REL: 09/30/2014

Notice: This opinion is subject to formal revision before publication in the advance

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the opinion is printed in Southern Reporter.

SUPREME COURT OF ALABAMA

SPECIAL TERM, 2014

____________________

1100872

____________________

Baldwin Mutual Insurance Company

v.

Melissa Adair et al.

Appeal from Calhoun Circuit Court

(CV-11-0002)

MURDOCK, Justice.1

This case was originally assigned to another Justice on 1

this Court. It was reassigned to Justice Murdock on June 12,

2014.
1100872

Baldwin Mutual Insurance Company ("BMIC") appeals from an

order of the Calhoun Circuit Court modifying a previous order

granting BMIC injunctive relief. We reverse and remand.

I. Facts and Procedural History

On December 2, 2010, BMIC filed an "Application for

Temporary Restraining Order, Motion for a Preliminary

Injunction and Complaint for Declaratory Judgment" ("the

complaint") in the Baldwin Circuit Court against 122

individuals who were insured under various insurance policies

issued by BMIC ("the insureds"). According to the complaint, 2

the insureds, through their legal counsel, had sent a letter

dated November 12, 2010, to BMIC. The November 2010 letter

stated:

"On behalf of each of our clients listed on the

attached, please know that we invoke the appraisal

provision contained within the Baldwin Mutual

policies issued to these insureds for each loss or

claim suffered previously. We hereby identify

Samantha Ronquille-Green as our appraiser, and

insist that you identify your appraiser within the

time specified in the policies [i.e., 20 days]. 

Obviously, we are only seeking appraisal of claims

for which there is prior coverage."

Additional defendants were subsequently added as 2

insureds. In their briefs, the parties refer to there being

approximately 130 insureds.

2
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The letter also requested that BMIC provide the insureds'

counsel with a copy of the policy file for each of the

insureds, and the letter accused BMIC of "bad faith" as to its

treatment of the insureds.

According to BMIC's complaint, the various insurance

policies at issue provided that BMIC or an insured could

invoke an appraisal process if BMIC and the insured could not

reach an agreement as to the amount of compensation due the

insured for a loss covered under the insured's policy. The

appraisal process entailed BMIC and the insured each choosing

an appraiser to estimate the insured's loss, and the

appraisers in turn choosing an umpire who would resolve

differences in the loss estimates provided by the appraisers. 

BMIC alleged:

"11. Under each of the appraisal provisions

..., a condition precedent to the demand of an

appraisal is that there be a disagreement as to the

amount of the loss.

"12. The November 12, 2010 letter, by which the

[insureds] demand appraisal, fails to satisfy this

condition precedent, as the [insureds] fail to

establish that there is a disagreement as to the

amount of the loss.

"13. Specifically, the purported appraisal

demand fails to set forth, among other things, the

date of the loss, the cause of the loss, the

3
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location of the loss, any specifics concerning the

nature of the loss, or why the [insureds] assert

that there is a disagreement as to the amount of the

loss.

"14. Upon information and belief, [BMIC] avers

that all claims and losses have been adjusted and

settled properly and without any disagreement or

complaint by said ... policyholders.

"15. Under each of the appraisal provisions at

issue, appraisal is proper only as to the 'amount of

loss.'

"16. Therefore appraisal is appropriate under

said policies only where (1) no coverage issue

exists, and (2) the policyholder and insurer agree

on the scope of the damage.

"17. To the extent the November 12, 2010

letter, by which the [insureds] demand appraisal,

demands an appraisal as to issues concerning

coverage or the scope of the loss, the appraisal

demand is improper.

"18. [The insureds], separately and severally,

therefore, have no right to invoke the appraisal

process.

"19. [BMIC] further avers that the attorneys

that demanded appraisal by way of the November 12,

2010 letter presently have filed nine (9) separate

lawsuits against [BMIC], three of which set forth

class action allegations (McCain v. Baldwin Mutual

et al, CV-10-901266, Montgomery County ('McCain

Class'), Moyers v. Baldwin Mutual et al,

CV-10-900100, Escambia County ('Moyers Class'), and

Smith v. Baldwin Mutual et al, CV-07-900258, Calhoun

County ('Smith Class')).

"20. The Complaint as last amended in Smith

defines the putative class as follows:

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1100872

"'The class includes all of those past and

present ... policyholders, who, after

suffering an insured loss, were subjected

to Defendant [John] Bobo's nefarious ways [3]

following his dispatch to adjust the loss

by [BMIC].'

"21. Upon information and belief, most, if not

all, of the [insureds] were identified by their

current attorneys and contacted by way of the Smith

litigation. Specifically, the attorneys that now

represent the [insureds] sent over two thousand

(2,000) letters to various policyholders of [BMIC],

including, most, if not all, of the [insureds].

"22. While simultaneously prosecuting the Smith

class, the attorneys for the [insureds] are also

seeking individual appraisals for the same

individuals that would fall within the Smith class.

"23. The Complaint as last amended in Moyer[s]

defines the putative class as follows:

"'The class includes past and present BMIC

policyholders that suffered losses as a

result of the occurrence of Hurricane Ivan

for which they have not been duly

compensated, upon whose land Defendants

trespassed or who have otherwise been

aggrieved by Defendants' conduct in the

wake of Hurricane Ivan.

"'Members of the class or a class also

include those BMIC policy holders who

suffered losses as a result of Hurricane

Ivan and who were subjected to the

abnormally low pricing scheme perpetrated

by Defendants, as herein described above,

"Defendant Bobo" allegedly is a claims adjustor for BMIC. 3

5
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and whose claims were consequently

underpaid.'

"24. Count IX of the Second Amended Complaint

in Moyers sets forth a demand for Appraisal.

"25. The Complaint as last amended filed in

McCain defines the putative class as follows:

"'All holders of policies, issued by

[BMIC], insuring properties within the

State of Alabama who have suffered a loss

within six (6) years of the filing of this

complaint for which [BMIC] reduced the

actual cash value of the same by reduction

for the loss of value of undepreciable loss

elements.'

"26. The same Gloria McCain that serves as the

class representative in the McCain class is among

the Respondents on whose behalf appraisal has been

demanded.

