorado.  Argument by Ms. 
Heintz.

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, 
JJ.

 
 
VOIGT, 
Chief Justice.

 
 
[¶1]      The district 
court granted summary judgment to an insured on its contract claim against its 
insurer after a fire loss, granted summary judgment to the insurer on the 
insured's emotional distress claim, and denied summary judgment to both parties 
on the remaining claims.  We will 
reverse the summary judgment based upon the contract claim because genuine 
issues of material fact exist.  The 
summary judgment based upon the emotional distress claim was not appealed, and 
is not, therefore, before us for review.  
The summary judgment denials were not final appealable orders and we do 
not, therefore, have jurisdiction to review them.1

 
 
FACTS

 
 
[¶2]      The Buford 
Trading Post is a small gas station/convenience store located on Interstate 80 
between Cheyenne and Laramie, Wyoming.  
It is owned by the Sammons Family Living Trust (Sammons).  The Trading Post has existed at the same 
site, in one form or another, for nearly 150 years.  At the time of the fire, it consisted of 
a log building constructed in the 1940s, manual gas pumps, and underground steel 
storage tanks.

 
 
[¶3]      On August 17, 
2003, a fire completely destroyed the Trading Post building and damaged the fuel 
dispensing system.  Sammons filed a 
property damage claim with its insurer, Colorado Casualty Insurance Company 
(Colorado Casualty), under a replacement cost policy.2  The policy provision that is central to 
the present controversy is Subsection 6 of Section E, which reads in pertinent 
part as follows:

 
 
E.   Property Loss 
Conditions

 
 
       6.   Loss 
Payment

 
 
In the 
event of loss or damage covered by this policy:

 
 
a.   At our option, we will 
either:

 
 
(1)   Pay the value of lost or damaged 
property;

 
 
(2)   Pay the cost of repairing or 
replacing the lost or damaged property;

 
 
(3)   Take all or any part of the 
property at an agreed or appraised value; or

 
 
(4)   Repair, rebuild or replace the 
property with other property of like kind and quality, subject to d.(1)(e) 
below.

 
 
. . . 
.

 
 
d.   Except as provided in (2) through 
(8) below, we will determine the value of the Covered Property as 
follows:

 
 
(1)   At replacement cost after 
application of the deductible without deduction for depreciation, but not more 
than the least of the following amounts:

 
 
(a)    The full cost of replacement 
of such property at the same site with new material of like kind and quality; 
or

 
 
(b)    The cost of repairing your 
property within reasonable time; or

 
 
(c)    The Limit of Liability that 
applies to the property shown in the Declarations; or

 
 
(d)    The amount actually and 
necessarily expended in repairing or replacing said property or any part 
thereof.

 
 
We shall 
not be liable for payment of loss on a replacement cost basis unless and until 
actual repair is completed.

 
 
You may 
elect not to repair or replace the damaged property.  In this event, loss settlement shall be 
made on an actual cash value basis instead of a replacement cost basis.  Should you elect this option, you may 
still make a claim on a replacement cost basis if you notify us of your intent 
to do so within 180 days after the loss or damage.

 
 
[¶4]      Colorado Casualty 
determined certain damage valuations after the fire:  (1) an actual cash value (ACV) of 
$215,489.71 for the building; (2) a replacement cost value (RCV) of $307,400.18 
for the building; and (3) an RCV of $38,189.00 for the damaged portions of the 
fuel dispensing system.  Consistent 
with the terms of the policy, Colorado Casualty paid Sammons $215,489.71 for the 
building's ACV, retaining a "depreciation holdback" of $91,910.47 ($307,400.18 
less $215,489.71) pending rebuilding.3  In addition, because Sammons had already 
contracted to have extensive work done to the fuel dispensing system, Colorado 
Casualty used the bid documents received by Sammons to pay beyond its estimated 
RCV for the fuel dispensing system, eventually sending Sammons two checks, one 
for $71,008.49, and another for $12,274.51, for a total of $83,283.00.  Colorado Casualty conceded at oral 
argument that this $83,283.00 figure represents the RCV for the fuel dispensing 
system.

