Becker Township, Respondent,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A24-0917

Becker Township,
Respondent,

vs.

Minnesota Association of Townships Insurance Trust,
Appellant.

Filed January 27, 2025
Affirmed
Johnson, Judge

Sherburne County District Court
File No. 71-CV-23-1521

Jordan T. Vassel, Anthony A. Remick, Smith, Jadin, Johnson, P.L.L.C., Bloomington,
Minnesota (for respondent)

Jay T. Squires, Marcus B. Jardine, Squires, Waldspurger & Mace, P.A., Minneapolis,
Minnesota (for appellant)

Considered and decided by Johnson, Presiding Judge; Bjorkman, Judge; and
Halbrooks, Judge.∗
NONPRECEDENTIAL OPINION
JOHNSON, Judge
Becker Township submitted a claim to the Minnesota Association of Townships
Insurance and Bond Trust (hereinafter “MATIT” or “the trust”), stating that its town hall

∗ Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant
to Minn. Const. art. VI, § 10.
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was damaged in a hailstorm. The trust denied the claim. The township requested an
appraisal. The trust refused to participate in an appraisal process. The township
commenced this action for a declaration that it is entitled to an appraisal. On cross-motions
to dismiss and to compel an appraisal, the district court concluded that the township is
entitled to an appraisal. We conclude that the township has a contractual right to an
appraisal and, therefore, affirm.
FACTS
Becker Township is a political subdivision located in Sherburne County. The trust
is a joint-powers entity established pursuant to statutes that authorize political subdivisions
to act jointly or cooperatively to self-insure through the use of risk-spreading pools. See
Minn. Stat. §§ 471.59, .98, .981, .982 (2024). The trust was established by the Minnesota
Association of Townships (hereinafter “MAT ” or “the association”), and membership in
the trust is available to Minnesota townships that are members of the association. The
township, as a member of the trust, was required to enter into a written agreement that
resembles an insurance policy but is entitled “coverage document.”
The township alleges in its complaint that, on May 9, 2022, wind and hail caused
damage to property owned by the township. On May 13, 2022, the township submitted a
claim to the trust, using a form provided by the trust. The township’s claim describes the
“type of loss” as follows: “Hail storm and strong winds. Damage to roof of township hall,
gazebo, and back door of township [hall].”
The trust responded to the township’s claim with a letter dated July 8, 2022. The
letter states generally that the trust “will pay for direct physical loss or damage to covered
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property resulting from any cause of loss except as excluded or limited.” The letter
identifies one such exclusion by stating, “There is no coverage for . . . wear and tear.” The
letter concludes, “Since there is no coverage for this loss, I cannot compensate Becker
Township for the property damage . . . due to wear and tear / cosmetic damages . . . .”
After the trust’s denial of the township’s claim, the t ownship and the trust
exchanged correspondence. In early October 2022, an attorney representing the t ownship
wrote to the trust’s board to initiate an appeal of the denial of the claim and to request an
appraisal. Two days later, the trust’s manager responded by stating that the trust had
“engaged a second adjuster to visit the site, review the damage and opine on the loss.” The
trust’s manager also stated that the township’s appeal to the trust’s board “is on record and
will be preserved.” In December 2022, a different attorney representing the township wrote
to the trust’s board to withdraw the township’s appeal and to request an appraisal. In
January 2023, an attorney representing the trust responded by stating that the township
must abide by an agreed-upon dispute-resolution process and, for that reason, is not entitled
to an appraisal. The trust’s attorney’s letter concluded by stating that the trust “will not
participate in an appraisal process.” In February 2023, the township’s attorney wrote back,
specifically referred to the appraisal provision of the coverage document, and requested
that the trust participate in an appraisal process. The trust’s attorney replied, stating that
the appraisal provision in the coverage document “does not apply to the dispute at hand”
for two reasons: because the dispute is not about “the amount of the loss” but, rather,
“whether the damage resulted from a covered cause of loss,” and because the township is
required to follow the dispute-resolution process described in the coverage document.
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The township commenced this action in October 2023. The township alleg ed a
breach-of-contract claim and requested a declaration that it has a “right to proceed with the
appraisal process to determine the amount of loss.” In lieu of answering the complaint, the
trust moved to dismiss on the ground that the township had not exhausted its administrative
remedies. In February 2024, the township moved to compel an appraisal. The township
argued, among other things, that an appraisal is appropriate to determine the amount of its
loss, including the cause of the loss. Both parties filed responsive and reply memoranda.
In May 2024, the district court filed an order in which it granted the township’s motion to
compel an appraisal and denied the trust’s motion to dismiss. The trust appeals.
DECISION
The parties raise numerous issues on appeal, but this court need resolve only some
of those issues. The trust raises two main issues in its principal brief: first, whether the
township may assert a statutory right to an appraisal based on a statute that, the trust asserts,
applies to insurance companies but not to joint-powers entities, see Minn. Stat. § 65A.26
(2024), and, second, whether the township may assert a contractual right to an appraisal
without having utilized the dispute-resolution process described in the coverage document.
In its responsive brief, the township first argues that it has a contractual right to an
appraisal, then argues that it also has a statutory right to an appraisal, and last argues that
its right to an appraisal is not precluded by the dispute- resolution process described in the
coverage document. Because the parties raise issues of the interpretation of contracts and
a statute, we apply a de novo standard of review. Glacier Park Iron Ore Props., LLC v.
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United States Steel Corp., 961 N.W.2d 766, 769 (Minn. 2021); Linn v. BCBSM, Inc., 905
N.W.2d 497, 504 (Minn. 2018).
We conclude below that the township has a contractual right to an appraisal. See
infra part A. We also conclude that the township may assert its contractual right to an
appraisal without having utilized the dispute-resolution process described in the coverage
document. See infra parts B-C. In light of those conclusions, we need not consider whether
the township also has a statutory right to an appraisal.
A.
We first consider whether the coverage document confers on the township a
contractual right to an appraisal.
Section C.M.b. of the coverage document provides:
In the event of a disagreement on the value of the claim
or the amount of loss, either party may initiate an appraisal
process by written demand on the other party. Each party shall
select an appraiser at its own expense. Those appraisers shall
select an umpire or, failing agreement on an umpire, have an
umpire judicially appointed. The cost of such umpire shall be
borne equally by the parties. An agreement by any two of the
appraisers or umpires shall be binding. (Emphasis added.)