"27. Because [the insureds] have failed to

adequately identify the claims or losses for which

they seek an appraisal, [BMIC] is unable to

determine which of the [insureds] may fall within

the class definitions set forth in the

aforementioned class actions.

"28. [BMIC] avers that proceeding with the

appraisal process prior to a determination whether

there exists a real dispute or disagreement and

whether each [of the insureds], separately and

severally, is entitled to invoke the appraisal

process, will result in immediate and irreparable

injury loss damage to [BMIC]."

(Emphasis added.)

6
1100872

In its complaint, BMIC sought a temporary restraining

order, "until such time as this court has the opportunity to

rule on [BMIC's] Motion for a Preliminary Injunction." BMIC

asked that the restraining order "enjoin[] the [insureds] from

engaging in the appraisal process and stay[] the time in which

[BMIC] has to identify an appraiser or otherwise participate

in said process." Also, BMIC asserted that "it will be caused

immediate and irreparable injury, loss or damage should it be

required to engage in the appraisal process demanded prior to

determining whether [the insureds] separately and severally

are entitled to invoke the appraisal process."

In regard to BMIC's motion for a preliminary injunction,

the complaint requested that the court "conduct a hearing as

to the issues set forth above and issue a preliminary

injunction enjoining the [insureds] from proceeding with the

appraisal process as requested herein during the pendency and

until the final disposition of this cause." (Emphasis added.)

As to the declaratory relief requested, BMIC's complaint

alleged as follows:

"40. The insurance policies issued to the

[insureds] by [BMIC] serve as the basis for the

[insureds'] claims for appraisal. [BMIC] has not

been able to determine that all [the insureds] have

7
1100872

been insured with or suffered a covered loss while

insured with [BMIC].

"41. Each policy issued by [BMIC] provides, as

a condition to the appraisal process, that there be

a failure to agree on the amount of the loss.

"42. The appraisal demanded by the [insureds]

does not identify the claims or losses for which

appraisal is sought, but on information and belief,

[BMIC] avers that all claims and losses have been

adjusted and settled without any disagreement or

complaint by said ... policyholders.

"43. [The insureds] fall within [the] definition

of one or more of the three class actions that the

attorneys for the [insureds] have filed, and

therefore, may not pursue individual appraisals.

"44. [BMIC] seeks a determination from this

Court pursuant to Alabama Code [1975,] § 6-6-220

et seq., as to the following issues:

"(1) Whether the [insureds] may properly

demand an appraisal, where, as is the case

here, the [insureds] (1) have failed to

identify the claims or losses for which

appraisal is sought; (2) have failed to set

forth any reason as to why the [insureds]

contend there is a disagreement as to the

amount of loss; and (3) have failed to

establish that any alleged disagreement is

over the amount of loss, as opposed to a

disagreement over coverage under the policy

or the scope of loss or some other matter

not subject to appraisal.

"(2) Whether the [insureds] may seek an

appraisal, given the pendency of the three

class actions filed by their attorneys.

8
1100872

"(3) Determine that those [insureds] who

have not suffered a loss insured by [BMIC]

are not entitled to appraisal."

4

On December 21, 2010, the Baldwin Circuit Court held a

hearing on BMIC's request for a preliminary injunction. 

During the hearing, the court summarized its understanding of

the matter as follows:

"[I]f the essence of your injunction request is, we

don't want to proceed with an appraisal until we

know what the basis of their disagreement is, that's

a very reasonable claim. That's a very reasonable

At the hearing on the temporary restraining order, the 4

Baldwin Circuit Court raised the issue of abatement as to

BMIC's action. Thereafter, BMIC filed a brief on that issue. 

In the brief, BMIC stated that no class had been certified in

any of the class actions described in BMIC's complaint and

that the class representative in McCain v. Baldwin Mutual,

CV-10-901266, filed in Montgomery County, was the only one of

the insureds who was currently a party in an action in which

BMIC also was a party. It is not clear from the materials

before us whether the claims at issue in McCain or the other

two class actions referred to in BMIC's complaint are also

claims that might be at issue in the present case. Thus, it

is not clear whether BMIC's claims might be considered

compulsory counterclaims that are subject to abatement,

whether as to McCain or as to other insureds in the various

class actions. See Ex parte Breman Lake View Resort, L.P.,

729 So. 2d 849, 851 (Ala. 1999). Nor are we in a position to

consider the issue whether or how abatement might apply where

a class in a first-filed case has not been certified before a

second action is filed. See Ex parte Water Works & Sewer Bd.

of Birmingham, 738 So. 2d 783 (Ala. 1998)(discussing 

compulsory counterclaims in the context of a class action);

see also Ex parte State Farm Mut. Ins. Co., 715 So. 2d 207

(Ala. 1997)(plurality opinion as to the issue of abatement in

class actions).

9
1100872

position for [BMIC] to take, and that is, I paid you

$5,000. You accepted $5,000. You're now saying

$5,000 isn't enough. And they're simply saying,

'Well, why is it not enough? What are you basing

that on?' And you give that to them and say,

'Here's why, because I've got estimates that it's

going to cost another $2,500 to do the work or it

did cost me an extra $2,500 to do the work.' Well,

they may say, 'Okay. We agree with you. Here's

another check for another $2,500,' and you don't

need the appraisal process. It's not until you say

it's worth more -- the claim is worth more and they

say, 'No, it's not,' then you say, 'Well, then we're

invoking the appraisal process.'"

Counsel for the insureds responded, however, stating that

"that's not the law of the State of Alabama." A later

colloquy is as follows:

"THE COURT: So if the insured goes back -– each

of these insureds goes back and files an amended

proof of loss -– 

"[BMIC'S COUNSEL]: We'll have -- what we're

thinking is we should have a chance to investigate

it. They could -- you're right. They could be a

hundred percent right, Judge. We don't --

"THE COURT: -- had a chance to investigate it.

"[BMIC'S COUNSEL]: We have not. We don't even

know -- there are people with five losses. Judge. 

That letter says every claim ever made under every

policy for these people. 

"....

