Bonbeck Parker, LLC v. Travelers Indem. Co. of Am.

• Decision Date: 01 October 2021
• Docket Number: No. 20-1192,20-1192
• Citation: 14 F.4th 1169
• Parties: BONBECK PARKER, LLC ; BonBeck HL, LLC, Plaintiffs - Appellees, v. The TRAVELERS INDEMNITY COMPANY OF AMERICA, Defendant - Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

14 F.4th 1169

BONBECK PARKER, LLC ; BonBeck HL, LLC, Plaintiffs - Appellees,

v.The TRAVELERS INDEMNITY COMPANY OF AMERICA, Defendant - Appellant.

No. 20-1192

United States Court of Appeals, Tenth Circuit.

FILED October 1, 2021

Amy M. Samberg (Renee M. Peters and Jonathan T. Koehler with her on the briefs), of Foran Glennon Palandech Ponzi & Rudloff PC, Denver, Colorado, for Defendant-Appellant.

Larry E. Bache, Jr. (Jonathan Bukowski with him on the brief), of Merlin Law Group, P.A., Denver, Colorado, for Plaintiffs-Appellees.

Before MATHESON, MORITZ, and CARSON, Circuit Judges.

MORITZ, Circuit Judge.

This summary-judgment appeal stems from an insurance claim filed by BonBeck Parker, LLC and BonBeck HL, LC (collectively, BonBeck) for hail damage. The Travelers Indemnity Company of America (Travelers) acknowledged that some of the claimed damage to BonBeck's property was caused by a covered hailstorm but argued that the remaining damage was caused by uncovered events such as wear and tear. BonBeck requested an appraisal to determine how much damage occurred, but Travelers refused this request unless BonBeck agreed that the appraisers would not decide whether the hailstorm in fact caused the disputed damage. When BonBeck rejected this condition, Travelers filed this lawsuit, seeking a declaratory judgment that the appraisal procedure in BonBeck's policy does not allow appraisers to decide the causation issue. The district court disagreed, ruling that the relevant policy language allowed appraisers to decide causation. After the appraisal occurred, the district court granted summary judgment to BonBeck on its breach of contract counterclaim, concluding that Travelers breached the policy's appraisal provision. Travelers appeals.

Applying Colorado law, we affirm. The disputed policy provision allows either party to request an appraisal on "the amount of loss," a phrase with an ordinary meaning in the insurance context that unambiguously encompasses causation disputes like the one here. And contrary to Travelers’ view, giving effect to this meaning aligns both with other related policy language and with the appraisal provision's purpose of avoiding costly litigation. For these reasons, the district court appropriately allowed the appraisers to resolve the parties’ causation dispute and granted summary judgment for BonBeck on its breach of contract claim.

Background

In June 2012, a hailstorm damaged three buildings owned by BonBeck. BonBeck submitted a claim for the damage under its commercial insurance policy with Travelers (the Policy), which covers hail damage. For each building, BonBeck alleged that the hailstorm damaged the exterior siding, overhang, HVAC, and roof. Travelers acknowledged that some hail damage occurred to all the building components except for the roofs, and it covered this damage with two payments totaling about $ 34,200.¹ But Travelers denied coverage for the roof damage, asserting that it resulted not from the hailstorm but from uncovered events like wear and tear, deterioration, and improper installation.

Faced with this impasse over the roof damage, BonBeck invoked the Policy provision at the heart of this appeal. This provision, which we later quote in full, allows either party to request an appraisal of certain issues on which they might disagree during the claims process, including "the amount of loss." App. vol. 2, 294. Invoking the appraisal provision sends the parties’ dispute to a panel comprised of three appraisers (the Panel, for short). But it did not immediately have that effect when invoked by BonBeck.

That's because Travelers would only agree to BonBeck's appraisal request under certain conditions. In particular, Travelers insisted that the parties require the Panel to distinguish between disputed and undisputed damages. Travelers considered undisputed damages to be those that it already agreed resulted from the hailstorm, a covered cause of loss; in other words, the non-roof damage. Disputed damages, by contrast, referred to the roof damage, which Travelers contended resulted from excluded causes of loss like wear and tear. So under Travelers’ conditions, the Panel would be required to separately allocate damages for the roofs and for the other building components, assigning a specific dollar amount to each. But crucially, Travelers’ proposal would not allow the Panel to decide what caused the roof damage, whatever that amount of loss turned out to be. That is, the Panel could decide how much it would cost to repair the roofs but not what caused the roofs to require repair in the first place.

