A federal district court on Tuesday agreed to file an appraisal award against a Traveler Corp. unit due to an unforeseen fee arrangement made with an appraiser.
The protracted dispute began in 2017, when a former showroom was turned into a warehouse in Owensboro, Kentucky, owned by Owensboro-based Mudd’s Furniture Showrooms Inc., was damaged by a strong wind and rainstorm, according to the judgment of the U.S. District Court in Owensboro in Travelers Casualty Insurance Co. of America v. Mudd’s Furniture Showrooms, Inc., CMS Roofing Inc. and Jaron Jaggers.
Mudd’s later entered into an agreement with Bowling Green, Kentucky-based CMS Roofing Inc., a roofing contractor, who was authorized to assist Mudd̵7;s in the insurance claim. CMS found further damage. Travelers have so far paid a total of $ 141,169.64 to Mudd’s.
Mudd’s then transferred its rights in the insurance claim to the CMS owner, Mr. Jaggers. Jaggers had discussions with an official from the Nashville-based Howarth Group, a non-partisan valuation company, which led to an unforeseen fee arrangement.
Travelers requested a declaratory judgment in the case in December 2019. In an amended complaint, it said the award should be made because Howarth was not impartial as an appraiser due to the unforeseen event arrangement.
In the same way as the insurer said the verdict: “The question of Howarth’s impartiality goes deeper than just his fee arrangement, especially when viewed against case law.” It cited a previous ruling that states that valuers should not be biased.
“This type of arrangement means that the higher the award, the more Jaggers earns, both as a recipient of the claim and in a referral fee,” the ruling states.
“A satisfied Jaggers is more inclined to send further business to the Howarth group,” it said, judging in favor of the traveler, leaving the appraisal price and granting the Travelers’ request for summary judgment.
The lawyers in the case had no comments or did not respond to a request for comment.