United States Court of Appeals

For the Eighth Circuit 

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No. 21-1481

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Craig Shaw; Katie Shaw

 Plaintiffs - Appellees

v.

Farm Bureau Property & Casualty Insurance Company

 Defendant - Appellant

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Appeal from United States District Court 

for the District of Minnesota

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Submitted: October 19, 2021

Filed: January 21, 2022

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Before GRUENDER, ERICKSON, and STRAS, Circuit Judges. 

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GRUENDER, Circuit Judge.

Craig and Katie Shaw sued their insurance company seeking payment of the 

policy limit in full on the claim for the second of two fires that destroyed their house. 

The district court1 granted summary judgment in favor of the Shaws. We affirm.

1

The Honorable Nancy E. Brasel, United States District Judge for the District 

of Minnesota. 
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I.

Two fires, occurring two months apart, destroyed the house of Craig and Katie 

Shaw. The first fire burned a large hole in an exterior wall, and the second fire 

demolished the rest of the house.

After the first fire, the Shaws’ insurance company, Farm Bureau Property & 

Casualty Insurance Company, paid damages in the sum of $159,808.52. Before any 

significant repairs had been made, the second fire destroyed the house completely. 

The Shaws submitted a second claim, and Farm Bureau paid the Shaws $108,991.48. 

That amount is the difference between the policy limit of $268,800 and the amount 

already paid for the first fire. The fires occurred within the same policy period.

The Shaws sued Farm Bureau for breach of contract, claiming that

notwithstanding Farm Bureau’s payment after the first fire, the total loss entitled the 

Shaws to payment of the full policy limit for the second fire by the policy’s terms. 

Both parties moved for summary judgment.

The district court granted the Shaws’ motion for summary judgment and 

denied Farm Bureau’s motion. It held that the second fire caused a total loss entitling 

the Shaws to the full policy limit over and above what Farm Bureau had paid on the 

previous claim. The court further held that Minnesota’s valued-policy statute, Minn. 

Stat. § 65A.08, subd. 2, obligated Farm Bureau to pay the full policy limit on the 

second claim. Farm Bureau appeals.

II.

We review de novo the district court’s summary-judgment decisions, Jerry’s 

Enters., Inc. v. U.S. Specialty Ins., 845 F.3d 883, 887 (8th Cir. 2017), its 

interpretation of the insurance policy, id., and its interpretation of state insurance 

law, Brill v. Mid-Century Ins., 965 F.3d 656, 659 (8th Cir. 2020). Summary 
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judgment is appropriate only if there is no dispute of material fact and the moving 

party is entitled to judgment as a matter of law. Id.

 

III.

 

We begin by addressing whether the terms of the insurance policy entitle the 

Shaws to relief. “Because this case is in federal court based on diversity jurisdiction,

Minnesota’s substantive law controls our analysis of the insurance policy.” Jerry’s 

Enters., 845 F.3d at 887. Minnesota law requires us to “ascertain and give effect to 

the intentions of the parties as reflected in the terms of the insuring contract.” Eng’g 

& Constr. Innovations, Inc. v. L.H. Bolduc Co., 825 N.W.2d 695, 704 (Minn. 2013). 

“Provisions in an insurance policy are to be interpreted according to both plain, 

ordinary sense and what a reasonable person in the position of the insured would 

have understood the words to mean.” Midwest Fam. Mut. Ins. v. Wolters, 831 

N.W.2d 628, 636 (Minn. 2013) (internal quotation marks omitted). Insurance 

policies must be construed as a whole. Watson v. United Servs. Auto. Ass’n, 566 

N.W.2d 683, 692 (Minn. 1997). If policy language “is susceptible to two or more 

reasonable interpretations,” then it must be “resolved in favor of the insured.” 

Midwest, 831 N.W.2d at 636.

