In August of 2018, an explosion and fire severely damaged the insured’s bar, restaurant and bowling alley.1 Auto-Owners Insurance Company (“Owners”) insured the buildings and personal property at the time of the loss. After resoling their dispute over coverage on damage to the building, Owners made payment. However, a dispute remained between the parties as to amounts owed for business personal property (“BPP”) and electronic data processing equipment (“EDP”), among others.

During the claim, the parties through their representatives engaged in a series of communications regarding purported discrepancies between the values of the damaged BPP that had been submitted to Owners versus what had been reported by the insured’s tax accountant in its tax returns. Such discrepancies were not resolved prior to filing suit.

In litigation, the insured asserted that Owners breached the insurance policy by failing to pay for his full BPP loss and by never making any payment for EDP. In contrast, Owners asserted that the insured failed to comply with his post-loss duties by failing to provide requested documents including purchase receipts, which were ultimately produced during litigation. Neither party ever invoked the policy’s appraisal provision as to these disputes. Nor did Owners assert that the insured’s purported failures to comply with post-loss duties included not proceeding with appraisal. Ultimately, the insured moved for summary judgment as to Owners’ breach of the insurance policy.

Notwithstanding the fact that there was no formal invocation of the appraisal provision by either party, the trial court ordered the parties to appraisal. Specifically, the court issued an order which granted partial summary judgment in favor of the insured on its breach of contract claim, but only to the extent of ordering an appraisal of the value of the BPP an EDP. The court explained in its opinion that appraisal was the only “appropriate legal or equitable course of action at this stage, now that plaintiff’s post-loss obligations have been fulfilled and the parties still disagree on valuation.” Entering a stay on the litigation while the appraisal was pending, the court advised the insured that it could revisit the claim of breach of contract after the appraisal was concluded.
1 Reich v. Auto-Owners Ins. Co., No. 19-cv-763, 2021 WL 1667891 (W.D. Wis. Apr. 28, 2021).