My New York colleague, Jonathan Wilkofsky, not long ago wrote a third edition to his book about appraisal, The Law and Procedure of Insurance Appraisal. If the appraisal cases in Florida and Colorado keep up at their frantic pace of publication, he is certainly going to have a fourth edition in the near future. A recent Florida case concerned the common issue of whether appraisal is appropriate to determine whether a roof can be repaired with matching shingles.1
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If you have ever appraised a loss in Minnesota, chances are it was more akin to an arbitration than a traditional appraisal under an insurance policy. That might change given the recent opinion by the Minnesota Supreme Court in Oliver v. State Farm Fire and Casualty Insurance Company., 2020 WL 1041113 (Minn. March 4, 2020).
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A recent case1 had the following fact pattern of facts and findings:
1. Public adjuster Erick Arias of Universal Loss Consultants, Inc., was hired as a loss consultant for the Plaintiffs with respect to the subject insurance claim.
2. Erick Arias produced an estimate for the Plaintiffs prior to the invocation of appraisal.
3. There exists a fiduciary relationship between Erick Arias and the Plaintiffs through the Plaintiffs’ counsel.
4. It is unreasonable to believe that Erick Arias would second-guess his initial estimate at appraisal.
5. There is too great a likelihood that neither Erick Arias, nor any other person affiliated with Universal Loss Consultants, Inc. could be disinterested for the purposes of appraisal as required by the appraisal provision of the subject policy.
Those appraisers being hired on a contingency fee may want to read a recent case indicating that you cannot do so where the policy requires a “disinterested” appraiser.1 While the case discussion noted the difference between an “independent” appraiser and a “disinterested” appraiser, the trend in Florida cases is clearly moving towards no appraisers being previously retained as public adjusters or those hired on a contingent basis.
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Prior to the 2009 Texas Supreme Court decision in State Farm Lloyds v. Johnson,1 Texas courts were split regarding the line between damage and liability, and when an appraiser could decide causation as part of the damage determination. For the most part, that issue has been resolved.
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As Hurricane Maria insurance claims continue to be litigated, we begin to see how trial courts in Puerto Rico are evaluating case by case the insurance code’s amendments such as the appraisal process. It has been a year since Puerto Rico’s Insurance Code was amended and one of the significant changes made was under law 242-2018,1 which added an “appraisal process” as an alternative to solve insurance claims. These and other amendments were discussed in my blog published on December 5, 2018, “Puerto Rico Approves Amendments to the Insurance Code to Protect Policyholders and Improve Claim Handling Procedures.”
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Mientras se continúan litigando muchas de las reclamaciones al seguro por los daños ocasionados por el Huracán María, observamos como los tribunales comienzan a evaluar y aplicar en cada caso las enmiendas realizadas al Código de Seguros de Puerto Rico tales como el nuevo proceso de “appraisal”. Ya ha pasado un (1) año desde la enmienda al Código de Seguros de Puerto Rico que incluyó como uno de sus cambios significativos bajo la ley 242-2018,1 el proceso de “appraisal” como alternativa para solucionar reclamaciones al seguro. Ésta enmienda junto a las demás fueron discutidas dentro de mi “blog” publicado el 5 de diciembre de 2018, titulado “Puerto Rico Aprueba Enmiendas Al Código de Seguros Para Proteger A Los Asegurados Y Mejorar Los Procedimientos Para Solucionar Reclamaciones”.
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Memorandums of Appraisal, Appraisal Parameters or similarly named documents which outline the scope of the appraisal are becoming more and more common. The case of Church Mutual Insurance Company v. Circle of Light,1 is a good reminder that all appraisers should know the terms and limitations set forth in any such document before proceeding to appraisal.
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Public adjusters in Florida have routinely appointed themselves as appraisers for their policyholder clients. This generally saves the policyholder money and provides a person already familiar with the loss and ready to move the appraisal process along. However, based on the trend and discussion in legal court cases, it appears that this practice of self-appointment will be a thing of the past.
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Texas has a lot of insurance claims decided by appraisal. Maybe the appraiser for one insured should have gone to Steve Patrick’s appraisal class because the umpire and insurer’s appraiser came to a zero award, which was upheld on appeal.
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