"I mean, they've got to show us something that

we can go back and investigate, and at that point,

if we don't agree with what their appraiser says,

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that's the disagreement that's triggered to invoke

the appraisal process. ... 

"....

"... They can't just say we disagree when they

don't even know what our position is.

"[INSURED'S COUNSEL]: We know what your

position is because you made a payment --

"[BMIC'S COUNSEL]: We made a payment under a

claim that your person accepted. You've not sent us

anything to let us know how it was deficient.

"[INSURED'S COUNSEL]: We don't have to do that,

Your Honor.

"....

"THE COURT: How do you know if you don't say,

you know, you underpaid us a thousand dollars, that

they're not going to say you're right?

"....

"I don't think the appraisal process has been

properly initiated yet because the insureds have not

responded to the basis of their disagreement for

[BMIC] to make a determination of whether they

disagree with the assessment by the insureds or not,

that until there is -- as [counsel for BMIC]

described it -— a mutual disagreement ... where the

insureds say, 'Our claim is for this amount of money

and you've only paid us this amount,' and Baldwin

Mutual says, 'No,' there's not a mutual disagreement

and so, therefore, the appraisal process, it's

preliminary to invoke the appraisal process and that

once that happens -- so, therefore, I think, the

insureds have to invoke some type of basis for why

they're disagreeing with whatever they have been

paid so far and then whatever the policy says as far

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as a reasonable time ... to investigate and then

determine whether you accept what their proof of

loss is or whether you reject it and that if you

reject it, then the appraisal process can be

invoked.

"... It is the reopening of a claim that has

been previously agreed to and the only way to

logically reopen it is [for the insureds to] tell

them what you disagree with what the amount of claim

is. I mean, there ain't no other way to do it."

Immediately after the hearing, the Baldwin Circuit Court

issued an order ("the December 2010 order"), which states:

"This matter is before the Court on a

preliminary injunction filed by [BMIC] seeking a

stay from the appraisal process attempted to be

invoked by the [insureds], each being an insured of

[BMIC], to re-open certain claims previously

processed. Based on the legal and factual arguments

presented, the Court finds that the appraisal

process on these named [insureds] has not been

adequately invoked because there is not a

determination yet of whether there is an actual

disagreement on the amount of loss. The [insureds]

have notified [BMIC] that they now disagree with the

amount of money offered to settle their claims. 

However, no insured has provided any basis for the

current rejection of the offered amount or provided

any amended claim of loss. [BMIC] cannot respond as

to whether it can accept an insured's claim amount

or not until it is presented with the new claimed

amount. Therefore, since the appraisal process has

not been triggered the time limit of 20 days for

[BMIC] to disclose an appraiser is STAYED, pending

each [insured] providing a basis for the rejection

of [BMIC's] claim settlement offer."

(Capitalization in original; emphasis added.)

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In the December 2010 order, the Baldwin Circuit Court

also noted that the parties disagreed as to whether each of

the insureds was entitled to discovery of BMIC's claim file as

to that insured. The court stated: "Because there exist 3

pending class action suits in other courts within Alabama, all

awaiting class certification, this Court is not inclined to

undertake potential discovery issues that might better be

addressed by a court that might certify the class." 

Thereafter, the present action was transferred to the Calhoun

Circuit Court ("the circuit court"), where Smith v. Baldwin

Mutual, CV-07-900258, the first-filed of the class actions

against BMIC, was pending. 

5

On February 11, 2011, the insureds filed a motion in the

circuit court entitled "Motion to Alter, Amend, or Vacate." 

The insureds alleged that "it is not clear on the face of the

[December 2010] order whether the Circuit Court of Baldwin

County intended to grant [BMIC's] application for a

preliminary injunction," and they requested that the circuit

court vacate the December 2010 order "to the extent that the

Initially, the case was assigned to Calhoun Circuit Judge 5

John C. Thomason. It was reassigned to Calhoun Circuit Judge

Brian P. Howell, before whom Smith was pending at the time of

these proceedings. 

13
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same purports to grant injunctive relief." According to the

insureds, the December 2010 order did not satisfy the

requirements of Rule 65(d), Ala. R. Civ. P., because it

allegedly did not "describe in reasonable detail ... the act

or acts sought to be restrained." The insureds also argued

that "the facts underlying the entry of the Court's order do

not satisfy the requirements for the issuance of a preliminary

injunction."

BMIC filed a response to the insureds' "Motion to Alter,

Amend, or Vacate." BMIC argued that the insureds' motion

should be denied because, BMIC argued, the insureds failed to

appeal from the December 2010 order pursuant to Rule

4(a)(1)(A), Ala. R. App. P. ("[T]he notice of appeal shall be

filed within 14 days (2 weeks) of the date of the entry of the

order or judgment appealed from: (A) any interlocutory order

granting, continuing, modifying, refusing, or dissolving an

injunction ...."). BMIC also argued that, even if the 6

circuit court could reconsider the December 2010 order, the

BMIC also argued that the insureds' "Motion to Alter,

6

Amend, of Vacate" had not been timely filed pursuant to

Rule 59, Ala. R. Civ. P.

14
1100872

insureds had failed to show that the Baldwin Circuit Court had

exceeded its discretion as to the entry of the order. 

On March 15, 2011, the insureds filed an answer to BMIC's

complaint and a counterclaim. The counterclaim alleged:

"60. Each [of the insureds] is either a present

or former BMIC policy holder or the successor in

interest of a BMIC policy holder.

"61. BMIC issued policies of property and

casualty insurance to [the insureds] or their

successors covering losses to property.

"62. [The insureds] or their successors each

made claims on the corresponding policies issued to

them or to their successors.

"63. [The insureds] aver that these claims were

not paid in full.

"64. [The insureds] aver further that there was

widespread fraud associated with the manner in which

their claims were adjusted.

"65. [The insureds] aver that they each disagree

or have failed to agree with BMIC regarding amounts

of loss for each claim made by them or by their

successors."

Based on the foregoing allegations, the insureds asserted

claims of breach of contract in their counterclaim, and they

requested a judgment "declaring the various rights of the

parties under the terms of each policy issued to [an insured]

15
1100872

or his or her or its successor-in-interest," particularly as

to certain matters regarding the appraisal process.

