this is a contract case surance contract it's an eerie case diversity of citizenship which could set an important precedent for kentucky and actually for other states regarding an alternative dispute mediation process known as appraisal which as i think i've explained in my brief is voluntary for the insured and i represent the respondent appellant but actually in the shoes of the plaintive because the insurance company took this case to the courthouse seeking to appoint an appraiser and it could be a bad precedent in two or three ways first of all it will discourage the appraisal process because we received what would appear to be a biased appraiser and could not probe much into it at least that's what we thought and every appraiser they nominated to the court and allegedly prior to litigation was an insurance oriented praiser who would ever want to go into appraisal it will discourage appraisal and it's good for courts to have alternative dispute mediation secondly it sets a precedent against what's called matching which is a common remedy when the property that's insured which is building not the specific border shingle is damaged and the cosmetic value of the entire building is damaged and you don't get matching which you would see after storms as you drove around in kentucky or arguably elsewhere throughout the country is is these these make sho for the opposite proposition what the policy provides is in the four options each one has the word property in it even the repair replace option has the word property and if you look at page ten seventy th property to include building not just sobbing or shingle and in every case they cite and we cite about the same insurance policies pretty provisions are there in the always decided on the facts and no one is saying that actual cash value precludes matching we pay for insurance coverage up to agree policy limits for each building some may be actual cash value some may be closer to replacement cost but there's nothing this policy which is to be construed in the think the state paul cases the kentucky case on ambiguity that this policy is to be construed against the insurance company i mean maybe i don't understand this but you know you've got these four options the fourth one looks like a quote matching option because it talks about replace with other property of like kind and quality that seems anonymous to me with matching but the problem as i see it is these four options are separated by an order and so i thought that left it was cincinnati to decide how to do this what am i missing about that reading of the contract when they're going to have a contract where if they're going to say it's about it's insurance property insurance policy to deal with losses in property so what does it mean that if they all mention property let me answer the two part sentence they deliberately wri way but if you look at the definition of property which i think is on page ten seventy in the record includes buildings and if buildings are the property then the value of the buildings which are the insured property in the word property is an all for those options and there are cases are cited page twenty three my reply brief and else where cases forget the cases keep going with the language the property of the building not just the board if the property if the property is the boards then all we have is the right to repair or replace the boards with this court messed isn't there's national this is interpretation in count which i saw is it that the damaged property is the buildings that's why you get matching i understand i just don't get your focus on property assume everything you're saying is correct about the property the property is the building the policy says the insurance company gets to choose which of these four options they utilize to pay and one of those is to pay the value so matching cost more than the value they obviously pick option one if batching cost less than they might pick one of the other options what's wrong with that why am i wrong in that reading of the of section for the polls there's a simple answer to that it doesn't just say repair or replace in every one of those sentences the word property is a necessary part of the equation it always say repair or replace the property and if i word proper to me maybe just tell me if this is what you're trying to get out are you saying that if you had a bunch of broken windows in a building they invoke this insurance policy are you saying the owner of the building that bought the policy gets to say i know it's just broken windows but we want the whole building replaced is that the point you're making when you emphasize the word building you know that i don't understand in light of judge givens question what you're getting at the problem is the windows are easy to replace and when you can replace them if you read the entire language of those poor clauses if you can provide a say this would counts as a satisfactory remedy with replacement that's fine in this case they don't make the kind of signing anymore that it would take to provide it cause medically blending remedy and in some of these cases the building will not match a bond together without a complete replacement i don't think though it's much as a remedy but if what you were saying is true your honor then with windows you could use any of the four options you could use and the four options you can read use it to get the remedy because you can you can achieve the replacement by just replacing the windows there's no cosmetic issue on the windows unless there's some sort of unique windows with which i'm not