Michelle VanDyke, 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This opinion is nonprecedential except as provided by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
A25-1538

Michelle VanDyke, et al.,
Appellants,

vs.

State Farm Fire and Casualty Company,
Respondent.

Filed June 1, 2026
Affirmed
Bentley, Judge

Dakota County District Court
File No. 19HA-CV-24-4250

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

Scott G. Williams, Lindsey A. Streicher, Haws-KM, P.A., St. Paul, Minnesota (for
respondent)

Considered and decided by Bentley, Presiding Judge; Ede, Judge; and Beane, Judge.
NONPRECEDENTIAL OPINION
BENTLEY, Judge
In this insurance-coverage dispute, the policyholders argue that they are entitled to
the replacement cost value (RCV) for damage to their home from a windstorm, rather than
the actual cash value (ACV). The insurance company maintains that the policy does not
require payment of the RCV because the policyholders did not complete repairs within two
years of the date of loss. We agree with the insurance company’s interpretation of the policy
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and applicable state law. We therefore affirm the district court’s grant of summary
judgment in its favor.
FACTS
The following facts derive from the summary-judgment record, which reveals no
genuine dispute of material fact as to the issues on appeal.
Appellants Michelle and William VanDyke had an insurance policy with respondent
State Farm Fire and Casualty Company. Relevant here, the policy includes: (1) an appraisal
clause, (2) a clause requiring completion of repairs within two years to recover the RCV
(the RCV clause), and (3) a clause establishing a two-year deadline from the date of loss
to commence a lawsuit against State Farm.
The appraisal clause provides that, if the parties “fail to agree on the amount of loss,
either party can demand that the amount of the loss be set by appraisal.” It continues, “The
written report of agreement will set the amount of the loss of each item in dispute and will
be binding upon [the parties].”
The RCV clause states, as relevant:
We will pay the cost to repair or replace with similar
construction . . . , the damaged part of the property
[RCV] . . . subject to the following:

(1) until actual repair or replacement is completed,
[State Farm] will pay only the [ACV] of the damaged part of
the property . . . ;

(2) when the repair or replacement is actually
completed, [State Farm] will pay the covered additional
amount [an insured] actually and necessarily spend[s] to repair
or replace the damaged part of the property. . . ;

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(3) to receive any additional payments on a replacement
cost basis, [the insured] must complete the actual repair or
replacement of the damaged part of the property within two
years after the date of loss[.]

