In the

United States Court of Appeals

For the Seventh Circuit ____________________ 

Nos. 23-2282 and 23-2354 

MARGRIT MEIER, doing business as HARTLAND INN, 

Plaintiff-Appellant, Cross-Appellee,

v.

WADENA INSURANCE COMPANY,

Defendant-Appellee, Cross-Appellant. 

____________________ 

Appeals from the United States District Court for the

Eastern District of Wisconsin. 

No. 2:23-cv-00158-BHL — Brett H. Ludwig, Judge. 

____________________ 

ARGUED FEBRUARY 8, 2024 — DECIDED MARCH 8, 2024 

____________________ 

Before EASTERBROOK, SCUDDER, and ST. EVE, Circuit Judges. 

SCUDDER, Circuit Judge. Margrit Meier appeals the district 

court’s dismissal of state law claims against Wadena Insurance Company arising out of coverage requests following a 

fire that destroyed her restaurant in Hartland, Wisconsin. Interpreting the terms of the commercial property insurance 

policy, the district court held Meier to her choice and agreement to resolve a portion of the coverage dispute through an 

appraisal process resembling arbitration. From there the 
2 Nos. 23-2282 & 23-2354 

district court saw nothing problematic about the appraisal 

process or its outcome. We agree and affirm. 

I 

A 

After a fire caused extensive damage to the Hartland Inn 

in June 2019, the owner of the building, Margrit Meier, submitted a coverage request to Wadena Insurance Company. 

The parties begin from the common point of agreement that 

the policy entitled Meier to the “actual cash value” of the 

Hartland Inn at the time of the fire, subject to the policy’s 

overall coverage limit of approximately $1.1 million. But the 

policy does not define “actual cash value,” and the parties disagree about how to calculate it. 

Wadena first paid Meier $775,000 on her claim. The company explained in a letter that in accordance with Wisconsin 

law, it had calculated actual cash value using a method called 

the “Broad Evidence Rule,” which, as its name implies, permits an insurer to consider a variety of relevant evidence in 

estimating the value of the covered property at the time of the 

loss. See Doelger & Kirsten, Inc. v. Nat’l Union Fire Ins. Co., 167 

N.W.2d 198, 200 (Wis. 1969) (describing the Broad Evidence 

Rule as “giv[ing] to the trial forum the right to consider in a 

given case all facts reasonably tending to throw light upon the 

subject”). Wadena averaged the “assessed value, sales approach value, cost approach value[,] and actual cost value” to 

produce the actual cash value estimate for the Hartland Inn.

Displeased by her recovery, Meier hired a third-party adjuster to provide its own estimate. Meier’s adjuster concluded 

that the actual cash value of the building exceeded the insurance limit of $1.1 million. Upon learning of this estimate, 
Nos. 23-2282 & 23-2354 3

Wadena increased its own estimate of Meier’s covered loss 

and paid her an additional $60,135.79, resulting in a total policy coverage of $845,135.79. 

Still unsatisfied, Meier invoked the policy’s panel appraisal option:

If we and you disagree on the amount of loss, 

either may make written demand for an appraisal of the loss. In this event, each party will 

select a competent and impartial appraiser. The 

two appraisers will select an umpire. If they 

cannot agree, either may request that selection 

be made by a judge of a court having jurisdiction. The appraisers will state separately the 

amount of loss. If they fail to agree, they will 

submit their differences to the umpire. A decision agreed to by any two will be binding.

After the parties proposed their respective appraisers, 

Meier attempted to short-circuit the appraisal process by filing suit in federal court in Milwaukee. See Meier v. Wadena Ins. 

Co., 2021 WL 3679614 (E.D. Wis. Aug. 19, 2021). The district 

court dismissed the action, pointing to Meier’s prior choice to 

resolve the coverage dispute outside of court and ordering 

her to complete the appraisal proceeding before a neutral umpire. See id. at *2. 

The appraisal process culminated in the umpire arriving 

at an independent estimate of the building’s actual cash value. 

