United States District Court, D. Maine
DECISION AND ORDER ON DEFENDANTS' MOTION FOR
Brock Hornby United States District Judge
dispute is over the effect of an insurance policy's
requirements that the parties engage appraisers to determine
the amount of loss in the event the insurer and the insured
disagree, and prohibiting suit under the policy unless the
insured has fully complied with its terms. I conclude that
the provisions are enforceable and therefore
Grant the insurer's motion for summary
judgment on the insured's claim because the insured
failed to engage in the appraisal process.
over 125 years, standard fire insurance policies have
provided that when the amount of a loss is disputed, either
the insurer or the insured can demand arbitration or
appraisal to determine the amount of loss, and that no
lawsuit can be brought on a claim unless that policy
requirement has been met. See, e.g., Hamilton v.
Liverpool & London & Globe Ins. Co., 136 U.S.
Hamilton, the Supreme Court declared:
Such a stipulation, not ousting the jurisdiction of the
courts, but leaving the general question of liability to be
judicially determined, and simply providing a reasonable
method of estimating and ascertaining the amount of the loss,
is unquestionably valid, according to the uniform current of
authority in England and in this country.
Id. at 255.
Maine, a statute requires fire insurance policies to provide
that in the event of a dispute over the value of an insured
loss, one party can demand that each party “select a
competent and disinterested appraiser, ” and the two
appraisers are to “select a competent and disinterested
umpire.” “An award in writing . . . of any two .
. . shall determine the amount of actual cash value and
loss” and, according to the statute, each party must
pay the expense of its own appraiser and half the expenses of
the umpire. 24-A M.R.S.A. § 3002. No lawsuit for the
recovery of any claim is “sustainable in any court . .
. unless all the requirements of this policy shall have been
complied with . . . .” Id. The Maine Law Court
has reviewed such terms in the past, although not focused on
the issue presented here. See, e.g., Oakes v.
Franklin Fire Ins. Co., 120 A. 53 (Me. 1923); Mowry
& Payson, Inc. v. Hanover Fire Ins. Co., 76 A. 875
case, the plaintiff insured had a homeowner's
policy with the defendant insurer that contained
provisions substantially mirroring the statutory
language. She incurred a loss on her insured
premises (by vandalism, not fire), but she and the insurer
ended up far apart on the recoverable loss. Def.'s
Statement of Material Facts (SMF) (ECF No. 21) ¶ 18-29;
Pl.'s Reply to Def.'s SMF (ECF No. 23-1) ¶
18-29. The insurer proceeded to request an appraisal
proceeding under the policy and nominated a particular
appraiser, but the insured never responded by selecting her
own appraiser. Def.'s SMF ¶ 41; Pl.'s Reply
¶ 41. Accordingly the insurer proceeded to deny her
claim based in part upon her failure to comply with the
appraisal clause. Def.'s SMF ¶ 42; Pl.'s Reply
¶ 42. She has now sued the insurer for recovery of her
loss, and the insurer has moved for summary judgment, arguing
that her failure to comply with the appraisal clause dooms
her claim. The material facts are not in
insured's only basis for opposing summary judgment is
Ms. Alfiero [the insured] lives off of social security. Ms.
Alfiero's monthly income is approximately $945.00 per
month. The appraiser[ ]s that were contacted all gave
estimates stating the appraisal would take approximately six
to eight hours depending on travel time, and the hourly fee
was $200.00 to $300.00 per hour. The total cost for just an
appraiser selected by Ms. Alfiero would be a minimum of $1,
200.00 and a maximum of $2, 400.00. The amount that an
appraiser costs vastly exceeds what Ms. Alfiero's income
is. According to Metropolitan [the insurer] they can deny her
claim because of her inability to pay for an appraiser after
they denied her proof of loss statement.
Pl.'s Opp'n (ECF No. 23) at 8.
Enger v. Allstate Ins. Co., 682 F.Supp.2d 1094 (E.D.
Cal. 2009), aff'd, 407 F. App'x 191 (9th
Cir. 2010), the court dismissed an insured's lawsuit
under a fire insurance policy with similar provisions where
the insurer invoked the appraisal policy and the insured did
not pursue it. Enger ruled that under California law
“[completion of the appraisal process is] a
precondition to Plaintiff's filing a lawsuit.”
Id. at 1099 (quoting Garner v. State Farm Mut.
Auto. Ins. Co., No. C 08-1365 CW, 2008 WL 2620900, at *7
(N.D. Cal. June 30, 2008)). Likewise in United Community
Ins. Co. v. Lewis, 642 So.2d 59 (Fla. Dist. Ct. App.
1994), a Florida court ruled that the appraisal clause was
“mandatory once invoked by one of the contracting
parties.” Id. at 60. There is also the approving
language in Hamilton quoted at the outset of this
opinion. And in Fisher v. Merchant's Ins. Co.,
50 A. 282, 284 (Me. 1901), Maine's Law Court stated:
“A determination by arbitration of the amount of loss
having been especially made by the parties a condition
precedent to any right of action for recovery of damages for
the loss, it was incumbent upon the plaintiff to prove
performance or a valid excuse for nonperformance.” The
parties have cited and I have found no contrary authority.
Nor is this feature of the appraisal clause hidden from the
lay public: the Maine Bureau of Insurance website maintains a
“Frequently Asked Questions” page on homeowners
insurance, and it too states that the parties “each
choose an appraiser at [their] own expense.” Maine
Bureau of Insurance, Homeowners
Insurance―Frequently Asked Questions, State of
Maine Professional and Financial Regulation,
(last visited June 28, 2017).
conclude that the appraisal process is mandatory under Maine
law, that the insured failed to participate in the process,
and that she therefore cannot proceed in this lawsuit to
recover her claim under the policy. Nothing in the statute,
the policy or the caselaw suggests that inability to pay is
seems like a harsh outcome if indeed the insured homeowner
could not cobble together resources to pay for an
appraiser. But the statute and the cases suggest no
alternative. I note that the same result of no coverage and
no insurance ...