Judge: Michelle C. Kim, Case: 23STCP02866, Date: 2023-11-08 Tentative Ruling
Case Number: 23STCP02866 Hearing Date: November 8, 2023 Dept: 31
Tentative Ruling
Judge Kerry Bensinger, Department 31
HEARING DATE: November
8, 2023 TRIAL DATE: N/A
CASE: Certain
Underwriters at Lloyds, London Subscribing to Policy Number ATR/LR/340252 v. SHBR
Holdings LLC
CASE NO.: 23STCP02866
PETITION
TO APPOINT AN INSURANCE APPRAISAL UMPIRE
MOVING PARTY: Petitioner
Certain Underwriters at Lloyds, London Subscribing to Policy Number
ATR/LR/340252
RESPONDING PARTY: SHBR Holdings LLC
I. Background
This matter arises from alleged damage to a commercial
building owned by Respondent, SHBR Holdings LLC, due to a fire. Respondent thereafter made a claim against
Petitioner, Certain Underwriters at Lloyds, London Subscribing to Policy Number
ATR/LR/340252, for losses arising from the fire. Per the policy between the parties, each party
appointed an appraiser. The appraisers,
however, could not agree on the amount of Respondent’s property loss nor on the
selection of an umpire. On August 9,
2023, Petitioner filed this Petition to Appoint an Insurance Appraisal
Umpire. On October 26, 2023, Respondent
filed a Response to the Petition.
No reply
has been filed.
II. Legal Standard and Discussion
The
parties’ appraisers disagree over the value of the damage to Respondent’s property
and further disagree as to whom should be appointed as the neutral umpire.
Insurance
Code section 2071, subdivision (a) governs the standard form for insurance policies. Section 2071 states, in relevant part, as
follows:
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
request of either, each shall select a competent and disinterested appraiser
and notify the other of the appraiser selected within 20 days of the
request. Where the request is accepted, the appraisers shall first select
a competent and disinterested umpire; and failing for 15 days to agree upon the
umpire, then, on request of the insured or this company, the umpire shall be
selected by a judge of a court of record in the state in which the property
covered is located. Appraisal proceedings are informal unless the insured
and this company mutually agree otherwise. For purposes of this section,
“informal” means that no formal discovery shall be conducted, including
depositions, interrogatories, requests for admission, or other forms of formal
civil discovery, no formal rules of evidence shall be applied, and no court
reporter shall be used for the proceedings. 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.
(Ins. Code, § 2071, subd. (a); Mahnke
v. Superior Court (2009) 180 Cal.App.4th 565, 572.)
Appraisal
proceedings are a form of informal arbitration and generally are subject to the
rules governing arbitration. (See Code Civ. Proc., § 1280, subd. (a); Louise
Gardens of Encino Homeowners’ Assn, Inc. v. Truck Ins. Exch., Inc. (2000)
82 Cal.App.4th 648, 658; Appalachian Insurance Co. v. Rivcom Corp.
(1982) 130 Cal.App 3d 818, 824; Lambert v. Carneghi (2008) 158
Cal.App.4th 1120, 1129; Devonwood Condominium Owners Ass’n v. Farmers Ins.
Exch. (2008) 162 Cal.App.4th 1498, 1505.) However, while the
agreement providing for arbitration often gives the arbitrator broad powers,
appraisers generally have more limited powers. (See, e.g., Kirkwood v.
California State Auto. Assn Inter-Ins. Bureau (2011) 193 Cal.App.4th 49,
58-59 [finding that, unlike arbitrators, appraisers have no power to interpret
insurance policy or governing statutes]; Doan v. State Farm Gen. Ins. Co. (2011)
195 Cal.App.4th 1082, 1096 [appraisers’ jurisdiction limited to amount of
damages (precluded from determining proper method for calculation].)
Accordingly,
Code of Civil Procedure section 1281.6, which governs arbitration proceedings,
may be applied to the selection of a neutral umpire.
Here,
Petitioner selected Jeff S. Caulkins as their appraiser and Respondent selected
Charles Younes as their appraiser to assess the fire damage to Respondent’s
property. (Caulkins Decl., ¶ 5.) The appraisers disagreed on the amount
of loss and further, did not agree on the chosen umpire for the
appraisal. (Caulkins Decl., ¶ 14.) Pursuant to the policy issued to
Respondent, if the appraisers for the parties cannot agree upon an umpire
within 15 days, “either may request that selection be made by a judge of a
court having jurisdiction.” (Black
Decl., Ex. 2.)
Pursuant
to Code of Civil Procedure section 1281.6, Petitioner now requests, and
Respondent does not dispute, the two steps that are involved in the selection:
(1) the Court is to nominate five individuals to serve as the umpire and the
parties will have five days to agree upon an umpire, and (2) if the parties
cannot agree within the five-day period, the Court must appoint an umpire from the
Court’s list of nominees.
Given
the parties’ agreement, the Court completes the first step. Petitioner and Respondent have each nominated
five individuals to serve as the umpire. Only Respondent has provided qualifications
for their list of proposed umpires. Upon review of the parties’ list, the Court
selects the following nominees:
III. Conclusion
The
Petition is GRANTED. The parties are ordered to select an umpire
from the list of nominees within five (5) days’ notice of the Court Order, as
required by Code of Civil Procedure section 1281.6. If the parties fail
to select an umpire within 5 days, the Court shall appoint an umpire from the
list of nominees.
Petitioner
to give notice.
Dated: November 8,
2023 ___________________________________
Kerry
Bensinger
Judge
of the Superior Court