Applying the Broad Evidence Rule, the umpire computed the 

recovery amount by averaging a market valuation, cost approach valuation, tax assessment, the Wadena appraiser’s 

valuation, a repair estimate by Meier’s appraiser, and a 
4 Nos. 23-2282 & 23-2354 

second repair estimate to reach an actual cash value of 

$939,136.58. Wadena’s appraiser agreed with that estimate—

making the amount “binding”—so the insurer increased its 

coverage payment to match the umpire’s determination.

Meier then filed a second lawsuit in Wisconsin state court, 

naming both Wadena and the umpire as defendants. She alleged breach of contract and bad faith and sought to set aside 

the appraisal award as invalid under state law. After the Wisconsin court dismissed the umpire, Wadena invoked federal 

diversity jurisdiction and removed the action to the Eastern 

District of Wisconsin. See 28 U.S.C. §§ 1332(a), 1441(b). 

B 

Wadena moved to dismiss, contending that Meier’s claims 

failed because she had agreed to resolve the coverage dispute 

through the appraisal process. The district court agreed and 

dismissed the action, observing that Wadena “did precisely 

what it undertook to do”: it complied with the alternative dispute resolution process and paid out the binding award. From 

there the district court added that nothing in either Wisconsin 

law or the policy prohibited use of the Broad Evidence Rule 

to determine the actual cash value of the Hartland Inn. The 

district court later denied Wadena’s motion for sanctions under Federal Rule of Civil Procedure 11, rejecting the company’s argument that Meier’s state law claims were frivolous.

Meier now appeals the dismissal of her breach of contract 

and other state law claims, and Wadena cross-appeals the denial of its motion for sanctions.
Nos. 23-2282 & 23-2354 5

II

A 

Wisconsin public policy favors freedom of contract—the 

idea “that individuals should have the power to govern their 

own affairs without governmental interference.” Merten v. 

Nathan, 321 N.W.2d 173, 177 (Wis. 1982). To protect this freedom, courts aim to “ensur[e] that promises will be performed,” thereby preserving “justifiable expectations and the 

security of transactions.” Id. The contracting parties are “responsible for evaluating the obligations [they] take[] on before entering into [an] agreement.” Farmers Auto. Ins. Ass’n v. 

Union Pac. Ry. Co., 768 N.W.2d 596, 606 (Wis. 2009). 

The Wisconsin Supreme Court has emphasized that when 

parties to an insurance policy agree to use an appraisal process as a means of alternative dispute resolution, Wisconsin 

law backs that choice. See id. at 607. Indeed, “[t]he obvious 

point of contracting for an appraisal process is to keep a jury 

or court out of that decision.” Id. Appraisals “promote finality, are time and cost-efficient, and place a difficult factual 

question—the replacement value of an item—into the hands 

of those best-equipped to answer that question.” Id. The Wisconsin Supreme Court has explained that for these reasons 

appraisal awards should be treated as “presumptively valid.” 

Id.

An award may be set aside under limited circumstances—

“upon the showing of fraud, bad faith, a material mistake, or 

a lack of understanding or completion of the contractually assigned task.” Id. (citing Dechant v. Globe & Rutgers Fire Ins. Co., 

217 N.W. 322, 322 (Wis. 1928)). Regarding the last exception, 

the Wisconsin Supreme Court has cautioned that “[t]he 
6 Nos. 23-2282 & 23-2354 

court’s role is not to determine whether the third party experts accurately valued the item (as if the court itself could do

[a] better job), but whether the third party experts understood 

and carried out the contractually assigned task.” Id. at 607. 

B 

Meier insists that the appraisal award is invalid because 

the umpire did not understand the contractually assigned 

task to calculate the actual cash value of the Hartland Inn. We 

take her argument to be that the policy prohibited the application of the Broad Evidence Rule to calculate actual cash 

value—that the term “actual cash value” as understood in its 

“common and ordinary” sense prohibits use of the Rule when 

the policy leaves the term undefined. See Danbeck v. Am. Family Mut. Ins. Co., 629 N.W.2d 150, 153 (Wis. 2001) (stating the 

foundational principle that “[t]he words of an insurance policy are given their common and ordinary meaning”). 