On March 18, 2011, the circuit court entered an order

denying the insureds' "Motion to Alter, Amend, or Vacate" the

December 2010 order. The March 2011 order further stated that

the insureds "must present the appropriate information to

properly trigger the appraisal process. The Stay shall remain

in effect until such information is provided to [BMIC]." 

Thereafter, BMIC's counsel sent the insureds' counsel a

letter dated April 11, 2011. The letter acknowledged that the

insureds' counsel had provided

"some information with respect to Hugh Bryan, Dora

Bryan, Mary Bulger, Mary Hicks, Hattie Jemison,

Gloria McCain, Robert Tubbs and LeAnna Williams. I

need to have them submit to an Examination Under

Oath, as per the express terms of their policies.

"Also, it is imperative that your clients

provide me with all of the requested documentation

prior to the Examination Under Oath. Again, this

information has been requested by way of the

consolidated discovery, and must also be provided

per the policies at issue.

"Many of the [insureds] are attempting to submit

multiple claims to appraisal. Further, the claims

span over years and years. As a practical matter,

it is very difficult to review the dwelling years

after the fact and make any sort of accurate

assessment. Having documentation, as has been

requested, will certainly allow [BMIC] to determine

16
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whether, in fact, it does disagree with any

contentions of your clients. In addition, in the

event that there is disagreement between [BMIC] and

your clients, having this information readily

available should permit the appraisers to make a

more reasoned and accurate determination as to

whether any additional amounts are owed under the

claims in question."

On April 15, 2011, the circuit court held a hearing as to

various pending motions, and, at the conclusion of the

hearing, the court requested that the parties submit briefs as

to the issue of appraisal. The parties submitted briefs. 

BMIC noted in its brief:

"To date, ... only 14 of the 130 [insureds] have

provided any information other than the date of

loss. Clearly, with respect to the 116 or so

[insureds] that have provided nothing to [BMIC]

since receiving payment from [BMIC] and thereby

reaching an 'agreement' with [BMIC], there has been

nothing presented that would tend to establish a

disagreement.

"Appraisal has been demanded again with respect

to 7 of the [insureds] -- (1) Banks; (2) Bulger;

(3) Hicks; (4) Key; (5) Kynard; (6) McNeal;

(7) Williams. With respect to each and every one of

the seven [insureds], the only thing that has been

provided to [BMIC] following the 'agreement' wherein

the [insureds] were initially paid is the report of

Samantha Green, who has been retained by the

[insureds] as their expert."

On April 22, 2011, the circuit court entered an order

giving BMIC "ten (10) calendar days to name an appraiser in

17
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this case as required by the provisions of the policy" ("the

April 2011 order"). Thereafter, BMIC sought clarification as

to whether the April 2011 order 

"applies with respect to all of the approximately

130 [insureds], or just the [insureds] that have

made the most recent demand for Appraisal. Second,

[BMIC] seeks clarification as to whether this Order,

in addition to requiring that [BMIC] name its

appraiser, also holds that appraisal has been

properly invoked."

On April 29, 2011, the circuit court entered an order

granting BMIC's motion for clarification. The order states:

"The Court clarifies its earlier Order to state that

the Court finds sufficient evidence of a

disagreement as it relates to the fourteen (14)

[insureds] that have made the most recent demand for

appraisal. The Court finds that they have satisfied

the terms of the policy necessary. Other [insureds]

may be added to this initial group of [insureds]

once they comply with the requirements of the policy

to invoke the appraisal provision."

BMIC appealed to this Court pursuant to Rule 4(a)(1)(A),

Ala. R. App. P., governing appeals from "any interlocutory

order granting, continuing, modifying, refusing, or dissolving

an injunction, or refusing to dissolve or modify an

injunction." BMIC also filed a motion in the circuit court

requesting that that court stay the April 2011 order, pending

resolution of BMIC's appeal. The circuit court denied the

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motion for a stay. BMIC then filed a motion with this Court

asking that we stay the April 2011 order; this Court granted

BMIC's motion. 

II. Standard of Review

In the present case, a preliminary injunction was issued

in December 2010. Thereafter, the April 2011 order (as

clarified) modified the injunction as to 14 of the insureds

and, in effect, permanently denied BMIC's claims for

injunctive relief as those 14 insureds. The "facts" before

7

the circuit court were undisputed, and no ore tenus evidence

was presented at the proceedings. Thus, the ore tenus rule is

not applicable, and, as this Court has stated, "where the

trial court's ruling rests upon a construction of facts

indisputably established, this Court indulges no presumption

of correctness in favor of the lower court's ruling." Alabama

Farm Bureau Mut. Cas. Ins. Co. v. Dyer, 454 So. 2d 921, 923–24

As to those 14 insureds, the circuit court's order 7

disposes of the central dispute in this case: the timing of

the appraisal process in relation to the insureds' fulfillment

of their post-loss duties. It requires the parties to engage

in the appraisal process before the insureds meet their postloss duties. Once this happens pursuant to the court's order,

it cannot "unhappen." This is not an order that maintains the

status quo until relief can be entered or provides any sort of

"preliminary" relief; the relief it orders is irreversible.

19
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(Ala. 1984). "[W]hen the facts are undisputed and the

'"ruling [is] a reconsideration of a question of law, ... the

standard of review is de novo."'" Kappa Sigma Fraternity v.

Price-Williams, 40 So. 3d 683, 694 (Ala. 2009)(quoting Bradley

v. Town of Argo, 2 So. 3d 819, 824 (Ala. 2008), quoting, in

turn, Pioneer Natural Res. USA, Inc. v. Paper, Allied Indus.,

Chem. & Energy Workers Int'l Union Local 4–487, 328 F.3d 818,

820 (5th Cir.2003)). 

Further, as this Court noted in Twin City Fire Insurance

Co. v. Alfa Mutual Insurance Co., 817 So. 2d 687, 691-92 (Ala.

2001):

"A contract of insurance, like other contacts,

is governed by the general rules of contracts. ... 

