The Eight Circuit Court of Appeals in Noonan v. American Family Mutual Insurance,1 recently upheld that the Minnesota Amendatory Homeowners Endorsement (“Endorsement”) excludes “matching.” The Endorsement provides that an insurer does “not pay to repair or replace undamaged property due to mismatch between damaged material and new material used to repair or replace damaged material.”

The insureds in Noonan sustained hail damage to their home. The matter proceeded to appraisal, wherein it was requested that the appraisers distinguish their award to two categories – one for replacing damaged shingles and another for replacing undamaged shingles that would not match. The panel entered a lump sum award, stating that “[t]his is a matching issue. Alternative products do not match current shingle on the roof.” Ultimately the appraisers clarified their award and reported the amounts attributable to damage and matching. American Family paid the part of the award attributable to damage but took the position that the policy did not cover the cost of matching. The insureds filed suit against American Family for breach of contract.

The policy issued by American Family included the Endorsement. The Endorsement, however, stated that it applied to “the Form,” but it did not expressly reference or state it applied to the insured’s policy. The district court concluded that Endorsement was ambiguous and granted judgment for the insureds.

On appeal, the Eight Circuit reversed the district court’s opinion holding that the Endorsement unambiguously applied to the policy. The Eight Circuit looked to the first page of the policy which stated that the Endorsement applied, and a physical copy was attached. And the Eight Circuit noted that the Endorsement’s failure to reference the policy was intentional as American Family argued. Rather than amending a provision in the policy, the Endorsement was a separate, independent part of the policy. The Endorsement covered a topic (matching), which the policy did not. The Eight Circuit concluded that the Endorsement explicitly and unambiguously applied, and American Family was not obligated to pay for damage attributable to matching difficulties.
1 Noonan v. American Family Mut. Ins., No. 18-1393, 2019 WL 2236092 (8th Cir. May 24, 2019).