The two-year deadline for commencing a lawsuit against State Farm states that “[n]o
action will be brought against [State Farm] unless . . . the action is started within two years
after the occurrence causing loss or damage.”
The VanDykes experienced a loss on September 17, 2021, when their home
sustained wind damage. On September 11, 2023, the VanDykes emailed State Farm
demanding an appraisal. On September 14, 2023, they served State Farm with a summons
and complaint. The record does not indicate whether the VanDykes ever completed repairs
to their home, but the parties agree that the VanDykes did not complete repairs within two
years of the date of the loss.
The parties underwent appraisal. The appraisal panel made its award in April 2024
and identified both the RCV and ACV for each category of damaged property. Two
categories resulted in different values between the RCV and ACV: “windows” had an RCV
of $10,000 and an ACV of $5,000, and “siding matching” had an RCV of $47,600 and an
ACV of $0. Days later, State Farm paid the ACV for each category set forth in the appraisal
award.
The litigation continued, and after State Farm paid the ACV and not the RCV, the
parties cross-moved for summary judgment on the issue of whether the VanDykes are
entitled to the RCV . Following a hearing in May 2025, the district court denied the
VanDykes’ motion for summary judgment and granted summary judgment to State Farm.
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The VanDykes appeal.
DECISION
In an appeal from a grant of summary judgment, appellate courts review “whether
there are any genuine issues of material fact and whether the district court erred in its
application of the law.” STAR Ctrs., Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d 72, 76
(Minn. 2002). “The interpretation of an insurance policy and the application of the policy
to the undisputed facts of a case are questions of law that [an appellate court] reviews de
novo.” Com. Bank v. W. Bend Mut. Ins., 870 N.W.2d 770, 773 (Minn. 2015).
The VanDykes challenge the district court’s summary-judgment determination on
three grounds. First, they maintain that the right to an appraisal renders the two-year repair
deadline in the RCV clause unenforceable. Second, they argue that, even if they failed to
comply with the two -year repair deadline, State Farm must prove prejudice to avoid
liability. And third, they assert that they are entitled to payment for matching siding
regardless of the two-year repair deadline. We address each argument in turn.
I
The VanDykes argue that the right to an appraisal, established in the policy and
required under Minnesota Statutes sections 65A.01 and 65A.26 (2024), obligates State
Farm to pay the RCV awarded in the appraisal, notwithstanding the two-year repair
deadline. State Farm responds that the two-year repair deadline is enforceable and, because
State Farm paid the ACV set forth in the appraisal award, it has complied with all
contractual and statutory requirements. State Farm has the better argument.
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“In general, an insurer’s liability is determined by the insurance contract as long as
that insurance policy does not omit coverage required by law and does not violate
applicable statutes.” Kelly v. State Farm Mut. Auto. Ins. Co., 666 N.W.2d 328, 331 (Minn.
2003). A court’s “objective when interpreting an insurance policy is to ascertain and give
effect to the intentions of the parties as reflected in the terms of the policy.” King’s Cove
Marina, LLC v. Lambert Com. Constr. LLC, 958 N.W.2d 310, 316 (Minn. 2021) (quotation
omitted). “We construe an insurance policy, if possible, so as to give effect to all
provisions.” Id. (quotation omitted). “We give unambiguous policy language its plain and
ordinary meaning.” Id. Likewise, we give an unambiguous statute its plain and ordinary
meaning. Carlson v. Allstate Ins. Co., 734 N.W.2d 695, 700-01 (Minn. App. 2007), aff’d,
749 N.W.2d 41 (Minn. 2008).
Here, neither party argues that the policy language is ambiguous. Based on our
review of the policy, we conclude that the policy language is unambiguous and therefore
we apply its plain meaning. See King’s Cove Marina, LLC, 958 N.W.2d at 316. The
VanDykes assert that their right to appraisal renders the two- year repair clause
unenforceable. But neither the policy nor the Minnesota Statutes support that argument.
The policy provides that, if the parties “fail to agree on the amount of loss, either
party can demand that the amount of the loss be set by appraisal.” But proceeding with an
appraisal does not mean that the VanDykes are entitled to the RCV set forth in that award,
as opposed to the ACV. It is well established 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) (quotati on omitted); see also
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Cedar Bluff Townhome Condo. Ass’n, Inc. v. Am. Fam. Mut. Ins. Co., 857 N.W.2d 290,
293 (Minn. 2014) (“[A]n appraisal panel ‘may not construe the insurance policy or decide
whether the insurer should pay.’” (quoting Quade, 814 N.W.2d at 706)). Here, the question
is whether the policy requires payment of the RCV or ACV under these circumstances,
which is a legal question for the court. See Com. Bank, 870 N.W.2d at 773. Because the
VanDykes did not complete the repairs within two years, the policy’s plain language
establishes that payment of only the ACV is required.
Turning to the statutes, we consider the VanDykes’ invocation of Minnesota
Statutes sections 65A.01, subdivision 3, and 65A.26. Those provisions contain form policy
language that function s as a statutory minimum to which the insurance policy here must
conform.1 Minn. Stat. §§ 65A.01, subd. 3, .26; see also Quade, 814 N.W.2d at 707
(discussing Minn. Stat. § 65A.01, subd. 3 (2010)). The standard policies provide that
insureds have the right to an appraisal and that the appraisal award determines the amount
of loss. See Minn. Stat. § 65A.01, subd. 3; Minn. Stat. § 65A.26. The VanDykes argue that
these provisions entitle them to payment of the RCV in full, regardless of the timing of
repairs.
The appraisal provisions in the statute do not mandate that an insurer pay the RCV
award, as compared to the ACV award. The policy here complies with the statute because
it includes an appraisal clause and, in accordance with the statute, the appraisal here

