The Eighth Circuit affirmed the district court's finding of bad faith and award to the insured of taxable costs and prejudgment interest. Selective Ins. Co. v. Sela, 2021 U.S. App. LEXIS 26062 (8th Cir. Aug. 30, 2021).      The insured suffered two hail storms that damaged his home. In 2010, the first storm caused over half a million dollars in loss. Before submitting a claim to his original insurer or beginning any repairs, the insured secured a new policy with Selective. The policy did not exclude pre-existing damage, it did preclude coverage if the insured "willfully and with intent to defraud, concealed or misrepresented any material fact or circumstance relating to the insurance."     Before issuing the policy, Selective appraised the property and assigned a $1.6 million value to the home. The insured then filed a claim with his original insurer and received $510,787.23 for actual cash value of his loss. Neither the terms of this settlement nor this new policy with Selective required the insured to repair all of the 2010 damage.      A second storm hit in 2015, damaging the insured's roof. Selective sent an adjuster, who found the damage was "significant." Selective then received an anonymous letter claiming the insured was a serial fraudster who was falsifying claims, Selective brought in its special investigation unit to look into potential fraud. Selective was concerned that the insured said he had repaired all of the 2010 damage while only providing documentation for about $200,000 of work. Selective eventually denied the claim based on fraud.     Selective then filed suit for a declaration of no coverage. The insured filed a counterclaim for breach of the policy and bad faith. The court determined that the jury would decide coverage, an appraisal panel would determine damages, and the court would decide bad faith. The jury found no fraud, the damage issue went to appraisal, and a date for the bench trial was set.     A week before the appraisal was finished, Selective moved for summary judgment, arguing the Minnesota statute would bar the bad faith claim because the claim would be resolved by appraisal. The district court denied the motion, held a bench trial and found that Selective denied the claim in bad faith. It awarded judgment for $1,024,233.10, which included the actual case value award, taxable costs, and prejudgment interest. Selective appealed.     The Eighth Circuit noted that the Minnesota statute allowed an insured to recover taxable costs if an insurer lacked a reasonable basis for denying benefits and did so knowing of or in reckless disregard of the lack of a reasonable basis. The Eighth Circuit agreed with the district court that there was no reasonable basis to deny the insured benefits. Selective recklessly disregarded the lack of a reasonable basis to deny the claim. Prejudgment interest was also properly granted by the district court. Under Minnesota precedent, the district court found that Selective had enoguht information in the property loss notice to assess its potential liability. Prejudgment interest was due from this point forward.

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