CVC Investments LLP, et al., Appellants,

This opinion is nonprecedential except as provided by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
A24-1915

CVC Investments LLP, et al.,
Appellants,

vs.

State Farm Fire and Casualty Company,
Respondent.

Filed June 2, 2025
Affirmed in part, reversed in part, and remanded
Frisch, Chief Judge

Rice County District Court
File No. 66-CV-24-943

Edward E. Beckmann, Beckmann Law Firm, LLC, Bloomington, Minnesota (for
appellants)

Ariel K. Lierz, Luke J. Wolf, Samuel J. Logterman, Spencer Fane LLP, Minneapolis,
Minnesota (for respondent)

Considered and decided by Smith, Tracy M., Presiding Judge; Frisch, Chief Judge;
and Ede, Judge.
NONPRECEDENTIAL OPINION
FRISCH, Chief Judge
Appellants assert that the district court erred in dismissing their complaint for failure
to assert a justiciable controversy with respect to their insurance policy with respondent.
We conclude that the complaint does not state a justiciable breach-of-contract claim. But
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because we conclude, at this procedural posture, that the complaint sets forth sufficient
facts to notify respondent of a justiciable declaratory-judgment claim, we reverse and
remand for further proceedings on that claim.
FACTS
Appellants CVC Investments LLP and MJC Investments LLC (collectively CVC)
own several apartment buildings (the property) that sustained hail damage “on or about
April 12, 2022, and May 19, 2022.”1 At the time of the damage, the property was insured
by respondent State Farm Fire and Casualty Company (State Farm). Relevant to appraisal
of a claimed loss, the insurance policy between the parties provides:
If we and you disagree on the value of the property or
the amount of loss, either may make written demand for an
appraisal of the loss. In this event, each party will select a
competent and impartial appraiser. Each party will notify the
other of the selected appraiser’s identity within 20 days after
receipt of the written demand for an appraisal. The two
appraisers will select an umpire. If the appraisers cannot agree
upon an umpire within 15 days, either may request that
selection be made by a judge of a court having jurisdiction.
The appraisers will state separately the value of the property
and amount of loss. If they fail to agree, they will submit their
differences to the umpire. A decision agreed to by any two will
be binding. Each party will:
(1) Pay its chosen appraiser; and
(2) Bear the other expenses of the appraisal and umpire
equally.

