Court Opinion

ID: 8247972
Source: CourtListenerOpinion
Date Created: 2022-10-16 09:51:41.639697+00
Date Added: 2024-06-11T16:42:50.028985
License: Public Domain

DISSENT
ANDERSON, Justice
(dissenting).
James Poehler suffered a serious loss from a fire that occurred at his home. His insurance carrier, Cincinnati Insurance Company, promptly paid, him to compensate him for his loss. A dispute developed over the total amount of Poehler’s loss; the dispute was ultimately resolved by an award made in an appraisal process governed by statute and contract. Cincinnati paid the amount awarded to Poehler through the appraisal process.
This is where matters stood for four months. Then, Poehler moved the district court to confirm the already-paid appraisal award and to grant preaward interest‘in the approximate amount of $18,000. The district court confirmed the appraisal award but declined to enter judgment because the award had already been paid.’ The district court also granted preaward interest, calculated from the date that Poehler demanded the appraisal. The court of appeals reversed on the preaward interest issue. Because I agree with the court of appeals that preaward interest is not permitted under these circumstances, I would affirm.
More specifically, I conclude that the court has interpreted the governing statute, Minn. Stat. § 649.09, subd. 1(b) (2016), in a way that is inconsistent with its plain and unambiguous language. Section 549,09, subdivision 1(b) simply does not contemplate an appraisal award as an event that triggers .the accrual of preaward -interest. Accordingly, the question of whether an insured is entitled to interest on an- appraisal award is governed -instead by either: one, the language of the insurance policy, or two, Minnesota’s standard fire insurance policy, Minn. -Stat § 65A.01 (2016).
In addition, even' if there were some theory to get around the plain language of the statute and conclude that appraisal awards are generally contemplated by the statute, the language of section 549.09, subdivision 1(b) expressly provides that the recovery of preaward interest is permitted “[ejxcept as otherwise provided by contract” (emphasis added), such as a loss payment provision in an insurance contract, “or allowed by law,” such as Minnesota’s standard fire insurance policy set forth in Minn, Stat. § 65A.01, subd. 3. Here, the loss payment provision in the insurance contract between Poehler and Cincinnati bars Poehler’s recovery of pre-award interest. For these reasons, I respectfully dissent. -
•I.
I turn first to the language of Minn. Stat. § 549.09, subd. 1(b). “We review questions of statutory interpretation de *147novo.” Sumner v. Jim Lupient Infiniti, 865 N.W.2d 706, 708 (Minn. 2015) (citing Larson v. State, 790 N.W.2d 700, 703 (Minn. 2010)). We “interpret statutes ‘as a whole,’ and ‘the words and sentences therein are to be understood ... in the light of their context.’ ” In re Dakota Cty., 866 N.W.2d 905, 909 (Minn. 2015) (quoting Schmidt ex rel. P.M.S. v. Coons, 818 N.W.2d 523, 527 (Minn. 2012)). We give the words of a statute their plain and ordinary meaning. Meeker v. IDS Prop. Cas. Ins. Co., 862 N.W.2d 43, 46 (Minn. 2015). We may read multiple parts of a statute, together when determining whether a statute is ambiguous. Christianson v. Henke, 831 N.W.2d 532, 537 (Minn. 2013) (citing Martin v. Dicklich, 823 N.W.2d 336, 344 (Minn. 2012)).
The court concludes that “[sjection 549.09 plainly and unambiguously provides preaward interest on ‘pecuniary damages’—including those awarded in insurance appraisals—that are not otherwise excluded by the statute.” This broad statement suggests that the mere mention of the phrase “pecuniary damages” is sufficient to bring appraisal awards within the coverage of the statute. That is incorrect because the parties’ appraisal proceeding does not trigger a right to preaward interest.1 Minnesota Statutes § 549.09, subdivision 1(b) sets out a specific list of predicate events—one of which must occur—before preaward interest accrues on pecuniary damages.2 These events are one, the “commencement of [an] action,” two, “a demand for arbitration,” or three, “the time of’a written notice of claim.” When one of these events occurs, preaward interest on pecuniary damages is computed from the time the event occurred, subject to additional restrictions provided by the statute.3 Id. If one of these events does not occur, then subdivision 1(b) of the statute simply does not apply.
It is undisputed that .Poehler. did not *148demand arbitration.4 Nor did Ms demand for an appraisal commence an “action.” See Minn. Stat. § 645.45(2) (2016) (defining “action” as “any proceeding in any court of this state”); see also Lucas v. Am. Family Mut. Ins. Co., 403 N.W.2d 646, 650 (Minn. 1987) (“[W]e conclude that ‘action’ in section 549.09 refers only to a judicial proceeding.”). Notably, the district court found that Poehler’s notice to his insurance company about the fire, in October 2013, did not “constitute[ ] a “written notice of claim’ sufficient to trigger pre-award interest” under the statute. Thus, in the absence of a “written notice of claim,” the district court relied on “the date Poehler demanded an appraisal.”