The trust argues that this section of the coverage document does not give the
township a right to an appraisal because “it is not an appraiser’s job to interpret coverage
language or the language of a contract.” The trust contends that appraisers have authority
to determine the amount of loss but do not have authority to determine the meaning of the
terms and conditions of the coverage document. In response, the township agrees with the
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trust’s general premise but argues that the dispute between the parties is a dispute about
the amount of loss.
Both parties cite the supreme court’s opinion in Quade v. Secura Insurance, 814
N.W.2d 703 (Minn. 2012), and urge the court to apply it to the facts of this case. In Quade,
two farmers submitted a claim to their insurer after a windstorm caused extensive damage
to their farm buildings. Id. at 704. The insurer denied the claim with respect to the roofs
of three buildings on the ground that the damage to those buildings “resulted from
‘continual deterioration over a period of time rather than a specific storm occurrence,’”
thereby falling within a policy exclusion for inadequate maintenance. Id. The insureds
and the insurer disagreed as to whether their dispute was subject to an appraisal. Id. at
704-05. The supreme court concluded that an appraisal was appropriate, reasoning as
follows:
The parties’ disagreement concerning the scope of the
appraisal process focuses on the meaning of the phrase
“amount of loss.” . . . . [I]n 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. With respect to
insurance, “loss” is defined as “[t]he amount of financial
detriment caused by . . . an insured property ’s damage, for
which the insurer becomes liable.” . . . . These definitions
state that as a general matter the term “loss” refers to damages
for which the insurer is responsible. Thus, the dictionary
definitions of “loss” for purposes of insurance expressly
contemplate an element of causation. By extension, an
appraiser’s duty to determine the “amount of loss” requires the
appraiser to determine causation.

