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Remodeling Dimensions, Inc. v. Integrity Mutual Insurance Co.

Minnesota Court of Appeals

806 N.W.2d 82 (2011)

Facts

Mike and Peggy Provenzano (the Provenzanos) hired Remodeling Dimensions, Inc. (RDI) (plaintiff) to build an addition on their home. The agreement provided that any disputes would be arbitrated. Construction defects were found a year later. The Provenzanos filed an arbitration demand against RDI, alleging that RDI’s work was defective. RDI was insured by Integrity Mutual Insurance Co. (Integrity) (defendant). Integrity retained an attorney to represent RDI in the arbitration. After a hearing, the arbitrator issued a damages award. RDI’s request that the arbitrator explain the award was denied because neither party had requested an explanation in writing before the arbitrator was appointed as required by the arbitration rules. RDI paid the Provenzanos to satisfy the award and sought indemnification from Integrity. Integrity refused to indemnify RDI. RDI sued Integrity for breach of contract. RDI and Integrity cross-moved for summary judgment. The court granted RDI’s motion, reasoning that it could not determine the basis of RDI’s liability to the Provenzanos without an explanation of the arbitration award. Because Integrity was obligated to provide RDI with an attorney, Integrity was responsible for the attorney’s failure to make a timely request for an explanation and was prevented from denying coverage. Integrity appealed.

Rule of Law

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Holding and Reasoning (Johnson, C.J.)

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