“The function of an umpire who is to act in matters of difference only is not to coincide with one or the other of the appraisers, but he is to make his award independently of such estimates.” Fisch v. Transcontinental Ins., 365 S.W.2d 186, 190 (Tex.Civ.App. — Houston 1962, writ ref’d n.r.e.).
Many appraisers believe that when a disagreement is presented to the umpire regarding the cost to repair or replace an item, the umpire is limited to choosing one or the other adjuster’s estimate for that specific line item. In part, this belief may find its genesis in both sides’ frustration with awards that appear to be nothing more than a ‘splitting of the baby.’ The issue, they claim, is further amplified when the umpire has no subject matter expertise. How can an umpire with no background in the construction trades or claims adjustment ‘make an award independently of such estimates?’ The umpire lacks the ability to generate the estimate on his own.
Providence Lloyds Ins. Co. v. Crystal City Indep. School Dist., 877 S.W.2d 872 (Tex.App. — San Antonio 1994, no writ) provides some insight into the issue. The case involves a fire at an elementary school. The parties disagreed as to the amount of loss and agreed to engage in an appraisal. There were forty-eight (48) items in dispute at the start of the appraisal. The two appraiser agreed upon twenty-six (26) items leaving twenty-two (22) items for the umpire to rule upon. The insured contested the appraisal award contending, among other things, that the umpire was guilty of misconduct when he appraised seventeen (17) items at values beyond the limits fixed by the appraisers.
The court concluded, “we find that in acting independently as to the disputed values, the umpire did not exceed the authority conferred upon him. On the contrary, it was the duty of the umpire under the terms of the insurance policy to ascertain and determine, in the exercise of his own judgment and as the result of his own investigation, the cost values of the disputed items, independent of the findings of the appraisers, or either of them.” Id. at 878.
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