1 Consistent with the procedural posture of this case, the following facts reflect the
assertions set forth in CVC’s complaint, which we accept as true. See Walsh v. U.S. Bank,
N.A., 851 N.W.2d 598, 606 (Minn. 2014) (“We accept the facts alleged in the complaint as
true and construe all reasonable inferences in favor of the nonmoving party.”).
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If there is an appraisal, we will still retain our right to
deny the claim.
The policy also includes a two-year time limit for legal actions to be brought against State
Farm related to a claimed loss that begins the date the loss occurred.
On April 8, 2024, CVC submitted a claim with State Farm related to the hail damage
to the property. This claim included an estimate of the damages and a “demand to toll the
period of limitations stated in State Farm’s policy.” State Farm then assigned a claims
specialist to the claim. Two days later on April 10, CVC demanded appraisal.
On April 12, four days after CVC filed the claim, CVC served a summons and
complaint on State Farm, asserting claims for declaratory judgment and breach of contract.
On April 30, State Farm moved to dismiss the complaint pursuant to Minn. R. Civ.
P. 12.02(a), (e), and (f), asserting that CVC had not pleaded a justiciable controversy. On
June 11, CVC moved to compel appraisal and stay discovery. On October 7, following a
motion hearing, the district court granted State Farm’s motion to dismiss, dismissed the
complaint without prejudice, and denied CVC’s motion to compel appraisal and stay
discovery.
On November 15, CVC request ed “an amendment to the Court’s Order for
Dismissal Without Prejudice so that it expressly states [CVC has] the right to re-file.” The
letter reflects that, as of October 10, State Farm had affirmed that CVC’s claim was
ongoing but that, as of October 31, “State Farm’s evaluation [had] ended with a total
denial.” The district court, construing CVC’s letter as a request to move for reconsideration
pursuant to Minn. R. Gen. Prac. 115.11, denied the requested relief.
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CVC appeals.
DECISION
CVC asserts that the district court erred in dismissing its complaint. The district
court concluded that the breach-of-contract claim failed to state a claim and dismissed that
claim pursuant to Minn. R. Civ. P. 12.02(e). The district court also determined that it
lacked subject-matter jurisdiction over the declaratory-judgment claim and dismissed that
claim pursuant to Minn. R. Civ. P. 12.02(a). Both dismissals were based on the district
court’s conclusion that CVC failed to assert a justiciable controversy in its complaint.
“Justiciability is an issue of law that we review de novo.” McCaughtry v. City of Red Wing,
808 N.W.2d 331, 337 (Minn. 2011).
A justiciable controversy exists if a claim “(1) involves definite and concrete
assertions of right that emanate from a legal source, (2) involves a genuine conflict in
tangible interests between parties with adverse interests, and (3) is capable of specific
resolution by judgment rather than presenting hypothetical facts that would form an
advisory opinion.” Id. at 336-37 (quotation omitted). But courts are not to “issue advisory
opinions,” nor “decide cases merely to establish precedent.” Id. at 337 (quotation omitted).
CVC argues that its complaint adequately asserts justiciable claims for both breach
of contract and declaratory judgment. We address each claim in turn.
The district court concluded, and State Farm now argues, that CVC failed to state a
claim upon which relief can be granted for breach of contract. State Farm contends that,
at the time CVC initiated this action, there was no live controversy between the parties
because State Farm did not deny or take any action with respect to CVC’s claim. Indeed,
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State Farm argues that, given that only four days elapsed between the notice of claim and
the commencement of this action, it did not have time to respond to CVC’s claim. State
Farm emphasizes that the timing of CVC’s claim, demand for appraisal, and initiation of a
lawsuit ignores that the policy affords State Farm 20 days before it is required to take action
on CVC’s demand for appraisal. State Farm therefore argues that it cannot have breached
the policy before the 20 days had elapsed.
Based on our review of the complaint, we agree that CVC did not state a claim for
breach of the insurance policy. The complaint alleges that “any future” failure by State
Farm to participate in or be bound by the appraisal process would be a breach of the policy.
This asserted claim, therefore, had not ripened into a “genuine conflict in the tangible
interests” between the parties, and was instead based on “hypothetical facts” that did not
give rise to a justiciable controversy. See id. at 336-37 (quotation omitted). Thus, at the
commencement of the action, CVC’s complaint did not state a claim for breach of contract
upon which relief can be granted.
On the other hand , we conclude that the pleading related to CVC’s
declaratory-judgment claim sets forth a justiciable controversy. The Minnesota
Declaratory Judgments Act authorizes district courts to “declare rights, status, and other
legal relations whether or not further relief is or could be claimed.” Minn. Stat. § 555.01
(2024). This act “is remedial, intended to settle and to afford relief from uncertainty with
respect to rights, status, and other legal relations.” Holiday Acres No. 3 v. Midwest Fed.
Sav. & Loan Ass’n, 271 N.W.2d 445, 447 n.2 (Minn. 1978).
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But “like every other action, a declaratory judgment action must present an actual,
justiciable controversy.” McCaughtry, 808 N.W.2d at 337. To do so, a plaintiff must
“possess a bona fide legal interest which has been, or with respect to the ripening seeds of
a controversy is about to be, affected in a prejudicial manner” as a “minimum requirement.”
State ex rel. Smith v. Haveland, 25 N.W.2d 474, 477 (Minn. 1946). This standard may be
“fulfilled prior to the final conclusion of a contractual relationship where it would be
unwarranted and unrealistic in today’s marketplace to expect parties to finally conclude
their contract without judicial resolution of some issue and better to permit the parties to
avoid unacceptable risks.” Rice Lake Contracting Corp. v. Rust Env’t & Infrastructure,
Inc., 549 N.W.2d 96, 99 (Minn. App. 1996) (quotation omitted), rev. denied (Minn. Aug.
20, 1996); see also Holiday Acres, 271 N.W.2d at 448-49 (holding that a property owner
could obtain a declaration as to the validity o f a “due-on-sale” clause before a proposed
sale after already losing one potential buyer).
CVC’s complaint contains allegations that it made “a demand [to State Farm] to toll
the period of limitations stated” in the policy. And before initiating the action, CVC alleged
that it had demanded appraisal from State Farm, an act that occurs when the parties
“disagree on the value of the property or the amount of loss.” CVC also alleges that, as of
the date the action was commenced, State Farm had not “agreed to tolling the period of
limitations or agreed to appraise the matter.” While State Farm is not obligated to enter
into a tolling agreement, it is reasonable to infer from these allegations that State Farm’s
alleged refusal to do so implicates the insureds’ legal interest in the determination of the
scope of the loss. And, CVC alleges, under the declaratory judgment act, “an adjudicable
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controversy exists between State Farm and [CVC] with respect to the scope of” CVC’s
claimed losses. Taking these allegations together, along with all reasonable inferences
from these allegations, we conclude that the pleading is sufficient to notify State Farm that
CVC possessed a “bona fide legal interest”— here, in its requests for tolling and appraisal
and in the scope of the losses—“which has been, or with respect to the ripening seeds of a
controversy is about to be, affected in a prejudicial manner.” Haveland, 25 N.W.2d at 477.
And these asserted controversies involve “definite and concrete assertions” emanating
from the policy—a legal source. McCaughtry, 808 N.W.2d at 336 (quotation omitted).
And, under the policy, CVC’s allegations regarding its rights under the policy are “capable
of specific resolution by judgment.” Id. (quotation omitted).
CVC asserts a broad theory of justiciability, stating that the elements of a
controversy “always apply to an insurance policy because the policy is the legal source
. . . , the insured and insurer have tangible interest[s] in that policy but with adverse
interests, and there is the capability of a specific resolution of the parties’ rights under the
policy.” But we decline to consider CVC’s argument about the outer bounds of justiciable
controversies between an insured and an insurer because we conclude that its complaint, at
this procedural posture, states a justiciable controversy.
Our conclusion is supported by Minnesota’s notice-pleading standard under Minn.
R. Civ. P. 12, which “does not require absolute specificity in pleading, but rather requires
only information sufficient to fairly notify the opposing party of the claim against it.”
DeRosa v. McKenzie, 936 N.W.2d 342, 346 (Minn. 2019) (quotations omitted). Under this
standard, a plaintiff may make sufficient allegations in their complaint to survive a motion
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to dismiss through “broad general statements that may be conclusory.” Id. (quotation
omitted). And our conclusion is bolstered by the declaratory-judgment act’s “remedial”
purpose “to settle and to afford relief from uncertainty with respect to rights, status, and
other legal relations.” Holiday Acres, 271 N.W.2d at 447 n.2; see also Minn. Stat. § 555.12
(2024) (noting that the act “is to be liberally construed and administered”).
In sum, because we conclude that CVC’s complaint sufficiently pleads a justiciable
controversy regarding its declaratory-judgment claim, we reverse the district court’s
dismissal of this claim and remand for further proceedings. In so doing, we express no
opinion about the merits of the underlying claim. We affirm the district court’s dismissal
of CVC’s breach-of-contract claim.
Affirmed in part, reversed in part, and remanded.