The Villas at Winding Ridge v. State Farm Fire and Casualty Company1 opinion is a good reminder to appraisers that they need to timely raise any issues related to the appraisal, or risk having those issues waived.

In relevant part, the insured’s disputes about the amount of hail damage to the 33 buildings was submitted to appraisal. The insured’s appraiser submitted an estimate for repairs including full replacement shingles on 13 of the 33 buildings. Whereas the insurer’s appraiser only estimated repairs to each of the 33 buildings and did not include full shingle replacement on any building. Following a joint inspection with the appraisers and umpire, the umpire issued a preliminary award which provided for (1) 20% repair allowance for roofing shingles on 13 buildings; (2) replacement costs for soft metal damage on all 33 buildings; and (3) replacement costs for roofing shingles around new turtle vents on all 33 buildings.

Approximately three weeks later, the insured’s appraiser asked the umpire to modify the award to cover full shingle replacement on 13 buildings and for the first time submitted a report from the shingle manufacturer that the original shingles were discontinued, and any replacement shingle would not match. Despite having this report in his possession before the proposed award was entered, the insured’s appraiser had not shared it with either the insurer’s appraiser or the umpire. Ultimately, the umpire and the insurer’s appraiser signed the award making in binding.

Disagreeing with the award, Winding Ridge filed suit. The Seventh Circuit Court of Appeals affirmed the trial court’s grant of summary judgment in favor of State Farm. The Seventh Circuit agreed that Winding Ridge’s matching argument was untimely. It specifically noted that Winding Ridge’s appraiser had the letter from the shingle manufacturer for six months but elected not to share it or advance the argument. The Seventh Circuit further noted that if the insured were to permit such “second guessing,” it would only frustrate the purpose of a binding appraisal.
1 Villas at Winding Ridge v. State Farm Fire & Cas. Co., 2019 WL 5853547 (7th Cir. Nov. 8, 2019).