{"id":902061,"date":"2024-01-02T15:16:03","date_gmt":"2024-01-02T22:16:03","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=902061"},"modified":"2024-01-02T15:16:05","modified_gmt":"2024-01-02T22:16:05","slug":"insurance-appraisal-isnt-arbitration-alabama-supreme-court","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/insurance-appraisal-isnt-arbitration-alabama-supreme-court\/","title":{"rendered":"Ala. Supreme Court Rules Appraisal Isn\u2019t Arbitration, Dismisses Insurer\u2019s Appeal"},"content":{"rendered":"\n

Jim Sams | Claims Journal<\/a><\/p>\n\n\n\n

A petition to invoke appraisal is not the same thing as a motion to compel arbitration, the Alabama Supreme Court ruled Friday.<\/p>\n\n\n\n

The high court\u00a0dismissed an appeal\u00a0by Great American Insurance Co. that sought to overturn a trial court\u2019s order denying its motion to compel an appraisal in a dispute over hurricane damage to a beachfront condominium complex. The insurer argued that its motion was subject to the Federal Arbitration Act because an appraisal<\/a> is akin to arbitration, which means it can appeal the Baldwin County Circuit Court\u2019s decision to deny it.<\/p>\n\n\n\n

A unanimous Alabama Supreme Court disagreed.<\/p>\n\n\n\n

\u201cAs we have noted, Alabama cases have consistently drawn distinctions between appraisal and arbitration,\u201d the court\u2019s unsigned opinion says. \u201cAlabama law focuses on whether the parties to the contract intended to arbitrate the dispute at issue based on the language of the contract, and, despite the prolific presence of appraisal clauses such as the one at issue in insurance contracts, our courts have never held that \u2018appraisal\u2019 is the same procedure as \u2018arbitration.’\u201d<\/p>\n\n\n\n

As Hurricane Sally approached the Alabama coast in September 2020, the main water line to the 12-story Crystal Shores condominium complex in Gulf Shores was shut off in preparation for landfall. The owner of Unit 606, however, had left a bathtub faucet open before he evacuated. When the water was turned back on after the storm passed, water ran into the tub for more than 24 hours, causing an overflow that flooded a stack of condominium units below.<\/p>\n\n\n\n

The Crystal Shores Owners Association filed a claim with its three insurers; Great American, RSUI Indemnity Co. and Landmark American Insurance Co.<\/p>\n\n\n\n

The association hired Servpro of Montgomery to repair the damage, but the insurers refused to pay the full amount of its invoices. The owner of the Servpro franchise filed a lawsuit against Crystal Shores. The Owners Association filed an answer and a counterclaim. The association also filed a motion with the Baldwin County court asking to amend its complaint to add RSUI, Landmark and Great American. The court approved.<\/p>\n\n\n\n

Great American filed a motion to dismiss the Owners Association\u2019s complaint, or in the alternative, to stay proceedings and resolve the dispute with appraisal. Crystal Shores objected, saying tat the insurers had based its denial of its claims on exclusions in the policy and \u201ccoverage issues\u201d that could not be resolved through appraisal.<\/p>\n\n\n\n

Great American responded by saying the tub overflow issue had been resolved when it denied the claim by disclaiming coverage. The only unresolved issue was the amount of the loss, the insurer said.<\/p>\n\n\n\n

The circuit court denied Great American\u2019s motion to dismiss. Great American appealed. Crystal Shores asked the Supreme Court to dismiss what it called an \u201cinterlocutory appeal,\u201d arguing that the circuit court\u2019s ruling was not final.<\/p>\n\n\n\n

The Supreme Court agreed to dismiss the appeal, but did not agree on the grounds. Six of the court\u2019s nine justices joined in an opinion that said Great American\u2019s requested appraisal was not an \u201carbitration\u201d under federal law so it isn\u2019t subject to the Federal Arbitration Act. The arbitration clause did not provide a specific standard to determine the value of the loss. Also, an appraisal would not resolve the entire dispute because there is disagreement about coverage and causation in addition to value, the majority opinion says.<\/p>\n\n\n\n

Three other justices wrote an opinion that concurred in the decision to dismiss, but said the case should have been decided using state law alone.<\/p>\n\n\n\n

\u201cI see no need to consider federal authority here because our own precedents have determined that an appraisal does not constitute arbitration,\u201d the concurring opinion written by Justice Jay Mitchell says.<\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Jim Sams | Claims Journal A petition to invoke appraisal is not the same thing as a motion to compel arbitration, the Alabama Supreme Court ruled Friday. The high court\u00a0dismissed an appeal\u00a0by Great American Insurance Co. that sought to overturn a trial court\u2019s order denying its motion to compel an appraisal in a dispute over… Continue reading Ala. Supreme Court Rules Appraisal Isn\u2019t Arbitration, Dismisses Insurer\u2019s Appeal<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[10235],"tags":[9895,517,351],"class_list":["post-902061","post","type-post","status-publish","format-standard","hentry","category-insurance-appraisal","tag-advise-consult","tag-alabama","tag-insurance-appraisals","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nAla. 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