1 The parties do not dispute that the insurance policy here must conform to these statutory
requirements because the policy covers the perils of fire and hail. See Minn. Stat. § 65A.01,
subd. 3 (standard fire insurance policy requirements); Minn. Stat. § 65A.26 (standard hail
insurance policy requirements).
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determined the amount of actual value and loss—assessed in terms of both the RCV and
the ACV. The statute requires nothing more. In effect, the VanDykes are asking us to add
language to the statute that requires an insurer to pay the RCV whenever an appraisal is
completed—but courts “may not add language to a statute; rather, we must apply the plain
language of the statute as written.” Energy Pol’y Advocs. v. Ellison, 980 N.W.2d 146, 156
(Minn. 2022) (quotation omitted).
The VanDykes argue that our decision in Ariel, Inc. v. State Farm Fire & Casualty
Co., 15 N.W.3d 673 (Minn. App. 2024), supports their position that the statute requires
payment of the RCV in the appraisal award regardless of whe ther or when repairs were
completed. Their argument stretches the holding in Ariel too far. In Ariel, the district court
denied an insured’s motion to compel an appraisal because the insured demanded the
appraisal after the two-year deadline to commence a lawsuit against the insurer expired.
15 N.W.3d at 676-77. The standard policy in Minnesota Statutes section 65A.01,
subdivision 3, includes a provision that, “No suit or action on this policy for the recovery
of any claim shall be sustainable in any court of law or equity . . . unless commenced within
two years after inception of the loss.” This court reversed the district court’s denial of an
appraisal in Ariel on the basis that “the statute’s two-year time limit . . . does not apply to
a demand for an appraisal so long as the insured . . . timely commence[d] an action against
the insurer.” 15 N.W.3d at 684-85. This holding does not help the VanDykes because they,
unlike the insured in Ariel, had an appraisal. The question here is whether the VanDykes
are entitled to the RCV or ACV. This issue never arose in Ariel because an appraisal had
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not occurred and because the repairs were completed within the policy’s deadline. Id. at
676-77.
The VanDykes contend that, if the policy’s two-year repair deadline is enforceable,
then the right to an appraisal is “hollow” because an insurer could impose deadlines “that
preclude payment of some, or all, of the appraisal award.” But the policy here did not
preclude payment of an appraisal award, as evidenced by the fact that the VanDykes
received full payment of the ACV determined in the award.
In sum, we are not persuaded that either the policy or the statute required State Farm
to pay the RCV in these circumstances.
II
In the alternative, the VanDykes argue that, even if they did not comply with the
two-year repair deadline, State Farm must show “actual prejudice” before it may “establish
the breach of a policy obligation for a covered loss.” State Farm responds that it need not
establish prejudice in this situation because the RCV provision created a condition
precedent. Again, we agree with State Farm.
The VanDykes are correct that the Minnesota Supreme Court has held in some
situations, such as when an insured fails to provide a proof of loss in a timely manner, that
an insurer must prove prejudice to avoid liability. See Farrell v. Neb. Indem. Co., 235 N.W.
612, 614 (Minn. 1931) (“To hold that [the insurer] under the circumstances should be
absolved from liability because of the failure to give earlier notice would be unreasonable,
unwarranted, and a grave injustice. The record does not disclose that [the insurer] was in
any way prejudiced by the delay.”); see also Reliance Ins. Co. v. St. Paul Ins. Cos. , 239
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N.W.2d 922, 924-25 (Minn. 1976) (“[Farrell] has long been the law in this state, requiring
a showing of actual prejudice by the insurer to defeat liability.”).
That rule does not apply, however, when the breached policy provision establishes
a condition precedent. Minn. Laws. Mut. Ins. Co. v. Bradshaw & Bryant L. Off. PLLC,
19 N.W.3d 206, 220 (Minn. App. 2025), rev. denied (Minn. June 17, 2025). “A condition
precedent is a contract term that calls for the performance of some act or the happening of
