Sheila Oliver, et al.,

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STATE OF MINNESOTA

IN SUPREME COURT

A18-0367

Court of Appeals Anderson, J.

Sheila Oliver, et al.,

Respondents,

vs. Filed: March 4, 2020
Office of Appellate Courts
State Farm Fire and Casualty Insurance Company,

Appellant.

________________________

Alexander M. Jadin, Timothy D. Johnson, Jeffrey J. Woltjen, Smith Jadin Johnson, PLLC,
Bloomington, Minnesota, for respondents.

C. Todd Koebele, William L. Moran, Scott G. Williams, Lehoan T. Pham, HKM, P.A.,
Saint Paul, Minnesota, for appellant.
________________________

S Y L L A B U S
Because the Minnesota Uniform Arbitration Act, Minn. Stat. §§ 572B.01–.31
(2018), does not apply to fire insurance appraisal awards under the Minnesota standard fire
insurance policy, Minn. Stat. § 65A.01 (2018), the district court erred by holding that a
motion for preaward interest on a fire insurance appraisal award was time-barred by the
Act.
Affirmed.
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O P I N I O N
ANDERSON, Justice.
A fire occurred at the home of respondents Sheila and William Oliver in Edina. The
Oliver home was insured against fire loss by appellant State Farm Fire and Casualty
Insurance Company (State Farm). Oliver and State Farm were un able to agree on the
amount of the loss, so Oliver requested an appraisal. An appraisal panel issued an award
and State Farm paid the appraisal award. Oliver then sought confirmation of the appraisal
award under the Minnesota Uniform Arbitration Act, Minn. Stat. §§ 572B.01–.31 (2018),
from the district court. Oliver also moved the court to grant preaward interest on the
appraisal award. The court granted the motion to confirm the appraisal award but denied
the motion for preaward interest as untimely. The court of appeals reversed and remanded.
Because we hold that the district court erred by applying the Minnesota Uniform
Arbitration Act to a fire loss appraisal award, we affirm the court of appeals, though on
different grounds, and remand to the district court for reconsideration based on our holding.
FACTS
In May 2015, the Oliver home was significantly damaged in a fire. Oliver reported
the fire loss to the insurer of the home, State Farm. Because Oliver and State Farm were
unable to agree on the amount of the loss, Oliver requested an appraisal under the
provisions of the fire insurance policy. In March 2016, the appraisal panel issued its award,
which State Farm paid. Oliver had not sought, nor did the appraisal panel award, any
preaward interest as part of the appraisal award. Over a year later, Oliver sent a letter to
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State Farm demanding that State Farm pay $94,009.18 in preaward interest, which State
Farm declined to pay.
In October 2017, Oliver moved the district court to confirm the award under the
Minnesota Uniform Arbitration Act . As a part of the confirmation, Oliver also sought
preaward interest on the appraisal award. State Farm opposed the motion for preaward
interest, arguing inter alia that the motion was untimely under Minn. Stat. § 572B.24(a)
because it was made outside the 90-day period to modify an arbitration award under the
Minnesota Uniform Arbitration Act. Oliver argued that section 572B.24(a) did not apply
because the request for preaward interest was not a modification of the award of the
appraisal panel.
The district court ruled that the motion for preaward interest was untimely under
section 572B.24(a) because it concluded that the motion was one to modify an arbitration
award and was thus outside the 90-day limitation period in the statute. Oliver appealed the
denial of preaward interest. The court of appeals reversed, holding that although appraisal
awards are subject to the Minnesota Uniform Arbitration Act, the 90-day limitation period
for motions to modify an arbitration award does not apply to motions for preaward interest
on appraisal awards. Oliver v. State Farm Fire & Cas. Ins. Co., 923 N. W.2d 680, 688
(Minn. App. 2019). In addition, the court of appeals held that appraisal panels lack
authority to grant preaward interest. Id. at 686–87. Thus, the court of appeals remanded
to the district court for reconsideration. Id. at 688.
State Farm sought review of two questions: (1) whether Minn. Stat. § 572B.24(a),
the provision limiting modification of awards to 90 days after receiving notice of an
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arbitrator’s award, applies to an insured’s right to obtain preaward interest; and (2) whether
an appraisal panel has authority to issue preaward interest.
We granted review.
ANALYSIS
Oliver’s fire loss was covered by a homeowner’s insurance policy issued by State
Farm, which adhered to the Minnesota Standard Fire Insurance Policy. See Minn. Stat.
§ 65A.01 (2018) (prescribing the minimum level of coverage for fire insurance policies
issued in Minnesota). Oliver sought preaward interest on the fire loss award based on our
decision in Poehler v. Cincinnati Insurance Company, 899 N.W.2d 135 (Minn. 2017). In
Poehler, we held that, under Minn. Stat. § 549.09, subd. 1(b) (2018), “absent contractual
language explicitly precluding preaward interest, an insured may recover preaward interest
on an appraisal award for a fire insurance loss.” Poehler, 899 N.W.2d at 142. Oliver
moved the district court to confirm the award and grant preaward interest using the
procedures contained in the Minnesota Uniform Arbitration Act. See Minn. Stat.
§ 572B.22. Given that Oliver proceeded under the Act to confirm the award and seek
preaward interest, the issue, raised by State Farm, is whether the Act’s 90-day period for
modifying awards applies.
Inherent in the parties’ positions is the underlying assumption that the Minnesota
Uniform Arbitration Act applies to appraisals. The Minnesota Standard Fire Insurance
Policy, which applied to Oliver’s policy with State Farm, provides an appraisal process for
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resolving disputes over the amount of fire loss.1 See Minn. Stat. § 65A.01. The Minnesota
Uniform Arbitration Act applies to “agreements to arbitrate.” Minn. Stat.
§ 572B.03 (2018). The Minnesota Standard Fire Insurance Policy does not use the term
“arbitrate” or its derivatives. But based on precedent from the court of appeals’ holding
that the Act applies to appraisals, Oliver proceeded under the Minnesota Uniform
Arbitration Act to seek preaward interest on the appraisal award. See QBE Ins. Corp. v.
Twin Homes of French Ridge Homeowners Ass’n, 778 N.W.2d 393, 398 (Minn. App. 2010)
(“Appraisal decisions are subject to . . . the arbitration statute.”). The court of appeals also
relied on this authority in its decision, stating that “appraisal decisions are subject to the
[Minnesota Uniform Arbitration Act].” Oliver, 923 N.W.2d at 687 (citing QBE Ins. Corp.,
778 N.W.2d at 398). Thus, as a predicate matter, before we can decide whether a request
for preaward interest is a modification of an award and subject to a 90-day limitation for
modifications, we must first decide whether an appraisal is governed by the Minnesota

