Insurance Litigation Never Easy

When Appraisers Fail to Agree on Umpire Court Must Appoint One

Barry Zalma

Dec 14, 2023

Transcript

Get a group subscription

Background

The lawsuit involves claims for damage to property located in Gonzales, Louisiana as a result of Hurricane Ida. Dorian Theodore (“Plaintiff”) sought coverage and statutory bad faith damages related to claims made under an insurance policy (the “Policy”) issued by Allied Trust Insurance Company (“Defendant”).

The parties represent that the Policy provides the following language with respect to appraisals, including the appointment of an umpire:

Appraisal

"If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the "residence premises" is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. Any outcome of the appraisal will not be binding on either party.

"Each party will:

"1. Pay its own appraiser; and

"2. Bear the other expenses of the appraisal and umpire equally."

Prior to the filing of this lawsuit, the parties selected their initial appraisers when Defendant demanded an appraisal of the loss. Plaintiff designated Matthew Addison as Plaintiff's appraiser, and Defendant designated Ronald West as its appraiser. After the filing of this lawsuit, Plaintiff designated Mike Deckelman as Plaintiff's appraiser. The parties' appraisers were unsuccessful in jointly selecting an umpire in accordance with the Policy.

As ordered, the parties submitted separate lists of proposed umpires for potential appointment.

Law and Analysis

There is no dispute between the parties that the appraisal provision in the Policy is enforceable. The parties have jointly sought court appointment of an umpire in accordance with the appraisal provision in the Policy.

The District Court appointed Cade Cole as the appraisal umpire for the purposes of the instant insurance claim dispute. Federal courts routinely have appointed Cade Cole as deputy special master and recognized him as a "neutral" in Hurricane Laura and Hurricane Delta cases. The Court took judicial notice of this fact and found that Mr. Cole is well-qualified for the position of umpire and so selects him to fulfill that role in this case.

If Mr. Cole declines to serve as umpire in this matter, then the Court selects Joel Moore as umpire. His resume demonstrates that he is well-qualified for the position and would likewise serve as a neutral umpire.

As discussed above, although both Mr. Cole and Mr. Moore were proposed by the Plaintiff, the Court has no reason to suggest that both can fulfill this role in a fair, neutral and impartial manner.

ZALMA OPINION

Insurance claims resulting from hurricanes that have struck Louisiana have become aggressive, unfair and unreasonable. For two appraisers to fail to pick an umpire is an indication of litigation game playing forcing the District Court to appoint an umpire. This litigation requiring a judge to do what insurance appraisers do every day with little or no discussion reflects a desire to make the process more expensive and difficult rather than fulfill its purpose to quickly and fairly resolve the quantum of a loss.