PUBLISH UNITED STATES CO URT OF APPEALS FOR THE TENTH CIRCUIT

__________________ _______________ BOARDWALK APARTMENTS, L.C., Plaint iff Counter Defendant- Appellee,

v. STATE AUTO PROPERTY AND CASUALTY INSURANCE CO., Defe ndant Counterclaimant- Appellant. No. 15-3070

__________________ _______________ Appeal from the United States District Court for the District of Kansas (D.C. No. 2: 11-CV-02714-JAR)

__________________ _______________ Matthew Jon Smith, Smith Rolfes & Skavdahl, Cincinnati, Ohio, for Defendant Countercla imant-Appellant. Mark G. Arnold, Husch Blackwell LLP, St. Louis, Missouri (William A. Lynch, Kirsten A. Byrd, and Stacey M. Bowman, Husc h Blackwell, LLP, Kansas City, Kansas, with him on the brief), for Plaintiff Counter Defendant-Appellee.

__________________ _______________ Before GORSUCH , EBEL , and BACHARACH , Circuit Judges.

__________________ _______________ BACHARACH , Circuit Judge.

__________________ _______________ FILED United States Court of Appeals Tenth Circuit 

### March 14, 2016
Elisabeth A. Shumaker Clerk of Court2 Boardwalk Apartments, L. C. sued State Auto Pr operty and Casualty Insurance Co. for breach of an insuran ce policy, contending that State Auto had underpaid on the policy after on e of Boardwalk’s eight apartment buildings (Building 1) was destroyed in a fire. 1 In district court, State Auto contended that Boardwalk was underinsured under th e policy’s coinsurance provision. Under this provision, Boardwalk’s insurance benefits were reduced if the value of the Boardwalk apartment complex exceeded the policy limit. Before trial, the district court i ssued two rulings that underlie this appeal. First, the court he ld that for purposes of the policy’s coinsurance provision, the value of the apartment complex did not incl ude the cost of complying with laws and ordinances re gulating the construction and repair of buildings. (We refer to these cost s as “law-and-ord inance costs.”) Second, the district cour t excluded reference at trial to either the coinsurance provision or the possibili ty that Boardwalk was underinsured. At trial, the jury valued the Bo ardwalk complex below the policy limit. Based on this valuation, the district court concluded that Boardwalk was not underinsured under the coinsurance provision. In addition to valuing the apartm ent complex, the jury found that State Auto had

1 Boardwalk also sued for misrepresentation and negligence. These claims are not involv ed in th e appeal.3 underpaid for the loss of Building 1. As a resu lt, the court awarded damages to Boardwalk. State Auto appeals, and we conc lude that the district court

 abused its discretion by exclud ing reference to the coinsurance provision and

 incorrectly construed the coinsurance provision. In light of these errors, we reverse and re mand for a new trial.
I. This appeal turn s on the meaning and eff ect of the coinsurance provision in the Boardwalk policy. Central to the appeal is the meaning and application of the coinsurance provision. A. After Boardwalk submitted its claim for the loss of Building 1, State Auto asserted that Boardwalk was underinsured, triggering the coinsurance provision. The coinsurance provis ion requires Boardw alk to purchase enough insurance to fully cover the value of the apartment complex. If the value of the apartment complex ex ceeded the policy limit ($7.4 million), Boardwalk would be considered underinsured and the coinsurance provision would require a reduction in the amoun t owed for a covered loss. State Auto invoked this provision , claiming that Boardwalk was underinsured, which woul d reduce the am ount owed to Bo ardwalk for the loss of Building 1. With this reduction, State Auto paid roughly $2.14 million to Boardwalk. 2 Boardwalk alleged that it was owed more and denied that it was underinsured. The dispute resulted in two suits between Boardwalk and State Auto. The first was a declarat ory judgment act ion brought by Stat e Auto in the Western District of Missouri. That suit ended in 2009 after an appeal to the Eighth Circuit Court of Appeals. See State Auto Prop. & Cas. Ins. Co. v. Boardwalk Apartments, L.C. ( Boardwalk I ), 572 F.3d 511 (8th Cir. 2009). The second suit, wh ich resulted in th is appeal, was brought by Boardwalk in the District of Kansas. B. The district court disallowed reference to coinsurance or the effect of underinsurance. In the second suit, Bo ardwalk claimed that St ate Auto had breached the insurance contract by failing to fu lly pay for the loss of Building 1. In response, State Auto main tained its earlier pos ition that Boardwalk was underinsured, triggering the coinsurance provis ion and reducing the amount owed to Bo ardwalk under the policy. But the district court excluded reference to co insurance and the effect of underinsurance. Without knowing why underinsuran ce would matter, the jury found that

2 Boardwalk asserts that State Au to relied on a Kansas insurance statute rather than the coinsurance provision to calculate the amount of the policy benefits; State Auto maintains that the coinsuran ce provision and the Kansas statute provided altern ative grounds for th e payment amount. This dispute is immate rial to ou r decision.5  the replacement cost of Building 1 was $3.9 million, $1.8 million more than State Auto’s orig inal payment and

 the value of the Boardwalk co mplex was $6.7 million, which was below the policy limit of $7.4 million. 3 Based on these jury finding s, the district court declined to apply the coinsurance provision and awar ded damages to Boardwalk. C. The district court erred in excluding reference to the coinsurance provision and in adopting Boardwalk’s interpretation of the provision. State Auto appealed on numerous grounds. We agree with State Auto on two of these grounds, conclu ding that the district court

 abused its discretion by exclud ing reference at trial to the coinsurance provision and the po ssibility that Boardwalk was underinsured and

 erred by ruling that for purposes of the coinsurance provision, the value of the apar tment complex should not include the cost of complying with laws and ordinances. According to State Auto, the district court also erred by dismissing State Auto’s affirmative defenses and counterclaims for fraud and misrepresentation. We reject this contention.