'Insurance contracts, like other contracts, are

construed so as to give effect to the intention of

the parties, and, to determine this intent, a court

must examine more than an isolated sentence or term;

it must read each phrase in the context of all other

provisions.'" 

(Quoting Attorneys Ins. Mut. of Alabama, Inc. v. Smith,

Blocker & Lowther, P.C., 703 So. 2d 866, 870 (Ala. 1996).) 

"'When analyzing an insurance policy,

a court gives words used in the policy

their common, everyday meaning and

interprets them as a reasonable person in

the insured's position would have

understood them. Western World Ins. Co. v.

City of Tuscumbia, 612 So. 2d 1159 (Ala.

20
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1992); St. Paul Fire & Marine Ins. Co. v.

Edge Mem'l Hosp., 584 So. 2d 1316 (Ala.

1991). ... Only in cases of genuine

ambiguity or inconsistency is it proper to

resort to rules of construction. Canal

Ins. Co. v. Old Republic Ins. Co., 718 So.

2d 8 (Ala. 1998). A policy is not made

ambiguous by the fact that the parties

interpret the policy differently or

disagree as to the meaning of a written

provision in a contract. Watkins v. United

States Fid. & Guar. Co., 656 So. 2d 337

(Ala. 1994). ...'

"B.D.B. v. State Farm Mut. Auto. Ins. Co., 814 So.

2d 877, 879–80 (Ala. Civ. App. 2001)." 

State Farm Mut. Auto. Ins. Co. v. Brown, 26 So. 3d 1167, 1169

(Ala. 2009). "'If there is no ambiguity, courts must enforce

insurance contracts as written and cannot defeat express

provisions in a policy ... by making a new contract for the

parties.'" Shrader v. Employers Mut. Cas. Co., 907 So. 2d

1026, 1034 (Ala. 2005) (quoting St. Paul Mercury Ins. Co. v.

Chilton–Shelby Mental Health Ctr., 595 So. 2d 1375, 1377 (Ala.

1992)). "'[I]nsurance contracts are subject to the same

general rules of all written contracts, that is, in case of

doubt or uncertainty of the meaning thereof, they are to be

interpreted against the party drawing them.'" Upton v.

Mississippi Valley Title Ins. Co., 469 So. 2d 548, 555 (Ala.

1985) (quoting Aetna Life Ins. Co. v. Hare, 47 Ala. App. 478,

21
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486, 256 So. 2d 904, 911 (1972)). In other words, "the rule

that ambiguous insurance contracts are to be construed in 

favor of insureds ... may [not] be permitted to frustrate the

parties' expressed intention if such intention can be

otherwise ascertained." 43 Am. Jur. 2d Insurance § 299

(2013). See also Tinker v. Continental Ins. Co., 410 A.2d

550, 553-54 (Me. 1980) (discussing, to like effect, the use of

the language of the contract as a whole as well as extrinsic

evidence in the construction of an insurance agreement). 

III. Analysis

BMIC argues that the April 2011 order requiring it to

participate at this time in the appraisal process as to some

of the insureds should be reversed: (1) because the insureds

at issue have not complied with their post-loss obligations as

described in provisions of the insured's insurance policy and

(2) because the insureds have not established the precondition

to the appraisal process, namely BMIC's 'failure to agree' or

'disagreement' with the insureds as to the value of the loss

at issue. As discussed below, the first reason feeds into the

second.

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BMIC is correct in its position that the insureds must

comply with their post-loss obligations as described in

provisions of the respective insured's insurance policy before

that insured may invoke the appraisal process. To conclude

otherwise would reflect an unreasonable reading of the

insurance policies at issue. That is, as to the satisfaction

of the insured's post-loss obligations being a precondition to

the insured's assertion of the right to an appraisal, the

policy is not ambiguous. See Slagle v. Ross, 125 So. 3d 117,

136 (Ala. 2012) (Shaw, J., concurring in the result in part

and dissenting in part) (recognizing that language is

ambiguous where it "is susceptible to at least two reasonable

interpretations"); Inter-Ocean Cas. Co. v. Scruggs, 24 Ala.

App. 130, 132, 131 So. 549, 551 (1930) ("[W]hile it is

practically everywhere the accepted rule that contracts of

insurance must be most strongly construed against the insurer,

this rule cannot be pressed to the extent of adopting a

construction that is unreasonable. Its applicability is

limited to those cases where the language of the policy is

ambiguous and is susceptible of two reasonable

constructions."). 

23
1100872

Under the express terms of the insurance policies at

issue, an appraisal is a step that may be demanded only after

an insurance company and an insured come to a state of

disagreement over the amount the insurer is to pay. Yet, the

insurer has no obligation to pay any amount -- a condition

necessary to put the parties in a state of disagreement over

that amount -- until the insured meets his or her post-loss

obligations. For example, the loss-payment clause in policy

CP-00-99, one of the policies at issue here, states:

"f. We will pay for covered loss or damages within

30 days after we receive the sworn statement of

loss, if:

"1. You have complied with all of the

terms of this policy; and

"2. a. We have reached an agreement with

you on the amount of loss; or

"b. An appraisal award has been

made."

Policy CP-00-99 further provides:

"3. DUTIES IN THE EVENT OF LOSS OR DAMAGE.

"You must see that the following are done

in the event of loss or damage to Covered

Property:

"a. Notify the police if a law may have

been broken.

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1100872

"b. Give us prompt notice of the loss or

damage. Include a description of the

property involved.

"c. As soon as possible, give us a

description of how, when and where the

loss or damage occurred.

"d. Take all reasonable steps to protect

the Covered Property from further

damage by a Covered Cause of Loss. If

feasible, set the damaged property

aside and in the best possible order

for examination. Also keep a record

of your expenses for emergency and

temporary repairs, for consideration

in the settlement of the claim. This

will not increase the Limit of

Insurance.

"e. At our request, give us complete

inventories of the damaged and

undamaged property. Include

quantities, costs, values and amount

of loss claimed.

"f. Permit us to inspect the property and

records proving the loss or damage. 

Also permit us to take samples of

damaged property for inspection,

testing and analysis.

