Church Mut. Ins. Co. v. Circle Light, Cause No: 4:18CV00349 JCH

• Decision Date: 10 September 2019
• Docket Number: Cause No: 4:18CV00349 JCH
• Citation: 416 F.Supp.3d 847
• Parties: CHURCH MUTUAL INSURANCE CO., Plaintiff, v. CIRCLE OF LIGHT, Defendant.
• Court: U.S. District Court — Eastern District of Missouri

416 F.Supp.3d 847

CHURCH MUTUAL INSURANCE CO., Plaintiff,

v.CIRCLE OF LIGHT, Defendant.

Cause No: 4:18CV00349 JCH

United States District Court, E.D. Missouri, Eastern Division.

Signed September 10, 2019

Jonathan B. Morrow, Aaron C. Sherman, Alexa Leigh Ackermann, Jamie Reza Nazemi Tabrizi, Timothy J. Wolf, Brown and James, P.C., St. Louis, MO, for Plaintiff.

Melvin L. Raymond, St. Louis, MO, for Defendant.

MEMORANDUM AND ORDER

JEAN C. HAMILTON, UNITED STATES DISTRICT JUDGE

This matter is before the Court on Plaintiff's Motion for Partial Summary Judgement (ECF No. 44) filed June 17, 2019. This matter is fully briefed and ready for disposition.

BACKGROUND ¹

Plaintiff issued a policy of insurance to Defendant under the policy number 0188688-02-526158 (the "Policy"). Defendant submitted a claim for damage and loss to its building located at 1308 Veronica Avenue, St. Louis, Missouri, 63147. (ECF No. 46, Plaintiff's Statement of Uncontroverted Facts ¶ 1 (Plaintiff Facts)). Defendant claims that on or about May 31, 2013, the property was damaged by hail and or wind. Id. ¶ 2. This action arises out of the Parties' dispute over the Appraisal Award that was issued because it allegedly included items for which coverage was still in dispute.

The Policy contained the following Appraisal Provision:

C. LOSS CONDITIONS

...

2. Appraisal.

If we and you disagree on the value of property or amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that a selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property and the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding.

Each party will:

a. Pay its chosen appraiser; and

b. Bear the other expenses of the appraisal and umpire equally If there is an appraisal, we will still retain our right to deny the claim

...

(Plaintiff Facts ¶ 3).

On or about May 31, 2013, the real property, a church building, located at 1308 Veronica Avenue was damaged by hail or wind. (Plaintiff Facts ¶ 2). Plaintiff did not accept coverage for all the claimed loss and disputed whether all the claimed damage was due to storm or hail. (ECF No. 45 at 2, citing Plaintiff Facts ¶ 19). The parties disagreed about the amount of loss and proceeded with the appraisal process pursuant to the Appraisal Provision. Id. ¶4. Defendant asserts that the parties also proceeded pursuant to the regulation of the Missouri Department of Insurance at 20 CSR 500-1.100(2)(A) 4, which makes appraisal mandatory upon demand by the insured or the insurer. (Defendant Response to Plaintiff's Statement of Uncontroverted Material Facts, ECF No. 62 ¶ 4 (Defendant Facts)).

Plaintiff and Defendant individually submitted estimates for the loss to the property. Defendant's estimate was completed by Innovative Construction and Roofing and utilized a copper

estimate by ADPD, LLC. (Plaintiff Facts ¶ 10). Plaintiff had an estimate prepared by Allmark Services. Id. The estimates indicated damage to a portion of the tiles and other parts of the roofing, gutters, vents, and decorative additions but did not include damage to all parts of the roof. (Plaintiff Facts ¶¶ 36-43). Defendant's estimate found a replacement cost of two-hundred and ten thousand, eight-hundred and twenty-four dollars and fifty-five cents ($210,824.55)(Defendant Facts ¶ 11; ECF No. 44-9). Plaintiff's estimate found a replacement cost of one-hundred and thirty-nine thousand, two-hundred and sixty-eight dollars and fifteen cents ($139,268.15). (Defendant Facts ¶ 11; ECF No. 44-8). The Parties did not agree and proceeded according to the above listed Appraisal Provision.

Pursuant to the Appraisal Provision, Plaintiff provided David Miller for its appraiser and Defendant appointed Cedric Thomas. (Plaintiff Facts ¶ 5). On January 31, 2017, John Easley was appointed as umpire. Id. ¶ 6. The parties further agreed to submit only certain aspects of the damage for appraisal. Id. ¶ 7. The scope of the parameters were executed in the Appraisal Parameters (Id. ¶7; Defendant Facts ¶ 7). The Appraisal Parameters included the following provisions for the agreed manner and scope of the appraisal under the Appraisal Provision:

2. ... the only issue appropriate for appraisal is the value of the property or the amount of the loss, not whether or not covered damage exists.

3. In the present case, the respective appraisers and umpire shall appraise the amount of the loss to the roofing system, including any attached guttering, vents decorate² additions, and/or exterior lighting related to the May 31, 2013 hail/wind event.

