“If one appraiser or arbitrator resigns, withdraws, or refuses to act further, it has been held that the other one and the umpire may complete the proceeding and make a valid award” Fisch v. Transcontinental Ins., 356 S.W.2d 186, 187 (Tex.Civ.App. — Houston 1962, writ ref’d n.r.e.).
It is a correct statement of law that “the umpire’s power to act is conditioned upon a disagreement between the appraisers and the submission of their differences only to him.” Id. at 188. What happens if one of the appraisers resigns or refuses to act? It’s difficult to appraise a claim and discover disagreements if one of the appraisers is absent.
“If one appraiser or arbitrator resigns, withdraws, or refuses to act further, it has been held that the other one and the umpire may complete the proceeding and make a valid award.” Id. citing Appleman on Insurance Law Practice, p.366. Fisch, however, presents a cautionary tale setting forth the pitfalls of such an approach.
In Fisch, the insurer’s appraiser and the umpire, without the homeowner’s appraiser present, made and signed an award. Prior to the award, the homeowner filed suit to recover the loss. At trial, the court discharged the jury and rendered judgement in the amount of the appraisal award. The homeowner appealed contending there were fact issues raised with respect to the award which, if found favorably, would justify setting it aside.
The court noted that the record was silent as to whether the appraisers ever met and discussed the value and damage, or whether there were any differences between them or whether they failed to agree, or whether or not the homeowner’s appraiser ever appraised the property. There was no evidence of his activities after the time he accepted the responsibility of acting as an appraiser. In sum, the appellate court noted there was ‘nothing to show that [the homeowner’s appraiser] resigned or deliberately refused to act as an appraiser.’ Id.
In remanding the matter to the trial court, the court found the following issues relevant to the analysis: 1) whether the appraisers failed to agree such that there were ‘differences’ to submit to the umpire (without a disagreement, the umpire may not act); 2) was there a great disparity between the amount of the award and the cost of making repairs to the building as testified to by the homeowner’s witnesses (while this might not in itself be sufficient to warrant setting aside the award, it is a circumstance that may be considered in connection with the other evidence showing that the umpire never consulted with the homeowner’s appraiser); 3) whether the insurer’s appraiser wholly ignored the homeowner’s appraiser and acted independently of him; 4) whether the umpire merely checked and endorsed the insured’s appraisal; 5) whether any differences were submitted to the umpire as required by the policy; and 6) whether the umpire resolved any differences between the appraisers.
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