"g. If requested, permit us to question

you under oath at such times as may be

reasonably required about any matter

relating to this insurance or your

claim, including your books and

records. In such event, your answers

must be signed.

"h. Send us a signed, sworn statement of

loss containing the information we

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request to investigate the claim. You

must do this within 60 days after our

request. We will supply you with the

necessary forms.

"i. Cooperate with us in the investigation

or settlement of the claim."

(Emphasis added.) The other policies contain similar

provisions requiring an insured to submit proof of loss and

imposing other post-loss obligations, such as providing

notice, protecting the property from additional damages, etc.,

before payment of loss must be made. In other words, the

insurance policies clearly condition BMIC's obligation to "pay

for covered loss" upon its receipt (1) of a proper statement

of loss from the insured, and (2) the insured's compliance

with the insured's post-loss obligations described in the

specific policy.

The foregoing conclusion is corroborated when one

considers the nature of the "duties after loss" at issue. 

Each of those is a duty that amounts to a precursor to the

establishment of a fair and final loss amount. Yet, of the

approximately 130 insureds, only 14 have provided even some of

the documentation BMIC has requested in its investigation of

the claimed losses.

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1100872

Even the 14 insureds who have provided some

documentation, however, have failed to submit to an

examination under oath as BMIC has requested. In addition,

the most that any of them has submitted is a report prepared

by an appraiser chosen by the insured, or some confirmation of

expenses allegedly incurred, as to a loss that is several

years old. Although perhaps helpful, the submitted

information does not provide BMIC with all the information to

which it is entitled under the terms of the insureds'

policies, and the insureds responses fall far short of

completion of the duties required to trigger BMIC's duty to

make an offer to settle the insured's claim for a particular

amount in addition to the amount to which the insured

apparently had previously agreed. We do not see how the

parties can engage one another in a dispute over the amount of

loss involved, and go even further to invoke an administrative

process for resolving that dispute, unless and until (1) the

insureds have provided the required notice of loss, including

the basis for each insured's claimed loss and its value, and

(2) the insureds have permitted BMIC to investigate and verify

the claimed losses, as allowed under the terms of the

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respective policies. See, e.g., Nationwide Ins. Co. v.

Nilsen, 745 So. 2d 264, 267 (Ala. 1998)("An insurance company

is entitled to require an insured to submit to an examination

under oath as part of its claims investigation process. ...

[A]n insurer's obligation to pay or to evaluate the validity

of an insured's claim does not arise until the insured has

complied with the terms of the contract with respect to

submitting claims."). Moreover, the failure of the insureds

to have complied with their post-loss duties may be

particularly problematic in this case. It appears that a

significant amount of time passed (two years or more) between

all, or most of, the claimed losses and the November 2010

letter from the insureds' counsel, by which BMIC was informed

that the insureds "disagreed" with the payments they had

received in settlement of the claims the insureds initially

had made -- in some cases, years earlier -- and that each of

the insureds now was demanding an appraisal. 

As BMIC correctly notes in its brief, an insured must

comply with his or her post-loss obligations when the insured

is making a claim upon the insurer, and meeting those

obligations is a precondition to any duty on the part of the

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insurer to make a loss payment. See Nilsen, supra; Akpan v.

Farmers Ins. Exch., Inc., 961 So. 2d 865, 872 (Ala. Civ. App.

2007). "[T]he obligation to pay or to evaluate the validity

of the claim does not arise until the insured has complied

with the terms of the contract with respect to submitting

claims." United Ins. Co. of America v. Cope, 630 So. 2d 407,

411 (Ala. 1993). "[N]o case from this Court places on an

insurance company an obligation to either investigate or pay

a claim until the insured has complied with all of the terms

of the contract with respect to submitting claims for

payment." 630 So. 2d at 412; see also Reeves v. State Farm

Fire & Cas. Co., 539 So. 2d 252, 254 (Ala. 1989)("Our cases

have consistently held ... that the failure of an insured to

comply within a reasonable time with such conditions precedent

in an insurance policy requiring the insured to give notice of

an accident or occurrence releases the insurer from

obligations imposed by the insurance contract.").

We also agree with BMIC that, absent the establishment of

a duty to pay, there cannot be a genuine "disagreement"

between the parties as to the issue of the proper amount of a

payment. We find helpful in this regard the decision in

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United States Fidelity & Guaranty Co. v. Romay, 744 So. 2d

467, 471 (Fla. Dist. Ct. App. 1999), in which the court held

that the insured must comply with the policy's post-loss

obligations before the appraisal clause is triggered. As the

Romay court explained, "the disagreement necessary to trigger

appraisal cannot be unilateral. ... In other words, by the

terms of the contract, it was contemplated that the parties

would engage in some meaningful exchange of information

sufficient for each party to arrive at a conclusion before a

disagreement could exist." Romay, 744 So. 2d at 469-70; see

also Hailey v. Auto-Owners Ins. Co., 181 N.C. App. 677, 687,

640 S.E.2d 849, 855 (2007) ("[T]he unsupported opinion of the

insured that the insurer's payment was insufficient does not

rise to the level of a disagreement necessary to invoke

appraisal. ... [T]o the extent Defendant requested that

Plaintiff comply with Plaintiff's post-loss duties prior to

invoking appraisal, such compliance was a necessary condition

precedent to the invocation of appraisal."). 

The Romay court also stated:

"[P]ermitting the insured to compel appraisal

without first complying with the policy's post-loss

obligations would place the insurer at a

considerable disadvantage entering the appraisal

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1100872

process. The nature of the post-loss obligations is

merely to provide the insurer with an independent

means by which to determine the amount of loss, as

opposed to relying solely on the representations of

the insured."

744 So. 2d at 471 n.4; see also Galindo v. ARI Mut. Ins. Co.,

203 F.3d 771, 777 (11th Cir. 2000) (applying Romay and

concluding that an "insurance company must be given an

opportunity to investigate a supplemental claim before there

can be a disagreement between the parties regarding the amount

of property loss or damage to effectuate appraisal"); Hailey,

supra. In other words, the insured must satisfy his or her

post-loss obligations so that the insurer can know whether it

does or does not agree with the insured's claim as to the

amount of the loss at issue.