3 The jury also

 found that Boardwal k had sustaine d consequential damages totaling $2.6 million and

 made findings enabling the dist rict court to calculate the insurance benefits for lost-business income.6 State Auto’s remaining arguments i nvolve alleged errors made during or after the trial. Because we remand for a new trial, we need not address these arguments.
II. The district court abused its disc retion by excludin g reference to the coinsurance provision and the effect of underinsurance. Before trial, the district court gr anted Boardwalk’s mo tion in limine, relying on Federal Rule of Evidence 403 to exclude reference to the coinsurance provision and the effect of underinsurance. State Auto argues that this ruling constituted an abus e of discretion. Because the coinsurance provis ion was highly probative and presented only a minimal risk of unfa ir prejudice or confusion, we agree with State Auto. A. We review the district cour t’s ruling under Rule 403 for abuse of discretion, giving the excluded evidence its maximum reasonab le probative value and minimum reasonable risk of unfair p rejudice or jury confusion. The district court excluded any reference to the coinsurance provision or the effect of underinsurance, relying on Federal Rule of Evidence 403. This rule permits the district court to exclude relevant evidence if the probative value of the evidence is substantially outweighed by the danger of un fair prejudice or jury confusion. Fed. R. Evid. 403. We review the district court’s exclusi on of evidence under Rule 403 for an abuse of discretion. Eller v. Trans Union, LLC , 739 F.3d 467, 474 (10th Cir. 2013).7 Under the abuse-of-discretion standard, we will not reverse an evidentiary ruli ng “absent a distinct showin g it was based on a clearly erroneous finding of fact or an erroneous conclusion of law or manifests a clear error of judgment.” Cartier v. Jackson , 59 F.3d 1046, 1048 (10th Cir. 1995). Nevertheless, we re gard the power to exclude relevant evidence as extraordinary, to be exercised sparingly. K-B Trucking Co. v. Riss Int’l Corp. , 763 F.2d 1148, 1155 (10t h Cir. 1985). In de ciding whether to exercise this extraordinar y power, the district cour t must give the evidence its maximum reasonable probative fo rce and the minimum reasonable risk of unfair prejudice or confusion. Deters v. Equifax Credit Info. Servs.,
Inc. , 202 F.3d 1262, 1274 (10th Cir. 2000); SEC v. Peters , 978 F.2d 1162, 1171 (10th Cir. 1992).
B. The district court excluded reference to the coinsurance provision and the eff ect of underinsurance. Invoking Rule 403, the district court excl uded refere nce to the coinsurance provision and the effect of underinsurance. In excluding these references, the court reas oned that the ju ry did not need to know about coinsurance or underinsuran ce to decide the two ulti mate issues at trial:
1. the cost of replacing Building 1, whic h was the amount of Boardwalk’s loss under the policy, and
2. the value of the en tire apartment complex, which would determine whether Boar dwalk was underinsure d for purposes of the coinsurance provision.8 If the jury valued the apartment comp lex above the polic y limit of $7.4 million, the district court would a pply the coinsuran ce provision to determine the amount owed by State Auto. The co urt explained that it was adopting this approach to avoid confusin g the jury with the complexities of the coinsurance provision. C. The district court abused its discretion by excluding reference to the coinsurance pr ovision or the effect of underinsurance. In our view, the district court’s ex planation for its ruling does not justify the exclusion of reference to th e coinsurance provision or the effect of underinsurance. The ju ry was asked to value the apar tment complex without knowing why this valuation mattered. The valuation was critical because it directly affect ed the application of th e coinsurance provision, which would have signif icantly reduced the amoun t owed if Boardwalk were underinsured. Thus, th e parties had far different incentives in valuing the apartment comple x, incentives counter to wh at the jury would naturally expect. In these circumstances, the exclusion of any evidence involving coinsurance or underinsurance constit uted an abuse of discretion. 4

