Judge Cites Merlin Law Group in Appointment of Umpire | Property Insurance Coverage Law Blog


Did you guess who would be selected as the umpire in the post, “Who Would You Pick as the Umpire If You Were the Judge?” The judge presiding over the matter should get a shout-out for making the selection expediently. Our judiciary is very overworked in many areas of the country. It is common to wait months for a judge to make a determination. This court did it in less than a week after the parties submitted papers and proposals. Bravo!

Here is the analysis provided by the court regarding the selection: 1

While the Insurance Policy requires the parties to select a ‘competent and impartial’ appraiser, it is silent with respect to any criteria for the selection of an umpire if the appraisers cannot agree on one. In its statement on umpire selection, Defendant cites the following three criteria as significant to a court called upon to select an umpire for an appraisal: (1) experience with the appraisal of the type of loss at issue, (2) lack of bias, and (3) proximity to the location at issue and availability of time to devote to the project. Plaintiff does not dispute these criteria and adopts it as the standard the Court should apply here. Finding no applicable controlling authority on the issue, the Court will use these criteria in making its umpire selection. The Court is further guided by the umpire’s primary role, which is ‘not to undertake a new, third appraisal, but to evaluate the appraisers’ completed appraisals, and their differences. This is more akin to adjudicating competing experts’ opinions than to preparing a third, independent opinion or appraisal. This role is aptly filled by an arbitrator with experience weighing parties’ competing submissions.’

The first criterion for umpire selection is the candidate’s experience with the type of loss at issue, which in this case is hail damage to the roof of a commercial property. In evaluating this criterion, the Court has reviewed Johnson’s Curriculum Vitae (‘CV’) and Feland’s Expert Resume (‘Resume’)…

Johnson is an insurance consultant and adjuster with more than 20 years of experience, including more than 15 years of experience as an insurance carrier and policyholder appraiser. He has adjusted claims in 19 states on behalf of more than 70 insurance companies, including the evaluation of more than 6,000 roof systems, and is frequently called upon to serve as a neutral appraisal umpire across the country. Feland has more than 40 years of experience in the roofing business. He does not have a lengthy resume like Johnson but his experience is more diverse. Feland has worked as a roofing foreman, as an adjuster for an insurance company, as a field adjuster and field adjuster trainer for an insurance company, and for the past 20+ years as the owner of a roofing company near Oklahoma City, Oklahoma. He has worked as an appraiser for various unidentified insurance companies and has served as an umpire in several unidentified cases. Neither Johnson nor Feland indicates that he has worked as an appraiser or umpire in Kansas.

The Court finds both umpire candidates have experience relevant to valuing damages to roof systems. However, the breadth of Johnson’s relevant experience is clearly much greater than Feland’s. Johnson has extensive experience serving as an appraiser and umpire around the country. His CV lists eleven courts by which he has been approved and/or appointed as an expert witness or Neutral Appraisal Umpire, plus six pages of appointments related to insurance appraisals. In contrast, Feland’s Resume states only that he has ‘worked as an appraiser for various insurance companies on different cases at different times and [has] also served as an umpire on several cases.’ He fails to identify any specific court, case, or matter in which he has been appointed as an appraiser or umpire. The Court finds Johnson is the better qualified candidate, demonstrating far more experience than Feland pertinent to the role as an umpire in this case. This criterion therefore weighs heavily in favor of Johnson.

The second criterion for selection of an umpire is lack of bias in favor of or against a party or insureds or insurers generally. While Defendant argues some of Johnson’s seminar titles and his apparent ‘affinity’ toward the Merlin Law Group may suggest a bias against insurers, Defendant fails to ‘connect the dots’ with these unsubstantiated assertions so the Court is unpersuaded by this argument. Moreover, had Defendant’s candidate, Feland, provided any details regarding the insurance companies for which he has worked as an appraiser or for whom he has served as an umpire, such unsubstantiated assertions might well be lodged against Feland as well. The Court presumes both candidates could serve as the umpire without bias in favor or against a party or the insureds or insurers generally. This criterion therefore does not weigh in favor of either candidate.

