Firm News

Federal Judge rules in favor of Hellmuth & Johnson client in matching exclusion case

EDINA, MN – January 25, 2018 – A Minnesota federal judge recently issued an order voiding a matching exclusion found in a widely used American Family insurance policy. All customers of American Family should be aware of this order, especially those covered by a Gold Star Policy.

The Order was issued in the case of Noonan v. American Family. American Family’s policy included many forms, three of which were important to the Judge’s decision.

One form, the Minnesota Endorsement, said the insurance company will not pay to replace undamaged material that is a color mismatch when next to new replacement material. This was in an effort to say that the insurance company would only pay to replace material directly hit and damaged by things like wind and hail, but not material nearby that is not directly hit and damaged.

The other two relevant forms in the Noonan policy were the Gold Star Form and the Gold Star Amendment. The Gold Star Form was the basic form, or main form, of the policy. It includes a valuation section that governs how an insurer will pay a claim. This valuation section was deleted and replaced by the Gold Star Amendment. Neither of these two forms specifically exclude coverage of color mismatches like the Minnesota Endorsement.

The Minnesota Endorsement purports to amend the loss valuation section of the Gold Star Form. Yet that section was deleted and replaced by the Gold Star Endorsement.

The federal judge agreed that the Minnesota Endorsement does not clearly amend the Gold Star Amendment. At a minimum, the judge said the policy is ambiguous and that ambiguity must be resolved in favor of the insured property owner. As a result, American Family was ordered to pay the full value of the loss, including the loss in value to property, and damage, resulting from aesthetic mismatches resulting from new replacement material that is next to undamaged material.

The Judge entered a judgment in favor of Noonan for the full amount awarded by an appraisal panel and interest.

“I’m thrilled to help our client achieve a successful resolution in this case,” said Ed Beckmann, the H&J attorney who led the case. “Additionally, this is an important ruling that has the potential to positively affect many American Family policyholders in Minnesota.”

Property owners must make a claim for the full value of their loss within two years of the storm that caused it. For more information on what claims might be included, read this related Hellmuth & Johnson blog post.

Hellmuth & Johnson
Hellmuth & Johnson, a Top 20 Minnesota law firm, represents clients ranging from individuals and emerging start-ups to multinational Fortune 500 companies. Focusing on transactional law, litigation and appeals, Hellmuth & Johnson attorneys are leaders in their fields. Founded in 1994, Hellmuth & Johnson has become one of Minnesota’s fastest growing law firms. Learn more at

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