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Texas Court Addresses What Constitutes an “Itemized” Appraisal Decision

On Tuesday of this week, a unanimous panel of Texas’ intermediate level appellate court rejected arguments that an appraisal award that set forth lump sum replacement cost, depreciation, and actual cash value amounts for real property, personal property, and additional living expense was not sufficiently “itemized.”  In Cantu v. Southern Ins. Co., 2015 Tex. App. LEXIS 8847 (Aug. 25, 2015), it also rejected the policyholder’s contention that a court, having appointed an umpire when the two appraisers were unable to agree, was without authority to remove him and select a replacement.  The decision is not currently reported on WestLaw. The insured’s home was damaged by 2011’s massive Bastrop County Complex Fire.  After disputes arose over the amount of loss, the

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Posted in Arbitration and Appraisal, Fire, Wildfire

California Court: Appraisers Cannot be Directed to Assign Loss Values to Undamaged or Non-Existent Items in the Insured’s Scope

It is axiomatic that the appraisers’ task is solely to determine the amount of loss, as opposed to coverage or liability.  In Li-Lin Sung v. California Capital Ins. Co., 2015 WL 3797827, 2015 Cal. App. LEXIS 530 (Jun. 18, 2015), a unanimous panel of California’s Court of Appeal recently held that that necessarily entailed assessing whether components of the policyholder’s claim were actually damaged or even in existence at the time of the loss.  According to the opinion, it was error to compel the appraisers to assign loss values to each and every item the insured claimed — such as damage to non-existent windows or to a fourth story on a three-story building — because assessing the existence and nature

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Posted in Arbitration and Appraisal, Fire, Investigation, Loss Adjustment

Florida Court: Your Own Attorney is Simply Not a “Disinterested” Appraiser

As noted yesterday, last month saw an intermediate level appellate panel in Florida address whether the attorney for the policyholder could serve as that party’s appraiser.  It was a case of first impression in the Sunshine State.  In Florida Ins. Guar. Assn. v. Branco, 2014 WL 4648208, 2014 Fla. App. LEXIS 14602 (Fla.Dist.Ct.App., Sept. 19, 2014), the panel held that it was impermissible to select one’s own lawyer to act in that capacity when the contract of insurance called for a “disinterested” appraiser. The Brancos’ home was damaged by a sinkhole in April of 2010, and they made claim under a homeowner’s policy issued by Homewise Preferred Insurance Company.  The insurer denied liability, asserting that what had happened did not

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Posted in Arbitration and Appraisal, Loss Adjustment, Sinkhole

Florida Court Holds “Retained Rights” Provision Does Not Render an Appraisal Clause Unenforceable

In a pair of sinkhole cases, different panels of Florida’s intermediate level appellate court recently compelled appraisal, and the decisions are instructive because they address both challenges to the procedure and also the question of who is qualified to serve as an appraiser.  Today’s post will discuss Cincinnati Ins. Co. v. Cannon Ranch Partners, Inc., – So.3rd –, 2014 WL 5286519, 2014 Fla. App. LEXIS 17033 (Fla.Dist.Ct.App., Oct. 17, 2014) where the panel rejected arguments that the appraisal clause was unenforceable because it permitted the carrier to deny the claim even after an appraisal had taken place.  Tomorrow’s post will then address who constitutes a “disinterested” appraiser. The case involved sinkhole damage to a piece of property owned by Cannon

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Posted in Arbitration and Appraisal, Loss Adjustment, Sinkhole

Pennsylvania Court Addresses What Is a Coverage Dispute for Appraisal Purposes

Last month, a Pennsylvania federal court rejected the notion that a dispute over whether an admittedly covered occurrence necessitated repair of certain discrete portions of the damaged structure was a coverage dispute, characterizing it instead as merely a dispute over the extent of loss.  As a result, Currie v. State Farm Fire & Cas. Co., 2014 WL 4081051, 2014 U.S. Dist. LEXIS 117970 (E.D.Pa., Aug. 19, 2014) held that the insurer could not refuse appraisal and stated that it was being “disingenuous” in arguing otherwise. The Curries were the owners of a home in Langhorne, Pennsylvania.  When Superstorm Sandy struck on October 29, 2012, the structure took a direct hit from a tree on the property.  The insurer, State Farm

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Posted in Arbitration and Appraisal, Bad Faith, Homeowners Coverage, Loss Adjustment, Superstorm Sandy

Florida, Georgia and Texas Appraisal Update: Is Causation A Coverage Question For The Court or A Damages Question for The Panel?

In most jurisdictions, underlying coverage issues must be resolved prior to invoking appraisal in a first-party property claim.  The question of what constitutes a coverage issue (typically reserved for a court’s judicial determination) and what constitutes a damage issue (appropriate for an appraisal panel’s consideration), however, is not always readily apparent. A routine subject of this particular appraisal debate is whether causation is a coverage or a damages inquiry, and recent decisions under Florida, Georgia and Texas law are evident of two things: (1) the determination of the issue is, in large part, factually dependent; but (2) the debate is far from over. In a recent appellate decision, Citizens Prop. Ins. Corp. v. Denetrescu, 2014 WL 1225124, — So.3d —

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Posted in Arbitration and Appraisal, Causation, Preservation and Protection, Wear and Tear
About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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