some event after the contract is entered into, and upon the performance or happening of
which the promisor’s obligation is made to depend.” Id. (quotation omitted). Although
“[n]o particular code words are needed to form an express condition ,” this court has held
that the phrase “subject to” creates a condition precedent. Minnwest Bank Cent. v. Flagship
Props. LLC, 689 N.W.2d 295, 299-300 (Minn. App. 2004) (quotation omitted) (discussing
the phrase “subject to” in 451 Corp. v. Pension Sys. for Policemen & Firemen of City of
Detroit, 310 N.W.2d 922, 924-25 (Minn. 1981)).
Here, the policy states that State Farm “will pay the cost to repair or replace [i.e.,
the RCV] . . . subject to the following” (emphasis added) and then states that “to receive
any additional payments on a replacement cost basis, [the insured] must complete the actual
repair or replacement . . . within two years.” The phrase “subject to the following” signals
that the provisions that follow establish conditions precedent to receipt of the RCV. The
phrase “to receive any additional payments . . . [the insured] must complete the actual
repair or replacement . . . within two years” delineates what the insured must do to obtain
payment of the RCV.
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The VanDykes argue that, even if the policy language establishes a condition
precedent, “the condition precedent to payment of replacement cost is the issuance of an
appraisal award—not the completion of repairs.” They assert that, “[b]ecause neither the
statute nor the policy imposes a deadline to determine the amount payable through
appraisal, there can be no deadline to enjoy that determination.” This argument is belied
by the plain language of the policy, which addresses RCV and appraisals in separate
paragraphs. The appraisal clause requires appraisers to “state separately the [ACV], [RCV],
and if applicable, the market value of each item in dispute.” It does not state which of those
must be paid under the policy in any given circumstance.
The policy unambiguously requires an insured to complete repairs within two years
as a condition precedent to payment of the RCV regardless of when an appraisal occurs.
Because the policy contains this condition precedent, State Farm is not required to prove
prejudice to avoid liability.
III
The VanDykes also argue that they are entitled to payment for matching siding,
regardless of any policy language pertaining to ACV and RCV, because matching siding
is covered unless it falls within a policy exclusion. In support of this argument, the
VanDykes cite Cedar Bluff Townhome Condominium Association, Inc. v. American Family
Mutual Insurance Co., 857 N.W.2d 290. But Cedar Bluff is distinguishable and does not
convince us to deviate from the plain language of the policy here.
In Cedar Bluff, the insurer had elected to pay the RCV of the damaged property —
immediately differentiating the facts of Cedar Bluff from this case. 857 N.W.2d at 291-92.
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The issue there was not whether the insured was entitled to payment for matching siding
under the policy regardless of whether the RCV or ACV was paid. Rather, the question
was whether the RCV included the cost of matching siding because the RCV was “to be
determined based on the cost to replace ‘the lost or damaged property with other
property . . . of comparable material and quality.’” Id. at 293. The supreme court held that,
for purposes of determining the RCV, matching siding was required to ensure the covered
property was repaired with siding of “comparable material and quality.” Id. at 295. Cedar
Bluff is therefore inapposite to the question before us, which is whether the policy
unambiguously requires an insured to complete repairs within two years as a condition
precedent to receiving payment of RCV. As explained above, we conclude that the answer
to that question is yes.
In conclusion, the district court did not err in denying the VanDykes’ motion for
summary judgment and granting State Farm’s motion for summary judgment.2
Affirmed.

2 Because we conclude that the policy does not cover the RCV of repairs to the VanDykes’
home, the claim has been paid in full based on the ACV and we do not reach their argument
that they are entitled to interest on any unpaid amounts.