Middle District of Florida Denies Insured’s Motion for Summary Judgment and To Compel Appraisal because Appraisal Is Premature Due to Unresolved Coverage Dispute

By Zachary D. Sonenblum

In Baytree v. Clear Blue Specialty Ins. Co., the US District Court for the Middle District of Florida denied the Insured’s motion for summary judgment and motion to compel appraisal because appraisal is premature due to an unresolved coverage dispute.

By way of brief background, the insurance Policy covered four separate buildings located on the same premises – Buildings 80, 90, 100, and 110. Based upon its investigation, including its engineer’s inspection, the insurer found $2,022.48 for covered wind damage to Buildings 90, 100, and 110 (but no damage to Building 80). Further, as the Policy did not cover the claimed interior damage to the condominium units, the $2,022.48 repair estimate for the three roofs did not exceed the applicable $5,000 policy deductible.

Baytree disputed the valuation of the covered damage based on its own repair estimate of $1,191,799.52 (for the four buildings at issue), and demanded appraisal under the Policy. In response, Clear Blue agreed “to participate in the appraisal of those areas of the subject claim in which coverage was extended by Clear Blue,” but declined to participate in appraisal for any portion of the subject claim “that goes beyond those areas specifically listed in [Clear Blue]’s estimate” as coverage was denied for those items and coverage disputes are not appropriate for appraisal. Clear Blue also asserted Plaintiff’s failure to comply with post-loss obligations, which Plaintiff did not dispute—Plaintiff merely argued that the “post-loss failures were asserted […] as part of a ‘boilerplate reservation of rights’.”

The Insured/Plaintiff Baytree then filed a motion for summary judgment seeking a declaration that it is entitled to appraisal of its entire claim (as opposed to the portion Defendant selected) under the Policy, and a motion to compel the appraisal. Notably, the policy’s appraisal provision states as follows:

Appraisal

If we and you disagree on the value of the property or the amount of loss, either may make written demand for appraisal of the 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.

The Court denied the Insured’s motion because appraisal is premature when underlying coverage disputes exist. Specifically, the Court explained:

At a minimum, the coverage disputes that Clear Blue identifies raise issues of material fact and require denial of summary judgment on the claim for appraisal because the coverage issue remains unresolved. See, e.g., Gulfside, 2021 WL 3471631 at *4 (denying motion to compel appraisal and holding that the insured’s compliance on other matters did not excuse its failure to comply with the insurer’s post-loss condition, a request for examination under oath) (citation omitted).