Gregg Andersen, Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A16-0115

Gregg Andersen,
Appellant,

vs.

Owners Insurance Company,
Respondent.

Filed April 2, 2018
Reversed and remanded
Reyes, Judge

Blue Earth County District Court
File No. 07-CV-15-2595

Alexander M. Jadin, Roeder, Smith, Jadi n, P.L.L.C., Bloomington, Minnesota (for
appellant)

Timothy P. Tobin, Brock P. Alton, Gislason & Hunter, L.L.P., Minneapolis, Minnesota (for
respondents)

Considered and decided by Schellhas, Presiding Judge; Reyes, Judge; and Jesson,
Judge.
U N P U B L I S H E D O P I N I O N
REYES, Judge
Appellant Gregg Andersen appeals the dist rict court’s order denying his request for
preaward interest on his commercial-insurance- appraisal award, arguing that the supreme
court’s decision in Poehler v. Cincinnati Ins. Co. , 899 N.W.2d 135 (Minn. 2017) dictates
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that he is entitled to preaward interest pursuant to Minn. Stat. § 549.09 (2016). We reverse
and remand for a determination of preaward interest pursuant to section 549.09, subd. 1(b),
the supreme court’s holding in Poehler, and this court’s holding in K & R Landholdings,
LLC v. Auto-Owners Ins. , No. ___ N.W.2d ___, 2018 WL 817723 (Mi nn. App. Feb. 2,
2018).
FACTS
The facts are undisputed. Andersen owns a commercial building located in Mankato,
Minnesota. On March 7, 2014, a fire se verely damaged his property. Andersen
subsequently submitted a claim to respondent Owners Insurance Company (Owners) under
his commercial insurance polic y with Owners. The partie s each obtained independent
valuations of the property da mage but could not agree on a monetary amount. Andersen
demanded an appraisal hearing, which took place on May 29, 2015. An appraisal panel
awarded Andersen $451,844 in actual cash value and $548,666 in replacement-cost value,
which was more than Owners had paid on the policy. After receiving the panel’s decision,
Owners paid the remaining amount owed to Andersen.
Andersen filed a motion in the district c ourt seeking confirmation of the appraisal
award, entry of judgment in the amount of $548,666, plus an award of pre- and post-award
interest pursuant to Minn. Stat. § 549.09, costs, and disbursements. Owners filed a motion
seeking confirmation of the appraisal award, entry of Judgment in the amount of $425,334,
a determination that it has been paid in full, and that it did not owe Andersen interest, costs,
or disbursements. On November 25, 2015, the district cour t filed its order confirming the
appraisal award; entering judgment in the amount of $425,334; determining that the
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judgment was satisfied; and denying Andersen ’s motion for prejudgment interest on the
appraisal award, costs, and disbursements.
Andersen appealed the district court’s order, and this court stayed the appeal pending
the resolution of Poehler. On July 19, 2017, th e supreme court released Poehler, and this
court then dissolved the stay of Andersen’s appeal.
D E C I S I O N
I. Poehler and K & R control our decision.

Andersen contends that Poehler directly controls the preaward-interest issue in this
case. We agree in light of our decision in K & R.
In Poehler, the supreme court interpreted Minn. Stat. § 549.09 and concluded that it
“plainly and unambiguously provides preaward interest on pecuniary damages—including
those awarded in insurance appraisals —that are not otherwise excluded by the statute.”
899 N.W.2d at 140 (emphasis added) (quotation and footnote omitted). The supreme court
held that “absent contractual language explicitly precluding preaward interest, an insured
may recover preaward interest on an appr aisal award for a fire insurance loss,
notwithstanding a contractual loss payment provi sion stating that the loss is payable after
the filing of an appraisal award.” Id. at 142. While Poehler involved a homeowner’s
insurance policy, this court in K & R applied the holding in Poehler to the commercial-
policy insureds in K & R, concluding that they are also entitled to preaward interest pursuant
to Minn. Stat. § 549.09. 2018 WL 817723, at *6.
Owners argues that (1) this court’s decision in Hogenson v. Hogenson, 852 N.W.2d
266 (Minn. App. 2014), dictates that Minn. Stat. § 3 34.01 (2016) applies to commercial
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insurance-policy claims; (2) if not section 334 .01, Minn. Stat. § 60A.0811 (2016) instead
applies to commercial-insurance-policy claims; and (3) Minn. Stat. § 549.09 does not apply
because appraisal proceedings are not arbitrations. We address each in turn.
II. Minn. Stat. § 334.01 does not contro l preaward interest for commercial
insurance policies.