familiar i've never heard of a windows case in casualty insurance you always have sagging or shingles number which no longer can be purchased on the market match or which don't bond together with the rest of the siding or shingles and function as a single unit that's why these cases of what you're saying is tr sir and i know you don't want me to cite precedent that all the cases i've cited across the country and even the district court recognized you you would not get a matching remedy ever replacement cost value or actual cash value because even the replacement cases all have those same four clauses in fact every case that the appellee cites has those four causes it's always a jury verdict which is being affirmed in this case the appraiser is the juror is a judge and jury when i ask the court to do was to instruct the him praise her about the law and then the appraiser who hopefully would be fair a neutral would decide what remedy was appropriate i'm not saying we're all them adequately intitled to anything i just wanted a proper instruction to be given to a fair empire which is what's supposed to happen in appraisal and we have these we have appraisals in the appraisal says ok in this case i'm going to repair it's just a window in this case i'm going to repair because we can replace the siding and it will cause medically blend but in this case i'm not going to do it and if you look at the photos which we test as exhibit you can see what happens when they don't match the property looks terrible and they paid for a policy which has those four options now i think i may have expressed what i'm trying to express i do cite a lot of cases it please the court good morning your honor is my name is emily lam i'm here on behalf of the appellee cincinnati specialty underwriters insurance company thank you all for the opportunity to address this court this morning regarding the claims and issues at stake in this case this case involved which should have been from the outset a very simple a fish and process to resolve the dispute between c s u and arcadia regarding the value of property damage that arcadi despite arcadia's multiple unsuccessful efforts to kind of derail that process of the trial court below the court sided with cincinnati especially underwriters in pretty much every respect and after several years the process was finally able to come to completion with the empire's award now it's important for this court to understand is that this process was fundamentally fair to arcadia and it worked at the end of the day arcadia received everything that it was entitled to under the policy what are the key to which one of the four options would you say your client boat i believe it was probably option two which is the repair the cost to repair or replace the lost or damaged property now i know and my colleague was up here there was a lot of focus on the word property it's important to note that in those options both one into the words lost or damaged qualifies property there's nothing in that in any of those options that would speak to serious use obligation to repair non damaged portions of the property and that's really what issue what does it issue in this case what idea of a city why don't people make it more clear when you know you get that your client gets the four options why not be more clear about which one you're choosing it seems a little unfair to the insured to try to poke holes in every single option i believe it was clear to be insured what happened was when the claim was processed the cincinnati specialty underwriters adjusters went out they evaluated the damage of the claim they issued a check for the amount of the loss for the cost of what it would pay or what it would cost to repair replace the damaged property arcadia was unsatisfied with that amount so they had to dispute it which is how we ended up in the appraisal process which the whole point of the appraisal process is to have a neutral unbiased umpire could increase under number two i'm sorry it doesn't go from basically a twenty five thousand up to nearly one hundred and i remember the numbers correctly when the umpire came in he did determine that the value of the damage was more than initially estimated by c s u and so yes what i'm asking is the umpire was the umpire looking at number two i believe the empire was so both of them looked at number two and that's a big difference ok and i think it could've been number one i believe it was number two matching is not part of two matching is not part of two matching is not part of any of these options under an actual cash value you know in the empire you don't think thought that either no empire did not think that the court specifically instructed the umpire in its orders that matching is not required under the policy or why isn't it retired under four wires and forward says replace with other property of like kind in quality that misreading it no you're not misreading it it simply means for example if a roof of a shingle irks me a shingle of a roof is damaged the insurance company cannot come in and put a red shingle to replace what would have been a roof with remaining black shingles the insurance company has to come in with a shingle of similar color and texture and quality as to what was there it does not mean the entire roof gets replaced because there may be a slight color texture difference all that's required is comparable materials where does matching come in matching doesn't come in at all in th actual cash value policy to asking this policy this matching that is that only a feature in the insurance world in connection