1 Insurers providing fire insurance policies in Minnesota must provide a minimum
level of coverage and include required provisions. See Minn. Stat. § 65A.01. The
Minnesota Standard Fire Insurance Policy provides an appraisal process as a way to resolve
disputes between an insured and an insurer regarding the amount of the loss from a fire.
See id., subd. 3. When a disagreement over the amount of the loss occurs, each party
appoints an appraiser. See id. The appraisers then select a neutral umpire, who resolves
any differences between the two appraisers. See id. The two appraisers and umpire
together comprise an appraisal panel. See id. The written appraisal award determines “the
amount of actual value and loss.” Id.

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Uniform Arbitration Act.2 Although the court of appeals has opined on this issue, we have
not, and thus this is a matter of first impression for us.
The Minnesota Uniform Arbitration Act defines the scope of its application by
stating that the Act “govern[ s] agreements to arbitrate.” Minn. Stat. § 572B.03. The Act
does not define what constitutes an agreement to arbitrate nor what constitutes arbitration,
and does not use the word “appraisal” or its derivatives. See Minn. Stat. §§ 572B.01–.31.
Thus, to determine whether the Act applies to appraisals, we must first decide whether
governing “agreements to arbitrate” also means the Act governs appraisals. This
determination requires us to interpret the Minnesota Uniform Arbitration Act.
“We review questions of statutory interpretation de novo.” Sumner v. Jim Lupient
Infiniti, 865 N.W.2d 706, 708 (Minn. 2015). The purpose of all statutory interpretation is
“to ascertain and effectuate the intent of the Legislature.” Hous. & Redevelopment Auth.
of Duluth v. Lee, 852 N.W.2d 683, 687 (Minn. 2014); see also Minn. Stat. § 645.16 (2018).
When interpreting the Minnesota Uniform Arbitration Act, “we will consider other
jurisdictions’ interpretations of their uniform arbitration acts.” City of Rochester v.
Kottschade, 896 N.W.2d 541, 546 (Minn. 2017).
The parties and the court of appeals rely on court of appeals’ decisions holding that
an appraisal is subject to the Minnesota Uniform Arbitration Act. This precedent

2 This issue was raised at oral argument. Following oral argument, the parties were
asked to provide supplemental briefing on whether the Minnesota Uniform Arbitration Act,
Minn. Stat. §§ 572B.01–.31, applies to fire insurance appraisals, in light of the appraisal
policy provisions under the Minnesota Standard Fire Insurance Policy, Minn. Stat.
§ 65A.01, subd. 3.