But, critically, there is no mention of an “appraisal” in the statute’s list of triggering events for preaward interest. The statute states that arbitration triggers pre-award interest based on a specific event: the demand for arbitration. By contrast, the statute does not even mention appraisals, let alone distinguish between the demand for an appraisal and the appraisal award as the trigger for preaward interest. There are just too many details missing to read the statute as the majority does and the district court did.
Moreover, the record lacks any details about Poehler’s demand for an appraisal, so we cannot conclude that it was “written” or a “notice of claim.”5 The only thing we know, other than the date, is that Poeh-ler requested an appraisal and Cincinnati agreed. By upholding Poehler’s request for preaward interest on this basis, the court has essentially made irrelevant the statutory requirement for a “written” notice of a “claim,” transforming that requirement instead into a request for an appraisal of any type, written or oral. Cf. Minn. Stat. § 645.16 (2016) (“Every law shall be construed, if possible, to give effect to all its provisions.”).
By ignoring the mandatory triggers for preaward interest, the district court and now this court violate the interpretive canon expressio unius est exclusio alterius, which means “the expression of one thing is the exclusion of another.” Finn v. Alliance Bank, 860 N.W.2d 638, 647 (Minn. 2015) (quoting In re Welfare of J.B., 782 N.W.2d 535, 543 (Minn. 2010)); see also Minn. Stat. § 645.19 (2016) (“Provisos shall be construed to limit rather than to extend *149the operation of the clauses to which they refer. Exceptions expressed in a law shall be construed to exclude all others.”). In short, the word “appraisal” is never mentioned in section 549.09. Insurance appraisal awards under a fire insurance policy are governed in exacting detail by statute.6 Minn. Stat. § 65A.01; see also Palmer v. Ill. Farmers Ins. Co., 666 F.3d 1081, 1083 (8th Cir. 2012) (“Insurance companies operating within Minnesota are subject to a detailed regulatory scheme created by the legislature.”). Given this extensive statutory framework, we can surely assume that the Legislature was well aware of the existence of appraisals and simply decided not to tie the accrual of preaward interest to that event. In sum, the plain and unambiguous language of section 549.09, subdivision 1(b) says nothing about a demand for appraisal—or anything relating to appraisals—in the list of events that trigger the computation of preaward interest. In the face of this legislative silence, we cannot expand the scope of the statute through judicial interpretation.
Accordingly, Poehler’s claim fails on this ground alone, and I would therefore affirm the decision of the court of appeals without proceeding any further. But the court decides otherwise and moves on to analyze Poehler’s specific contract with Cincinnati. Because the court’s analysis of the insurance policy between Poehler and Cincinnati is also flawed, I consider this issue as well.
II.
Preaward interest is available on pecuniary damages for certain awards, verdicts, and judgments once a triggering event has occurred. Minn. Stat. § 549.09, subd. 1(b). But, even when a triggering event occurs, preaward interest still may be unavailable. Specifically, preaward interest is available “[ejxcept as otherwise provided by contract or allowed by law.” Id.
Poehler and the court fail to recognize that even if we assume that appraisal awards lead to a triggering event under section 549.09, we must first determine whether a contract either restricts or excludes the recovery of preaward interest before deciding whether a party or an individual is entitled to preaward interest. Here, the contract excludes the recovery of preaward interest.
The availability of preaward interest is dependent on the terms of the insurance policy itself, which by statute can incorporate additional or different terms so long as the terms do not fall below the floor set by Minnesota’s standard fire insurance policy. Minn. Stat. § 65A.01, subd. 3. The insurance policy in this case contains just such a term, making losses payable by Cincinnati beginning only 5 days after an appraisal award.
*150We interpret the language of insurance policies de novo, Iowa Kemper Ins. Co. v. Stone, 269 N.W.2d 885, 886-87 (Minn. 1978), and any ambiguities are resolved in favor of the policyholder, Am. Family Ins. Co. v. Walser, 628 N.W.2d. 605, 609 (Minn. 2001). Cincinnati’s loss payment provision in the insurance policy provides that a loss is payable within 5—rather than 60—days after an appraisal award is filed with Cincinnati, thus granting Poehler a benefit more generous than what is guaranteed by the standard fire insurance policy statute. See Minn. Stat. § 65A.01, subd. 3. The loss payment provision, however, is silent as to when interest begins to accrue. Because the policy is silent on' this issue, we must determine when interest may begin to accrue uiider the policy.
“[T]he extent of liability of an insurer is governed by the contract” entered into with the insured, Bobich v. Oja, 258 Minn. 287, 294, 104 N.W.2d 19, 24 (1960), and a “statutorily required provision in an insurance policy will not necessarily be construed against the insurer,” Nathe Bros., Inc. v. Am. Nat'l Fire Ins. Co., 615 N.W.2d 341, 344 (Minn. 2000) (citing Laidlaw v. Commercial Ins, Co. of Newark, 255 N.W.2d 807, 811 (Minn. 1977) (“The usual rule of construction most favorable to the insured does not apply to a [policy] provision required by statute.”)).