 
 
[¶5]      The present 
controversy arose because Sammons did not replace the building and the fuel 
dispensing system by spending the damage valuation amounts determined by 
Colorado Casualty, nor did it replace the destroyed building or damaged fuel 
dispensing system with similar configurations.  Instead, Sammons constructed a smaller 
building at a cost of only $210,443.76, and then spent $139,137.09 for a fuel 
dispensing system with automated pumps and PVC storage tanks, $22,635.15 for a 
canopy over the gas pump islands, and $20,998.57 to pave the parking lot.  At that point, Colorado Casualty had 
paid Sammons $298,772.71, and Sammons had spent $393,214.57.  The policy's maximum value was 
$429,266.00.

 
 
[¶6]      On June 17, 2004, 
Sammons' agent demanded that Colorado Casualty pay Sammons the $91,910.47 
depreciation holdback.  Colorado 
Casualty refused, on the ground that Sammons had not even spent the building's 
estimated ACV of $215,489.71, much less the RCV of $307,400.18 from which the 
depreciation holdback had been calculated, and that the amount Sammons actually 
expended in replacing the damaged property was less than the RCV estimates.  Sammons then filed a consumer complaint 
against Colorado Casualty with the Wyoming Department of Insurance, seeking a 
determination that Colorado Casualty had wrongfully withheld the depreciation 
holdback.  The Department ruled in 
favor of Colorado Casualty, concluding that neither the policy nor Wyoming law prevented 
Colorado Casualty from separately adjusting the building and the fuel dispensing 
system.  In other words, Colorado 
Casualty only had to pay the building's ACV, because Sammons had not spent more 
than that amount on the building, even though he had spent more than the fuel 
dispensing system's RCV for changes and improvements to that 
system.

 
 
[¶7]      On May 2, 2005, 
Sammons filed a Complaint against Colorado Casualty in district court, alleging 
breach of contract, violation of the implied covenant of good faith and fair 
dealing, and unfair claims practices under Wyo. Stat. Ann. § 26-13-124 
(LexisNexis 2003), and seeking attorney's fees and penalties under Wyo. Stat. 
Ann. § 26-15-124 (LexisNexis 2003).4  Both parties filed motions for summary 
judgment.  Colorado Casualty filed 
first, with its central hypothesis being that the policy only required it to pay 
Sammons the depreciation holdback amount if he did, indeed, replace the building 
at a cost in excess of the ACV.  In 
its cross-motion, Sammons took the position that all of its expenditures were 
necessary to replace the building and fuel dispensing system, and that those 
expenditures should be combined as one amount under the "building" section of 
the policy, with a resultant single RCV.  More specifically, Sammons contended 
that, once Colorado Casualty determined the replacement value 
of the building and fuel dispensing system, it had to pay him that total 
amount whether he spent it replacing the building or refurbishing the fuel 
dispensing system.

 
 
[¶8]      The district 
court concluded that Sammons was correct as to two major points:  first, that in making RCV estimates, 
Colorado Casualty could not separate the store claim from the fuel dispensing 
system claim because both were covered under the single "Buildings" portion of 
the policy; and second, once the RCV amount was established as the value of the loss, the manner of rebuilding was up to 
Sammons.

 
 
ISSUES

 
 
[¶9]      The parties have 
presented numerous issues, with some duplication.  The following issues are 
dispositive:

 
 
           
1.   Does the policy 
provide an unambiguous method of calculating the amount Colorado Casualty owes 
Sammons?

 
 
           
2.   Are there genuine 
issues of material fact concerning the amount Colorado Casualty owes 
Sammons?

 
 
STANDARD 
OF REVIEW

 
 
[¶10]   Summary judgment motions are 
governed by W.R.C.P. 56, and the disposition of such motions is guided 
particularly by the following language found in subsection (c) 
thereof:

 
 
The 
judgment sought shall be rendered forthwith if the pleadings, depositions, 
answers to interrogatories, and admissions on file, together with the 
affidavits, if any, show that there is no genuine issue as to any material fact 
and that the moving party is entitled to a judgment as a matter of 
law.

