Minnesota District Court Rules Against Harleysville Insurance on the issue of Match Coverage

Last month the United States District Court for the District of Minnesota ruled in favor of an Association against insurer Harleysville on the issue of match coverage. In Trout Brook, the storm caused actual physical damage to some but not all of the shingles on the roofs of several buildings. However, repairing only those particular shingles would cause the new shingles to no longer match the original ones.

The Association and the insurer could not agree on the amount owed to fix the storm damage, and the insurance claim went to an appraisal panel for a decision. After the appraisal, the Association tried to complete the needed repairs using the amount awarded in their favor from the appraisal panel, but found that the color blend needed to match the original shingles had been discontinued by the manufacturer, and the manufacturer recommended that the newly manufactured color blend not be mixed with the old color blend because of the noticeable difference in color.

The Association contacted its insurer and advised that the entire roof needed to be replaced; otherwise the building would no longer match. The insurer refused and maintained it was not required to pay for the replacement of any physically undamaged roof shingles because the Policy language only required it to cover “direct physical loss” to “covered property.” The insurer also argued it was not responsible for color matching.

The trial court found Harleysville’s policy covered each of Trout Brook’s buildings as a whole, not just the individual items (such as shingles and siding). It also found Harleysville’s policy to be vague because it did not define the terms “like kind and quality” and witnesses in their depositions presented multiple interpretations of such terms that included the insurer being required to repair the shingles to match the others. Thus, consideration of color was not unreasonable and could not be precluded in defining the term “similar materials” and “material of like kind and quality.” Summary judgment on the issue of matching was therefore not granted. For a full copy of the decision click here.

This case is similar to the Cedar Bluffs decision that came out just months before this one. Cedar Bluffs held that an insurer was required to replace all of the siding on twenty townhome buildings, even though the storm only caused actual physical damage to two sides of the building, because the original siding was no longer manufactured in the same color. American Family is currently challenging the Minnesota Court of Appeals ruling to the Minnesota Supreme Court. For a full copy of the decision click here.