The court contends that we “have never addressed whether an insurance policy provision governing when payments for loss are due precludes the insured from recovering preaward interest.” This is not entirely correct. We have determined that when a policy provides for arbitration or an appraisal, interest does not begin to accrue until an award is made because until that time, the insurer has not defaulted on a payment obligation. Schrepfer v. Rockford Ins. Co., 77 Minn. 291, 295-96, 79 N.W. 1005, 1007 (1899) (determining that “[i]nterest by way of damages is allowed only on account of some default,” and “[u]ntil then the amount which it should pay could not be ascertained”); see also 12 Steven Plitt et al„ Couch on Insurance § 178:36 (3d ed. 2005) (‘Where a fire insurance policy provides for an appraisal or arbitration in case the parties should disagree as.to the amount of loss payable thereunder, and the insurer reasonably avails itself of this right, interest on the principal payable under the policy does not run until the appraisal or arbitration award has been made.” (emphasis added) (citing Schrepfer, 77 Minn, at 295, 79 N.W. at 1006)). In fact, we said in Schrepfer that an insurer is not “guilty of any default in not paying” the insured on a loss until an award was made that determined the amount of the loss. 77 Minn, at 295, 79 N.W. at 1007.
The logic of this reasoning is obvious. Preaward interest compensates for loss of the use of money occasioned by the defendant’s conduct. Lienhard v. State, 431 N.W.2d 861, 865 (Minn. 1988). Poehler'was not deprived of the use of any money because under the terms of his insurance policy, Cincinnati was not liable for the losses Poehler claimed until an appraisal award was filed. See Bobich, 258 Minn. at 294, 104 N.W.2d at 24 (stating that an insurer’s liability “is governed by the contract they enter into”); see also Hous. & Redevelopment Auth. of Redwood Falls v. Hous. Auth. Prop. Ins., No. 14-CV-4741 (PAM/HB), 2015 WL 4255858 at *4 (D. Minn. July 14, 2015) (stating that an insurer that demanded an appraisal and then paid the appraisal award “complied with the insurance policy,” thereby eliminating the right to preaward interest because the insured cannot claim “that it was entitled to payment of the loss sooner than when the policy said it would receive payment”). In contrast, an insured would be entitled to preaward interest if an insurer failed to *151comply with the agreed-to terms of the parties’ contract by failing to remit a timely payment under the contract.7 “After a valid appraisal or arbitration award has been made, interest is recoverable from the date of such appraisal or arbitration or after the expiration of a specified number of days if the policy involved so provides.” 12 Couch on Insurance § 178.36 (emphasis added).
Other states, in addition to Minnesota, recognize that an insured is not entitled to interest from the date of loss; rather, interest is calculated once the loss becomes payable.8
[Wjhere a policy insuring against fire loss provides, either affirmatively, that the loss shall be payable á certain number of days (ordinarily 60) after the insured has furnished proofs of loss, or negatively;. that the loss shall not be payable until' such a number of days have elapsed, the principal payable under the policy will not bear interest for any time before the period so provided has expired, but will bear interest from that time.
Kristine Cordier Karnezis, Annotation, Insured’s Right to Recover from Insurer Prejudgment Interest on Amount of Fire Loss, 5 A.L.R. 4th 126 (1981) (emphasis added); see also 12 Couch on Insurance § 178.38 (same).
In such states, two factors are considered when determining the point at which interest begins accruing on an unpaid property insurance claim. First, “[a]t which point did the claim become sufficiently certain to invoke the rule that interest should be paid on claims that are liquidated or susceptible to computation?” 12 Couch on Insurance § 178.34. Second, “[a]t which point is the insurer required— by the policy, by an applicable statute, or by basic equity if neither policy nor statute address the pointr—to make payment of claims'?”9 Id. (emphasis added). “[I]nter-*152est ordinarily commences on the later of the two above dates.” Id.
Under the first factor here, Poehler’s claim became sufficiently certain after the appraisers issued the award on June 23, 2014, determining that Poehler’s loss exceeded the payments made by Cincinnati in the amount of $88,480. Indeed, the district court determined that, before this date, Poehler’s communications with Cincinnati in October 2013 did not provide sufficient information to constitute a written notice of claim. There is no other evidence in the record to suggest that Poeh-ler’s claimed loss was sufficiently certain before the date of the appraisal award. Under the second factor, Cincinnati is required by its policy to make payment on claims 5 working days after the appraisal award is filed with Cincinnati. Thus, the loss became payable 5 working days after the appraisal award was filed, and Cincinnati became legally obligated to pay interest beginning on that date.10
Accordingly, Cincinnati is liable for interest to Poehler from the time when the loss became payable under the contract, 5 working days after the appraisal award was filed with Cincinnati.
For these reasons, I respectfully dissent.