When BonBeck rejected Travelers’ conditions, Travelers filed this lawsuit. Its complaint sought declarations that (1) the Policy precludes the Panel from determining causation issues and (2) Travelers owed BonBeck nothing more because the remaining damage (meaning the disputed roof damage) was caused by excluded causes of loss. As relevant here, BonBeck counterclaimed for breach of contract and for a declaration that the Policy does allow the Panel to decide the cause of loss.

Two rounds of summary-judgment motions followed. In the first round, the parties moved for summary judgment on their respective declaratory-judgment claims about whether the Panel could decide causation. The district court sided with BonBeck, concluding that the appraisal provision authorizes the Panel to make cause-of-loss determinations. It then stayed the case pending an appraisal and rejected Travelers’ request to require that the Panel separately assess disputed and undisputed damages. About nine months later, the Panel issued its appraisal award, estimating the total repair cost for BonBeck's loss from hail damage (excluding depreciation) to be about $216,000. Travelers paid BonBeck the appraisal-award amount, minus the approximately $34,200 it had already paid.

With the causation issue now resolved, the parties filed a second round of summary-judgment motions, this time on BonBeck's remaining counterclaim for breach of contract. The district court granted summary judgment for BonBeck on this counterclaim, finding no genuine dispute that Travelers breached the Policy by not agreeing to an appraisal when BonBeck requested one. For that claim, the district court awarded BonBeck nominal damages ($1) and statutory interest ($36,142.63). Travelers appeals.

Analysis

We review orders granting summary judgment de novo, affirming only if "there is no genuine dispute as to any material fact and the mov[ing party] is entitled to judgment as a matter of law." Auto-Owners Ins. Co. v. Csaszar , 893 F.3d 729, 733–34 (10th Cir. 2018) (quoting Fed. R. Civ. P. 56(a) ). Here, Travelers contends that the district court erred in granting summary judgment for BonBeck because under the appraisal provision's plain language, the Panel could determine how much damage BonBeck incurred but not what caused that damage. BonBeck disputes this reading, arguing that the Policy allows appraisers to decide the cause of loss. BonBeck also raises several preliminary issues that potentially affect our ability to decide the causation issue. We begin by addressing those issues.

I. Preliminary Issues

A. Waiver

BonBeck argues that as a matter of federal procedure, Travelers waived its challenge to the scope of the appraisal provision. In support, BonBeck cites district-court filings after the appraisal in which Travelers noted that the causation issue—whether BonBeck's damages resulted from a covered cause of loss—was "now moot" given the district court's earlier summary-judgment order concluding that the Panel would decide that issue. App. vol. 7, 1369. According to BonBeck, these filings show that Travelers "expressly waived and abandoned" its argument that the Policy precludes the Panel from deciding the cause of loss. Aplee. Br. 15.

We disagree. To be sure, we generally decline to consider on appeal issues that a party initially raised but later abandoned in the district court. See Lyons v. Jefferson Bank & Tr. , 994 F.2d 716, 722 (10th Cir. 1993). But that's not what happened here. Instead, as Travelers argues, the statements BonBeck pulls from Travelers’ district-court filings "simply reflect what the remaining issues appeared to be at that time, at the district[-]court level, in light of the prior [summary-judgment order]." Rep. Br. 3–4. By stating that the causation issue was "now moot," Travelers simply acknowledged that the district court had resolved the issue. Travelers neither agreed with the district court's resolution of the issue nor suggested that it would not appeal that resolution. App. vol. 7, 1369. Indeed, Travelers had no opportunity to appeal until after the district court resolved BonBeck's counterclaims and entered a final judgment. See 10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2715 (4th ed.) ("[T]he grant of a summary judgment on less than all the claims ... in the litigation normally is not appealable until the full case reaches judgment."); Haberman v. Hartford Ins. Grp. , 443 F.3d 1257, 1264 (10th Cir. 2006) ("[W]hen the material facts are not in dispute and the denial of summary judgment is based on the interpretation of a purely legal question, such a decision is appealable after final judgment."). In short, Travelers did not waive its challenge to the district court's interpretation of the Policy by abandoning that challenge in the district court.²

B. Payment of Appraisal Award

Even if Travelers’ challenge is procedurally sound, BonBeck maintains that Colorado insurance law independently bars Travelers from challenging the scope of the appraisal provision. That is the case, BonBeck argues, because Travelers "paid the [appraisal award] without protest, reservation, or any other limitation." Aplee. Br. 19. And in Colorado (says BonBeck), such payment constitutes "acceptance of the appraisal award and waive[r of] any future right to challenge the award." Id. ; see also, e.g. , Pueblo Country Club v....