 
 
[¶11]   In reviewing the grant of a summary 
judgment, we apply the following well-known standard of 
review:

 
 
We 
examine the record from the vantage point most favorable to the party who 
opposed the motion, and we give that party the benefit of all favorable 
inferences that may fairly be drawn from the record.  We evaluate the propriety of a summary 
judgment by employing the same standards and by using the same materials as were 
employed and used by the lower court.  
We do not accord any deference to the district court's decisions on 
issues of law.

 
 

Trabing 
v. Kinko's, Inc., 2002 
WY 171, ¶ 8, 57 P.3d 1248, 1252 (Wyo. 2002) (internal citations 
omitted).

 
 
DISCUSSION

 
 
[¶12]   We will begin this analysis by 
restating the principles of law we apply in reviewing insurance policy 
disputes:

 
 
            
An insurance policy constitutes a contract between the insurer and the 
insured.  As with other types of 
contracts, our basic purpose in construing or interpreting an insurance contract 
is to determine the parties' true intent.  
We must determine intent, if possible, from the language used in the 
policy, viewing it in light of what the parties must reasonably have 
intended.  The nature of our inquiry 
depends upon how clearly the parties have memorialized their intent.  Where the contract is clear and 
unambiguous, our inquiry is limited to the four corners of the 
document.

 
 
            
We interpret an unambiguous contract in accordance with the ordinary and 
usual meaning of its terms.  The 
parties to an insurance contract are free to incorporate within the policy 
whatever lawful terms they desire, and the courts are not at liberty, under the 
guise of judicial construction, to rewrite the policy.  It is only when a contract is ambiguous 
that we construe the document by resorting to rules of construction.  Whether a contract is ambiguous is a 
question for the court to determine as a matter of law.

 
 
            
A contract is ambiguous if indefiniteness of expression or double meaning 
obscure the parties' intent. Ambiguity cannot be created by the subsequent 
disagreement between the parties regarding the meaning of a contract.  If the meaning of a provision in a 
contract is not readily apparent, the court may resort to competent evidence of 
extraneous circumstances to determine the parties' intent.  Reviewing courts are free to make a 
determination as to the existence of ambiguity whether or not the parties agree 
one way or the other and whether or not the trial court has reached a conclusion 
one way or the other.

 
 

Cathcart 
v. State Farm Mut. Auto Ins. Co., 2005 
WY 154, ¶ 18, 123 P.3d 579, 587 (Wyo. 2005) (quoting Principal Life Ins. Co. v. Summit Well 
Serv., 2002 WY 172, ¶¶ 17-19, 57 P.3d 1257, 1261-62 (Wyo. 2002) (citations 
omitted)).

 
 
[¶13]   We agree with the district court 
and the parties that the policy, in its pertinent provisions, is unambiguous.5  The confusion in this case arises not 
from any ambiguity in the policy, but from the fact that the parties and the 
district court did not clearly follow the two-step process established in the 
policy for determining the amount Colorado Casualty was to pay Sammons.6  That process should have been as 
follows:  First, under Subsection 
6.a., Colorado Casualty had the option whether to (1) pay the value of lost or 
damaged property; (2) pay the cost of repairing or replacing lost or damaged 
property; (3) take the lost or damaged property at an agreed or appraised value; 
or (4) repair, rebuild or replace the lost or damaged property with property of 
like kind and quality.  In the 
present case, Colorado Casualty took the second option of paying the cost of 
replacing the lost or damaged property.  
Therefore, the other options are irrelevant.