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originated in the court of appeals’ decision in David A. Brooks Enterprises, Inc. v. First
Systems Agencies, 370 N.W.2d 434, 435 (Minn. App. 1985). In David A. Brooks, the
conclusion “that the arbitration statute . . . governs the decision of the appraisers” was
without any substantive analysis by the court. Id. Rather, the court merely stated that it
“believe[s] that the arbitration statute, Minn. Stat. § 572.01 –572.30 (1980), governs the
decision of the appraisers, and therefore, the appraisers had the authority to award
prejudgment interest.” Id. But even in light of David A. Brooks and its progeny, the court
of appeals has not been consistent in this conclusion. See, e.g., Johnson v. Mut. Serv. Cas.
Ins. Co., 732 N.W.2d 340, 346 (Minn. App. 2007) (concluding that “the statutorily required
appraisal provision is not an agreement to arbitrate governed by the [Minnesota] Uniform
Arbitration Act” (emphasis added)).
Even though we have not decided the issue before us, our decisions have recognized
a distinction between arbitration and appraisal.3 For example, we have held that the scope
of judicial review of an arbitration panel’s decisions and an appraisal panel’s decisions are
fundamentally different. Arbitration panels “ are the final judges of both law and fact.”
Johnson v. Am. Family Mut. Ins. Co., 426 N.W.2d 419, 421 (Minn. 1988). “[E]very

