INSURANCE DISPUTES – APPRAISALS – UNBIASED AND DISINTERESTED APPRAISERS REQUIRED
A very important insurance case came out this morning from the Colorado Supreme Court. Virtually all insurance policies include a built-in dispute resolution mechanism called “appraisal.” When the insured and insurance company disagree as to the amount of loss to be paid, either side can demand the disagreement be resolved through appraisal. Each side appoints an appraiser they are responsible to pay. The two appraisers then decide who the third member of the panel, called the “umpire,” will be. A decision by any two on the issues presented is binding on the parties. The insurance policy sets forth the qualifications for the appraisers, and usually does for the umpire too.
Today, in Owners Insurance Company v. Dakota Station II Condominium Association, Inc., 2019 CO 65, the Colorado Supreme Court ruled that appraisers must be “unbiased, disinterested, without prejudice, and unswayed by personal interest” and “must not favor one side more than another.” This decision clears up differing opinions on the subject by lower courts. Now, when the appraisal mechanism is triggered, it will be very important that both the policyholder and the insurance company each select appraisers that are unbiased, disinterested, without prejudice, are unswayed by personal interest, and do not favor one side more than another.
Nelson Boyle’s civil litigation practice focuses on appeals, business, insurance bad faith, and personal injury litigation. Mr. Boyle is licensed to practice in all Colorado courts, the U.S. District Court for Colorado, the U.S. Court of Federal Claims, the Tenth Circuit Court of Appeals, and the United States Supreme Court.
The Speaker of the Colorado House of Representatives appointed Nelson to serve as a Commissioner on Colorado’s Second Judicial District Judicial Performance Commission. He also serves as a member of the Amicus Curiae Committee of the American Association for Justice and on the Board of the Colorado Trial Lawyers Association, where he co-chaired the Amicus Curiae Committee from 2010-2018.