This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).







Mitchel E. Sampson,





Horace Mann Insurance Company,



Filed September 30, 2003


Hudson, Judge


Ramsey County District Court

File No. C6-02-8186


Jay M. Quam, Fredrickson & Byron, P.A., 4000 Pillsbury Center, 200 South Sixth Street, Minneapolis, Minnesota 55402-1425 (for appellant)


Peter G. Van Bergen, Michelle D. Mitchell, Cousineau, McGuire & Anderson, Chartered, 600 Travelers Express Tower, 1550 Utica Avenue South, Minneapolis, Minnesota 55416-5318 (for respondents)


            Considered and decided by Hudson, Presiding Judge; Randall, Judge; and Minge, Judge.

U N P U B L I S H E D   O P I N I O N


Appellant Mitchel E. Sampson argues that the district court erred in dismissing appellant’s complaint on the grounds that appellant’s property damage claim must be resolved through the mandatory appraisal process set forth in appellant’s homeowner’s insurance policy with respondent Horace Mann Insurance Company (Horace Mann).  Because this dispute falls within the scope of the appraisal process set forth in the insurance policy, appellant is required to participate in the appraisal process.  We affirm.



On July 7, 2000, a severe hailstorm caused damage to the siding of appellant’s home.  Appellant had contractors examine the damage to the siding, and the contractors determined that the hailstorm dented the siding.  The contractors concluded that it was necessary to replace the siding, at a cost estimated between $13,540.95 and $14,076.  Appellant filed a claim for that amount with his insurer, Horace Mann.  The adjusters for Horace Mann examined the damage to appellant’s siding and found marks on the siding, but no dents.  The adjusters concluded that the marks could be repaired by power washing the siding at a cost of only $1,297.87. 

Horace Mann and appellant were unable to resolve the dispute concerning the amount of damage to the siding and the cost to repair it.  Appellant’s insurance policy with Horace Mann contains an appraisal clause that states, in relevant part, “[i]f you and we do not agree on the amount of the loss, the Actual cash value of the property or the cost to repair or replace the property, either party may demand that these amounts be determined by appraisal.”  Pursuant to this provision, Horace Mann made a demand to have the dispute settled through the policy’s appraisal process.

Appellant refused to submit to the appraisal process and initiated a declaratory judgment action seeking a determination that the appraisal process did not apply to this dispute.  Appellant then brought a motion for summary judgment.  The district court denied appellant’s motion for summary judgment and dismissed appellant’s complaint, finding that under the terms of the insurance policy, appellant was required to participate in the appraisal process.



            On appeal from summary judgment, we ask whether there are any genuine issues of material fact and whether the district court erred in its application of the law.  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).  Also, we “view the evidence in the light most favorable to the party against whom judgment was granted.”  Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).

The interpretation of the language of an insurance contract is a question of law.  Iowa Kemper Ins. Co. v. Stone, 269 N.W.2d 885, 886-87 (Minn. 1978).  A reviewing court is not bound by and need not give deference to a district court’s decision on a purely legal issue.  Frost-Benco Elec. Ass’n v. Minnesota Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn. 1984).  General principles of contract interpretation apply to insurance policies.  Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246, 249 (Minn. 1998).  Unambiguous language must be given its plain and ordinary meaning, and any ambiguity in a policy must be construed in favor of the insured.  Henning Nelson Constr. Co. v. Fireman’s Fund Am. Life Ins. Co., 383 N.W.2d 645, 652 (Minn. 1986). 

Appellant contends that the appraisal clause is ambiguous because it does not specifically address whether appraisal is appropriate when the parties disagree on the underlying nature of the damage.  Whether language is ambiguous is a question of law.  Amatuzio v. United States Fire Ins. Co., 409 N.W.2d 278, 280 (Minn. App. 1987).  Language is ambiguous if it is reasonably subject to more than one interpretation.  Id

Here, the policy language unambiguously states that when there is disagreement about the amount of the loss or the cost of repair to appellant’s property, the appraisal process may be triggered by either party.  Both sides agree that damage occurred to the siding of appellant’s home as a result of the hailstorm, and that appellant has suffered a loss under the terms of the policy.  Likewise, both sides agree that Horace Mann must pay the costs to repair that loss; thus there is no dispute as to liability.  But appellant claims that the damage will cost approximately $14,000 to repair because the siding is dented and must be completely replaced.  Horace Mann claims that the damage will cost approximately $1,300 to repair because the siding is marked, not dented, and can be repaired through power washing. 

Appellant’s claim that this factual dispute is outside the scope of the appraisal process is unpersuasive.  In our view, the dispute centers around “the amount of the loss” to the siding and also “the cost to repair or replace” the siding.  This is precisely the type of factual dispute the policy’s appraisal process is designed for.  Thus the dispute falls within the scope of the appraisal process contained in the insurance policy.  Horace Mann properly triggered that process, and now the parties must allow appraisers to determine the amount of loss to the siding and estimate what it will cost to put the siding—whether it is dented or marked—back in the same condition as it was before the hailstorm. 

Appellant also argues that appraisers are generally trained only to determine the valuation of a particular loss, and that appraisal provisions in insurance policies have historically limited the appraiser’s role to resolution of valuation issues.  Thus, according to appellant, before any valuation can occur, a fact-finder must first decide whether the siding has been dented and requires replacement. 

But “appraisers must determine many matters other than the mere value of specific property produced before them for examination and appraisal.”  Am. Cent. Ins. Co. v. District Court, Ramsey County, Second Judicial Dist., 125 Minn. 374, 378, 147 N.W. 242, 244 (1914).  Moreover, there is no basis to support appellant’s claim that the selected appraisers will not be qualified to assess the nature of the damage to his siding.  According to the terms of the policy, each party selects its own appraiser.  Therefore, before choosing an appraiser, each side will be able to question potential appraisers about whether that appraiser can differentiate between dents and marks on siding.  This ensures that each party will select a qualified appraiser for this dispute.

Under the terms of the policy, if the selected appraisers cannot reach an agreement, their differences will be submitted to a neutral umpire selected by the appraisers.  At oral argument, appellant’s counsel objected to this aspect of the appraisal process, because, appellant’s counsel contends, he would be precluded from presenting evidence, engaging in cross-examination or making an oral argument to the neutral umpire.  While we acknowledge the generally limited scope of the appraisal process, the situation is not as dire as appellant’s counsel suggests, because the policy does not specify the nature and scope of the attorneys’ involvement, and use of the appraisal process does not mean the neutral umpire can disregard evidence offered by the parties.  Am. Cent. Ins. Co., 125 Minn. at 377-78, 147 N.W. at 243-44.  Moreover, respondent’s counsel conceded at oral argument that opposing counsel could be present with his client at the appraisal hearing if the matter went before the neutral umpire.  In addition, both counsel acknowledged at oral argument that appellant’s counsel will be allowed to present his version of the facts and present arguments to the neutral umpire through his chosen appraiser.  Furthermore, there is nothing in the policy that prevents appellant’s counsel from helping the appraiser prepare the arguments that the appraiser will make before the neutral umpire.

Under the terms of the insurance policy, appellant is required to participate in the mandatory appraisal process, and the district court properly denied appellant’s motion for summary judgment and properly dismissed appellant’s complaint.