IV. Conclusion

Based on the foregoing, the circuit court erred by

ordering BMIC to engage in the appraisal process before the

insureds satisfied their respective post-loss obligations and

before BMIC had sufficient information on which it could

decide whether it disagreed with the respective claims of the

insureds. Accordingly, we reverse the April 2011 order of the

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circuit court and remand this matter for further proceedings

consistent with this opinion. 

REVERSED AND REMANDED.

Stuart, Bolin, Parker, Shaw, Wise, and Bryan, JJ.,

concur.

Moore, C.J., dissents.

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MOORE, Chief Justice (dissenting). 

I respectfully dissent. As the main opinion notes,

Baldwin Mutual Insurance Company ("BMIC") raises two issues on

appeal: (1) Whether the insureds may demand and invoke an

appraisal in light of the fact that "the insureds ... have not

complied with their post-loss obligations as described in

provisions of the insured's insurance policy"; and (2) whether

the insureds have "established the precondition to the

appraisal process, namely BMIC's 'failure to agree' or

'disagreement' with the insureds as to the value of the loss

at issue." ___ So. 3d at ___.

As to the first issue, BMIC argues that the insureds may

not demand or invoke an appraisal because, BMIC says, they

have failed to comply with the post-loss obligations in their

insurance policies. BMIC argues that, to properly invoke an

appraisal under the various policies, the insureds were

required to fulfill certain post-loss obligations. BMIC notes

that no Alabama appellate court has addressed the effect of an

insured's noncompliance with post-loss obligations on the

insured's ability to invoke an appraisal. BMIC relies on cases

from other jurisdictions for the proposition that an insured

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may not demand an appraisal without first complying with the

post-loss obligations in the underlying policies. See, e.g.,

United States Fid. & Gaur. Co. v. Romay, 744 So. 2d 467, 471

(Fla. Dist. Ct. App. 1999)("No reasonable and thoughtful

interpretation of the policy could support compelling

appraisal without first complying with the post-loss

obligations."); Galindo v. ARI Mut. Ins. Co., 203 F.3d 771,

777 (11th Cir. 2000)("[W]e hold that these insureds must

comply with the post-loss terms of their respective

homeowner's policies, which enables the insurance companies to

investigate the insureds' claims and to disagree with the loss

amount before the appraisal term becomes effective."); Hailey

v. Auto-Owners Ins. Co., 181 N.C. App. 677, 687, 640 S.E.2d

849, 855 (2007)("[T]o the extent Defendant requested that

Plaintiff comply with Plaintiff's post-loss duties prior to

invoking appraisal, such compliance was a necessary condition

precedent to the invocation of appraisal."). According to

BMIC, these foreign cases align with Alabama cases holding

that an insurer is not obligated to pay an insured until the

insured has submitted claims to the insurer pursuant to the

terms of the policies. Nationwide Ins. Co. v. Nilsen, 745 So.

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1100872

2d 264, 267 (Ala. 1998)("[A]n insurer's obligation to pay or

to evaluate the validity of an insured's claim does not arise

until the insured has complied with the terms of the contract

with respect to submitting claims."). Therefore, BMIC asks

this Court to hold that the insureds must satisfy certain

post-loss obligations before demanding an appraisal according

to their policies. 

By their terms, however, the policies do not require the

insureds to first satisfy the post-loss obligations before

demanding an appraisal. The parties stipulate that the

appraisal provisions are roughly the same in each policy:

"Appraisal. If you and we fail to agree on the

values of the property or the amount of loss, either

may make written demand for an appraisal of the

loss. In this event, each party will select a

competent and impartial appraiser. The two

appraisers will select an umpire. If they cannot

agree, either may request that selection be made by

a judge of a court having jurisdiction. The

appraisers will state separately the value of the

property and amount of loss. If they fail to agree,

they will submit their differences to an umpire. A

decision agreed to by any two will be binding. Each

party will: Pay its chosen appraiser and bear the

other expenses of the appraisal and umpire equally." 

The section of the policies regarding post-loss obligations is

entirely separate from the section of the policies regarding

an appraisal. Neither section makes reference to the other.

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1100872

Nothing in the policies states that post-loss provisions must

be satisfied before the insureds may invoke the appraisal

provisions. Instead, the policies maintain that either BMIC or

the insureds may demand an appraisal if BMIC and the insureds

disagree on the value of the property or the amount of loss.

Such disagreement could arise at any time. The policies do not

specify that the insureds must bring their disagreement to the

attention of BMIC only after they have satisfied their postloss obligations. The plain and unambiguous terms of the

policies suggest that the insureds may demand an appraisal

whenever they disagree with BMIC regarding the value of the

property or the amount of loss. Although BMIC attempts to

portray the performance of post-loss obligations as a

condition precedent to appraisal, no language in the policies

supports that interpretation. Public Bldg. Auth. of Huntsville

v. St. Paul Fire & Marine Ins. Co., 80 So. 3d 171, 180 (Ala.

2010)("A court may not make a new contract for the parties or

rewrite their contract under the guise of construing it.").

BMIC would have us adopt holdings from other

jurisdictions to establish a bright-line rule for all Alabama

insurance cases, namely, that an insured must always satisfy

36
1100872

post-loss obligations before invoking appraisal provisions in

an insurance policy. Such a rule impairs the obligation of

existing contracts between insureds and insurers. "General

rules of contract law govern an insurance contract." Safeway

Ins. Co. of Alabama, Inc. v. Herrera, 912 So. 2d 1140, 1143

(Ala. 2005). "The Court must enforce the insurance policy as

written if the terms are unambiguous." Id. 

Here, the policies are not ambiguous: They allow both

BMIC and the insureds to demand an appraisal if the parties

disagree about the value of the property or the amount of

loss. Although to compel an appraisal in Florida requires a

party first to comply with the post-loss provisions in an

insurance policy, no such law exists in Alabama. Had the 8

parties wished to be bound by such a rule, they could have

included it in their policies. It is unreasonable to hold

that, when the insureds purchased their policies from BMIC,

they should have expected Florida law to govern their

policies. This Court should not read into a contract a

provision that is not there. Harbison v. Strickland, 900 So.