. I acknowledge that the statute provides for preaward interest only on "pecuniary damages.” Minn. Stat. § 549.09, subd. 1(b). Because I conclude that the parties’ appraisal proceeding did not trigger a right to pre-award interest, I would conclude that it is unnecessary to define the scope of the phrase "pecuniary damages.” I note, however, that the decisions the court relies.on to illustrate the plain and ordinary meaning of "damages” involved a formal judicial proceeding or binding arbitration, neither of which occurred here. See Ray v. Miller Meester Advert., Inc., 684 N.W.2d 404 (Minn. 2004) (considering whether a jury's verdict awarding front pay could be doubled under Minn. Stat. § 363.071, subd. 2 (2002)); Phelps v. Commonwealth Land Title Ins. Co., 537 N.W.2d 271 (Minn. 1995) (considering whether actual damages awarded following a court trial on claims of age and disability discrimination could be doubled under Minn. Stat. § 363.071, subd. 2 (1992)); Lessard v. Milwaukee Ins. Co., 514 N.W.2d 556 (Minn. 1994) (considering whether an insurer is liable for preaward interest on an arbitration award).

. The court asserts, incorrectly, that this "triggering-event issue” is not properly before the .court.'But, in his petition for review, Poehler specifically requested that the court answer a “question of statewide significance; Under what circumstances does Minnesota’s preaward interest statute, Minn. Stat. § 549,09, apply to insurance ■ appraisal awards?” We granted review without modifying this question. To answer this question, the court must interpret section 549.09, which contains a list of predicate, or triggering, events. Accordingly, answering the question on which we granted review requires us to determine whether an insurance appraisal award is an event that triggers the accrual of preaward interest.

. The court contends that my interpretation ignores the exceptions to the availability of preaward interest listed in subdivision 1(b)(1)-(5), To the contrary, if one of the three triggering events occurs, then a court must determine whether the type of award/ verdict, or judgment is excluded by subdivision 1(b)(1)-(5). Minn. Stat. § 549.09, subd. 1(b).

. Often, and unfortunately with resulting confusion, the terms "appraisal” and "arbitration” are used interchangeably. See 15 Steven Plitt, et al., Couch on Insurance 3d § 209:8 (3d ed. 2005). An appraisal is an informal and limited non-judicial proceeding. Id. "Arbitration is a more far-reaching proceeding, by which the parties agree to have a neutral person or persons resolve a disputed matter.” Id. at § 209:4. Arbitrators "act quasi-judicially and may receive the evidence or views of a party to the dispute only in the presence, or on notice to, the other side, and may adjudge the matters to be decided only on what is presented to them in the course of an adversary proceeding.” 4 Am. Jur. 2d Alternative Dispute Resolution § 3 (2007). Given these distinctions between the limited appraisal process and the more formal, quasi-judicial arbitration, "the statutes, rules and procedures applicable to arbitration do not always apply." 15 Couch on Insurance § 209:8 (emphasis added); see also id. at § 209:9 ("[P]rin-ciples governing arbitration and award do not necessarily extend to appraisals.”). Further, “an appraisal typically does not resolve the entire controversy between the parties to the insurance contract, [therefore] a judge is without authority to enter judgment on the appraiser’s award without the consent of the parties," Id. at § 209.10.

