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How is the Impartiality of an Appraiser Determined in a Controversy Over Covered Losses?

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The Colorado Court of Appeals answered that question in Owners Insurance Company v. Dakota Station II Condominium Association, (2017 COA 103).

Owners Insurance Company (“Owners”) issued a property damage insurance policy to Dakota Station II Condominium Association, Inc. (Dakota). Storms damaged buildings in the community owned by Dakota. The parties disagreed about the total amount of damages.  Since there was disagreement, a neutral umpire was hired, as per the policy.

The umpire adopted estimates from Owners’ appraiser, Mark Burns (“Burns”), and from Dakota’s appraiser, Laura Haber (“Haber”). Burns disagreed with the final award but Haber and the umpire signed off on the almost 3 million dollar award, and Owners paid Dakota. Owners motioned to vacate the award on grounds that Dakota’s appraiser was not impartial as required by law.

The question became whether Haber was an impartial appraiser as necessary under the insurance policy. The policy did not define impartial, and the trial court construed it as similar to an expert at trial—that the appraiser would rely on her experience and knowledge and not be influenced by the parties. The Court disagreed with Owners’ contention that the appraiser could not favor one party over another. The policy plainly said the appraisers would put forth a value on behalf of the party that selects them. The umpire, who is not selected by either party, made the final determination.

The Court examined all of Owners’ claims of error—and determined that the trial court got all its conclusions correct, and all challenges to Haber’s impartiality were unfounded, at least based on the evidence put forth. While Owners offered objective factors that could demonstrate a lack of impartiality, it pointed to no action, decision, or analytical choice made by Haber in rendering her appraisal report that showed a subjective lack of impartiality. It identified no appraisal assumption made by Haber that should have been assumed differently but for the fact that it was the product of bias. For these reasons, the Court affirmed the lower court’s judgment denying Owners’ motion to vacate the award.

The Metier Law Firm is committed to assisting people with personal injury claims throughout Colorado, Wyoming and Nebraska, and we frequently serve as co-counsel to law firms nationwide. Tom Metier recently secured the largest personal injury verdict in Colorado.