The Shaws’ claim centers on the Total Loss Valuation provision of the policy, 

which states that “[i]n the event of a total loss of the dwelling . . . , the limit of 

insurance indicated in the Declarations represents the total value of the dwelling 

insured.” This provision is “consistent with the Minnesota standard fire insurance 

policy,” see Auto-Owners Ins. v. Second Chance Invs., LLC, 827 N.W.2d 766, 768 

(Minn. 2013), which “requires the insurer to pay the policyholder an amount equal 

to the limit of insurance in case of a total loss,” id. at 770. The parties agree that the 

second fire “rendered the Shaws’ house a total loss.” They further agree that the 

policy requires Farm Bureau to pay an amount equal to the policy limit if covered

occurrences cause a total loss. They disagree, however, on what the policy requires 

when two covered occurrences successively contribute to a building’s total 

destruction. Farm Bureau contends that in such cases, the two claims’ combined 
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payout may not exceed the policy limit, while the Shaws argue that the full policy 

limit must be paid on the claim for the occurrence that delivered the finishing blow. 

The disagreement turns on the meaning of the words “total loss.” The Shaws

understand the phrase to be result-based. Their interpretation asks whether an 

occurrence resulted in the complete destruction of the structure without regard to the 

structure’s original condition. By contrast, Farm Bureau’s interpretation posits that 

whether a “total loss” has occurred depends on the original condition of the house at 

the time the contract was made. To Farm Bureau, the result is not sufficient to make 

a total-loss determination; one must also assess whether, prior to the loss, the 

structure was whole. 

We first consider the “plain, ordinary sense” of the phrase “total loss.” See 

Midwest, 831 N.W.2d at 636. The word “total” means “whole,” or “[c]omplete in 

extent or degree; absolute, utter.” “Total,” Oxford English Dictionary (2d ed. 1989). 

A “loss” is a deprivation. See “Loss,” Oxford English Dictionary (2d ed. 1989)

(defining “loss” as “[t]he being deprived of, or the failure to keep (a possession

. . . ),” “ruin, destruction,” and “[t]he fact of losing (something specified or 

contextually implied)”). Farm Bureau asserts that a house with missing exterior wall

portions is a “partial house,” not a “whole house,” and so its destruction cannot be a 

total loss. On that view, the second fire caused a partial loss, and the destruction can 

be understood as a total loss only by combining the two fires.

The grammar of the Total Loss Valuation provision resists Farm Bureau’s 

interpretation. Importantly, the word “total” modifies the word “loss” rather than 

the insured object. The provision does not say “in the event of the loss of the total 

(or whole) dwelling.” Instead, it reads: “in the event of a total loss.” It is thus the 

loss—the deprivation—that must be total. Hence, one could fairly say the second 

fire caused a total loss because the destruction was complete, even if the house was 

not. In fact, the building’s original condition is irrelevant to the conclusion that the 

second fire, unlike the first, caused an utter destruction, a total loss. This resultbased approach accords with ordinary usage. For example, it would not be unusual 
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or inaccurate to say that a collision “totaled” one’s car even if the car had already 

been missing a door at the time of the crash. Thus, the “plain, ordinary sense” of the 

phrase “total loss” favors, or at least permits, the Shaws’ interpretation and supports 

the conclusion that the second fire, by itself, caused a total loss. See Midwest, 831 

N.W.2d at 636. Even if Farm Bureau’s interpretation is also reasonable, the

ambiguity must be “resolved in favor of the insured.” Id. 

The policy, when read as a whole, further supports the Shaws’ interpretation. 

The Policy Period provision, which states that coverages “apply to each accident, 

‘occurrence’ and loss that takes place during the policy period,” anticipates that 

separate claims for separate occurrences will be assessed separately. Furthermore,

nowhere does the policy state that successive losses deplete the general policy limit 

on the house. As the drafter, Farm Bureau could have included such a limitation, 

see Safeco Ins. v. Lindberg, 380 N.W.2d 219, 222 (Minn. Ct. App. 1986) (construing 

policy against insurer where the policy did not “clearly identify coverage and 

exclusions”), aff’d, 394 N.W.2d 146 (Minn. 1986), as other insurance companies 

have done, see, e.g., Coats v. Farmers Ins. Exch., 230 S.W.3d 215, 218 (Tex. App. 

2006) (construing policy language providing that “[e]ach time there is a loss to any 

building . . . the [policy limit] will be reduced by the amount of the loss,” and “[a]s

repairs are made, the amount of insurance will be reinstated up to the [policy limit]”). 