Id. at 706 (citations omitted). The supreme court noted that the parties’ dispute
encompassed “both a question of damages and a question of liability” because the insureds
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argued that “the damage to the roofs is a covered loss for wind damage” while the insurer
argued that “the damage to the roofs is due to wear and tear and is excluded under the
policy.” Id. In light of that dispute, the supreme court reasoned, “a determination of the
‘amount of loss’ under the appraisal clause necessarily includes a determination of
causation,” and “the causation question involves separating loss due to a covered event
from a property’s preexisting condition.” Id. at 706-07.
The dispute in Quade is very similar to the dispute in this case. The township and
the trust disagree about the cause of the township’s loss, which is “necessarily include[d]”
within the concept of amount of loss. See id. The nature of the parties’ dispute is illustrated
by the trust’s claim-denial letter, which essentially acknowledges the existence of a loss by
stating that “there is no coverage for this loss.” (Emphasis added.) The letter explained
that the township’s claim was denied because of an exclusion “for the following causes of
loss . . . wear and tear.” (Emphasis added.) The nature of the parties’ dispute is confirmed
by the trust’s attorney’s subsequent pre-suit letter to the township’s attorney, which states
that “[t]he disagreement between the parties is whether the damage resulted from a covered
cause of loss” and further states that “MATIT has determined any damage to the Town
Hall resulted from a non-covered cause of loss (Wear and Tear).” (Emphasis added.)
Because the parties dispute the cause of the township’s loss—an issue that is
encompassed by the issue of the amount of the township’s loss—the dispute is governed
by section C.M.b. of the coverage document , which plainly states, “In the event of a
disagreement on the value of the claim or the amount of loss, either party may initiate an
appraisal process by written demand on the other party.” See id.; see also Axis Surplus Ins.
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Co. v. Condor Corp., 19 F.4th 1062, 1063-64 (8th Cir. 2021) (concluding that, under
Minnesota law, insured was entitled to appraisal because parties disputed whether loss was
caused by storm occurring during policy period).
Thus, the township has a contractual right to an appraisal pursuant to section C.M.b.
of the coverage document.
B.
We next consider whether the township’s contractual right to an appraisal may be
enforced in this action in light of the existence of a contractual dispute-resolution process.
Section C.H. of the coverage document provides:
No legal action may be brought against us as a result of
any dispute with respect to this coverage document or any of
its terms and conditions. The MAT Board of Directors shall
have the sole, exclusive and final authority to interpret
coverage document terms and conditions.

Any dispute can be brought by you by written petition
to the MATIT Board of Trustees provided there has been full
compliance by you with the terms of the coverage document
and that the written petition is made within 2 years following
the date of loss giving rise to the dispute. A decision of the
MATIT Board of Trustees may be appealed in writing within
30 days to the MAT Board whose determination shall be final
and binding.

A related provision in the trust’s bylaws provides, “If a dispute should arise relative
to the Trust or any Program . . . between one or more Participating Members and the Trust,
. . . the Trustees shall decide the dispute in the first instance.” In addition, the bylaws state:
If a Participating Member who was party to the dispute
is aggrieved by the determination of the Trustees, the
Participating Member may appeal the Trustees’ decision to the
[MAT] Board of Directors by written notice of appeal . . . .
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The [MAT] Board of Directors shall consider the appeal de
novo and shall give the Participating Member its decision in
the matter in writing . . . .

The [MAT] Board of Directors may specify any
additional information or material that Board deems necessary
or appropriate to its decision. The decision of the [MAT]
Board of Directors is final, conclusive and binding on the
Trustees and the Participating Member(s) involved in the
appeal.