with the replacement value yes it is only in the replacement value policies and the right mr lampe seems to say as i understand it is the same or they apply in both replacement policies and actual cash value policies so therefore matching must apply that's that is not correct so the same four provisions do apply whether the policy is an actual cash value or replacement cost policy what the difference is is the last condition which here in section seven of the policy does say its actual cast value or its replacement cost you still have the same four options but the way the loss is calculated can be higher essentially what a replacement cost policy does is it allows the insured the ability to profit from a loss were actual cash value policy takes into account what the fair market value of the property is at the time of the loss in other words what's the properties as as is condition when the loss occurs now these options to repair or replace under an actual cash value policy as judge hill pointed out in the court below would actually allow the insurer in the case of an a c v policy to pay less than actual cash value if the cost to replace a window for example is less than the fair market value of the window then the insurance company can actually pay less than a c v but in the replacement cost policy  buildings is is only worth fifteen hundred dollars or something like that the damage to the siding at the value of the damage to the siding is only worth that certain amount of value damage to the damage varied from building to building there were some buildings that were more heavily damaged some buildings that only sustained you know one or two hail dense but that's where i'm still confused because you seem to be looking back and forth between the value of the covered property which is the building that's what mr lamb  arguing versus the cost of of the repair the damage which is what you seem to be so the way the policy defines covered property is the building however when you look at the last provision sections the only obligation the obligation to the insurer under option one is to pay the actual cash value of the lost or damaged property not the undamaged property the lost or damaged property likewise under the section two provision t it gives c s u the option to pay the cost of repairing or replacing the lost or damaged property again those words are lost or damaged qualify what the property is there's nothing that would require u to essentially give arcadia windfall by re hauling all of the siding on the bill covered property and the valuation provision means the buildings but lost or damaged property and obligate c s u to pair or replace components of the building such as non damage courses of the siding when there is no damage there to repair or replace that would be a windfall to arcadia and that is why in the cases we've cited the courts have said that's unreasonable it's unduly burdensome to insurance companies and it creates a windfall for insurers or insured that they did not bargain for particularly under these actual cash value policies where the recovery is limited to the fair market value of the property in it as is condition at the time of the loss it's not zero with the few minutes i have left i want to talk with some of the other issues at stake in this appeal  other big issue was arcadia's motions to rescind the appraisal process and its allegations regarding bias of the umpire who was initially appointed as to the motion to rescind that motion was properly denied and the court did not care when it allowed the appraisal process to continue they present process worked exactly as it should the fact that c s use appraiser in arcady is appraiser disagreed on who should be umpire is not grounds to rescind the process that's why the appraisal process is there it contemplates disagreement between the appraisers at the end of the day all c s u really cared about was having an umpire with the subject matter expertise the education the experience the training to be able to go in independently evaluate this property look at it determine what the fair market value is what damages preexisting because as we've cited in our briefs and into the lower court below this had been a long neglected property well before the hail storm the sighting was in extreme disrepair at the time of the hail storm there was other damage to it that was not subject to this claim so we needed an independent umpire to be able to go in there evaluate the damage the causation the extent and determine the loss c s u nominated three umpires who knew to have experience as empires and doing appraisals at the end the day the court review those chose as the umpire later on in the case new allegations about mr turley's bias were raised the core question mr truly conducted of our dear found of those allegations of bias to be unfounded and allowed the appraisal process to proceed now there is something in or katie is briefs that i want to point out because the it's a misstatement of the facts and it's very important in both of arcadia's brief in chief and it's a reply brief  his alleged that there is some kind of ownership relationship between c s u and n c a a group which is a company that mr truly was formerly affiliated with that is not accurate it's not at all accurate they are not affiliated entities there is no ownership relation between them they are two separate distinct entities mr turley was formally and his own  adjusting business that was bought out by n c a a group for a period of time mr turley worked with n c a a group but the time of the appraisal in this case and