. The court's assertion that the district court could create a triggering event, i.e., "Poeh-ler’s demand for appraisal,” conflicts with the plain language of the statute. See supra note 2. As discussed above, section 549.09, subdivision 1(b) lists three triggering events, and a demand for appraisal clearly is not one of them.

. Minnesota’s standard fire insurance policy statute provides that when the insured and insurer cannot agree on the actual cash value or amount of loss, then either may submit a written, demand for appraisal. Minn. Stat. § 65A.01, subd. 3. Upon written demand, each must select a “competent and disinterested appraiser and notify the other of the appraiser selected within 20 days of [the written] demand.” Id. If either fails to select an appraiser within the timeframe provided, then an appraiser may be appointed by a judge. Id. The appraisers must then select an umpire, and if they fail to do so, an umpire may be appointed by a judge. Id. After an umpire is selected or appointed, the appraisers must then “appraise the loss, stating separately actual value and loss to each item.” Id. If they fail to agree, they must submit their differences to the umpire. Id. When filed with the company, a written itemized award by any two appraisers determines the amount of actual loss and value. Id. The insured and the company each pay the expenses of the appraiser they selected, and the umpire is paid by each side equally. Id.

. The decision in Eden Homeowners Ass'n, Inc. v. American Family Mutual Insurance Co., No. 15-CV-3527 (RHK/HB) (D. Minn. Dec. 22, 2015), which the court concludes is persuasive, is distinguishable for at least two reasons. First, the insurer "had not paid any of the appraisal award” by the time the case was before the magistrate jpdge. Id. at 5. Thus, the insurer in that case could not, in contrast to Cincinnati, claim to have complied with its contractual obligations. Second, the magistrate judge concluded that an insured is "entitled to use of [the] money" when the insured files a notice of claim under section 549.09. Id. at 13-14 (quoting Nelson v. Ill. Farmers Ins. Co., 567 N.W.2d 538, 543 (Minn. App. 1997)). Here, in stark contrast, the district court found no evidence of a notice of claim made to Cincinnati, and the parties have not pointed us to anything in the record that represents the notice of claim required by Minn. Stat. § 549.09, subd. 1(b).

. Minnesota’s federal district courts also have followed this approach, relying on Minnesota law. See Bellanca Aircraft Corp. v. Fireman’s Fund Ins. Co., 353 F.Supp. 929, 931 (D. Minn. 1973) ("The law is that interest accrues at the time that damages become liquidated,” and damages here became liquidated "60 days after plaintiff submitted its proof of loss.”); Craigie v. Firemen’s Ins. Co., 191 F.Supp. 710, 715-16 (D. Minn. 1961) (recognizing that under Minnesota law, "interest would not begin to run under the policy provisions until the award was filed with the insurance company").

.Plitt observes that a "practitioner should ■ first review the policy to determine whether there is any explicit or implicit policy provision that may apply. Absent a policy provision, the practitioner should review any applicable statute or common law rules to determine the commencement date.” 12 Couch on Insurance § 178.34, Plitt further .. notes that "[a]s a general proposition, interest upon a loss payable under an insurance policy is not recoverable before,, but is recoverable, from the time when, the payment of the principal—the claim by the insured—is due under the terms of the policy." Id. (emphasis added).

. The court also concludes that it cannot address the "anomalous” result of awarding Poehler preaward interest on over $100,000 that Cincinnati paid to Poehler before the appraisal award was made because Cincinnati failed to raise this objection below or before us. I cannot agree. Cincinnati has argued throughout these proceedings that Poehler is not entitled to payment of preaward interest for money that was timely paid to him. Therefore, Cincinnati’s argument before both the court of appeals and here that Poehler is not entitled to preaward interest places the determination of the proper calculation for pre-award interest properly before our court.