Owners first contends that section 334.01 applies to this commercial insurance policy
because it fits within section 549.09’s clause, which renders the statute applicable “except
as otherwise provided by cont ract or allowed by law.” Minn. Stat. § 549.09, subd. 1(b).
Owners relies on Hogenson v. Hogenson, 852 N.W.2d 266 (Minn. App. 2014), which held
that preverdict interest is permitted fo r a conversion claim under common law and that
section 334.01 applies if the damages are ascert ainable or liquidated. 852 N.W.2d at 274.
This court concluded that section 549.09 “was meant to supplement, not replace, the existing
law on preverdict interest,” and that “the phrase ‘except as otherwise allowed by law’
required that preverdict interest be calc ulated under existing common-law principles
whenever possible.” Id. at 273-74.
Owners argues that Hogenson applies here and that the crux of the present case is the
amount that Owners owes Andersen pursuant to his insurance contract, which is a claim for
damages at common law. However, this court disposed of that argument in K & R, stating
that the commercial-insurance-policy claim i nvolved preaward intere st on an appraisal
award and, as here, respondent failed to cite authority demonstrating that preaward interest
was permitted for appraisal awards at common law. 2018 WL 817723, at *4. This court
also noted that “[t]he supreme court could have acknowledged that section 334.01 may, in
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some circumstances, ‘otherwise’ provide for preaward interest. But the supreme court did
not mention section 334.01.” Id. K & R concluded that the supreme court in Poehler did
not intend to limit the application of its holding to homeowners insurance policies alone, as
evidenced in its analysis of a federal distri ct court case involving a commercial-property
insurance policy. Id. (citing Poehler, 899 N.W.2d at 142 (citing Hous. & Redevelopment
Auth. of Redwood Falls v. Hous. Auth. Prop. Ins., No. 14-CV-4741, 2015 WL 4255858 (D.
Minn. July 14, 2015)). Therefore, section 334.01 does not apply to this commercial
insurance policy. K & R, 2018 WL 817723, at *4.
III. Minn. Stat. § 60A.0811 does not control preaward interest for this commercial
insurance policy.

Owners argues that preaward interest is “otherwise” provided by law pursuant to
Minn. Stat. 60A.0811, which applies to commer cial insurance policies. This court also
disposed of this issue in K & R, holding that section 60A.0811 is limited to “a court action
or arbitration proceeding, including an action seeking declaratory judgment.” 2018 WL
817723, at *5 (quoting Minn. Stat. § 60A.0811, subd. 3). Here, an appraisal proceeding,
as held in K & R, is neither an arbitration proceeding nor does it arise from one. See 2018
WL 817723, at *5. Similarly, an appraisal proceeding does not determine liability and is
not a court action. Id. (citing Johnson v. Mut. Serv. Cas. Ins. Co. , 732 N.W.2d 340, 346
(Minn. App. 2007), review denied (Minn. Aug. 21, 2007) (“It is well settled that appraisal
does not determine liability under a polic y. Liability depends on a judicial
determination.”); Vaubel Farms, Inc. v. Shelby Farmers Mut. , 679 N.W.2d 407, 411-12
(Minn. App. 2004) (noting that an “action” is “confined to judicial proceedings”)). Thus,
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section 549.09 applies here because sectio n 60A.0811 does not “otherwise” provide for
preaward interest. K & R, 2018 WL 817723, at *5.
IV. K & R is dispositive of Owners’ argument that appraisals are arbitrations and
are not an event triggering the application of section 549.09.

Owners argues that section 549.09 does not apply because ap praisals are not
“arbitrations” under the Arbitration Act and relies on the Poehler dissent to further argue
that the appraisal cannot trigger a right to preaw ard interest under the statute. We are not
persuaded.
Both Poehler and K & R concluded that section 549. 09 “unambiguously provides
for preaward interest” on an appraisal award. Poehler, 899 N.W.2d at 140; K & R, 2018
WL 817723, at *5. Therefore, Owners’ argument that section 549.09 does not apply
because appraisals are not “arbitrations” lacks merit.
As to Owners’ triggering-event argument, in Poehler, the district court found that
Poehler’s demand for an appraisal was the event triggering application of preaward interest
under section 549.09. 899 N.W.2d at 140, n.2. Because the respondent insurance company
did not argue that Poehler’s demand for an appraisal was not a triggering event, the supreme
court concluded that the triggering-event issue was not properly before the court. Id. Just
as the K & R court concluded that the respondent insurance company’s reliance on the
Poehler’s dissent was unpersuasive and conflicted with the majority’s holding, we
conclude the same with respect to Owners’ argument.
Reversed and remanded.