This was an issue recently in a Florida case from the Second District Court of Appeal, Jyurovat v. Universal Property & Casualty Ins. Co., No. 2D11–712 (Fla. 2d DCA April 13, 2012). The Court stated “[t]he insurance policy does not address a breakdown in the appraisal process.” The policyholder’s appraiser had fired the neutral umpire from the appraisal process, apparently being dissatisfied with the pace of the umpire’s efforts.

The claim stemmed from a fire loss in January 2008. The insured and the insurer could not agree on a settlement, so the insured demanded appraisal. The parties appointed their appraisers and selected a neutral umpire, who inspected the property. The insured’s appraiser became dissatisfied with the lack of conclusion to the process despite repeated suggestions by the umpire that he would be issuing his award shortly. After the matter had been in appraisal for about seven months, the insured’s appraiser fired the neutral umpire. Universal’s appraiser did not agree to the firing.

The insured sued Universal, seeking declaratory relief on whether the structure was a total loss, whether Universal could withhold overhead and profit, whether the dismissal of the umpire was proper, whether the loss payable under the ordinance or law provision was ripe for appraisal, and damages. Count II of the Complaint sought the appointment of a new umpire.

As an affirmative defense, Universal asserted that the insured obstructed and failed to complete the appraisal process by terminating the umpire without just cause. Universal also counterclaimed for breach of contract. The insured denied terminating the umpire without just cause. He argued that he tried to comply with the appraisal provision but that, after he moved to replace the umpire, Universal raised coverage issues not subject to appraisal. The insured filed an amended complaint seeking damages for breach of contract.

After some discovery in the case, the trial court granted summary judgment for Universal, ruling that the insured breached the policy by unilaterally terminating the umpire and failing to complete the appraisal before filing suit. The insured appealed that adverse ruling.

The Second District Court of Appeal stated that the insured cooperated in the appraisal process from May 2008 until December 2008 and noted that he did not end the appraisal process; he just wanted a new umpire. The Court held that the whether the insured willfully and materially breached the policy by firing the umpire was a question to be decided by a jury, and reversed the trial court’s summary judgment for Universal:

The sole basis for the summary judgment was the purported termination of the umpire and the filing of a declaratory judgment action. The issue of whether this constituted a material breach, if at all, of the policy is a question for resolution by the fact finder. Summary judgment was improper. [emphasis added]

The Court noted that if the insured’s appraiser was dissatisfied with the pace of the umpire’s efforts, the law provides alternatives to unilaterally firing the umpire. The Court cited cases where various emergency motions seeking to replace the umpires had been filed.