4. Church Mutual Insurance and Circle of Light Church previously provided their estimates for the amount of damage. The current dispute is not with regarding to scope of the damage, only the amount of loss to the roofing system, including any attached guttering, vents, decorate³ additions, and/or exterior lighting related to the May 31, 2013 hail/wind event.

5. The respective appraisers and umpire are not to appraise any damage to the interior, as there is a pending coverage dispute on damage to the interior.

6. Additionally, any exterior damage above and beyond the damage outlined in the parties' respective estimates is beyond the scope of the current appraisal process.

7. However, should the appraisers locate and/or observe further damage to the exterior, which they believe have been caused by or related to the May 31, 2013 hail/wind event, the appraisers are to notify the parties' respective attorneys, so the alleged additional exterior damage may be evaluated and inspected by Church Mutual Insurance.

(Plaintiff Facts ¶ 9; ECF No. 44-7).

Plaintiff asserts that the appraisal parameters limited the appraisal to the value of the scope of damage outlined in the Defendant's or Plaintiff's Estimate. (Plaintiff Facts ¶ 12). The estimates did not include damage to the convent roof, daycare roofing, or garage roof on the property.

(Plaintiff Facts ¶¶ 9, 36, 40). Plaintiff's appraiser submitted an estimate for its appraisal, which appraised the total for all work done as two-hundred thousand, one-hundred and twenty-five dollars and twenty-six cents ($200,125.26) (Plaintiff Facts ¶ 13, citing ECF No. 44-12). Defendant's appraiser submitted an estimate which appraised the work costs to be five-hundred and forty-three thousand, two-hundred and seventy-five, and twenty-five cents ($543,275.25). (Plaintiff Facts ¶ 14; ECF No. 44-14). Defendant asserts that this amount includes values for overhead and profit at ten percent each. (Defendant Facts ¶14). Plaintiff asserts that Defendant's appraisal improperly included damage to the convent roof and garage roof, school roof, and the storage roof. (Plaintiff Facts ¶¶ 37, 39). Defendant does not dispute that these items appeared in the Appraisal, but states that they "were not a significant portion of the Appraisal Award..." (Defendant Facts ¶ 37). Plaintiff asserts that it never accepted or acknowledged coverage with respect to any damage not outlined in its own appraisal or estimate. (Plaintiff Facts ¶ 20). Defendant asserts that the Plaintiff agreed to be bound by the scope of damage set forth in the Appraisal Parameters agreed to and signed by its appraiser and Defendant's appraiser. (Defendant Facts ¶ 19, citing ECF No. 44-7). Defendant further asserts that the Parties' previous estimates included damage to the roofing system, including any attached guttering, vents or decorative additions, related to the estimates of the parties and Cedric Thomas' appraisal estimate. (Defendant Facts ¶ 19).

On or about February 19, 2018, an Appraisal Award for the insurance claim was made to and signed by Defendant's Appraiser, Cedric Thomas, and Umpire John Easley. (Plaintiff Facts ¶ 15). The Appraisal Award included a replacement cost value of five-hundred and forty-three thousand, two-hundred and seventy-five dollars and twenty-five cents ($543,275.25); which after adjustments for deductible, prior payments and depreciation, resulted in an actual cash value of four-hundred and fifteen thousand, eight-hundred and one dollar and twenty-one cents ($415,801.21). (Plaintiff Facts ¶16; ECF No. 44-15). Plaintiff tendered a check to the Defendant in the amount of $51,131,35. (Plaintiff Facts ¶ 21). Plaintiff asserts that this represented the appraised replacement cost in Plaintiff's Appraisal of $200,125.36 less $67,722.32 for non-recoverable depreciation, $76,271.69 for prior actual cash payments, and $5000 for the policy's deductible. Id. Plaintiff argues that this amount was undisputed. Id. Defendant states that the amount is disputed because it does not comply with the Appraisal Parameters. (Defendant Facts ¶¶ 18,19,21).

Plaintiff states that prior to completing Defendant's Appraisal and signing the Appraisal Award, Defendant's Appraiser did not see or review any of the parties' previous estimates referred to in the Appraisal Parameters; nor did he know whether or not his appraisal was within the scope of the Appraisal Parameters. (Plaintiff Facts ¶¶ 22-23). Defendant asserts that Defendant's Appraiser, Cedric Thomas, having signed the Appraisal Parameters, was made aware thereof. (Defendant Facts ¶¶ 22-23). Defendant's appraiser, however, undertook to determine where covered damage existed. (Plaintiff Facts ¶ 24). The Parties dispute whether Defendant's appraisal contained damage that was not covered under the policy. (Plaintiff Facts ¶ 24; Defendant Facts ¶ 24). At no time during the appraisal process did the Defendant's Appraiser, Cedric Thomas, notify Plaintiff or an attorney for either party that he found any additional damage not outlined in the Appraisal Parameters. (Plaintiff Facts ¶ 26). The Plaintiff therefore asks the Court to set aside the appraisal for...