Tred R. Eyerly | Insurance Law Hawaii
The court granted the insured’s motion for partial summary judgment, allowing an appraisal to go forward even with outstanding coverage issues in dispute. DC Plastic Products Corp. v. Westchester Surplus Lines Ins. Co., 2021 U,.S. Dist. LEXIS 95908 (D. N.J. May 19, 2021).
DC Plastic’s property was damaged by Superstorm Sandy in October 2012. Claims submitted to Westchester resulted in a payment of $951,102.89 to DC Plastic. The parties disagreed on whether further payments were due. In 2017, DC Plastic sued Westchester for additional payments. DC Plastic moved to compel an appraisal for its claims, requesting that the court appoint an umpire for the appraisal process. Westchester cross-moved to dismiss the case in its entirety.
DC Plastic’s complaint asked that the court appoint an umpire. The policy stated if the parties could not agree on the amount of loss, each party would select an appraiser, who would then agree upon an umpire. If they could not agree, either party could request the court to appoint the umpire. Therefore, the court was authorised to select the umpire here.
Nevertheless, Westchester argued that the court should not yet appoint an umpire because there were still outstanding coverage issues. But Westchester did not point to anything in either the case law or the policy that stated that coverage issues must be handled before the appraisal process. New Jersey law simply made it clear that appraisers could not make legal determinations and could only determine a disputed amount of loss, not a party’s liability. Appointing an umpire would not prevent Westchester from contesting liability later on to all or part of DC Plastic’s claims. Therefore, the court directed the parties to proceed with the appraisal process as set forth in the policy. Westchester’s motion was denied.