In a ruling issued immediately from Iowa, the court docket enforced an appraisal award issued in favor of house owners Gregory and Karen Larson, who suffered hailstorm injury to their property in March 2023. The case, Larson v. Auto-Homeowners Insurance coverage Firm, 1 presents an vital reminder that the appraisal course of and awards will not be simply overcome primarily based on dissatisfaction with the end result.
The dispute arose when the Larsons and their insurer disagreed over the scope and valuation of the hail injury. A central level of rivalry concerned whether or not undamaged siding must be changed to take care of a fairly uniform look, a requirement underneath Iowa legislation. Pursuant to their coverage, the Larsons invoked the appraisal provision to find out the quantity of their loss. Every celebration chosen an appraiser, and the 2 appraisers agreed upon an umpire, Lee Shepherd, to resolve any disputes.
The appraisal proceeded based on plan till the appraisers couldn’t attain an settlement, at which level the umpire took over. Shepherd carried out an unbiased inspection after each appraisers agreed to not be current and in the end issued an appraisal award within the quantity of $208,194.47. This determine matched the quantity proposed by the Larsons’ appraiser and exceeded the quantity listed within the Larsons’ unique sworn proof of loss by over $80,000. The Larsons’ appraiser signed the award. Auto-Homeowners’ appraiser refused to signal, criticizing the umpire’s course of.
Auto-Homeowners responded by submitting a movement to put aside the umpire’s award, claiming mistake, bias, and misfeasance. The corporate contended that the umpire failed to carry discussions with both appraiser, didn’t facilitate deliberations, and primarily adopted the policyholders’ appraiser’s place wholesale. They argued that this lack of interplay and the truth that the award exceeded the proof of loss indicated that the method was not neutral or truthful. In line with Auto-Homeowners, the award must be vacated and the matter returned to court docket.
The Larsons, represented by Merlin Regulation Group lawyer Jonathan Bukowski, opposed the movement and filed their very own movement to implement the award. They argued that the method complied with each the insurance coverage coverage and Iowa legislation. The coverage doesn’t require the umpire to deliberate with appraisers or maintain joint inspections, and Iowa courts have lengthy held that appraisers and umpires are chosen for his or her experience and permitted to achieve their very own unbiased conclusions.
The Larsons identified that the umpire had acquired detailed estimates from either side, reviewed them, and made his personal web site inspection earlier than reaching a choice. That the umpire’s conclusions mirrored these of the policyholders’ appraiser didn’t, of their view, point out bias, solely settlement on the information and mandatory scope of repairs. Moreover, the quantity within the proof of loss doesn’t prohibit the appraisal panel, whose operate is to determine the precise quantity of the coated loss.
The court docket agreed with the Larsons. In its ruling, it reiterated the excessive threshold required underneath Iowa legislation to overturn an appraisal award. Iowa requires clear proof of fraud, mistake, or misfeasance. The court docket discovered no such proof. Whereas acknowledging that the umpire’s course of was much less communicative than Auto-Homeowners would have favored, the court docket emphasised that neither the coverage nor Iowa legislation required dialogue, consensus-building, or adherence to the proof of loss determine.
The umpire’s actions fell squarely inside the procedural and authorized boundaries for a sound appraisal. The court docket famous that personal resolutions of disputes, akin to value determinations, are strongly favored for his or her pace and cost-efficiency. Accordingly, the court docket denied Auto-Homeowners’ movement, lifted the keep on the lawsuit, and enforced the appraisal award in full.
This resolution highlights how courts will usually defend the finality and integrity of the appraisal course of. Dissatisfaction with the end result shouldn’t be sufficient to undo an award, particularly when the difficult celebration can’t exhibit concrete wrongdoing. This case serves as a reminder to policyholders and insurers alike that appraisal selections, as soon as rendered underneath the agreed phrases, carry vital weight and won’t be simply disturbed.
Thought For The Day
“I don’t all the time agree with what the Courtroom says or does, however I respect its position in our democracy.”
—Lyndon B. Johnson
1 Larson v. Auto-Homeowners Ins. Co., No. LACV053659 (Iowa Dist. Ct. June 4, 2025).
