I was forwarded a lawsuit by Art Newman, who is the current president of the Windstorm Network. The suit is regarding activities that Newman conducted as an Umpire to an appraisal. A policyholder that was not pleased with the appraisal award sued Citizens Property Insurance Corporation and Art Newman.
It states in part:
11. Pursuant to the terms of the Policy, the Insured invoked the appraisal process and demanded the Insurance Company to comply with the Policy’s appraisal clause via’ US Mall and facsimile.
12. The Insurance Company complied wlth the Insured’s appraisal demand and selected Shawn Hall of Burton Claims Service, Inc. as their appraiser, Shortly thereafter, the Insured selected Tony Quintana of Claimserve Co. as his appraiser.
13. On or about March 24, 2008, the appraisers, in order to provide an accurate appraisal estimate, conducted an inspection of the insured’s property which is the subject ofthis action.
14. Each appraiser separately detailed the actual cash value, the replacement cost, and the amount of loss of each Item. Unfortunately, they failed to come to an agreement.
15. As afforded in the Policy, in the event that the competent and impartial
appraisers are unable to reach an agreement, the decision to set the amount of loss must be assigned to a neutral umpire, selected by both the Insured and the Insurance Company.
16. Mr. Art Newman (the "Umpire"), was mutually selected by Mr. Quintana and Mr. Hall, before the start of the appraisal process.
17. On or about June 13, 2008, both appraisers provided the Umpire copies of their loss estimates. In order to provide a competent and accurate estimate of the loss, The Umpire scheduled an inspection of the property. This property inspection was to be attended by himself, Mr. Quintana and Mr. Hall and was scheduled to take place on July 23, 2008.
18. On July 23, ;l008,the date mutually agreed to by all parties, the Umpire failed to appear at the Inspection and did not notify any party of same.
19. Notwithstanding, his failure to appear at the inspection and failure to examine the physical damages that were the subject of disagreement between the appraisers, on July 30, 2008, the Umpire submItted an executed Appraisal Award in the amount of $17,613.61.
20. The Umpire never visited nor inspected the property, never attempted to
reschedule said inspection, never examined the physical damages that were the
subject of disagreement between the appraisers and never properly appraised the
amount of the losses.
21. The Umpire did not have prior knowledge of the claim, and therefore was
unqualified to make an assessment of the damages without personally inspecting the property first.
22. The Insured has suffered and continues to suffer damages resulting from the Umpire’s egregious behavior In issuing an Appraisal Award after failing to inspect
23. Pursuant to Frorida Statute Section 682.13(b), the court snarl vacate an award when: "… there Is evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or umpire or misconduct prejudicing the rights of
24. Clearly, the issuance of an Appraisal Award by the Umpire, wrthout the inspection of the property, evidences partiality on his part and clearly constitutes misconduct prejudicing the rights of the Insured. These egregious acts of misconduct have undoubtedly damaged the Insured.
25. The Insured has been obligated to retaIn the undersigned attorneys for the prosecution of this action and is entitled to a reasonable attorneys’ fee pursuant to
Florida Statute Section 627.428.
26. This Court should vacate the Appraisal Award executed by the Umpire who has engaged in blatant misconduct as a result of his actions, prejudiced the rights of the Insured and has otherwise greatly damage the Insured,
WHEREFORE, the Insured respectfully requests that this Court enter judgment
against the Insurance Company and Art Newman, vacate the Umpire’s Appraisal
Award or in the alternative modify or correct the award and entille the undersigned to court costs and reasonable attorneys’ fees pursuant to Sections 627.428, Florida
I do not know what will come of this lawsuit. Generally, it is difficult to overturn an appraisal award. And, just because Newman did not go to the loss site does not prove he is prejudiced against the policyholder. Further, there is no requirement that he go to the loss site. As I previously indicated in Appraisals Better Be Won Because They are Difficult to Overturn–Even if Unfair in Result or Procedure, there are no rules at all.
Still, the cost of hiring counsel to represent himself could subject Newman to a change of heart. Possibly, this will be the new techniques for those that lose appraisals– sue the umpire. The impact of such action would certainly make umpires a little more concerned with their activities during the appraisal process. Fortunately, I have never filed suit against an umpire.
My concern is that if my colleagues start filing such suits on a regular basis, the availability of umpires is going to diminish and the cost is going to rise. I used to question why umpires posed the hypothetical of being the target of lawsuits, and now I can appreciate their concern and the reality of the costs and implications by such actions. It will be interesting to see if this becomes a trend or isolated occurrence.