United States District Court, S.D. Mississippi, Northern Division
PROSIGHT-SYNDICATE 1110 AT LLOYDS Subscribing to Policy No. PR2015MFB00132 PLAINTIFF/COUNTER-DEFENDANT
RST WESTWICK, LLC DEFENDANT/COUNTER-CLAIMANT
CARLTON W. REEVES UNITED STATES DISTRICT JUDGE
Westwick, LLC (“Westwick”) has filed a motion for
partial summary judgment seeking declaratory relief for the
validity of an appraisal award. It also seeks immediate payment
of the award's full amount. Having reviewed the record
and applicable law, the Court is ready to rule.
Factual and Procedural History
February 23, 2016, Westwick suffered storm damage to its
property. Westwick submitted a claim to its insurer,
Prosight-Syndicate 1110 at Lloyds (“Prosight”).
The parties agreed that coverage existed for hail damage.
They disagreed, however, as to the amount of damage.
Prosight's independent adjusting firm, Engle Martin &
Associates, determined the repairs to be $16, 290.87, which
did not exceed the $25, 000 hail and wind deductible. The
parties then engaged in the appraisal process set forth in
the insurance policy: each selected an appraiser and then the
appraisers together selected an umpire. The appraisal panel
consisted of Westwick's appraiser Bruce Fredrics,
Prosight's appraiser Randy Warren, and the
mutually-agreed-upon umpire David Hawkins. During the
appraisal process, Fredrics also retained a consultant,
Dexter Brown, to assist in the appraisal process.
October 6, 2017, the umpire issued an appraisal award of a
replacement cash value (RCV) amount of $1, 429, 554.26, with
depreciation resulting in an actual cash value (ACV) amount
of $1, 402, 642.75. The award also included a directive for
the parties to split a $3, 000 “consultant's
fee.” Two agreed. David Hawkins and Bruce Fredrics
signed the award-Randy Warren did not. As Westwick notes, the
record does not reflect that Warren ever submitted a written
value of loss. Prosight subsequently filed this suit seeking
to invalidate or, in the alternative, modify the appraisal
award. Westwick now seeks partial summary judgment confirming
the validity of the appraisal award. Westwick also requests
that the Court direct Prosight to immediately issue payment
of the full amount of the award.
judgment is appropriate “if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). A dispute is genuine “if the
evidence supporting its resolution in favor of the party
opposing summary judgment, together with any inference in
such party's favor that the evidence allows, would be
sufficient to support a verdict in favor of that
party.” St. Amant v. Benoit, 806 F.2d 1294,
1297 (5th Cir. 1987) (citation omitted). A fact is material
if it “might affect the outcome of the suit under the
governing law.” Id. (quotation marks and
citation omitted). The moving party bears the initial burden
of identifying the basis for its motion and the portions of
the record that support it. See Nola Spice Designs,
L.L.C. v. Haydel Enters., Inc., 783 F.3d 527, 536 (5th
Court views the evidence and draws reasonable inferences in
the light most favorable to the nonmovant. See Maddox v.
Townsend and Sons, Inc., 639 F.3d 214, 216 (5th Cir.
2011). But “[u]nsubstantiated assertions, improbable
inferences, and unsupported speculation are not sufficient to
defeat a motion for summary judgment.” Brown v.
City of Hous., 337 F.3d 539, 541 (5th Cir. 2003)
(citation omitted). In an insurance case, where the contract
is clear and unambiguous, the Court may grant summary
judgment based upon the plain language of the contract.
See Shelton v. American Ins. Co., 507 So.2d 894, 896
(Miss. 1987) (citation omitted).
argues that the appraisal award is invalid because Fredrics
and Hawkins acted improperly by designating Brown as an
“independent consultant” (who was in fact not
independent), splitting Brown's fee among the parties,
and colluding between themselves through ex parte
communications during the appraisal process. Prosight then
asserts that even if the appraisal award is valid, applicable
policy provisions reduce the amount owed and the depreciation
amount was incorrectly calculated. Summary judgment is thus
improper, Prosight contends, because there are genuine issues
concerning the conduct of the appraisal panel. Also, mistakes
of fact in the calculation of the amount of the appraisal
award preclude summary judgment.
case is proceeding under the diversity jurisdiction of this
Court, in determining the validity of the appraisal award the
Court must look to the substantive law of Mississippi.
See Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938).
State law is determined by looking to the decisions of the
state's highest court. St. Paul Fire & Marine
Ins. Co. v. Convalescent Servs., Inc., 193 F.3d 340, 342
(5th Cir. 1999).
first be noted that “[i]n Mississippi as in other
states, it is difficult for a [party] to succeed in
impeaching an award made by disinterested appraisers.
Mississippi law favors amicable settlements of controversies
without court involvement.” Mitchell v. Aetna Cas.
& Sur. Co., 579 F.2d 342, 350 (5th Cir. 1978)
(citations omitted). Consequently, as the Mississippi Supreme
Court has explained, “an appraisal is presumptively
correct but . . . the court may set aside an appraisal where
the award is so grossly inadequate as to amount to fraud in
effect, although fraud is not charged, or where the
appraisers were without authority, or where there is a
mistake of fact or to prevent injustice.” McElroy
v. Evanston Ins. Co., No. 3:14-CV-180-CWR-FKB, 2016 WL
2726859, at *3 (S.D.Miss. May 6, 2016) (citing Munn v.
Nat'l Fire Ins. Co. of Hartford, 115 So.2d 54, 58
Validity of the Appraisal Award
Prosight claims that Brown's involvement in the appraisal
process, along with the umpire's directive to split his
fee, raises serious questions about the fairness and
impartiality of the appraisal proceedings. Prosight further
argues that the ex parte communications between
Fredrics and Hawkins were improper and led to an invalid
appraisal award. The Court will consider each argument in
Dexter Brown's Involvement in the Appraisal
request of Hawkins, Fredrics retained Dexter Brown to serve
as a consultant in the appraisal process. Warren was aware of
Brown's involvement long before expressing any
opposition. Warren first became aware of Brown's
involvement in an email on May 1, 2017. In the email,
Fredrics informed Warren that Westwick approved an
independent consultant to provide a second opinion in the
appraisal. Fredrics further informed Warren that he would
wait until after he received Brown's report to complete
his own estimate for the umpire. Docket No. 48-2. In response
to Warren's inquiry on the identity of the consultant,
Fredrics stated that Brown was a former general contractor
who specialized in roofing and remodeling. Warren expressed
no opposition at this point, nor did he request to meet with
later, Fredrics told Warren in an email that Brown had
completed his inspection and given Fredrics his findings
verbally. Fredrics also attached his own findings to the
email and requested that Warren advise of any errors. Docket
No. 48-3. Ten days after that, Fredrics notified
both Warren and Hawkins of his intention to submit a formal
report from Brown. Docket No. 48-4. A June 7, 2017 email from
Warren to a Prosight representative stated, in relevant part:
Even though [the umpire] was nominated by my opposition, I
thoroughly vetted him and am still convinced that he is
honest and ethical . . .. As you know, anything can happen
during this procedure, but I am ...