The current resolution in Briarwood Workplace Heart II Condominium Affiliation v. West Bend Mutual Insurance coverage Firm 1 highlights a important lesson for anybody concerned within the insurance coverage appraisal course of in regards to the finality of an appraisal award. Allegations alone will not be sufficient to overturn a binding appraisal award.
Briarwood introduced a breach of contract declare in opposition to its insurer following an unfavorable appraisal consequence. Regardless of taking part totally within the appraisal course of and receiving an award, Briarwood sought to problem the consequence by claiming that the appraisal panel ignored substantial roof harm and that the method was tainted by bias and impropriety.
Nevertheless, the court docket granted the insurer’s Movement for Judgment on the Pleadings and rejected Briarwood’s grievance, discovering it inadequate below the usual required to put aside a binding appraisal. The decide identified that whereas Briarwood accused the umpire of missing credentials and questioned the neutrality of West Bend’s appraiser, it supplied no substantive information to assist these claims. As a substitute, the grievance was crammed with what the court docket known as conclusory allegations and authorized conclusions unsupported by detailed factual assertions.
Courts making use of Illinois regulation deal with appraisal provisions in insurance coverage contracts equally to arbitration clauses. As soon as an award is made by two members of a duly appointed appraisal panel, it’s binding and enforceable except there’s a well-supported factual allegation of fraud, gross error, or misconduct. Briarwood, the court docket discovered, merely failed to fulfill that burden.
What additional weakened Briarwood’s place was a important inconsistency in its pleadings. The grievance initially alleged that West Bend had improperly used one among its personal workers as an appraiser. Nevertheless, in a later submitting, Briarwood admitted that West Bend had retained an impartial third-party appraiser. The court docket seen this contradiction as a judicial admission that undercut the credibility of Briarwood’s declare. Below federal pleading requirements, events can not contradict their very own statements to create factual disputes the place none exist. The court docket utilized well-established guidelines stating that events are sure by their admissions and can’t plead their manner out of unfavorable information they’ve already acknowledged.
This case presents a sensible warning for policyholders and their attorneys. If there’s concern throughout the appraisal course of about impartiality, {qualifications}, or equity, these points should be supported by actual information and correctly preserved.
For instance, proof of prior relationships between appraisers, documented bias, refusal to contemplate related harm, or procedural irregularities could all assist a official problem to an appraisal award. However when a celebration merely alleges wrongdoing with out presenting concrete information, courts will view such complaints with skepticism. Dissatisfaction with the consequence is just not the identical as demonstrating that the method itself was flawed.
One other message from the Briarwood resolution is that courts favor finality of the appraisal course of. As soon as a binding award has been made below the phrases of the coverage, will probably be upheld absent clear proof that one thing went severely incorrect. A celebration can not merely declare the method unfair and anticipate the court docket to reopen the matter. Allegations should be backed by particular, well-pleaded information that elevate real doubt in regards to the propriety of the appraisal. In any other case, the get together dangers not solely shedding the problem but in addition being dismissed from court docket fully.
The appraisal course of is just not a trial run or a preliminary negotiation. It’s normally the tip of the highway. Those that enter it should achieve this with seriousness, understanding that the end result will seemingly be remaining and enforceable.
For these on this matter, I’d counsel studying “Can the Appraisal Award Be Challenged As a result of the Appraisers Used Mistaken Strategies to Arrive on the Award?” and “Overturning Appraisal Awards for Bias and In search of Discovery from Appraisers: A Policyholder’s Information,” printed by the ABA.
Thought For The Day
“Justice delayed could also be justice denied, however justice finalized should still be incorrect.”
—Realized Hand
1 Briarwood Workplace Heart II Condominium Affiliation v. West Bend Mut. Ins. Co., No. 24-cv-50177 (N.D. Sick. June 6, 2025).
