Shawn Pierce and Stephanie Pierce v. American Family Mutual Insurance Company

This insurance coverage dispute before Judge David S. Doty of the United States District Court for the District of Minnesota arose from a July 17, 2020 fire that severely damaged the home and personal property of plaintiffs Shawn and Stephanie Pierce. The Pierces held a homeowner's insurance policy (the Policy) with defendant American Family Mutual Insurance Company, S.I. (American Family), effective October 1, 2019 to October 1, 2020. The Policy covered damage to the dwelling (Coverage A) and personal property (Coverage B).

Payments and Appraisal Dispute American Family acknowledged coverage and made pre-litigation payments of approximately $360,789.91 in actual cash value (ACV — property value after depreciation) for the dwelling under Coverage A, and $176,167.45 for personal belongings under Coverage B. When the parties disagreed over the total loss amount, American Family invoked the Policy's appraisal provision in April 2021 to resolve the dispute. The Pierces, however, refused to participate in appraisal, asserting that their losses exceeded Policy limits, making the home a 'total loss' and rendering appraisal unnecessary. American Family also learned in May 2021 that the Pierces had sold the fire-damaged home in January 2021 without prior notice.

The Pierces filed suit in January 2022 and filed an amended complaint in January 2023 alleging breach of the Policy. On August 10, 2023, the court ordered the parties to proceed with appraisal under Minn. Stat. § 65A.01, subdiv. 3 and the Policy, and stayed the litigation. The appraisal concluded in early February 2025, awarding: replacement cost value (RCV — full replacement without depreciation deduction) of $568,233.80 and ACV of $360,769.56 for the dwelling; RCV of $438,368.52 and ACV of $344,799.68 for non-consumable personal property; and RCV/ACV of $39,851.05 for consumables. American Family agreed to pay the Policy limit under Coverage B (an additional $244,483.26) plus pre-award interest for 805 days ($53,999.40), less the $1,500 deductible. It refused additional payment under Coverage A.

Both parties moved for summary judgment. The Pierces also moved to amend the complaint to add a bad-faith punitive damages claim under Minn. Stat. § 604.18 and moved to strike portions of American Family's reply brief.

RCV for the Dwelling (Coverage A) The central dispute was whether the Pierces could collect RCV for the dwelling up to the $550,000 Policy limit. The Policy required, as conditions for receiving RCV: (1) notice within 180 days of the loss of the decision to repair or replace, and (2) completion of repair or replacement within one year of the loss. The court found no genuine factual dispute that the Pierces failed both conditions — they did not notify American Family of the decision to replace the home until at least May 2021 (ten months after the fire), and the replacement home was not completed within one year.

The Pierces argued for equitable tolling (pausing the deadline) because American Family allegedly caused their inability to comply. The court rejected this, noting that equitable estoppel against an insurer's time limitations is appropriate only when the insurer's conduct caused the delay. Here, the court found the delay was caused by the Pierces themselves, who refused to participate in appraisal for over two years until compelled by court order in August 2023, while American Family had requested appraisal as early as April 2021 and continued making additional payments.

The Pierces also argued that Minn. Stat. § 65A.01 — which sets a two-year limitations period for commencing insurance lawsuits — prohibited the Policy's one-year completion deadline. The court disagreed, holding that the statute governs when lawsuits must be filed, not the substantive terms of insurance policies.

The court also rejected in a footnote the Pierces' argument that the RCV provision did not apply until American Family had made all ACV payments, finding the Policy plainly stated it applied once an ACV 'settlement' had been received.

Pre-Award Interest American Family paid $53,999.40 in pre-award interest under Coverage B, covering 805 days. The Pierces sought an additional $56,749.68 covering an 864-day period during which the appraisal was delayed due to their refusal to participate. The court denied this, finding the delay was the Pierces' fault and that awarding them interest for that period would be inequitable. The court also cited Axis Surplus Ins. Co. v. Condor Co., 19 F.4th 1062, 1064 (8th Cir. 2021), which held that appraisal should proceed regardless of an underlying coverage dispute.

Debris Removal Interest The Pierces sought $9,329.28 in pre-award interest on a debris removal claim. Because the appraisal panel did not award any debris removal amount, the court found that pre-award interest (which applies specifically to appraisal awards under Minn. Stat. § 549.09(b) and Poehler v. Cincinnati Ins. Co., 899 N.W.2d 135 (Minn. 2017)) was not applicable.

Deductible The Pierces argued they should not have to pay the $1,500 Policy deductible under Coverage B. The court disagreed, citing the Policy's plain language requiring the insured to pay any applicable deductible.

Motion to Amend The Pierces sought to add a bad-faith claim for punitive damages under Minn. Stat. § 604.18, arguing American Family denied benefits without a reasonable basis. Given the court's findings in favor of American Family on the merits, the court found the record did not support a bad-faith claim and denied the motion.

Motion to Strike/Sur-Reply The Pierces moved to strike portions of American Family's summary judgment reply as exceeding the scope of the opposition brief, or alternatively sought leave to file a sur-reply. The court denied this motion as moot.

Disposition Judge Doty granted American Family's motion for summary judgment, denied the Pierces' cross-motion for summary judgment and motion to amend, and denied as moot the motion to strike. Judgment was entered in favor of American Family.