Girard v. Atlantic Mut. Ins. Co., 2645

• Decision Date: 01 May 1967
• Docket Number: No. 2645,2645
• Citation: 198 So.2d 444
• Parties: Milton GIRARD v. ATLANTIC MUTUAL INSURANCE COMPANY.
• Court: Court of Appeal of Louisiana — District of US

Page 444

198 So.2d 444

Milton GIRARD v. ATLANTIC MUTUAL INSURANCE COMPANY.

No. 2645.

Court of Appeal of Louisiana, Fourth Circuit.

May 1, 1967.

Jackson P. McNeely, New Orleans, for plaintiff-appellant.

Deutsch, Kerrigan & Stiles, Dermot S. McGlinchey, New Orleans, for defendant-appellee.

Before McBRIDE, YARRUT and SAMUEL, JJ.

McBRIDE, Judge.

Plaintiff claims $6600 (the limit) under a fire insurance policy containing extended coverage provisions (including windstorm damage) which was issued by the defendant insurer to the plaintiff. The insured property, owned by plaintiff, bearing municipal numbers 2500--2502, Alabo Street in the City of New Orleans, allegedly sustained serious damage in excess of the above amount as the consequence of a windstorm (Hurricane Betsy, Sept. 9--10, 1965). The petition alleges that plaintiff timely filed proof of loss, but that defendant arbitrarily rejected the claim and is demanding an appraisal of the loss. Defendant interposed an exception of prematurity which was maintained by the court below, and the suit was dismissed at plaintiff's cost. He appeals.

Pursuant to the provisions of R.S. 22:691 (F) the policy before us contains the following provisions for an appraisal:

'In case the insured and this Company shall fail to agree as to the actual cash value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within twenty days of such demand. The appraisers shall first select a competent and disinterested umpire; and failing for fifteen days to agree upon such umpire, then on request of the insured or this Company such umpire shall be selected by a judge of a court of record in the state in which the property covered is located. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with this Company shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting him and the expenses of appraisal and umpire shall be paid by the parties equally.'

After the receipt of the proof of loss submitted by plaintiff, defendant notified him of the rejection of the claim because it exceeded the actual loss caused by the windstorm and for 'other good and valid reasons'. Plaintiff was further notified that the insurer elected to exercise its right under the above quoted paragraph of the policy; to that end defendant furnished plaintiff with an appraisal form and requested him to fill in the name of his appraiser, sign the form, and then return it to defendant. Plaintiff refused to comply with the insurer's request for an appraisal and instituted this suit.

It is contended on behalf of appellant that the policy stipulations respecting an appraisal are in effect nothing more or less than provisions for an arbitration and are null, void and unenforceable because reprobated by R.S. 22:629. In support of his position counsel cites Macaluso v. Watson, La.App., 171 So.2d 755, decided by this court, wherein a loss under the uninsured motorist coverage in a policy of automobile insurance was involved. We held that the policy stipulations for an arbitration of the insured's claim Which, by the terms of the policy, was to be binding upon both the insured and the insurer were null and void as being in violation of R.S. 22:629 subd. A(2) in that their effect is to deprive the courts of this state of jurisdiction of plaintiff's action against the insurer.

Counsel for appellant seems to have confused arbitration with appraisal. The duties of the appraisers, when appointed under the provisions of the policy in the instant case, are merely to ascertain the cash value and the extent of the insured's loss and are proper and legal and do not fall into that class of arbitrations which undertake to oust the courts of their jurisdiction. The difference between arbitration and appraisal was clearly recognized by the Supreme Court in Housing Authority v. Henry Ericsson Co., 197 La. 732, 2 So.2d 195, as follows:

'In theory, arbitration is a substitute for a proceeding in court, and should not be confused with what takes place where parties refer to selected persons some ministerial duty or some matter involving only the ascertainment of facts, requiring no hearing nor the exercise of judicial discretion upon the question in dispute'.

In Branch v. Springfield Fire & Marine Ins. Co., 198 La. 720, 4 So .2d 806, the Supreme Court was concerned with a fire insurance policy containing provisions for an appraisal of a loss caused by windstorm. The only difference in the policy stipulations in that case and those in the instant case is that in the former the appraisers' duty was to ascertain the 'sound value' of the loss and damage, while in the instant case the purpose of the appraisement was the ascertainment of the 'actual cash value and loss'. Such...