{"id":896140,"date":"2019-07-11T10:21:43","date_gmt":"2019-07-11T16:21:43","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=896140"},"modified":"2019-07-09T11:33:36","modified_gmt":"2019-07-09T17:33:36","slug":"appraisal-and-impartiality-of-appraisers","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/appraisal-and-impartiality-of-appraisers\/","title":{"rendered":"Appraisal and the Impartiality of Appraisers"},"content":{"rendered":"\n

Timothy Burchard | Property Insurance Coverage Law Blog<\/a> | July 6, 2019<\/p>\n\n\n\n

Recently, the Colorado Supreme Court issued its opinion in Owners Ins. Co. v. Dakota Station II Condominium Association<\/em>,1<\/sup> on appraiser impartiality. Specifically, the court discussed the meaning and interpretation of impartiality<\/em> under the insurance policy and whether a contingent-cap fee agreement between the appraiser and Dakota Station rendered the appraiser not impartial as a matter of law.<\/p>\n\n\n\n

The story starts off in a very familiar way. Dakota Station made two insurance claims for weather damage to its property, a dispute arose, and Dakota Station invoked the appraisal clause in the insurance policy. The appraisal clause stated:<\/p>\n\n\n\n

If [Owners] and [Dakota] disagree on the value of the property or the amount of loss, either may make a written demand for an appraisal of loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property and amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding.<\/p><\/blockquote>\n\n\n\n

Both appraisers prepared estimates, but could not come to an agreement, so the appraisal decision went to an umpire. The appraisers\u2019 estimates considered six total repair categories. The umpire agreed to four out of six repair categories in Owners appraiser estimate and agreed to two of six repair categories in the Dakota Station appraiser\u2019s estimate, one of which was for the roofing system. The umpire drafted an appraisal award, which was signed by the umpire and Dakota Station\u2019s appraiser. Owners paid the appraisal award.<\/p>\n\n\n\n

Months later, \u201cOwners called foul\u201d2<\/sup> and challenged the appraisal award in the lower courts. Owners challenged the appraisal award through a motion to vacate, claiming Dakota Station\u2019s appraiser did not act impartially as required by the appraisal clause in the policy. The lower court disagreed, dismissed Owners motion to vacate, and a division of the court of appeals affirmed the dismissal. Owners then appealed to the Colorado Supreme Court.<\/p>\n\n\n\n

The Colorado Supreme Court set out the issues it would review in the appeal:<\/p>\n\n\n\n

[H]aving agreed to review the case, we must interpret the policy\u2019s impartiality requirement and determine whether a contingent-cap fee agreement between Dakota and its appraiser rendered the appraiser partial as a matter of law.<\/p><\/blockquote>\n\n\n\n

Here are takeaways from the Colorado Supreme Court opinion:<\/p>\n\n\n\n