his appointment is higher he had no employment or contractual affiliation with he was going to decide the cases in which he was on fire he didn't get assignments from n c a a group and he wasn't sure whether he even ever been involved in any other matter involving c s u absent the showing absent showing that there was some kind of sufficient ongoing relationship person if against me ongoing relationship between mr turley and c s u the district court was the correct in allowing him to retain his appointment umpire and letting the umpire process finish out the third and final issue to point on was the bad faith claim its c s use position that the district court properly found that this bad faith claim failed as a matter of law and a granted summary judgment in c s u favor as the court is probably aware under kentucky law of bad faith claim her acquires a showing that the insured was obligated to pay the claim and it was not fairly debateable here all the evidence showed that all along up until the point of the umpire's award the claim was fairly debatable there was a huge debate over the amount of the claim c s u was claiming that it was close to thirty thousand dollars arcadia was claiming it was close to a million dollars so in the face of that debate cus you did exactly what it was supposed to do under the policy it invoked the appraisal process it attempted numerous times to move forward with the appraisal process it appointed nom nominees for umpire who it believed had the requisite experience handle the case it also threw it open to the district judge to say if you don't like any of our non nominees that's fine feel free to disregard them all we want to somebody with the rexford requisite subject matter expertise at the end of the day  finally went through there was no evidence at any point below that c s you acted in bad faith as such the district court was correct when it found that there was no question of fact on this shoe and it properly granted summary judgment to s u on that claim so for the reasons i stated we ask that this court affirm the district court in all respects and finding that this is an actual cash value policy in finding that because this is an actual cash value policy there is nothing in the policy or in kentucky law that road give arcadia the right to cosmetic matching in other words a windfall we ask that you affirm the summary judgment order dismissing the bad faith claim against art against c s you and we ask that you affirm the district court's decisions to move forward with the appraisal process as mr jeff turley is empire and if there are no questions live i have thirty seconds left i will see my time thank you problem is the first thing you says you say is an a there's an ambiguity on the face of the policy as that it was a replacement value reimbursement policy position now on appeal is this is a  replacement you seem to change that even again in your oral argument today but the reason i'm asking this question is it seems absolutely crystal clear that you conceded below that this was an actual cash value policy several times orally and in writing so am i right or about that or my wrong about that and all due respect that's not what i said when a said wounds its actual cash value up to the limits and you get replacement cuts a hybrid is what i said and i explained that well in my briefcase so if i go back to your brief below you'll find that aside that in my brief here we're assigned it below ok but there are other issues so you say now it's are you saying it's cash value or it's replacement or it's like what do you say i'm saying it's hybrid although the replacement cost value box is checked this part of the reason for that or human ok then you but the say the district court should have ruled that arcadia may have been a title to a remedy of matching to be true determined by the prior by the trier of fact so he is he was in error in saying no matching pleadings that you are entitled to a due process here hearing before whom about what and when what is that me that got to the point that i want to make we've filed four  of pleading forty ok i also asked for a jury trial on bad faith and unfair claim someone practices this may be the first kentucky precedent i showed a lot of reasons all three of the  they named including mr turley had relationships with them i was never allowed any discovery we heard conversation there was no evidence i had some evidence but there was a lot of challenge and question about mr turley and they nominated three of three the whole purpose of appraisal is to avoid a trial and they forced us into this litigation and one reason why that's important is that the district court's decision this is this thing in this that then there are there and then do the do the two one from them and one from you then appoint the third is out of this work we both nominate appraisers and the judge appoints the umpire ok so he picks between  fair nominees and the judge that you're is there is there any case that supports that just because you don't like them therefore there's bad there's a tort of bad faith in kentucky and there is a statute on unfair claims settlement practices and one of the issues is he is given the discretion to make a decision even if it's actual cash value this is pretty clear pretty pretty with the question is there a place that  praising clause was considered to be a materially breeched and some of those cases are kentucky cases the land handling him might be one of them were the gummed up the appraisal process but trying to control the  consider the cancer carefully thank you very much