Certiorari to the Colorado Court of Appeals, Court
of Appeals Case No. 16CA733
for Petitioner: Wheeler Trigg ODonnell LLP, Terence M.
Ridley, Evan Bennett Stephenson, Kayla L.
Scroggins-Uptigrove, Denver, Colorado, Wheeler Waters, P.C.,
Karen H. Wheeler, Jami A. Maul, Greenwood Village, Colorado
for Respondent: Orten Cavanagh & Holmes, LLC, Jonah G. Hunt,
for Amicus Curiae American Insurance Association: Foran
Glennon Palandech Ponzi & Rudloff PC, Amy M. Samberg, Matthew
S. Ponzi, Thomas Orlando, Denver, Colorado
for Amicus Curiae Colorado Defense Lawyers Association:
American Family Insurance Legal Group, Dylan Lewis,
Englewood, Colorado, Ruebel & Quillen, LLC, Jeffrey Clay
Ruebel, Westminster, Colorado
for Amicus Curiae Colorado Trial Lawyers Association: The
Frankl Law Firm, P.C., Keith E. Frankl, Greenwood Village,
Colorado, Speights & Worrich Colorado LLC, David Roth,
for Amici Curiae National Association of Public Insurance
Adjusters and Rocky Mountain Association of Public Insurance
Adjusters: Sherman & Howard, LLC, Christopher R. Mosley,
for Amici Curiae Property Casualty Insurers Association of
America and Colorado Civil Justice League: Sweetbaum Sands
Anderson PC, Jon F. Sands, Marilyn S. Chappell, Denver,
for Amicus Curiae United Policyholders: Reed Smith, LLP, Jim
Davis, Chicago, Illinois
A condominium association, Dakota, filed two claims with its
insurer, Owners, for weather damage. The parties couldnt
agree on the money owed, so Dakota invoked the appraisal
provision of its insurance policy.
The appraisal provision requires each party to "select a
competent and impartial appraiser." An umpire would be
selected by the parties or appointed by the court. The
appraisers would assess the value of the property and amount
of loss. Any disagreement would be submitted to the umpire.
Any agreement as to the values reached by at least two of the
three would bind them all.
The parties each selected an appraiser, putting the rest of
the provisions terms into motion. Ultimately, the appraisers
submitted conflicting value estimates to the umpire, and the
umpire issued a final award, accepting some estimates from
each appraiser. Dakotas appraiser signed onto the award, and
Owners paid Dakota.
Later, Owners called foul. It moved to vacate the award,
arguing that Dakotas appraiser was not "impartial"
as required by the insurance policys appraisal provision and
that she failed to disclose material facts. The trial court
disagreed and "dismissed" the motion to vacate. A
division of the court of appeals affirmed.
Having agreed to review the case, we must interpret the
policys impartiality requirement and determine whether a
contingent-cap fee agreement between Dakota and its appraiser
rendered the appraiser partial as a matter of law. We
conclude that the plain language of the policy requires
appraisers to be unbiased, disinterested, and unswayed by
personal interest. They must not favor one side more than
another, so they may not advocate for either party. We also
hold that the contingent-cap fee agreement didnt render
Dakotas appraiser partial as a matter of law.
Accordingly, we affirm the judgment of the court of appeals
with respect to the contingent-cap fee agreement, reverse
with respect to the impartiality requirement, and remand for
further proceedings consistent with this opinion.
I. Facts and Procedural History
Dakota Station II Condominium Association Inc., the owner of
a condominium development in Littleton, filed two claims with
its insurer, Owners Insurance Company, for weather damage to
Dakota disagreed with Owners about the value of the claims,
so it invoked the following appraisal provision of its
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
In accordance with this provision, each party selected an
appraiser. The two appraisers couldnt agree on an umpire, so
the court appointed one. The appraisers evaluated the
property and submitted their conflicting estimates to the
umpire. Each estimate included six cost categories.
After reviewing the appraisers estimates and supporting
documentation, the umpire adopted Owners appraisers
estimates in four of the six cost categories and Dakotas
appraisers estimates in the other two. In total, the umpire
found that the replacement cost reached almost $ 3
Even though the umpire adopted four of Owners appraisers
six cost estimates, Owners appraiser didnt agree with the
roof-cost estimate, the big-ticket category ($ 2,553,434.50),
and wouldnt sign the final determination of
costs. However, Dakotas appraiser and the
umpire both signed the award. Owners then paid Dakota.
Months later, Owners filed a petition to vacate the award
pursuant to section 13-22-223, C.R.S. (2018), of the Colorado
Uniform Arbitration Act, arguing that Dakotas appraiser was
impermissibly partial and failed to disclose material facts.
Owners asserted that appraisers must be competent and
impartial "like arbitrators." Owners later filed a
clarification of the relief requested, explaining that the
appraisers "duties of impartiality stem from the
As relevant here, Owners alleged that Dakotas appraiser
acted improperly by entering into a contract with the public
adjuster that capped her fees at five percent of the
insurance award (allegedly giving her a financial interest in
Later, at an evidentiary hearing, Owners counsel asked
Dakotas appraiser whether she felt that "its
appropriate to be an advocate for an insured when youre
acting as an appraiser." The appraiser replied: "I
think its natural. I think youre an advocate for ...
Owners." In closing arguments, Owners counsel argued
that this testimony further demonstrated the appraisers
The trial court "dismissed" the petition.
Ultimately, the court concluded that Dakotas appraiser
didnt act improperly or unlawfully. The trial court rejected
Owners contention that appraisers must act as impartially as
an umpire or arbitrator in every instance. It reasoned that
the law requires appraisers to be impartial in the sense that
they must render their decisions based upon experience ...