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Home / Insurance / Evaluations can lead to nasty legal battles – Should valuers and judges get insurance to protect them? | Legal insurance blog for property insurance

Evaluations can lead to nasty legal battles – Should valuers and judges get insurance to protect them? | Legal insurance blog for property insurance



Evaluation is generally regarded as a faster and more cost-effective method of resolving controversies over property insurance than disputes. This is not the case when an assessment is followed up with disputes. Furthermore, although rare, there are times when assessors and judges may be involved in the dispute, as evidenced by recent applications in a federal case in Texas involving a Baptist church and Brotherhood Mutual Insurance Company. 1

The latest submission from the Baptist Church tells a story about a property insurance in dispute where the judge told the policyholder's assessor that he was too busy to continue the evaluation.

On June 1

, 2020, Choate called [the church appraiser] Williams [Brotherhood Mutual’s appraiser] to request the appointment of a new judge. Williams never responded. On June 5, 2020, Choate followed up on this request and asked Williams "[w] when do you want to discuss new judges?" Williams also ignored this email. On June 12, 2020, Choate followed up with a third email and phone call in which Williams asked him to call or email to discuss the appointment of a new judge. Williams continued to ignore these messages. Given that the allegation was approximately three years old and that the fraternity again caused its resolution, MMA [the church counsel] retained attorney Chris Lyster to have a new judge appointed.

On June 15, 2020, and expressly permitted by Policy, Lyster sent a letter to the Honorable Mike Moore of the 29th District Court in Palo Pinto County, Texas, explaining the procedural status of the claim, the parties' inability to resolve the assessment , resumed by potential judge candidates and request & # 39; that you appoint a competent and uninterested judge to oversee the evaluation process. The next day, Judge Moore responded by appointing Mark Weeks ("Weeks") to serve as judge. 2

The unilateral letter request to establish a judge in a letter sent to a judge is something that is rarely done. In this case, it was sent to a judge in Texas while this federal case is pending. In some jurisdictions, writing a unilateral letter to a judge who knows that another party is represented would be a major ethical issue. What still happened after the new judge was unilaterally appointed?

On June 19, 2020, MMA sent an e-mail to Brotherhood Councilor Jennifer Durbin advising on this week's nomination. On June 22, 2020, Choate sent an e-mail to Weeks and Williams that he would like to set up a conference call to discuss moving forward with the evaluation and request that the evaluators be available. Weeks responded via email on June 23, 2020 and suggested that the call be held on June 29, 2020. Williams replied the same day, stating that he had previous obligations on June 29, 2020, but that he was free July 1 or 2, 2020. The day Choate and Weeks then confirmed that they were available for July 2, 2020.

Williams did not respond to emails requesting availability for the conference call, but forwarded the email to Brotherhoods attorney Amanda Hazelton. On June 25, Hazelton emailed the MMA Board, along with the assessors and the weeks, advising her opinion that Judge Moore was not authorized to appoint weeks as judges and that the fraternity did not agree to the appointment…. Mutual apparently did not file a legal objection, moved to limit or stop the judge, or moved formally to leave the state court judge's appointment of the new judge. Without the involvement of the insurance company's valuer – who apparently boycotted the proceeding because the insurance company opposed the new judge's appointment – the church's valuers and new judges came to a real cash value allocation of $ 48,076,677.36. There must have been many “Alleluia Jesus” comments at the following Sunday service because the actual amount of cash requested prior to the assessment was reportedly in the $ 10,000,000 range. and the church's valuer. 4 If permitted, these lawsuits against the judge and the appraiser can only be expensive for legal fees. Although this is rare, costumes against valuers or a judge are becoming more of a trend as they were almost non-existent 20 years ago.

For the record, I wondered why Steve Badger seemed so much more animated and argumentative at the Wind Storm Insurance Conference Panel, as I noted in Impressions of the Wind Storm Panel involving Steve Badger and Jon Held . Part of the answer is obvious because he is a co-conspirator representing Brotherhood Mutual in this case.

This case is worth examining as it raises a number of cutting issues with the evaluation process. For background information, we have previously noted The Umpire & # 39 ;s Roll in Texas Appraisals as set forth in the Texas Insurance Act:

The judge's obligation under the insurance terms was to determine and determine, in the exercise of his best judgment, the cash value of the objects that the assessors had disagreed on, regardless of the assessors or any of them … The judge is obliged to act with the assessors in differences. He is the third valuer. If the three are of the same mind, or if two of them correspond to value and loss, the evaluation prize is a finality.

I have noted that Texas requires the evaluation panel to be independent and impartial and questioned how often it actually occurs in Texas Appraisers are believed to be disinterested, impartial and not biased: I doubt this is the reality of Texas Appraisals . I was also critical of panels that did not work hard and tried to find an honest and reasonable amount of all damages:

I ask that customers I represent in the assessment should have a valuer who works as hard as possible to find out all information about the loss from both my client and from the insurer's point of view. It is my impression that the harder and longer you work on analyzing damage after a loss, the more damage is found that would simply become uncollected as a result of ignorance. To get a correct and fair independent estimate from one of the valuers requires accuracy, information, expertise and then an understanding of why other opinions are not correct or subject to criticism.

This type of critical analysis is normal for us in insurance. coverage disputes. However, it is often the exception rather than the rule in evaluations where the panel often, as pointed out by Buchman, simply divides amounts.

We will keep readers updated on developments in this case. There are now high stakes for everyone.

Thought for the day

Good stories are driven by conflict, tension and high stakes.
—William Landay [19659020] ____________________________________________________________
1 First Baptist Church Odessa v. Brotherhood Mutual Ins. Co. 7: 18-cv-00208 (W.D. Tex.).
2 First Baptist Church Odessa v. Brotherhood Mutual Ins. Co. 7: 18-cv-00208 (WD Tex. – Doc. 41, filed April 10, 2021).
3 Id.
4 First Baptist Church Odessa v. Brotherhood Mutual Ins. Co. 7: 18-cv-00208 (W.D. Tex. – Doc. 36, filed April 2, 2021).


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