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M Street Investments, Inc. v. Zurich American Insurance Co.

United States District Court, S.D. Mississippi, Northern Division

July 29, 2014



DAVID BRAMLETTE, District Judge.

This cause is before the Court sua sponte to address the matter of umpire fees. On August 8, 2013, the Court entered an Order granting plaintiff M Street Investments, Inc. ("M Street")'s motion to compel arbitration and appoint umpire. (Docket entry 53). The terms of the insurance policy between M Street and Zurich American Insurance Company ("Zurich") include the following under "Commercial Property Conditions":

If we and you disagree on the value of the property or the amount of the loss, either may make a written demand for an appraisal of the loss. In this event, each party will select a competent, disinterested, and impartial appraiser who has no direct or indirect financial interest in the claim. The two appraisers will select and umpire. If they cannot agree, [e]ither may request that selection of an umpire be made by a judge of a court having jurisdiction. The appraisers will state separately the value of each item of lost or damaged property as of the date of loss and amount of loss in accordance with the Valuation provisions of the applicable Coverage Form, or, if not stated, the "actual cash value" and "replacement cost." If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:
1. Pay its chosen appraiser; and
2. Bear the other expenses of the appraisal and umpire equally.
If there is an appraisal, we will still retain our right to deny the claim in whole or in part, based on the terms and conditions of the policy.

Zurich Insurance Policy, Commercial Property Conditions, ΒΆ B. The Court's August 8, 2013, Order directed M Street and Zurich to comply with the terms of their appraisal agreement, and provided, pursuant to the policy's terms, that if the parties' appointed appraisers could not agree on an umpire, the Court would appoint one. (Docket entry 53).

On August 22, 2013, M Street filed a motion (docket entry 54) to enforce the Court's August 8, 2023, Order, and on September 13, 2013, Zurich filed a motion (docket entry 64) requesting the Court to appoint an umpire. The Court's Order of September 23, 2013 (docket entry 71), directed the parties to submit additional information prior to the Court's appointment of an umpire. This information was submitted on September 30, 2013 (docket entries 77, 78). On October 8, 2013, the Court entered an Order advising the parties of its intent to name Harvey R. Little, MAI, as umpire within five days "unless the court receives from any of the parties information which will present a conflict." (Docket entry 80). Having heard nothing from the parties, the Court appointed Mr. Little as umpire on October 15, 2013. (Docket entry 83). On October 16, 2013, Mr. Little was added to the docket as a party. (Docket entry of 10/16/2013).[1]

On November 21, 2013, M Street filed a motion to disqualify Zurich's appraiser. (Docket entry 94). On January 9, 2014, Zurich filed a motion for sanctions against M Street's counsel for the filing of the motion to disqualify. (Docket entry 119). On March 6, 2014, M Street filed a motion requesting the Court to disqualify the umpire and appoint a new umpire. (Docket entry 148). On March 20, 2014, Zurich filed a response to M Street's motion (docket entry 164), and M Street filed its rebuttal memorandum on March 27, 2014. (Docket entry 172).

The Court scheduled a settlement conference in this case for April 22, 2014. (Docket entry of 3/25/2014). On March 31, 2014, M Street, Zurich, and Belfor U.S.A. Group, Inc. ("Belfor") filed a joint motion to continue the settlement conference until after the motion deadline of March 30, 2014. (Docket entry 177). The settlement conference was continued, and the parties were instructed to "schedule and complete private mediation or a settlement conference with the court by not later than June 30, 2014." (Docket entry of 4/2/2014).

On April 14, 2014, Zurich filed a motion to enforce appraisal award (docket entry 186), informing the Court that the umpire and Zurich's appraiser had agreed on an award. (Docket entry 186). Zurich requested the Court to

enter an Order enforcing the Appraisal Award and allow Zurich to deposit into the Registry of the Court $2, 170, 802.80, which represents the full Replacement Cost Value of $2, 802, 765 as determined by the Appraisal Award signed by Harvey Little and Joseph Rizzo, less the $631, 962.20 already paid by Zurich to Plaintiff M Street Investments, Inc. With this maximum possible claim amount safely in the Registry, the parties can present their arguments to the Court as to which losses are ...

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