As for the third criterion, proximity to the location at issue and availability of time to devote to the project, neither Johnson nor Feland lives in Wichita, Kansas, or even in Kansas. Both candidates are a significant distance from the property being appraised (according to Defendant, Feland 159 miles; Johnson 568 miles). Although Feland’s business in Oklahoma is more than 400 miles closer than Johnson is located to the subject property, the Court has been provided no information that would cause it to conclude that either Feland or Johnson has any knowledge of the local costs of materials and labor, applicable local building statutes, codes and ordinances, or familiarity with local commercial building values in Wichita, Kansas. As for availability of time to devote to this project, both candidates have indicated, if appointed as the umpire in this case, they could complete their work in about the same amount of time. The Court therefore concludes this criterion does not weigh in favor of either candidate.

Considering the three criteria discussed above, the Court finds that the first criterion weighs heavily in favor of appointing Johnson, while the second and third criterion do not favor either Johnson or Feland. Accordingly, the Court concludes that Johnson should be appointed as the umpire under the terms of the Insurance Policy.

I do not know why insurance company attorneys often think that people learning from our seminars magically become biased. I honestly believe that they are afraid their clients will pay more money because everybody will learn the benefits that exist in the policy, how the coverages are supposed to work and the good faith obligations which property insurance adjusters must abide which then leads to greater and faster payment. Our lessons have nothing to do with illegitimate means of obtaining money but literally doing the right thing and promptly paying the full amount of coverage.

I have had Department of Insurance proctors literally shake my hand, thanking me that they finally went to a seminar where everybody paid attention and actually learned something new. Those of you attending my presentations know the penalty for not paying attention and learning. As noted in a recent post, Understanding the Implications of the Heritage Market Conduct Study and $1 Million Consent Order Penalty, some enlightened insurance companies will have me speak to their claims departments. The rules for property insurance adjustment are the same for everybody.

When it comes to appraisals, both sides have an obligation to make certain that the insurance customer is not caught in gamesmanship, which leads to being paid less than the full amount owed. I feigned being knocked over when Steve Badger agreed with this statement at The Great Debate: The Rematch – A Clash of Titans Over Hail & Appraisal. Ethical property insurance claims managers also agree with this concept.

Similarly, it would be wrong to subject the insurer to a situation where “the fix is in” and the award is not supported by legitimate facts and valuations. The umpire who commands respect and makes the process fair is an extremely important participant in ensuring that the appraisal process continues to have legitimacy for both parties.

Based on a number of written decisions by judges who have selected umpires, I have been suggesting in my presentations at the IAUA and PLAN appraisal classes that all appraisers and umpires should keep a list of every case where they have been selected and appointed. Judges will often look at these experiences to determine if the person is being appointed only on the policyholder or insurance company side. The judge may also want to know if other judges have appointed those nominated as umpires.

I think judges also look to see how vested the proposed individuals are in the appraisal and arbitration processes. Attending classes and participating in respected forums are important. I am certainly teaching to a majority of the audience who are independent and insurance company property insurance adjusters when speaking to IAUA and PLAN certification events. It is not a one-sided “let’s get the other party” training session at these events.

The Windstorm Network’s appraisal and certification program is also attended by those who participate on both sides of the aisle when it comes to property insurance adjustment. John Voelpel was instrumental for two decades with this often sold-out certification program, as noted in “The Appraisal Process: Resolution of Disputed Insurance Claims” by John A. Voelpel III.

My hope is that this is the last ruling the court has to make in this matter. Hopefully, the parties will feel they had a fair and full opportunity through the panel’s work to have their differences resolved regardless of how the valuation turns out. I hope readers had a little fun playing judge for a day and predicting who would be selected.

Thought For The Day

The courts of this country should not be the places where resolution of disputes begins. They should be the places where the disputes end after alternative methods of resolving disputes have been considered and tried.
—Sandra Day O’Connor


1 L& M Auto Repair v. Federated Mutual Ins. Co., No. 23-CV-1203 (D. Kan. May 10, 2024).



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