4 According to State Auto, exclusion of the coinsurance provision also precluded any explanation of a good -faith basis for State Auto’s calculation of the amoun t owed to Boardwalk. Because we reverse and remand on the basis of State Auto’s alternativ e arguments about the context of the coinsurance provision and Boardwalk’s ince ntive to urge a low value for the complex, we need not address State Auto’s explanation for its decision to pa y roughly $2.1 million.9 1. The coinsurance provision was highly probative of State Auto’s defense. Applying Rule 403, the district court assigned minimal probative weight to the coinsurance provision and concluded that the jury did not need to know about the provision. But after gi ving the coinsurance provision its maximum r easonable probative valu e, we respectfully disagree with the district court’s assessment. See SEC v. Peters , 978 F.2d 1162, 1171 (10th Cir. 1992) (explaining that when reviewin g the exclusion of evidence under Rule 403, the court mu st give the excluded evidence its maximum reasonable probative value). The coinsurance provision was highly probative regarding State Auto’s contention that Boardwalk was underinsured. The di strict court may well have been right that it could apply the coinsurance provision based on the jury’s valuation of th e apartment complex. But ev en so, the jury needed to know about the coinsurance provis ion to understand why valuation of the apartment complex w ould matter and why Bo ardwalk, the insured party, had an incentive to value the complex below the $7.4 million policy
limit. When the jurors went about valu ing the apartment complex, some would inevitably be puzzled. Because in surers ordinarily pay based on the value of the covered property, insurers usually have an incentive to assess low values and insureds ordinarily have an incentive to claim high values.10 But because of the coinsurance provision, the incentives here were the opposite of what th e jury would have expected. As the insure d, Boardwalk had an incentive to urge a low value for the entire complex to avoid the coinsurance penalty; and State Auto, as the insure r, had an incentive to urge a high value to trigger the coin surance provision. Surely the jury wondered why the insured was insisting on a valu e for the complex that was below the insurer’s valuation. But because of the district cour t’s ruling, State Auto could not explain or address Boardwalk’s incent ive in the presen ce of the jury. Unaware of Boardwalk’s in centive to urge a low valuation, the jury could not properly weigh Boardwalk’s assertion that the complex was worth only $6.7 million. For example, State Auto contends that Boardwal k previously asserted a value of $13.3 million for the apartmen t complex during the Missouri litigation. But, State Auto maintains, Boar dwalk then reduce d its valuation to $6.7 million du ring this litigation, after the Missouri litigation had established the enforceab ility of the coinsurance pr ovision. By excluding reference to the coinsurance provision, the district court prevented State Auto from using this discrepancy to show why a low valuation would benefit Boardwalk. Because the jury did no t learn about Boardwalk’ s incentive for a low valuation, Boardwalk was able to po rtray its valuation as generous and11 impartial. For example, in its closing argument, Boardwalk exploited the jury’s lack of awarenes s about the coinsurance pr ovision, arguing: “And remember, it doesn’t do us any good for that number [the valuation of the entire complex] to be higher than it is really. This is the number. $6,697,509.” Appellant’s App’x at 5129. This argu ment was correct in a literal sense: Boardw alk had no incentive to urge a high valuation for the apartment complex. But Boardwalk had an enormo us incentive, unknown to the jury, to urge a low valuation. Boardwalk also alluded in its closing to State Auto’s incentive to urge a valuation of the apartment complex that was artificially high. Although Boardwalk bo asted during its closing that it ha d no reason to manipulate the apartmen t complex’s valuation, Boardwalk accused State Auto of distorting the valuation beca use it “want[ed]” the valuation to be “high.” Id. at 5130 (Boardwalk arguing in closing that State Auto presented a figure of approximately $15 million for the value of the entire complex, which “was like crazy” “[b]ecause they [State Auto] want it high”). Thus, Boardwalk hinted at Stat e Auto’s incentive to assert a high valuation without acknowle dging that Boardwalk had an equally strong incentive to assert a low valuation. With the presence of a coinsurance provisio n excluded, the jury never knew about th e strong incentives that Boardwalk and State Auto had to assert their respective valuations of the apartment comp lex. As a result,12 the jury was asked to value the apartm ent complex without any guidance on why this valuation mattered, why State Auto might desire a high valuation, or why Boardwalk might want a low va luation. The coinsurance provision and the resulting incentives were e ssential for the ju ry to know in assessing the parties’ valuations of the apartment complex. 2. The coinsurance pr ovision presented only a minimal risk of unfair prejudice or confusion. The district court excluded referen ce to the coinsura nce provision on the ground that the probative value of this evidence was substantially outweighed by the danger of unfair prejudice or jury confusion. In reviewing this determinati on, we must assume that the excluded evidence posed the least reasonable danger of unfair prejudice or confusion. See
SEC v. Peters , 978 F.2d 1162, 1171 (10th Cir. 1992) (explainin g that when reviewing exclusion of ev idence under Rule 403, we must give excluded evidence its minimum reason able prejudicial value). The district court did not identify th e danger of unfair prejudice or confusion. But at variou s points, the court sugge sted two possible grounds for confusion or prejudi ce: (1) the confusing natu re of the coinsurance provision and (2) the fact that the Missouri litigati on had already resolved some interpretative ques tions about the Boardwal k policy. In our view, these grounds reflect only a minimal risk of unf air prejudice or jury confusion.13 First, in its ruling in limine, the district co urt suggested that it was excluding the coin surance provision in part because of the provision’s “confusing nature.” Appellant’s App’x at 2110. Yet later, in denying State Auto’s motion for a new trial, the district court explained that the complexity of the “coinsurance concep t” was not the reason for exclusion of the coinsurance provision. Id. at 3480. We are unsu re how to reconcile these two statements. But whatever the distri ct court meant, State Auto’s proposed use of the coinsurance provision did not risk any meani ngful jury confusion. Calculating the amount ow ed under the coinsurance provision may have been complex, but State Auto did not ask for the jury to make this calculation. Instead, Stat e Auto sought only to elicit eviden ce that there was a coinsurance provision that would reduce the amount owed if Boardwalk had been underinsured. There is nothing particularly complex about this concept. Second, the district court pointed to “the degree to which [the coinsurance provision] had been interpreted by this Court on summary judgment and in accordance with the prior Missouri litigation.” Id. But State Auto did not want to relitigate th ese interpretations or to address the mechanics of the coinsurance provision. Instead, State Au to merely wanted to use the coinsurance provision to es tablish context for the valuation of the apartment complex an d to show why Boardwal k wanted the jury to14 press for a low figure. These uses of the excluded eviden ce would not have required discussion of any interpreta tions made in eith er the Missouri litigation or the summa ry judgment ruling. The district court identified no ot her source of unfair prejudice or jury confusion posed by the existence of a coinsurance pr ovision, and we can discern none in the record. In our view, the existence of the coinsurance provision presented only minimal risk of unfair prejudice or confusion.
3. Because the danger of unfair prejudice or jury confusion did not substantially outweigh the probativ e value, the district court abused its discret ion by excludin g reference to the coinsurance provision or the effect of underinsurance. Rule 403 permits the exclusion of relevant evidence only when the risk of unfair prejudice or confus ion “substantially outweigh[s]” the evidence’s probative value. Fed. R. Evid. 403. In our view, the coinsurance provision was highly probative and presented only minimal danger of unfair prejudice or conf usion. The district cour t thought differ ently, but did not explain why it feared jury confusion from the mere mention of coinsurance and the effect of underins urance. In the abse nce of such an explanation, we conclude that the district court abused its discretion.15 D. State Auto was prejudiced by the district court’s abuse of discretion, requiring us to reverse and remand for a new trial. Even if a district court abuses its discretion by im properly excluding evidence under Rule 403, we will not reverse on this ground unless the error affected a party’s substantial right. Eller v. Trans Union, LLC , 739 F.3d 467, 474 (10th Cir. 2013). In our view, the district court’s error substantially prejudiced State Auto, requiring reversal and remand for a new trial. Boardwalk argues that any error would have been harmless because State Auto did not prove that Boardwalk was underinsured. But even if Boardwalk is right about State Auto’s evidentiary proffe r at trial, the district court’s ruling could have a ffected State Auto’s strategy, causing State Auto to withhold evidence s howing Boardwalk’s failure to fully insure the apartment complex. We will not fault State Auto for failing to develop a defense that was improperly constrained by the district court’s ruling. The ruling was prejudicial, not harmless, because it