 
 
[¶14]   Once Colorado Casualty determined 
that it would pay Sammons the cost of replacing 
the lost or damaged property, Subsection 6.d. of the policy provided alternative 
methods for valuing the lost or damaged 
property, and limited Colorado Casualty's payment liability to the least of 
those amounts.  That evaluation is 
the second step in loss settlement analysis.  Colorado Casualty's first option under 
the policy was to pay the full cost of replacement of the lost or damaged 
property at the same site with new material of like kind and quality.  Using Colorado Casualty's RCVs of 
$307,400.18 for the building and $83,283.00 for the fuel dispensing system, that 
combined figure would be $390,683.18, which is the amount the district court 
determined Colorado Casualty owed Sammons.  
The opinion of the Wyoming Department of Insurance was, to the contrary, 
that the building and the fuel dispensing system could be adjusted separately, 
leading to a total figure of $298,772.71 ($215,489.71 plus 
$83,283.00).

 
 
[¶15]   Colorado Casualty's second option 
was to pay the cost of repairing the lost or damaged property.  This option was not exercised because 
the building was damaged beyond repair, and Sammons replaced the fuel dispensing 
system rather than repair it.  No 
dollar estimate for total repair costs appears in the record.   This option is 
irrelevant.

 
 
[¶16]   Colorado Casualty's third option 
was to pay policy limits, that figure being $429,266.00 at the time of the 
fire.  This figure was not adopted, 
of course, because it was the highest.  
Sammons did not argue below, and does not now argue, that Colorado 
Casualty was obligated to pay policy limits.  This option is 
irrelevant.

 
 
[¶17]   Colorado Casualty's fourth option 
under the policy was to pay the amount "actually and necessarily" expended in 
replacing the lost or damaged property.  
Indeed,

 

this 
subparagraph relates to a situation where the damaged property is repaired or 
replaced in a manner not identical with the original structure, but intended for 
the same occupancy and use.  In such 
situation, if the amount actually expended is less than the replacement cost of 
the original building, the company's liability is limited to the amount actually 
expended.

 
 

Ruter v. 
Northwestern Fire & Marine Ins. Co., 72 
N.J. Super. 467, 178 A.2d 640, 643 (N.J. Super. Ct. App. Div. 1962).  That is the situation in this case, and 
therein lies this controversy.  The 
ACV's and RCV's relevant under the first option are irrelevant under this 
option.  The provisions and 
limitations of one subsection are not to be read into another subsection.  Blanchette v.    York Mut. Ins. Co., 455 A.2d 426, 427-28 
(Me. 1983).  
Rather, the focus here is upon what expenditures were "actually and 
necessarily" made.  In effect, that 
has been Colorado Casualty's argument throughout this litigation.  Colorado Casualty concedes that Sammons 
actually expended $210,443.76 to replace the building and does not contest the 
necessity of that expenditure.  
Further, Colorado Casualty recognizes $83,283.00 of what Sammons spent on 
the fuel dispensing system as being necessary for replacement purposes, for a 
total "actual and necessary" replacement expenditure of $293,726.76.  Having already paid Sammons $298,772.71, 
Colorado Casualty contends that it has more than fulfilled its policy 
obligations.

 
 
[¶18]   Sammons, on the other hand, has 
presented this case from the beginning as if the only question is whether 
Colorado Casualty can separate the RCV's for the building and the fuel 
dispensing system, thus preventing Sammons from spending the building's 
depreciation holdback on upgrades to the fuel dispensing system, plus a canopy 
and a paved parking lot.  While 
Colorado Casualty has responded to this contention by pointing out that there is 
no policy provision that prevents such RCV separation, its fundamental argument 
has been that Sammons wants to be paid for costs that were not necessary to 
replace lost or damaged property.  
We agree with Colorado Casualty.  
The liability limitations in the policy clearly restrict the otherwise 
broad concept of "replacement cost coverage."  Davis v. Allstate Ins. Co., 781 So. 2d 1143, 1144-45 (Fla. Dist. Ct. App. 2002); 
Estes v. State Farm Fire & Cas. 
Co., 358 N.W.2d 123, 124-25 (Minn. Ct. App. 
1984).  Such limitations should be 
enforced where they are clearly stated.  
Higgins v. Insurance Co. of 
North America, 256 Or. 151, 469 P.2d 766, 
774 (Or. 1970); see also State Farm Fire 
& Cas.   Co. v. Patrick, 647 So. 2d 983, 
984 (Fla. Dist. Ct. App. 1994).  
Furthermore, Sammons can point to no policy provision that requires 
Colorado Casualty to adjust the claim by finding a single RCV for all items of 
damaged property.  Keeping in mind 
that replacement cost insurance is, in effect, depreciation insurance, and that 
depreciation may affect different items of property differently, there is no 
logical reason for this court to import a term into the policyeven if it were 
at liberty to do so, which it is notrequiring Colorado Casualty to lump all 
property together for the purpose of determining an RCV.7