That cannot be right. The Wisconsin Supreme Court has 

(at least) twice reached the opposite conclusion, explaining 

that an insurer may use the Broad Evidence Rule to calculate 

actual cash value when the insurance contract does not define 

the term. See Doelger, 167 N.W.2d at 199–200 (identifying the 

Broad Evidence Rule as “consistently” applied in determining 

“actual cash value” in fire insurance cases); see also Engh v. 

Calvert Fire Ins. Co., 63 N.W.2d 831, 834 (Wis. 1954) (allowing 

any competent evidence as to the value of a salvaged car for 

purposes of calculating “actual cash value”). 

Undeterred by the Wisconsin Supreme Court’s endorsements of the Broad Evidence Rule in Doelger and Engh, Meier 

urges us to wade into Wisconsin insurance law and the nuances of the Rule. She invokes Coppins v. Allstate Indemnity Co., 
Nos. 23-2282 & 23-2354 7

857 N.W.2d 896 (Wis. Ct. App. 2014), for the proposition that 

Wisconsin law altogether prohibits application of the Rule 

where, as here, the policy does not define the term “actual 

cash value.” We decline the invitation. 

As the district court explained, Coppins did not declare use 

of the Broad Evidence Rule unlawful in calculating “actual 

cash value” under any and all such policies. The Coppins court 

held more narrowly that appraisers must use a logical, predictable methodology to calculate “actual cash value” consistent with both the language of the underlying policy and 

“commonly-accepted definitions” of the term. See id. at 905; 

see also Doelger, 167 N.W.2d at 200 (listing “opinions upon 

value given by qualified witnesses” as an acceptable category 

of evidence under the Broad Evidence Rule (quoting McAnarney v. Newark Fire Ins. Co., 159 N.E. 902, 905 (N.Y. 1928))). The 

appraisers in Coppins misapplied the Rule in an attempt to 

disguise a “free-for-all” approach to calculating actual cash 

value, in the process disregarding policy terms suggesting 

that actual cash value would be determined as “replacement 

cost less depreciation.” See 875 N.W.2d at 905. 

Meier overreads Coppins. Rather than invoking the case to 

explain how the umpire’s application of the Broad Evidence 

Rule was incoherent or violated the specific terms of her policy, she contends that Coppins altogether prohibited the umpire from using the Rule. But Coppins, in short, was a case 

about the manner in which the appraisers applied the Broad 

Evidence Rule under the terms of a specific policy that differed in material ways from the policy here. Coppins was not 

a case that disturbed the Wisconsin Supreme Court’s prior 

holding in Doelger approving use of the Rule generally. 
8 Nos. 23-2282 & 23-2354 

Our role as a federal court is to decide the case before us 

and not to sort out uncertainties about applications of the 

Broad Evidence Rule at the margins. That work remains entrusted to Wisconsin courts, including the state’s Supreme 

Court. It is enough for us to conclude that Wadena complied 

with a dispute resolution process that resulted in the payment 

of a valid and binding award.

C 

We can make short work of Meier’s breach of contract 

claim. She seems to argue that Wadena breached the policy 

by paying a coverage amount based on a contractually prohibited method—the Broad Evidence Rule. But we have explained why that view is a non-starter. The rest is simple. The 

parties agreed that in the event of a dispute about the actual 

cash value of the building, either party could invoke panel appraisal as a means of resolving the coverage dispute. Indeed, 

Meier herself invoked that clause, and the appraisal proceeded accordingly, with Wadena paying out a final binding 

award equal to approximately 85% of the coverage limit. 

There was neither breach of contract nor bad faith here. 

D 

Finally, we affirm the district court’s denial of Wadena’s 

motion for sanctions under Federal Rule of Civil Procedure 

11. Meier’s challenge to the appraisal award may have been a 

long shot, anchored as it was in a stretched reading of the Wisconsin Court of Appeals’s decision in Coppins. But litigation 

long shots and frivolous claims are not the same. We see no 

abuse of discretion in the district court’s preference for closing 

the book on this litigation without an accompanying imposition of sanctions. 
Nos. 23-2282 & 23-2354 9

For these reasons, we AFFIRM.