District of Minnesota Compels Appraisal on Amount of Loss an Causation

Can an appraisal panel determine an amount of loss when it necessarily needs to determine the cause of that loss? In 2012, the Minnesota Supreme Court set the precedent that yes, it could. Siding with insurer Secura Insurance, the Court stated that “in the insurance context, an appraiser’s assessment of the ‘amount of loss’ necessarily includes a determination of the cause of the loss, and the amount it would cost to repair that loss.”[1] Two weeks ago, Judge Ann Montgomery of the District of Minnesota was presented with facts and legal arguments similar to those in presented to the Minnesota Supreme Court in Quade. In fact, Secura returned as the defendant-insurer. In Condominiums of Shenandoah Place v. Secura Insurance[2], the insured proffered the very argument Secura made in Quade, i.e., that when the extent and cause of damage to the subject property necessarily concerns that amount of loss, the dispute is appropriate for appraisal.[3] Secura, being put in the undesirable position of advocating against the position it took in Quade, tried to argue that Quade and Shenandoah are factually distinguishable because the causation questions presented in Shenandoah are more complicated.[4] Secura’s argument was rejected and the insured’s motion to compel appraisal was granted.[5] In the Memorandum Opinion and Order, Judge Montgomery frequently cited Quade and stated that “. . . just because the causation determination may be more difficult here does not foreclose that to accurately determine the ‘amount of loss,’ some causation questions must be answered.”[6]



[1] Quade v. Secura Insurance, 814 N.W.2d, 703, 706 (Minn. 2012).

[2] Civ. No. 15-165 ADM/HB (D. Minn.).

[3] Memo. Op. and Or., Condominiums of Shenandoah Place v. Secura Insurance, Civ. No. 15-165 ADM/HB, 2016 WL 614381 at *7 (D. Minn. Feb. 16, 2016).

[4] Id.

[5] Id. at *8, 11.

[6] Id. at *8.