 
 
[¶19]   Given that Colorado Casualty's 
obligation is only to pay the least of certain measured amounts, there are only two 
possibilities under the present facts.  
Either Colorado Casualty should have paid the RCV amounts upon 
replacement of the property "with new material of like kind and quality," or 
Colorado Casualty should have paid the actual and necessary amounts expended to 
replace the property, whichever amount is least.  The RCV and ACV computations are set 
forth above.  The actual and 
necessary amount expended was some figure between $293,726.76 ($210,443.76 plus 
$83,283.00) and $393,214.57 ($210,443.76 plus $139,137.09 plus $22,635.15 plus 
$20,998.57).  The problem is that 
the district court made this decision as a matter of law when it is in actuality 
a question of fact.  The fact finder 
must determine how much of the $182,770.81 spent otherwise than on the building 
was necessarily spent to replace lost or damaged property.

 
 
[¶20]   Courts appear uniformly to have 
found the term "replace," as used in the policy, to be unambiguous, and have 
thus given it its standard dictionary definition:

 
 
The 
dictionary definition of "replace" is:  
"1: to place again: restore to a former place, position, or condition 2: 
to take the place of: serve as a substitute for or successor: succeed, supplant 3: to put in place of: 
provide a substitute or successor for 4: to fill the place of: supply an 
equivalent for." (Webster's Third New 
Internat. Dict. (1968) p. 125.)

 
 

Conway v. 
Farmers Home Mut. Ins. Co., 26 Cal. App. 4th 1185, 1191, 31 Cal. Rptr. 2d 883 (Cal. 
Ct. App. 1994).  A similar 
definition of the term can be found in Huggins v. Hanover Ins. Co., 423 So. 2d 147, 150 (Ala. 
1982):

 
 
In the 
absence of a definition within the insurance policy and in the further absence 
of Alabama 
case law defining "replacement," the term must be given its common 
interpretation. [Citation omitted.]

 
 
Replace 
means "to take the place of esp. as a substitute or successor" or "to put 
something new in the place of."  Webster's New Collegiate Dictionary, G. 
& C. Merriam Co. (1974).  
(Emphasis added.)

 
 

See also 
Johnny 
Parker, Replacement Cost Coverage:  A Legal Primer, 34 Wake Forest L. Rev. 295, 315 (1999).

 
 
[¶21]   These definitions are consistent 
with the concept that "if the damaged building be replaced with a more expensive 
structure even though intended for the same occupancy and use, the company's 
liability is limited to the replacement cost of the old building."  Ruter, 178 A.2d  at 643.  Similarly, it is the nature of 
replacement cost insurance that, if an insured spends less for replacement than 
the actual cash value of the loss, he or she is not entitled to replacement cost 
coverage amounts.  Patrick, 647 So. 2d  at 984; Kolls v.     Aetna Cas. & Sur. Co., 378 F. Supp. 392, 397 (S.D. 
Iowa 1974), aff'd 503 F.2d 569 (8th 
Cir. 1974); Higgins, 469 P.2d  at 
771-72.  While we agree with the 
district court that Sammons could reach the replacement cost coverage of the 
policy by replacing the lost or damaged property with its functional equivalent, 
rather than having to construct identical facilities, we do not believe that 
such equates to a requirement that Colorado Casualty pay any more than the 
amount "necessarily expended to replace the lost or damaged property."  Once again, the latter is the measure of 
Colorado Casualty's liability if it is less than the amount owed via RCV and ACV 
computations.