See, e.g., Citizens Prop. Ins. Corp. v. Mango Hill Condo.

8

Ass'n 12 Inc., 54 So. 3d 578, 581-82 (Fla. Dist. Ct. App.

2011). 

37
1100872

2d 385, 391 (Ala. 2004)("'"[A] court should ... presume that

the parties intended what the terms of the agreement clearly

state."'" (quoting other cases)). Nor should this Court add

provisions to an insurance policy according to what it

perceives to be industry-wide insurance standards and

practices as to which the policy is silent. Poole v.

Henderson, Black & Green, Inc., 584 So. 2d 485, 487 (Ala.

1991)("'"The general rule of contract law is that, if a

written contract exists, the rights of the parties are

controlled by that contract, and parol evidence is not

admissible to contradict, vary, add to, or subtract from its

terms."'"(quoting Rime-Shatten Dev. Co. v. Birmingham Cable

Commc'ns, Inc., 569 So. 2d 332, 334 (Ala. 1990), quoting in

turn Clark v. Albertville Nursing Home, Inc., 545 So. 2d 9, 11

(Ala. 1989))). Therefore, I would affirm the circuit court's

April 2011 order as to the first issue.

As to the second issue, BMIC argues that the insureds

have failed to establish a "failure to agree" or a

"disagreement" regarding the amount of loss and, therefore,

may not demand an appraisal. In particular, BMIC contends that

the insureds failed to provide sufficient evidence (e.g.,

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estimates from contractors) that the parties disagreed about

the amount of loss either before or after BMIC compensated the

insureds for the loss. In response, the insureds allege that

they established a "disagreement" regarding the amount of loss

when, after receiving a check from BMIC to cover their loss,

they notified BMIC that the amount of the check was inadequate

and that their demand for an appraisal is in accordance with

their policies. The point of the appraisal, they contend, is

to determine not whether a disagreement between the parties

existed, but the amount on which the parties disagree. 

BMIC quotes from cases holding that there must be an

actual disagreement between the parties regarding the value of

the property or the amount of loss in order to effectuate an

appraisal. These holdings are in keeping with the policies in 9

this case. BMIC does not argue that it disagrees with the

insureds' allegation that BMIC inadequately compensated them

for their loss. Rather, BMIC alleges that it does not have

enough information to determine whether it disagrees with the

insureds regarding the amount of the loss because the insureds

have not identified, with sufficient evidence, what they

E.g., Jersey Ins. Co. v. Roddam, 256 Ala. 634, 637-38, 9

56 So. 2d 631, 633-35 (1952); Romay, 744 So. 2d at 469-70.

39
1100872

consider the amount of loss to be. If the insureds had

complied with the post-loss obligations in the policies, BMIC

adds, there might have been sufficient evidence to allow BMIC

to determine whether its assessment of the amount of loss

differs from the insureds' assessment of the amount of loss.

Accordingly, this Court must determine whether the

circuit court erred by denying BMIC's motion for injunctive

relief based on the circuit court's finding that 14 of the 130

insureds had proffered enough evidence of the amount of loss

to effectuate an appraisal under the policy. BMIC declares

that no such evidence exists or that the existing evidence

does not support the circuit court's finding that these

insureds presented sufficient evidence to invoke the

appraisal. However, BMIC does not describe the evidence in the

record and before the circuit court or explain how the

specific contents of such evidence were inadequate to support

the circuit court's order granting the appraisal. This Court

has stated that the appellant "has a heavy burden when it

seeks a reversal of an order on the ground that the decision

is not supported by the evidence." Curtis White Constr. Co. v.

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1100872

Butts & Billingsley Constr. Co., 473 So. 2d 1040, 1041 (Ala.

1985). 

"It is the function of a trial judge sitting as

factfinder to decide facts where conflicts in the

evidence exist. Such was the case here. The

appellate courts do not sit in judgment of the

facts, and review the factfinder's determination of

facts only to the extent of determining whether it

is sufficiently supported by the evidence, that

question being one of law. No error of law exists in

this case, and where there is evidence to support

the decision reached by the factfinder, we must

affirm its judgment."

473 So. 2d at 1041. Because there is ample evidence in the

record to support the decision reached by the circuit court,

including detailed estimates, drawings, and photographs of the

damage at issue, and because BMIC makes no attempt to explain

in detail how this evidence does not support the circuit

court's findings that the 14 insureds had properly invoked the

appraisal provisions in the policies, I would affirm the

circuit court's order. 

Finally, BMIC claims that, "if an insured has not

retained a contractor or repairman, or obtained an estimate of

the amount of loss from some other source, it is difficult to

understand how an insured could, in fact, disagree with the

insurer's determination of the amount of loss." Nevertheless,

41
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the policies by their terms did not require the insured to

retain a contractor or a repairperson or to obtain an estimate

of the amount of loss from some other source as a condition

precedent to invoking the appraisal provisions. "'Courts

cannot make contracts for parties, but must give such

contracts as are made a reasonable construction and enforce

them accordingly.'" Charles H. McCauley Assocs., Inc. v.

Snook, 339 So. 2d 1011, 1015 (Ala. 1976)(quoting R.P. Harris,

& Co. v. Thomas, 17 Ala. App. 634, 635, 88 So. 51, 52 

(1921)). "[W]e know of no canon of construction that warrants

an interpretation the only effect of which is to relieve a

party to the contract from consequences deemed by him hard or

unfair." Lilley v. Gonzales, 417 So. 2d 161, 163 (Ala. 1982).

"[I]t is the duty of the [C]ourt to enforce [the contract] as

written." Kinnon v. Universal Underwriters Ins. Co., 418 So.

2d 887, 888 (Ala. 1982). To hold otherwise is to require

consumers purchasing insurance policies to know not only what

provisions appear in such policies, but also what judicially

created provisions exist for such policies outside the four

corners of the policies. Ordinary consumers of insurance

policies are not lawyers and should not be expected to search

42
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"caselaw" for provisions applicable to their policies that do

not appear in such policies.

For these reasons, I respectfully dissent.

43