United States District Court, D. Maine
MEMORANDUM DECISION AND ORDER ON DEFENDANT'S
MOTION TO COMPEL APPRAISAL AND STAY PROCEEDINGS
H. RICH, III UNITED STATES MAGISTRATE JUDGE
insurance coverage action, the defendant, Transguard
Insurance Company of America, Inc.
(“Transguard”), moves over the plaintiff's
objection to (i) compel appraisal of the damaged real
property at issue and (ii) stay this action until the
appraisal process is complete. The parties' central
disagreement is over whether or not Transguard waived its
contractual right to invoke appraisal. Because I find that
Transguard did not waive that right, I grant its motion to
compel appraisal and for a stay of these proceedings.
However, I also set a deadline of January 31, 2019, for the
completion of the appraisal process.
property that is the subject of this action, a nearly
century-old building in Windham, Maine, caught fire on March
16, 2017. See Defendant Transguard Insurance Company
of America, Inc.'s Motion To Compel Appraisal and To Stay
Further Discovery and Proceedings (“Motion”) (ECF
No. 35) at 2; Opposition to Motion To Compel Appraisal and To
Stay (“Opposition”) (ECF No. 51) at 3. The next
day, the plaintiff, Liberty Bell Moving & Storage, Inc.
(“Liberty Bell”), notified Transguard of the
loss. See Motion at 2. On April 19, 2017, at
Transguard's request, Liberty Bell provided an estimate
of the value of the loss in the amount of $1, 166, 040.
See Motion at 2; Opposition at 3-4; see
also Exh. 1 (ECF No. 32-1) to Opposition to Motion To
Quash Subpoena or for Protective Order (“Subpoena
Opposition”) (ECF No. 32). On May 19, 2017, Transguard
engaged its own inspector, who inspected the building on May
25, 2017, and produced a report on June 30, 2017.
See Motion at 3; Opposition at 4. On August 29,
2017, Transguard provided Liberty Bell with its own estimate
of a cost of $135, 960 to restore the building to its
pre-fire condition. See Motion at 3; Opposition at
5. Liberty Bell responded with a $1, 216, 972 cost estimate
on October 2, 2017. See Motion at 4; Opposition at
5. Transguard, in turn, informed Liberty Bell on October 26,
2017, that its peer reviewer had reaffirmed its prior
estimate. See Motion at 4; Opposition at 5.
Transguard proposed a joint inspection of the property by the
parties' respective engineers, but the parties could not
agree on a schedule to complete it. See Motion at 5;
Opposition at 5-6; see also Exh.12 (ECF No. 32-12)
to Subpoena Opposition at 6.
Bell made a final demand on December 6, 2017, following which
it filed this suit on December 22, 2017. See Motion
at 5; Opposition at 6. The summons was returned executed on
January 8, 2018, and Transguard filed its answer on February
20, 2018, following the court's grant of two consented-to
motions to extend its time to answer. See ECF Nos.
5-7, 10-12. The court entered a scheduling order on February
21, 2018. See ECF No. 13. From March 14, 2018,
through July 11, 2018, the court granted a series of four
unopposed or joint motions to extend deadlines, two of which
accommodated the parties' unsuccessful effort to settle
the case through a May 7, 2018, judicial settlement
conference, see ECF Nos. 14-15, 19, 21-26.
proposed to have a neutral third-party estimator provide a
“nonbinding opinion” as to the value of the loss,
and Liberty Bell rejected that proposal on July 27, 2018.
See Motion at 5 & Exh. A (ECF No. 35-1) thereto;
Opposition at 17-18. On August 7, 2018, Transguard made a
written demand for appraisal, which Liberty Bell rejected on
August 7, 2018. See Motion at 5; Opposition at 17.
Transguard then filed this motion on August 20, 2018.
See ECF No. 35. On October 24, 2018, I heard oral
argument on the motion. See ECF No. 62.
request for appraisal is based on two provisions contained in
the parties' insurance contract. The first, an
endorsement to the Common Policy Conditions and the
Commercial Property Conditions, provides:
If we and you disagree on the value of the property or the
amount of loss, either may make written demand for an
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. Each party will:
a. Pay its chosen appraiser; and
b. Bear the other expenses of the appraisal
and umpire equally.
If there is an appraisal, we will still retain our right to
deny the claim.
(ECF No. 35-2) to Motion at 80. The second, an endorsement to
the Maine - Standard Fire Policy Provisions, provides:
In case the insured and this Company shall fail to agree as
to the actual cash value or the amount of loss, then, on the
written demand of either, each shall select a competent and
disinterested appraiser and notify the other of the appraiser
selected within twenty days of such demand. The appraisers
shall first select a competent and disinterested umpire; and
failing for fifteen days to agree upon such umpire, then, on
request of the insured or this Company, such umpire shall be
selected by a judge of a court of record in the state in
which the property covered is located. The appraisers shall
then appraise the loss, stating separately actual cash value
and loss to each item; and, failing to agree, shall submit
their differences, only, to the umpire. An award in writing,
so itemized, of any two when filed with this Company shall
determine the amount of actual cash value and loss. Each
appraiser shall be paid by the party selecting that appraiser
and the expenses of appraisal and umpire shall be paid by the
Id. at 98, 100.
Applicable Legal Standard
their briefs, both parties analogize the question of waiver
of the right to an appraisal to the question of waiver of the
right to arbitration. See Motion 10-15; Opposition
at 7-9. The analogy is an apt one: both rights derive from a
contractual agreement to utilize an extrajudicial method of
resolving all or part of a dispute. Hence, in determining
whether Transguard has waived its right to an appraisal, I
apply the test for determining whether a party has waived its
right to arbitration, which involves inquiry into
“whether there has been an undue delay in the assertion
of arbitral rights and whether, if arbitration supplanted
litigation, the other party would suffer unfair
prejudice.” Joca-Roca Real Estate, LLC v.
Brennan, 772 F.3d 945, 948 (1st Cir. 2014).
turn, “[t]hat determination is informed by a salmagundi
of factors, including: the length of the delay, the extent to
which the party seeking to invoke arbitration has
participated in the litigation, the quantum of discovery and
other litigation-related activities that have already taken
place, the proximity of the arbitration demand to an
anticipated trial date, and the extent to which the opposing
party would ...