 impeded State Auto in its cross-examinations of Boardwalk witnesses about their possible motivation to minimize the value of the apartment complex,

 limited State Auto’s ab ility to explai n Boardwalk’s reduction in its valuation of the apartment complex from $13.3 million to $6.7 million, and16  allowed Boardwalk to tout its own credibility regarding the value of the apartmen t complex while preventing State Auto from calling Boardwalk’s cr edibility into question. As a result of these constraints, Boar dwalk was able to appear generous, modestly valuing the apartment comp lex to a jury unaware that a low valuation would help Boardwal k obtain a larger payout. In these circumstances, we concl ude that the district court’s erroneous ruling prejudiced State Au to. Accordingly, we reverse the district court’s decision to exclude reference to the existence of a coinsurance provision and the effect of underinsurance. Based on this reversal, we remand for a new trial.
III. The district court erred by constr uing the coinsurance provision to exclude law-and-ordinance costs from the apartment complex’s replacement cost. In awarding partial su mmary judgment to Boardwalk, the district court interpreted the coinsurance provision to exclude law-and-ordinance costs from the valu e of the apartment complex. State Auto correctly argues that the value of the apartment complex should include law-and-ordinance costs. Because the district court’s er roneous interpretati on prejudiced State Auto, we reverse the district court’s award of partial su mmary judgment to Boardwalk on the inte rpretation of the coinsurance provision.17 A. We apply Kansas law and engage in de novo review of the district court’s interp retation of the policy. The district court’s interpretati on of the coinsurance provision involves a conclusi on of law that we review de novo. See In re Universal Serv. Fund Tel. Bi lling Practice Litig. , 619 F.3d 1188, 1211 (10th Cir. 2010) (“Contract interpretati on is a question of law, which we . . . review de novo.”). The parties agre e that Kansas law governs our interpretation of the policy. See Carolina Cas. Ins. Co. v. Nanodetex Corp. , 733 F.3d 1018, 1022 (10th Cir. 2013) (apply ing the state law that both parties agreed was applicable). Under Kansas law, we must ascertain what the parties intended. Liggatt v. Emp’r’s Mut. Cas. Co. , 46 P.3d 1120, 1125 (Kan. 2002). When we can dete rmine this intent from the written insurance contract, we go no further. Id.
B. Under Boardwalk I , the coinsurance provision’s definition of “value” incorporates the terms of the optional coverage for replacement cost, which in turn includes law- and-ordinance costs. The coinsurance pr ovision states that the amount owed to Boardwalk is reduced if the value of the apartment complex exceeds the policy limit of $7.4 million. Appellant’ s App’x at 84. But the po licy does not define the term “value” or otherwise indicat e whether the “valu e” of the complex includes law-and-ordinance costs. Thus, we must d ecide whether the term “value” in the coin surance provision in cludes law and ordinance costs. We conclude that it does.18 The parties agree th at the term “value” refers to the repl acement cost, rather than the actua l cash value, of th e apartment complex. 5 But the parties disagree about wh ether the replacement co st of the apartment complex includes law-and- ordinance costs. Boardw alk contends that the replacement cost of the apartment complex should not include law-andordinance costs, and State Auto disagrees. Boardwalk’s interpretation would make it less likely that Boardwalk was underinsured, thereby avoiding the coinsurance provision and a reduction in the amount owed under the policy. The district court agreed with Boardwalk, concluding that the “value” of the complex under the coinsurance prov ision means the replacement cost of the apartment complex wit hout law-and- ordinance costs. We respectfully disagree, fo r Boardwalk’s inte rpretation is foreclosed by the po licy’s text as construed in li ght of the Eighth Circuit’s opinion in Boardwalk I . 572 F.3d 511 (8 th Cir. 2009). 6 There the Eighth Circuit made two critical holdings:

5 The parties agree th at “value” means repl acement cost because Boardwalk purchased additional replacement cost coverage. See Appellant’s App’x at 64 (d eclaration page of th e policy showing that Boardwalk had replacemen t cost coverage).

6 The parties agree that Boardwalk I controls. We too agree, concluding that Boardwalk I binds us under the doctrine of issue preclusion. See Taylor v. Sturgell , 553 U.S. 880, 892 (2008).19 1. The term “value” in the coinsurance provision incorporates the policy’s replacement-cost cove rage, which is furnished by Section G.3 of the policy.
2. Exclusion of law-and-ordinance costs from the policy’s replacement-cost coverage is void because the exclusion violates Kansas public policy. Boardwalk I , 572 F.3d at 517-18. In our view, these two holdings jointly require us to define “value” under the coinsu rance provision as the replacement cost with la w-and-ordina nce costs. 1. Boardwalk I held that the term “val ue” in the coinsurance provision incorporates th e policy’s repla cement-cost coverage; thus, “replacement co st” means the same thing for both loss calculation and the coinsurance provision. Replacement cost matters under the Boardwalk po licy in two separate contexts: (1) for calculating covered losses sustained by Boardwalk, and (2) for calculating the va lue of the apartm ent complex for purposes of the coinsurance provision. The distri ct court thought that the term “replacement cost” could mean different things in each context. On this basis, the district court construed “r eplacement cost” to include law-andordinance costs for loss calculation, but exclude d these costs under the coinsurance provision. Boardwalk I , however, held that the coinsurance provision incorporates the same repla cement-cost provisio n that the policy uses for loss calculation. Boardwalk I , 572 F.3d at 517. Thus, the district court’s construction ca nnot be reconciled with Boardwalk I

.20 The policy’s text stat es that Section G.3, the policy’s replacementcost provision, applies to the calculation of Boar dwalk’s covered losses. The policy states that loss is calculated based on “actual cash value” when the insured does not purchase optional replace ment-cost coverage. 7 But Boardwalk did purch ase replacement-cost covera ge. In light of this purchase, the covered loss must be determined by replacement cost rather than actual cash value. 8 By contrast, the policy’s text does not expressly apply the replacement-cost provisi on to the valuation of the apartment complex under the coinsurance prov ision; the replacement-cost provision states only that replacement co st “replaces Actual Cash Va lue” in the policy’s losscalculation provision . In addition, the coinsurance provision is located in a different part of the policy and uses the term “value” ra ther than “actual cash value.” Therefore, th e policy’s text does not cl arify whether the term “value” in the co insurance provision means “replacement cost” (as provided by Section G.3) or some other measure of “value.”

7 Section E.7 of the po licy, titled “Valuation,” pr ovides that State Auto “will determine the value of Covered Property in the event of loss or damage . . . [a]t actual cash value as of the tim e of loss or damage.” Appellant’s App’x at 84.

