{"id":887110,"date":"2016-02-16T16:08:59","date_gmt":"2016-02-16T23:08:59","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=887110"},"modified":"2016-02-16T16:08:59","modified_gmt":"2016-02-16T23:08:59","slug":"wilcox-v-state-farm-minnesota-supreme-court-decision-in-labor-depreciation-class-action","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/wilcox-v-state-farm-minnesota-supreme-court-decision-in-labor-depreciation-class-action\/","title":{"rendered":"Wilcox v. State Farm: Minnesota Supreme Court Decision In Labor Depreciation Class Action"},"content":{"rendered":"

Wystan Ackerman | Robinson & Cole | February 10, 2016<\/p>\n

Today the Minnesota Supreme Court issued its opinion in Wilcox v. State Farm Fire & Casualty Company<\/em>, a putative class action alleging that State Farm, in estimating the \u201cactual cash value<\/a>\u201d of property damage under homeowners\u2019 insurance policies, improperly applied depreciation to the labor component of the replacement cost of damaged structures. A question pertaining to whether depreciation can properly be applied to labor costs was certified by Minnesota\u2019s federal district court to the state supreme court. In a prior post, I covered the oral argument in the Minnesota Supreme Court. I represented the American Insurance Association as an amicus curiae<\/em> in this case.<\/p>\n

Today, the court held that \u201cabsent specific language in the insurance policy that identifies a method of calculating actual cash value, the trier of fact must determine whether depreciation of embedded labor components \u2018logically tend[s] to the formation of a correct estimate of the loss.\u201d (Slip op. at 3.) In other words, the court concluded that determining the correct amount of the \u201cactual cash value<\/a>,\u201d based on all applicable factors, is an issue that should generally be decided by an appraisal panel or the finder of fact at trial, typically based on expert testimony. The court further concluded that this determination \u201cdepends on the facts and circumstances of the particular case (id.<\/em> at 10), which means that class certification on this issue is unlikely. This decision is more favorable to insurers\u2019 positions than some of the other recent decisions on this issue (see my January 18 blog post<\/a> for more on those).<\/p>\n

Key points from this decision include:<\/p>\n