Shaun Marker | Property Insurance Coverage Law Blog | December 1, 2014
Where an insurance policy requires parties’ appraisers to be “disinterested,” do you think their attorney can serve as their appraiser? Not according to a recent opinion from Florida’s Fifth District Court of Appeal.1
Florida Insurance Guaranty Association (“FIGA”) appealed a trial court order compelling appraisal for the policyholders in a dispute over damages in a sinkhole loss. The case on appeal involved, in part, whether the policyholders selected an appraiser that could serve as their appraiser. The trial court had ordered the claim to appraisal and allowed the policyholders to have their attorney act as their appraiser.
In a short opinion, the appellate court essentially said the claim can proceed to appraisal, but the policyholders cannot have their attorney act as their appraiser.
The Court held that:
Given the duty of loyalty owed by an attorney to a client, we conclude that attorneys may not serve as their clients’ arbitrators or appraisers when ‘disinterested’ arbitrators or appraisers are bargained for.
Court opinions in many jurisdictions seem to place a lot of emphasis on the word “disinterested” when used in appraisal provisions. If you look up the definition of the term “disinterested,” do you think most parties’ appraisers are “disinterested?” The definition means more than being unbiased. It means “having no desire to know about a particular thing.”2 Would you want someone meeting that definition to be your appraiser? Do you think when parties hire an appraiser—even if they agree to pay them on an hourly or flat fee contract—that they really are truly unbiased—if that is how you define or interpret the term “disinterested”?
1 FIGA v. Hanse, 2014 WL 6488882 (Fla. 5th DCA November 21, 2014).
2 Merriam Webster online http://www.merriam-webster.com/dictionary/disinterested.