8 Section G.3 of the policy, the replacement-cost pr ovision, provides that “Replacement Cost . . . replaces Actual Cash Value in [Section E.7, the loss-calculation provi sion]” when th e insured purchases optional replacement-cost coverage. Appellant’s App’x at 86.21 In Boardwalk I , the Eighth Circuit Court of Appeals resolved this ambiguity by holding that under Kansas law, th e coinsurance provision incorporates the policy’s replacement- cost coverage. Thus, “value” under the coinsurance provisio n means “replacement cost ” for purposes of loss calculation. In reaching this conc lusion, the Eighth Circ uit followed a Kansas Court of Appeals case, Wenrich v. Employers Mutual Insurance Cos. , that addressed a virtually identical coinsurance provision. Boardwalk I , 572 F.3d 511, 517 (8th Cir. 2009) (citing Wenrich , 132 P.3d 970 , 975 (Kan. Ct. App. 2006)). Like Boardw alk, the insured in Wenrich had purchased replacement-cost coverage. Wenrich , 132 P.3d at 973-74. And, like the Boardwalk coinsurance provision, the coinsurance provision in Wenrich used the term “value” ra ther than “actual cash va lue,” leaving it unclear whether the coinsurance provision tu rned on replacement cost or actual cash value. Id. In those circumstances, the Wenrich court held that “the replacement cost optional coverage mu st be construed as alte ring the met hodology for determining ‘the value of Covered Prop erty in the event of loss’ and is therefore incorporated into the coinsurance provisions.” Id. at 975.
In Boardwalk I , the Eighth Circuit adhered to Wenrich and incorporated the Bo ardwalk policy’s replacement-cost coverage into the coinsurance provision. “The Wenrich court [had] held that there [was] no22 ambiguity in the contract ,” the Eighth Circuit explained, “because the replacement cost coverage is ‘inherently in corporated’ into the coinsurance provision.” Boardwalk I , 572 F.3d at 517 (quoting Wenrich , 132 P.3d at 975). As a result, the Eight h Circuit concluded that “the term ‘value’ in the coinsurance provision me ans replacement cost.” Id. at 516-17. Like Wenrich , Boardwalk I incorporated the Boardwalk policy’s replacement-cost coverage into the coinsurance provi sion in place of the term “value.” Section G.3 of the policy defines the term “replacement cost” and sets out the po licy’s replacement-cost coverage. In light of Boardwalk I , the term “value” in the coinsurance pr ovision means “replacement cost” as deli neated by Section G.3. Consequently, we must apply th e same meaning of “replacement cost” in calculating Boardwalk’s covered losses and in determining whether Boardwalk was und erinsured for purposes of the coinsurance provision. 2. Under Boardwalk I , replacement cost mu st include law-andordinance costs. Given our holding that the term “value” in th e coinsurance provision means the policy’s replacem ent-cost coverage as provided by Section G.3 of the policy, we must decide whether that cove rage includes law-andordinance costs. But Boardwalk I resolves this question, rejecting any23 construction of the policy that excludes law-and-ordinance costs from replacement cost as void ag ainst Kansas public policy. As written, Section G.3 purports to exclude law-and-ordinance costs from replacement cost. 9 But in Boardwalk I , the Eighth Circuit Court of Appeals held that withho lding coverage for law-and-ordinance costs would violate Kansas public policy. Boardwalk I , 572 F.3d at 517-18. Because the parties could not lawfully exclude law-and-ordinance costs from coverage, the Eighth Circuit concl uded that replacement cost for purposes of loss calculation had to in clude those costs. Id. Under Boardwalk I , the term “value” in th e coinsurance provision bears the same meaning as “actual cash value” in the loss-calculation provision: “replacement cost” as pr ovided by Section G. 3 of the policy.
Because Boardwalk I requires replacement co st for purposes of loss calculation to incl ude law-and-ordinance costs, replacement co st under the coinsurance provision must also include those cost s. The district court’s conclusion to the contrary was incorrect.

9 Section G.3 of the po licy provides that “repla cement cost” “does not include the increased cost attributable to enforcement of any ordinance or law regulating the construction, use or repair of any property.” Appellant’s App’x at 87.24 3. We reject the district court’s reasons for excluding law-andordinance costs from the replacement cost of the apartment complex. The district court gave three reas ons for its interp retation of the coinsurance provision, and Boardwalk defends th ese reasons on appeal: 1. The term “replacement cost” can mean different things in different parts of the policy. 2. Because the written policy provides addi tional coverage for law-and-ordinance costs, inclusion of these costs in the coinsurance provision would render the policy ambiguous, requiring construction in favor of Boardw alk as the insured.3. The parties’ intent would be frustrated by including law-andordinance costs within replacement cost under the coinsurance provision. We respectfully disagree with each of these three reasons.

a. In light of Boardwalk I and the structure of the policy, the term “replacement cost” canno t mean different things in different parts of the policy. First, the district court assumed th at the term “repl acement cost” can mean different things in different parts of the policy. Based on this assumption, the district court interpreted “replacem ent cost” differently in two separate contexts: (1) for the ap artment complex under the coinsurance provision and (2) fo r Building 1 alone to determ ine the amount of the loss. The district court concluded that

 for application of th e coinsurance provis ion, the apartment complex’s “replacement cost ” excludes law- and-ordinance costs and25  for calculation of covered losses, “replacement co st” includes law-and-ordinance costs. We disagree, for the poli cy does not support di fferent interpretations of the term “replacement cost” in diff erent contexts. As we have explained, Boardwalk I held that the term “value” in the coinsu rance provision means “replacement cost” as defined by Se ction G.3, the po licy’s replacementcost provision. And Boardwalk I held that “replacem ent cost” (as defined by Section G.3) must include law-a nd-ordinance costs. As a result, theterm “value” in the coinsurance provision must also include law-andordinance costs.
b. Use of the term “r eplacement cost” to include law-andordinance costs does not re nder the optional coverage superfluous. Second, the district court observed that Section A.4 of the policy allows the insured to buy additional coverage for law-and-ordinance costs, which the written policy otherwise purports to wi thhold. “If replacement cost now includes la w and ordinance costs” in light of Boardwalk I , the district court determined, “then th e additional covera ge provision is superfluous.” Appellant’s App’x at 1716 . As a result, the district court concluded that the policy was ambiguous, requiring construction in favor of the insured und er Kansas law. But the policy is not ambiguous, for Boardwalk I bars any interpretation of the re placement-cost provision that excludes law-and-26 ordinance costs. Under Kans as law, “[a]mbiguity in a written contract does not appear until the application of per tinent rules of inte rpretation to the face of the instrument leaves it gene rally uncertain which one of two or more meanings is th e proper meaning.” Simon v. Nat’l Farmers Org. , 829 P2d 884, 888 (Kan. 1992). Boardwalk I leaves no uncert ainty; it requires the court to interpret the apartment complex’s “replacement cost” to include law-and-ordinance costs. Even if this interpretation renders Section A.4’s optional law-and-or dinance cove rage redundant, this redundancy would not justify adopting a different interpretation that is foreclosed by Boardwalk I

