MCWG Decisions, 2019
Fed. Ins. Co. v. Anderson, No. 18-CV-06920-JST, 2019 WL 8128570 (
In this case, the insurer successfully moved to compel an appraisal to establish disputed valuations under its insurance policy. The insureds had purchased a luxury home situated on a 20-acre estate in
Federal invoked the insurance policy's appraisal procedure, but the insureds refused to participate. Federal brought an action for declaratory relief seeking to enforce its right to appraisal, and the insureds filed cross-claims for breach of contract and bad faith. The insureds argued that the parties' dispute should proceed in court, not via appraisal, because the dispute involved legal issues relating to the insureds' causes of action, and because Federal's methodology for calculating the costs to replace the home was flawed, such that the appraisal could not proceed.
The court agreed with Federal, stayed the litigation and ordered the insureds to comply with the insurance policy's appraisal provision. It held that the duty to resolve disputes through appraisal was governed by federal and state arbitration law, which mandated that appraisal proceed prior to any litigation of coverage issues or other challenges.
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