Nelson v. American Family Mutual Insurance Co., No. 17-2665 (8th Cir. 2018)
Annotate this CaseThe Eighth Circuit affirmed the district court's grant of summary judgment to American Family in an action alleging breach of contract, negligent misrepresentation, and violation of Minnesota's consumer fraud statutes. The court held that American Family did not breach the contract because nothing in the policy imposed on American Family a contractual obligation to make objectively reasonable or accurate replacement cost estimates; American Family did not negligently misrepresent the replacement cost of plaintiffs home where, regardless of any breach of duty, no genuine dispute existed as to justifiable reliance upon the estimates; and plaintiffs could point to any promise, misrepresentation, or false statement made by American Family, let alone one that they relied upon, justifiably or unjustifiably, in deciding to purchase or renew the policy.
Court Description: Erickson, Author, with Gruender and Grasz, Circuit Judges] Civil case - Insurance. In action to recover what plaintiffs claim were premium overpayments based on inflated replacement cost value of their home, the policy language at issue expressly placed the burden on the policyholder to ensure that the appropriate amount of coverage was purchased, and the insurer did not have a duty to provide accurate replacement cost estimates to be used in determining policy premiums; because the policy expressly stated that the insurer does not guarantee that its replacement cost estimate will be the actual replacement cost in the event of a covered loss and that it is up to policyholder to select the proper amount of coverage, the insured could not reasonably rely on the estimates as the basis for a negligent misrepresentation claim; with respect to plaintiffs' claim under the Minnesota Consumer Fraud Act, plaintiffs could point to no promise, misrepresentation, or false statement by the insurer they relied on to purchase or renew the policy and the claim failed.
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