Insurance Claim-“Broad Evidence Rule”

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7^th Circuit Court of Appeals

Case Name: Margrit Meier v. Wadena Insurance Company

Case No.: 23-2282

Officials: Easterbrook, Scudder, and St. Eve, Circuit Judges.

Focus: Insurance Claim-“Broad Evidence Rule”

Margrit Meier, proprietor of the Hartland Inn restaurant, submitted a coverage claim to Wadena Insurance Company following a fire that ravaged her establishment. Although the policy entitled her to the “actual cash value” of the property at the time of the incident, a dispute arose over the calculation method. Initially, Wadena disbursed $775,000 to Meier, utilizing the “Broad Evidence Rule” to determine the actual cash value. However, dissatisfied with this amount, Meier engaged a third-party adjuster who provided a higher estimate. Consequently, Wadena increased its payment by $60,135.79. Despite this adjustment, Meier opted for the policy’s panel appraisal provision.

Following the completion of the appraisal process, an impartial umpire determined an independent estimate of the property’s actual cash value. Nevertheless, Meier initiated a second lawsuit, alleging breach of contract and bad faith, and sought to invalidate the appraisal award under state law. The district court dismissed the action, noting Wadena’s compliance with the alternative dispute resolution process and the fulfillment of the binding award.

The Seventh Circuit upheld the district court’s ruling, affirming the absence of breach of contract or bad faith on Wadena’s part. It concurred that the application of the Broad Evidence Rule to calculate the property’s actual cash value was appropriate. Furthermore, the court supported the district court’s decision to deny Wadena’s motion for sanctions under Federal Rule of Civil Procedure 11.

Affirmed.

Decided 03/08/24

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