.

c. Because the terms of the policy (as reformed by Boardwalk I ) are unambiguous, the parties’ intent does not dictate exclusion of law-and-ordinance costs. Finally, the district court reasoned that the parties had not intended to include law-and- ordinance costs when valuing the apartment complex. For two reasons, how ever, we disagree. First, the written policy, wh en construed in light of Boardwalk I , does not create an ambigu ity. When the parties’ intent is clear from the policy, we need not go further. Osterhaus v. Toth , 249 P.3d 888, 896 (Kan. 2011). As we ha ve explained, Boardwalk I construed

 “replacement cost,” fo r purposes of loss calc ulation, to include law-and-ordinance costs and

 the coinsurance provision to in corporate the same replacementcost coverage used for loss calculation.27 Boardwalk I , 572 F.3d at 517-18

. Under these holdin gs, replacement cost under the coinsurance provision must include law-and- ordinance costs. Even if the parties originally intend ed to exclude law- and-ordinance costs from replacement cost in one or both of these contexts, Boardwalk I already reformed the policy in a wa y that deviated from the parties’ impermissible intent. See Nat’l Bank of Andover v. Kan. Bankers Sur. Co. , 225 P.3d 707, 715 (K an. 2010) (“[C]ompet ent parties may make contracts on their own terms, provided such contracts are neither illegal nor contrary to public policy.”). Second, even if the policy itself were not conclusi ve, we conclude that the district court misinterpreted the intent reflect ed in the policy language. Based on the polic y’s structure and the pur pose of coinsurance, the most likely intent underlying the policy’s valuation sc heme was to use the same measure of valu e in the contexts of both loss calculation and coinsurance, for the only meaningful way to determine whether Boardwalk was underinsured is to compare th e policy limit to the amount that Boardwalk would recover in th e event of a covered loss. But the district cour t’s interpretation in troduces two separate measures of value for loss calculat ion and coinsurance. An example illustrates the problem with this ap ples-and-oranges approach. Suppose that each of the eight buildings had a replacem ent cost of $750,000 and28 law-and-ordinance cost s of $200,000. If all of the buildings were destroyed, the covered losses would to tal $7,600,000, excee ding the policy limit. Boardwalk would be underinsured. But under the district court’s reading of the policy, th e coinsurance provision would not be triggered because the value of the apartment co mplex would exclud e the $1,600,000
in law-and-ordinance co sts—even though these costs would be fully reimbursable for a loss that was only partial. In this hypothetical situation, Boardwalk would be underi nsured, but it would no t be subject to the coinsurance provision. We doubt that the parties wo uld have intended this outcome, but it is the unavoidable result of using different measures of value for a damaged bu ilding and the entire apartment complex. 10
C. The district court’s error in interpreting th e coinsurance provision constitutes a seco nd ground for reversal. The district court erred in its su mmary judgment or der by holding that the “value” of the apartment complex under the coinsurance provision means replacement cost wi thout law-and-or dinance costs. Based on this error, the district court instructed the jury to determ ine the replacement