Indeed, it did so with the policy’s Pollutant Cleanup and Removal Coverage section, 

under which Farm Bureau “will pay no more than $25,000 . . . during any policy 

period regardless of the number of losses.” Farm Bureau’s failure to attach a similar

restraint to the general policy limit indicates that no such restraint exists. Cf. Weber 

v. Sentry Ins., 442 N.W.2d 164, 167 (Minn. Ct. App. 1989). Granted, the lack of 

such a provision does not conclusively refute Farm Bureau’s position that “total 

loss” should be determined with reference to the original condition of the house. 

Nonetheless, the provisions calling for separate and independent treatment of each 

occurrence, except where explicitly noted, militate against an interpretation of “total 

loss” that would require multiple claims to be assessed together. 
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The absence of a provision establishing a general duty to repair also favors 

the Shaws. Farm Bureau’s argument implies a duty to repair as a condition to full 

payment of the policy limit after a total loss. By Farm Bureau’s logic, had the policy 

not covered the first fire, the Shaws would not have been entitled to the policy limit

even though the second fire—only a partial loss according to Farm Bureau—totally 

destroyed their house. In that scenario, though they would continue to pay the same 

premiums, the Shaws could not obtain the benefit of their bargain until they made 

full repairs. Yet the policy contains no general duty to repair. Instead, the Shaws 

have a responsibility “to make any repairs that are necessary to protect the property

from further damage.” Other repairs that would restore the house to its original 

condition are not required. We do not think that “a reasonable person in the position 

of the insured would have understood” the Total Loss Valuation provision to include 

an implied duty to repair. See Midwest, 831 N.W.2d at 636; cf. Luis v. RBC Cap. 

Mkts., LLC, 984 F.3d 575, 579 (8th Cir. 2020) (applying Minnesota law and noting

that “[f]or unambiguous contract language, this court should not rewrite, modify, or 

limit [a contract’s] effect by a strained construction”). In fact, Farm Bureau reserved 

its right to inspect and survey the property to determine insurability and to reduce 

the policy limit or cancel the policy entirely. These provisions indicate how the 

parties decided to handle lasting damage to the house: not through an implied duty 

to repair, but by an express right to decrease coverage.

Farm Bureau’s reliance on the Special Causes of Loss provision, which 

establishes that coverage is for “accidental direct physical loss,” does not help its 

case. Although Farm Bureau correctly observes that the second fire did not cause 

direct, physical damage to parts of the house that were already destroyed, explaining 

that “[t]here cannot be ‘direct physical loss’ to something that does not exist,” that 

is immaterial if the totality of the loss is determined solely by the extent of the 

devastation. In other words, Farm Bureau’s argument begs the question by assuming 

a definition of “total loss” that it has not shown to be correct. 

In addition to plain meaning and context, Minnesota common law supports 

the result-based interpretation of “total loss.” The Minnesota Supreme Court has 
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long held that “[a] building is not a total loss . . . unless it has been so far destroyed 

by the fire that no substantial part or portion of it above ground remains in place 

capable of being safely utilized in restoring the building to the condition in which it 

was before the fire.” Auto-Owners, 827 N.W.2d at 770 (quoting Nw. Mut. Life Ins. 

v. Rochester German Ins., 88 N.W. 265, 267 (Minn. 1901)). The overall thrust of 

this definition is result-based, and the only reference to a structure’s prior condition

cuts against Farm Bureau’s argument in two ways. First, the building’s “condition 

. . . before the fire” is considered merely to assess the feasibility of restoration, not 

to determine whether the building was intact. See id. Second, the definition refers 

to the building’s condition immediately prior to the loss, not its condition at the 

beginning of the policy period. In sum, Minnesota courts assess total loss by 

evaluating the extent of a building’s destruction (1) regardless of whether the 

structure was whole immediately before the loss and (2) regardless of the structure’s 

condition at the beginning of the policy period.

Because the plain language of the Total Loss Valuation provision, the context 

of the rest of the policy, and Minnesota’s background common-law principles all 

support the Shaws’ result-based interpretation, we conclude that the second fire

alone caused a total loss.2

 The district court did not err in granting the Shaws’ 

motion for summary judgment.

IV.

For the foregoing reasons, we affirm the judgment in favor of the Shaws.

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2

Because the policy terms, interpreted according to Minnesota principles of 

construction, plainly entitle the Shaws to judgment as a matter of law, we do not 

address whether Minnesota’s valued-policy statute, Minn. Stat. § 65A.08, subd. 2, 

compels the same outcome.