 
 
[¶22]   The word "necessarily," like the 
word "replace," is not defined in the policy.  The word is not ambiguous, and it is not 
a term of art in the industry, so we will ascribe to it its common meaning.  According to Webster's Third New International Dictionary 
1510 (2002), "necessarily" means:

 
 
1: in 
such a way that it cannot be otherwise; of necessity; INEVITABLY, UNAVOIDABLY . 
. . .  2: as a necessary result or 
consequence . . . .

 
 
In turn, 
the word "necessary" is defined by the same source as:

 
 
1a: that 
must be by reason of the nature of things; that cannot be otherwise by reason of 
inherent qualities; that is or exists or comes to be by reason of the nature of 
being and that cannot be or exist or come to be in any other way; that is 
determined and fixed and inevitable . . . .

 
 

Id.

 
 
[¶23]   The concept of "necessarily" 
invokes the concept of a lack of choice.  
For the most part, what is "necessary" in this policy context is a 
question of fact.  For instance, 
whether or not a change made for marketplace reasons was necessary must be 
determined by the fact finder, with the insured bearing the burden of proof in 
such regard.  "Marketplace needs" 
was one of Sammons' justifications for the changes made to the Trading Post, and 
he should be required to prove that his facilities could not be replaced without 
meeting those marketplace needs.  
The same can be said about any requirement by the Wyoming Department of 
Environmental Quality, or other law or ordinance, that Sammons remove or install 
particular equipment.  The district 
court found that "Sammons' replacement of the steel tank with pvc tanks, the 
steel reinforced paving laid over the underground tanks, the tank monitors, and 
other updated features were required by Wyoming law."  If that were a fact, we could perhaps 
agree with the district court that such additions were necessary expenditures 
under the policy, as a matter of law.8  Unfortunately, the record does not 
reflect that this fact was clearly established.  Indeed, Colorado Casualty insists that 
just the opposite is shown as true.  
Consequently, a genuine issue of material fact 
exists.

 
 
[¶24]   We do note, and in this regard we 
agree with the district court, that Subsection 6.d(1)(d), unlike Subsection 
6.d(1)(a), does not require replacement of lost and damaged property with "new 
material of like kind and quality."  
That does not mean, however, that an insured can change the measure of 
the insurer's liability by replacing one sort of property with another.  See Davis, 781 So. 2d  at 1144 (explaining the 
difference between the measurement of replacement cost value and the insured's 
subsequent use of the funds).  The 
measure remains the same:  the 
amount "actually and necessarily expended" replacing the property.  Whether an amount was expended to 
replace damaged property, or was expended to add something that was not there 
before the fire, is a question of fact.  
Applied to the facts of this case, what that means is that Sammons could 
rebuild the facilities as he saw fit, but any expenditure that went beyond a 
replacement cost was his to bear.9  The effect of the district court's 
ruling was to delete from the policy the provisions of Subsection 6.d.(1) 
allowing Colorado Casualty to pay for replacement at 
the least value proven by the facts.

 
 
CONCLUSION

 
 
[¶25]   The summary judgment granted to 
Sammons must be reversed because genuine issues of material fact remain for 
determination by a fact finder.  
Colorado Casualty's liability under the policy must be determined through 
application of the two-part valuation and payment process described in the 
policy.  Because Sammons did not 
replace the lost and damaged property according to the ACV and RCV estimations, 
a fact finder must determine the value of that part of the new construction that 
was necessarily expended to replace the lost and damaged 
property.

 
 
[¶26]   Reversed and remanded for further 
proceedings consistent herewith.

