The Nice Debate: The Rematch – A Conflict of Titans Over Hail & Appraisal is arising this Thursday in Colorado. In my preparation, I got here throughout an previous case the place Nice American appointed Steve Badger as its appraiser. Whereas Nice American participates in 1000’s of value determinations and conducts them utilizing the usual methodology of appraisal, Nice American is just not giving up on its argument that value determinations ought to be handled as arbitrations and ruled by the Federal Arbitration Act.
In Appraisal Is Not Arbitration in Alabama, I famous that Nice American misplaced its argument that value determinations are actually arbitrations and topic to the Federal Arbitration Act on the Alabama Supreme Court docket. 1 My remark was:
Appraisal, as property insurance coverage practitioners perceive the time period, is just not arbitration. Alabama sees it the identical approach regardless of a property insurance coverage service making an attempt to argue in any other case.
Nice American continues to be not giving up. It has filed a petition to the USA Supreme Court docket 2 arguing that the Alabama Supreme Court docket was incorrect and that value determinations are ruled by Congressional laws below the Federal Arbitration Act:
This case issues an vital query of regulation below the Federal Arbitration Act-an act created to convey nationwide uniformity throughout courts in validating and imposing dispute decision procedures. The Alabama Supreme Court docket reached a exceptional conclusion inconsistent with the FAA and this Court docket’s precedent.
The courtroom engaged in a misguided evaluation below federal regulation, however it additionally mentioned its personal choices holding that an appraisal provision is just not an settlement to ‘arbitrate’ and subsequently not enforceable below the Federal Arbitration Act, 9 U.S.C. § 1 et seq. If the Alabama Supreme Court docket’s choice stands, it should reinvigorate historic hostility to arbitration agreements that the FAA was meant to extinguish by permitting state courts to outline arbitration as narrowly as they need below state regulation. Accordingly, this case is a major candidate for this Court docket’s assessment.
What Nice American fails to inform the USA Supreme Court docket is that appraisal provisions inside property insurance coverage insurance policies are typically not handled as arbitrations by property insurance coverage firms and their adjusters. Certainly, I couldn’t discover one different appraisal case the place Nice American took this place that arbitrations are value determinations besides on this one Alabama case. I ponder if Steve Badger will agree or disagree with Nice American’s view on Thursday?
Whereas researching Nice American appraisal instances and preparing for this Thursday’s debate, I got here throughout an previous Texas case, which I cited in a weblog written 9 years in the past, Steve Badger Stricken as Biased Appraiser. I’ve come to have a whole lot of deep respect for Steve. Whereas now we have decided that we share a whole lot of frequent floor over varied points, this sentiment acknowledged 9 years in the past nonetheless holds true:
Final fall, I debated Steve at a TAPIA convention as referenced…I can assure you that everyone in that room knew I used to be for policyholders and Steve Badger was for the insurance coverage firms—all of them.
Most public adjusters blame him for beginning a battle on insurance coverage clients in the event that they occur to be so unfortunate to have been laid low with hail. These beginning wars have already taken a facet.
Thought For The Day
You’ve got enemies? Good. Which means you’ve stood up for one thing, someday in your life.
—Winston Churchill
1 Nice Am. Ins. Co. v. Crystal Shores Homeowners Ass’n, No. SC-2023-0092, 2023 WL 8858165 (Ala. Dec. 22, 2023).
2 Nice Am. Ins. Co. v. Crystal Shores Homeowners Assoc., No. 23-1051 [Petition for Writ of Cert. filed Mar.21, 2024].