The trust argues that these provisions create a dispute-resolution process that is a
condition precedent to the township’s assertion of its contractual right to an appraisal. In
other words, the trust argues that the township may not assert its contractual right to an
appraisal unless and until it has petitioned the trust’s board of trustees, the trust’s board has
made a decision, the t ownship has appealed that decision to the association’s board of
directors, and the association’s board has made a final decision. In response, the township
argues that there is no conflict between the appraisal provision in section C.M.b. and the
dispute-resolution provision in section C.H. because appraisers have authority to resolve
disputes concerning amount of loss while the association’s board has authority to resolve
disputes concerning the terms and conditions of the coverage document.
The trust’s argu ment for a condition precedent is not supported by contractual
language specifically linking the appraisal provision in section C.M.b. to the dispute-
resolution provision in section C.H. There is no language in either section expressly stating
that the right to an appraisal does not apply unless or until the association’s board has made
a final decision or that the dispute-resolution process in section C.H. must be pursued to its
conclusion before a party may request an appraisal. The two provisions, which are
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separated by four intervening provisions, appear to operate independently. As the township
argues, the lack of an express connection between the two provisions makes sense in light
of the fact that the appraisal provision refers to “a disagreement on the value of the claim
or the amount of loss, ” while the dispute -resolution provision refers to a “dispute with
respect to this coverage document or any of its terms and conditions.”
Thus, the township’s invocation of the contractual dispute-resolution process is not
a condition precedent of the township’s assertion of its contractual right to an appraisal.
C.
We last consider whether the township’s contractual right to an appraisal is subject
to a requirement that the township exhaust administrative remedies.
The district court concluded that the exhaustion- of-administrative-remedies
doctrine does not apply because the trust’s denial of the township’s claim is not a quasi-
judicial decision of a governmental entity. The trust argues that the district court erred by
rejecting its exhaustion-of-administrative-remedies argument. At oral argument, the trust’s
attorney clarified that its exhaustion -of-administrative-remedies theory overlaps with its
condition-precedent theory and that both theories are based on section C.H. of the coverage
document. In response, the township argues that the dispute-resolution process described
in section C.H. is not an administrative remedy that must be exhausted.
The trust asserts that the board of a joint-powers entity such as MATIT and the
board of an association such as MAT “fall within the broad gamut of an administrative
body or executive body.” The trust cites three opinions of this court in support of that
assertion, but each of those opinions is concerned with a decision of a political subdivision
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of the state, not an association composed of political subdivisions or a joint-powers entity.
See Anderson v. County of Lyon, 784 N.W.2d 77 (Minn. App. 2010); Northwest Airlines,
Inc. v. Metropolitan Airports Comm ’n, 672 N.W.2d 379 (Minn. App. 2003); Zaluckyj v.
Rice Creek Watershed Dist., 639 N.W.2d 70 (Minn. App. 2002), rev. denied (Minn.
Apr. 16, 2002). Consequently, the trust has not cited any authority for the proposition that
the exhaustion-of-administrative-remedies doctrine applies to a decision of the board of an
association of political subdivisions or the board of a joint-powers entity.
The township cites one opinion that casts significant doubt on the trust’s theory. In
Rasmussen v. Sauer, 597 N.W.2d 328 (Minn. App. 1999), rev. denied (Minn. Sept. 14,
1999), a deputy sheriff sued a motorist for injuries suffered in an automobile collision and
sought to add a claim against the county that employed him, which was a member of the
Minnesota Counties Insurance Trust (MCIT), another joint-powers entity with a risk-
sharing pool. Id. at 329. The district court denied the deputy’s motion to amend the
complaint after concluding that the deputy had not exhausted administrative remedies
specified in the MCIT bylaws. Id. at 329-30. This court reversed the district court,
reasoning, in part, that certiorari review of quasi-judicial administrative decisions is
“limited to executive-branch decisions.” Id. at 332. This court later cited Rasmussen in
holding that MCIT “is not an executive body whose quasi-judicial decision is subject to
certiorari review.” County of Martin v. Minnesota Counties Ins. Trust, 658 N.W.2d 598,
603 (Minn. App. 2003). We reasoned in County of Martin that MCIT “resembles an
insurance company” and is unlike the “administrative bodies,” “executive bodies,” and
“quasi-judicial boards or agencies” whose decisions are subject to a deferential form of
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judicial review because of the separation-of-powers doctrine. Id. at 601-03; see also Dietz
v. Dodge County , 487 N.W.2d 237, 239 (Minn. 1992) (reasoning that “certiorari is
compatible with the maintenance of fundamental separation of power principles” because
“it mandates nonintrusive and expedient judicial review”). The Rasmussen and County of
Martin opinions make it sufficiently clear that, because MATIT and MAT are not political
subdivisions of the state, the township’s contractual right to an appraisal is not subject to a
requirement that the township exhaust administrative remedies.
Thus, the township may assert its right to an appraisal without regard for any
requirement to exhaust administrative remedies.
Because the township has a contractual right to an appraisal and may assert that
right without having utilized the dispute-resolution process described in the coverage
document, we need not consider whether the township also has a statutory right to an
appraisal.
In sum, the district court did not err by granting the township’s motion to compel
an appraisal and by denying the trust’s motion to dismiss.
Affirmed.