3 Admittedly, our decisions at times have used the terms “arbitration” and “appraisal”
interchangeably. See, e.g., Boston Ins. Co. v. A.H. Jacobson Co., 33 N.W.2d 602, 604
(Minn. 1948) (stating that the “[f]ailure or inability of the parties to agree as to the amount
of the loss conditions the right to an appraisement or arbitration”); Kavli v. Eagle Star Ins.
Co., 288 N.W. 723, 725–27 (Minn. 1939) (upholding the district court’s authority to
appoint an umpire and, referring to the appraisal process, stating that “[t]he purpose of
arbitration is to provide a plain, speedy, inexpensive and just determination of the extent
of the loss”) . This past usage does not undermine the fundamental differences we have
recognized between an appraisal and an arbitration as discussed in this opinion.
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reasonable presumption is to be exercised in favor of the finality and validity of the
arbitration award, thus the scope of judicial review of an arbitrati on award is extremely
narrow.” Peggy Rose Revocable Tr. v. Eppich, 640 N.W.2d 601, 606 (Minn. 2002). This
contrasts with our view that the authority of an appraisal panel is more limited in that
“appraisers have authority to decide the amount of loss but may not construe the policy or
decide whether the insurer should pay.” Quade v. Secura Ins., 814 N.W.2d 703, 706 (Minn.
2012) (internal quotation marks omitted) (citing 15 Lee R. Russ & Thomas F. Segalla,
Couch on Insurance § 213:44 (3d ed. 1999) (“An appraiser can make no legal
determinations.”)).
The dictionary definitions of the terms “arbitration” and “appraisal” also illustrate
their differences. The term “arbitration” generally means “[a] dispute-resolution process
in which the disputing parties choose one or more neutral third parties to make a final and
binding decision resolving the dispute.” Arbitration, Black’s Law Dictionary (11th ed.
2019). By contrast, “appraisal” is generally understood as “[t]he determination of what
constitutes a fair price for something or how its condition can be fairly stated; the act of
assessing the worth, value, or condition of something.” Appraisal, Black’s Law Dictionary
(11th ed. 2019). These definitions are consistent with our decisions that distinguish
between appraisal and arbitration.
In addition, although not binding on us, we look to other states that have adopted a
form of the Uniform Arbitration Code and have ruled on issues similar to those presented
here. See Minn. Stat. § 572B.29(a) (stating that in “applying and construing this uniform
act, consideration must be given to the need to promote uniformity of the law with respect
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to its subject matter among states that enact it”). The Florida Supreme Court has held that
an appraisal clause is not an agreement to arbitrate and that the “formal procedures of the
Arbitration Code” do not apply . Allstate Ins. Co. v. Suarez, 833 So. 2d 762, 766 (Fla.
2002). Other courts have also held that the Uniform Arbitration Act does not apply to
appraisals. See Minot Town & Country v. Fireman’s Fund Ins. Co., 587 N.W.2d 189, 191
(N.D. 1998) (distinguishing between appraisal and arbitration and denying the vacation of
the appraisal award under the North Dakota Uniform Arbitration Act because the Act does
not apply to appraisals); see also Elberon Bathing Co. v. Ambassador Ins. Co., 389 A.2d
439, 446–47 (N.J. 1978) (holding that the Arbitration Act is not applicable to appraisals).
Courts that have treated an appraisal clause as an agreement to arbitrate have done
so under statutes that are distinguishable from ours. See, e.g., Louise Gardens of Encino
Homeowners’ Ass’n v. Truck Ins. Exch., Inc. , 98 Cal. Rptr. 2d 378, 385 (Cal. Ct. App.
2000) (holding that because the California arbitration statute specifically defines the term
“agreement” to include appraisals, “an agreement to conduct an appraisal contained in a
policy of insurance . . . is considered to be an arbitration agreement subject to the statutory
contractual arbitration law”); Silverman v. Fireman’s Fund Am. Ins. Cos., 604 P.2d 805,
806 (Nev. 1980) (concluding that appraisals fall within arbitration because the arbitration
statute “specifically includes appraisals within the arbitration law”).
Based on our analysis, our interpretation of the Minnesota Uniform Arbitration Act,
and our precedent limiting the authority of appraisal panels and distinguishing arbitration
from appraisal, we hold that the appraisal process under the Minnesota S tandard Fire
Insurance Policy is not an “agreement to arbitrate” under section 572B.03 of the Minnesota
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Uniform Arbitration Act. Therefore, because a fire insurance appraisal award does not fall
within the scope of the Act, the Act’s 90-day limitation to modify an award does not apply
to an appraisal award.4 The district court thus erred by denying preaward interest to Oliver
based on the 90-day limitation provision in the Act.5
We therefore affirm the court of appeals’ decision, including its decision to remand
to the district court , but we do so on different grounds. We hold that the Minnesota
Uniform Arbitration Act, Minn. Stat. §§ 572B.01–.31, does not apply to the appraisal
process under the Minnesota Standard Fire Insurance Policy, Minn. Stat. § 65A.01.6 Based

4 The fire insurance statute requiring appraisals has been in effect in similar form
since 1895. Thus, the Legislature has had ample opportunity to enact legislation to apply
the Minnesota Uniform Arbitration Act to appraisals, but has never done so. If the
Legislature wants to extend the Minnesota Uniform Arbitration Act, or portions of the Act
such as the confirmation process, to appraisals, it has the authority to do so.

5 We do not reach the issue of what time limitation, if any, applies because that issue
was not before the court of appeals and is not before us.
State Farm also raised the issue of whether appraisal panels have authority to grant
preaward interest, to support its argument that the 90-day limitation for modifications under
the Act applied. Because we hold that the Act, and thus the modification statute and its
90-day limitation, does not apply, we need not reach this issue.

6 We requested supplemental briefing addressing what remedy is available to a
policyholder seeking to claim preaward interest on an appraisal award if the Minnesota
Uniform Arbitration Act does not apply to an appraisal award. Both parties argue that the
Minnesota Uniform Declaratory Judgments Act, Minn. Stat. §§ 555.01–.16 (2018), is an
appropriate vehicle for asserting a claim for preaward appraisal interest, and we agree. The
parties did not brief, and we do not consider here, the possibility of other remedies,
including a civil contract action or other civil action.

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on this holding, a remand is necessary to allow the district court to determine whether
Oliver is owed preaward interest and if so the amount of interest that Oliver is owed. 7
CONCLUSION
For the foregoing reasons, we affirm the decision of the court of appeals.
Affirmed.

7 Because Oliver proceeded under published court of appeals precedent that endorsed
the use of the Minnesota Uniform Arbitration Act to confirm appraisal awards, the district
court should allow Oliver to amend the pleadings to assert the appropriate cause of action
relating back to the original commencement of the district court proceedings.