10 We recognize that parties may so metimes expressly choose different measures to value the co vered loss and to determine whether the covered property is underin sured under the coinsurance provision. See Carley Capital Grp. v. Fireman’s Fund Ins. Co. , 877 F.2d 78, 82 (D.C. Cir. 1989) (“Like other components of the policy contract, liability and coinsurance stipulations are whatever the parties c hoose to make them.”). But here the parties did not expressly use different measures to calculate covered losses and to determine whether Boardwalk was underinsured. Before Boardwalk I ’s reformation of the po licy to conform to Kansas public policy, the same measure was used in both contexts: “value.”29 cost of the complex without law-and-ordinance costs. Instead, the court should have instructed the jury to include law-and-ordinance costs in the apartment complex’s replacement cost. Ha d the jury included these costs, it might have found th at the complex’s replacemen t cost exceeded the policy limit of $7.4 million, triggering the coinsurance provision and reducing the amount owed by State Auto. As a result, the district court’s erro r prejudiced State Auto at trial. Because the error was prejudicial, we reverse the summary judgment ruling on interpretation of the coinsurance provision. With this reversal, we remand for a new trial with instructions to include law-an d-ordinance costs when determining th e apartment complex’ s replacement cost. IV. We vacate the district court’s im position of attorneys’ fees and expenses against State Auto. Because the jury found for Boardwalk, the di strict court granted Boardwalk’s motion for attorneys’ fe es and expenses. In light of our reversal, we vacate the district court’ s imposition of attorneys’ fees and expenses against State Auto. V. We reject State Auto’s allegations of error in the district court’s disposition of counterclaims an d affirmative defenses, and we need not address State Auto’s remaining arguments. State Auto also challe nges the rulings on its affirmative defenses and counterclaims. We reject this cha llenge. Because St ate Auto’s other30 arguments on appeal may not arise in the retrial, we decline to consider these arguments. A. We uphold the district court’s dismissal of State Auto’s defenses and counterclaims beca use State Auto has made no persuasive argument for reversal. State Auto raised multi ple affirmative defenses and counterclaims for fraud and misrepresentation, alleging that Boardwalk had provided misleading information about the claim. The district court dismissed the counterclaims under Federa l Rule of Civil Proce dure 12(b)(6) and struck the defenses under Rule 12(f). State Auto argues that in doing so, the district court erroneously applied a common law fraud standard to these claims and defenses. According to Stat e Auto, the correct standard required only that it plead fals ehood and materiality. In our view, State Auto has failed to develop a suff icient argument for reversal. For the sake of argume nt, we can assume without deciding that Kansas law does require State Auto to plead only falsehood and materiality for the misrepresentation de fenses and counterclaims. Even so, the district court conclude d that State Auto had faile d to adequately allege materiality. In its opening brief, Stat e Auto does not gi ve any reason to disturb the district court’s ruling on materiality. 11

11 The district court’s analysis of materiality turned in part on the Boardwalk tax returns refe renced in State Auto’s pleading. State Auto vaguely asserts that the district co urt’s reliance on those returns was “improper” without any further explanat ion. Appellant’s Op ening Br. at 52.31 We “will not consider issues that are raised on appeal but not adequately addressed.” Wilburn v. Mid-South Health Dev., Inc. , 343 F.3d 1274, 1281 (10th Cir. 2003). Because State Auto has failed to sufficiently contest the district court’s dismissa l of its affirmative defenses and counterclaims, we decline to disturb this part of the district court’s ruling.
B. We need not address State Auto’s remaining arguments on appeal because they may not arise in the retrial. State Auto also challeng es seven other rulings:
1. the exclusion of the Statement of Values document signed by a Boardwalk principal,
2. the exclusion of testimony by Mr . Brent Vincent, State Auto’s underwriter,
3. the exclusion of a valuation re port prepared by Boardwalk’s expert in the Mi ssouri litigation,
4. the introduction of ev idence regarding violat ion of the Kansas Unfair Claims Settlem ent Practices Act, 5. the introduction of evidence about Boardw alk’s consequential damages and the denial of State Auto’s motion to separate the consequential damages issue from the other issues,
6. the denial of a new trial based on the cumulative impact of evidentiary errors, and
7. the denial of State Au to’s motion fo r judgment as a matter of law on its affirmative defense involving Boar dwalk’s failure to cooperate.

As a result, this appeal point is not adequately developed for meaningful review. See United States v. Mike , 632 F.3d 686, 696 n. 4 (10th Cir. 2011) (declining to address an argument because the pr oponent did “not develop [the] argument” or “cite any authority in s upport of it”).32 Because a new trial is necessary, thes e potential issues may not arise on remand or may arise in di fferent ways. As a result, we decline to address State Auto’s challenges to these seven rulings. VI. Disposition We reverse and vacate the judgment because the district court

 abused its discretion by exclud ing reference to the coinsurance provision and the effect of underinsurance and

 incorrectly construed the coinsu rance provision to exclude lawand-ordinance costs from the va lue of the apar tment complex. 12
We affirm the dismissal of State Auto’s affirmative defenses and counterclaims alleging fraud and misrepresentation. The action is remanded to the district court for a new trial consistent with this opinion. 13 With this reversal and rema nd, we vacate the award of attorneys’ fees and expe nses against State Auto.

12 Though we reverse, we recognize that the district court had to confront a number of difficult issu es and did so exceptionally well.

13 The district court’s errors call th e jury’s valuation of the apartment complex into question, re quiring vacatur of the j udgment for Boardwalk on the award of unpaid insura nce benefits. The jury also made findings on Boardwalk’s lost business income and consequentia l damages, but it is less clear whether the district court’ s errors affect these findings. We can remand for a new trial lim ited to specific issues, but only when “a new trial on le ss than all the issues co uld . . . be had without confusion and uncertainty.” Malandris v. Merrill Lync h, Pierce, Fenner & Smith Inc. , 703 F.2d 1152, 1178 (10th Cir. 1981 ). Otherwise, a new trial on fewer than all the issues “would amount to a deni al of a fair trial.” Id.33 We decline to restrict the scope of the retrial, for neither party has addressed the possib ility of a retrial limited to specific issues. Given the significance of the coinsu rance provision, we canno t be certain about the potential effect of the di strict court’s errors on th e jury’s other findings. Thus, we vacate the entire judgment and remand for a new trial without parceling out the claims for lost busin ess income and consequential damages.