 
 
FOOTNOTES

 
 

1Even 
though this case involves the grant and denial of cross motions for summary 
judgment, the denials are not appealable because they are not simply denials of 
counter motions based upon the same issue, the result of which would be complete 
disposition of the case.  Rather, 
they involve issues beyond the breach of contract issue upon which summary 
judgment was granted.  See Gilstrap v. June Eisele Warren 
Trust, 2005 WY 21, ¶ 7, 106 P.3d 858, 861 (Wyo. 2005); Lee v. LPP Mortgage Ltd., 2003 WY 92, ¶ 
7, 74 P.3d 152, 157 (Wyo. 2003); Hutchins 
v. Payless Auto Sales, Inc., 2002 WY 8, ¶ 6, 38 P.3d 1057, 1059 (Wyo. 2002); 
McLean v. Hyland Enters., Inc., 2001 WY 111, ¶¶ 16-20, 34 P.3d 1262, 1267-68 (Wyo. 2001).

 
 

2As its 
title suggests, a replacement cost policy insures not just the actual or market 
value of the property at the time of a loss, but also the cost of 
replacement.  In effect, replacement 
cost insurance insures depreciation.  
Leo John Jordan, What Price 
Rebuilding?, 19 ABABrief, Fall 1990, at 
17.

 
 

3A primary 
feature of replacement cost insurance is that the insurer is not obligated to 
pay beyond the basic policy amountusually the actual cash value of the lost or 
damaged propertyuntil such time as the insured has completed repair or 
replacement of that property.  See   
  Burton v. 
Republic Ins. Co., 845 A.2d 889, 899 (Pa. Super. Ct. 2004); State Farm Fire & Cas.   Co. v. Patrick, 
647 So. 2d 983, 983 (Fla. Dist. Ct. App. 1994) (per curiam); Hess v. North Pac. Ins. Co., 122 Wash. 2d 180, 859 P.2d 586, 589 (Wash. 1993).  As will be seen later in this opinion, 
one obvious reason for that requirement is that the amount of the insurer's 
liability cannot be determined until repair or replacement has 
occurred.

 
 

4Four days 
later, Sammons filed what appears to be an identical document entitled "Amended 
Complaint."  Although the index to 
the court file shows that Colorado Casualty subsequently filed an "Answer to 
Second Amended Complaint," no "Second Amended Complaint" is in the record on 
appeal, except that a non-file-stamped copy of such a document, dated July 11, 
2005, is appended to the Notice of Appeal.  
The general allegations and the causes of action contained in the "Second 
Amended Complaint" appear to repeat those stated earlier, and the parties have 
pointed out no substantive differences.  
Colorado Casualty's brief contends that the district court granted 
Sammons leave to file this "Second Amended Complaint" on October 18, 2005, and 
that it "became the operative pleading for purposes of this appeal."  Nevertheless, the district court's 
Decision Letter makes reference only to the original Complaint in addressing the 
causes of action subject to the cross motions for summary judgment.  Because of this imprecision in the 
record, we are left simply to assume that there are no substantive differences 
among these pleadings.

 
 

5Other 
courts concur.  See, e.g., Burton, 845 A.2d  at 
894.

 
 

6                       
Thus, the loss settlement provisions are best viewed as separate and 
apart from the requirement in these policies that liability of the company 
beyond actual cash value loss does not occur until actual repair or replacement 
is completed.  It is best to apply a 
two-part analysis.  Viewed in this 
manner, first, the company's liability for additional funds is established if 
the insured completes the repair or replacement.  The amount of its liability, as the 
second question however, is to be determined from a review of the loss 
settlement provisions.

 
 

Jordan, supra note 2, at 
39.

 
 

7In a 
somewhat similar setting in Burton, 
845 A.2d  at 896-97, it was noted that "line-item pricing" is a generally 
accepted means of estimating value in the insurance industry and may be 
implemented even if not expressly so provided in the 
policy.

 
 

8Although 
there is policy language concerning the effect of laws and ordinances, neither 
party has pointed us directly to a policy provision that covers the payment or 
non-payment of such expenditures.

 
 

9One point 
of contention, for instance, is the replacement of manual gas pumps with fully 
automated gas pumps.  If manual gas 
pumps are no longer available for installation, or are impractically expensive, 
or have been legally banned, Sammons could show that it was necessary to replace 
them with automated pumps.  
Similarly, if Sammons proved, for instance, that he was required by law 
to pave his parking lot, that could show necessity for that 
expenditure.