United States District Court, D. Colorado
Kristen L. Mix United States Magistrate Judge
matter is before the Court on Defendant's Motion
to Establish Protocols for Appraisal Proceeding
[#38] (the “Motion”). Plaintiff
filed a Response [#44] in opposition to the Motion, and
Defendant filed a Reply [#48]. The Court has reviewed these
filings, the entire docket, and the applicable law, and is
sufficiently advised in the premises. For the reasons set
forth below, the Motion [#38] is DENIED.
Summary of the Case
an insurance company, issued Property Insurance Policy No.
CPA-3003502-24 (the “Policy”) to Plaintiff, the
owner of commercial property in Denver, Colorado (the
“Property”). Am. Compl. [#27]
¶¶ 1-3, 7. The Policy covered “direct
physical loss of or damage to the insured premises as a
result of perils including wind and hail.” Id.
24, 2015, the Property sustained damage caused by a hailstorm
and Plaintiff subsequently provided notice to Defendant
seeking the cost to fix the damage. Id. ¶¶
11-12. Plaintiff provided Defendant a Sworn Statement in
Proof of Loss estimating the damages from the hailstorm to be
$1, 125, 861.35. Id. ¶ 20. Defendant
investigated the claim and based on the advice of its
consulting expert, issued a check for assessed damages in the
amount of $76, 371.37. Id. ¶ 21. On
approximately November 8, 2016, Plaintiff invoked the
appraisal provision of the Policy, which states:
If “you” and “we” do not agree on the
amount of the loss or the value of covered property, either
party may demand that these amounts be determined by
If either makes a written demand for appraisal, each will
select a competent, independent appraiser and notify the
other of the appraiser's identity with[in] 20 days of
receipt of the written demand. The two appraisers will then
select a competent, impartial umpire. If the two appraisers
are unable to agree upon an umpire within 15 days,
“you” or “we” can ask a judge or a
court of record in the state where the property is located to
select an umpire.
Id. ¶ 31, 33. Plaintiff subsequently selected
George Keys (“Mr. Keys”) as its appraiser.
Id. ¶¶ 34, 45. Defendant filed a Motion
[#30] seeking to disqualify Mr. Keys, which the Court
recommended denying. See Recommendation [#50]. The
Recommendation was thereafter adopted by the District Judge.
See Order [#52].
present Motion [#38], Defendant asks the Court to order that
the appraisers follow proposed protocols that Defendant
believes will ensure a fair and impartial appraisal process.
Motion [#38] at 3. Plaintiff objects to the relief
sought in the Motion [#38], on the basis that the proposed
protocols are either redundant of existing obligations
recognized by the parties or constitute an improper attempt
to re-write the parties' contract. See
generally Response [#38].
Court applies the principles of contract interpretation when
interpreting insurance policies and attempts to carry out the
parties' intent and reasonable expectations when they
drafted the policies.” 5 Star Bank v. Am. Family
Mut. Ins. Co., No. 11-cv-02844-CMA-MEH, 2012 WL 4378395,
at *3 (D. Colo. Sept. 25, 2012) (citing Cotter Corp. v.
Am. Empire Surplus Lines Ins., 90 P.3d 814, 819 (Colo
2004). Thus, the Court is reluctant to impose additional
appraisal protocols where the Policy makes no mention of any
such protocols, particularly where Plaintiff objects to them.
See Compass Ins. Co. v. City of Littleton, 984 P.2d
606, 613 (Colo. 1999) (stating that “[c]ourts should
not rewrite insurance policy provisions that are clear and
on the overarching issue of whether the Court should impose
guidelines on the appraisal process, Defendant cites to
Auto-Owners Ins. Co. v. Summit Park Townhome
Ass'n, 129 F.Supp.3d 1150, 1155-56 (D. Colo. 2015).
In Summit Park, the Court stated: “Courts
regularly impose guidelines . . . to govern appraisal
processes in insurance contracts.” Id.
However, as recognized in another case in this district,
Court-imposed appraisal protocols are warranted in
circumstances where “the parties are deadlocked or
otherwise incapable of engaging cooperatively in the
appraisal process.” PB Prop. Holdings, LLC v.
Auto-Owners Ins. Co., No. 16-CV-01748-WJM-STV, 2016 WL
9415215, at *4 (D. Colo. Oct. 19, 2016), adopted by
No. 16-CV-01748-WJM-STV, Docket No. 34 (Jan. 26, 2017).
the plain language of the Policy provides that the appraisal
process is as follows: (1) the parties each select an
appraiser; (2) the two appraisers select a competent,
impartial umpire; and (3) if the two appraisers are unable to
agree on an umpire, either may request that a court with
proper jurisdiction select the umpire. See Ex. A
[#38-1] at 67. The appraisers then “determine and state
separately the amount of each loss, ” and submit a
written report. Id. In the event that the appraisers
cannot come to an agreement, any dispute will be submitted to
the umpire. Id. The issue that had created a
“deadlock” in the appraisal process here was
whether Mr. Keys should be disqualified as an appraiser. The
Court's recent resolution of that issue allows the
parties to continue with the appraisal process provided in
the Policy. See Order [#52]. Thus, the Court cannot
assume that the parties will be incapable of engaging
cooperatively in the remainder of the appraisal process
(i.e., selecting an umpire, determining the amount
of the loss, and submitting any disagreement to the umpire)
such that further Court intervention is necessary at this
point in the litigation. See PB Prop. Holdings, LLC,
2016 WL 9415215, at *4. Additionally, the joint selection of
a competent, impartial umpire by the appraisers (with Court
assistance, if required) should suffice to address
Defendant's concerns regarding ensuring a fair and
impartial appraisal process at this stage. See Ex. A
[#38-2] at 67.