Hanby v. Maryland Cas. Co.

• Decision Date: 01 April 1970
• Citation: 265 A.2d 28
• Parties: Carol Lee HANBY, Trustee for David S. M. Hanby, and Carol Lee Hanby, Trustee for Hillery A. R. Hanby, Plaintiffs Below, Appellants, v. MARYLAND CASUALTY COMPANY, a Maryland corporation, Defendant Below, Appellee.
• Court: Supreme Court of Delaware

Page 28

265 A.2d 28

Carol Lee HANBY, Trustee for David S. M. Hanby, and Carol

Lee Hanby, Trustee for Hillery A. R. Hanby, Plaintiffs Below, Appellants, v. MARYLAND CASUALTY COMPANY, a Maryland corporation, Defendant

Below, Appellee.

Supreme Court of Delaware.

April 1, 1970.

Upon appeal from Superior Court. Affirmed.

Alfred M. Isaacs, of Flanzer & Isaacs, Wilmington, for plaintiffs below, appellants.

F. Alton Tybout, of Tybout & Redfearn, Wilmington, for defendant below, appellee.

WOLCOTT, C.J., CAREY, J., and DUFFY, Chancellor, sitting.

DUFFY, Chancellor:

This appeal brings up for review an order of the Superior Court staying the action until completion of appraisal proceedings pursuant to the terms of a policy of fire insurance.

I

Carol Lee Hanby, Trustee for David S. M. Hanby, and Carol Lee Hanby, Trustee for Hillery A. R. Hanby (plaintiff), is the owner of real property in Wilmington which was insured against fire and rental income loss by Maryland Casualty Company (defendant). The premises were substantially damaged by fire on May 29, 1969. Thereafter representatives of the parties entered into negotiations looking toward restoration of the premises. Each side secured an estimate of the cost of repair and for present purposes it is sufficient to say that there was a difference of several thousand dollars between the two figures. When it appeared that an agreement was not going to be reached, plaintiff filed suit on September 12, 1969. On October 6 counsel for Maryland advised plaintiff's counsel that defendant desired appraisal to determine the amount of loss. On December 23 the Superior Court, on Maryland's motion and over plaintiff's objections, entered the order staying all proceedings until appraisal was completed in accordance with the contract of insurance. This appeal followed.

II

We first consider Maryland's argument that the appeal should be dismissed since the order entered below was not appealable.

It is settled law that an interlocutory order is not appealable unless it does two things: it must determine a substantial issue in the cause and it must establish a legal right. Pepsico, Inc. v. Pepsi-Cola Bottling Co. of Asbury Park, Del.Supr., 261 A.2d 520 (1969); Nadler v. Bohen, Del.Supr., 238 A.2d 836 (1968). And it is equally settled law that the grant or denial of a stay by a trial court lies within the discretion of that court. General Foods Corporation v. Cryo-Maid, Inc., 41 Del.Ch. 474, 198 A.2d 681 (1964); Auerbach v. Cities Service Company, 37 Del.Ch. 381, 143 A.2d 904 (1958); Lanova Corporation v. Atlas Imperial Diesel Engine Co., 5 Terry 593, 64 A.2d 419 (1949). But it does not follow in every case that the granting of a stay is not appealable. On the contrary, this Court will examine the basis on which the trial court granted the stay and, if a substantial issue was determined and a legal right established the order thereon is appealable. In short, we look beyond the technical result (i.e., 'stay') to see what the Court did.

Applying this test, we conclude that an appeal lies from the order below. Plaintiff had argued that Maryland waived its right to appraisal by waiting more than a reasonable time before asking for it. The Court rejected that argument and, in effect, left the parties to proceed with appraisal in accordance with what the Court said was their own agreement. The ruling thus foreclosed later argument on the question of waiver and, in our view, that settled a substantive legal right adverse to plaintiff. ^* In terms of Nadler the Superior Court order accomplished two things: it determined a substantial issue (whether Maryland had waived a contract right), and it established that Maryland has a legal right to have the loss determined, prior to trial, by an appraisal proceeding. For this reason the order is appealable and it follows that Maryland's motion to dismiss the appeal will be denied.

III

We turn now to the merits. The policy issued by Maryland provided in part as follows:

'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 of 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.

'No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within twelve months after the inspection of the loss.'

The policy does not state the time within which demand for appraisal must be...