Opinion ID: 1394767
Heading Depth: 1
Heading Rank: 4

Heading: mandatory/permissive nature

Text: The statute (and the parallel policy provision) provides that [i]n case the insured and this company shall fail to agree    then, on the written demand of either, each shall select a competent and disinterested appraiser. (Emphasis added.) ORS 743.648 does not require an appraisal in all cases in which the amount of loss is disputed. It is only when a party makes a written demand that the claim must be submitted to appraisal. See 1943 New York Standard Fire Ins Policy, 1953 ABA Sec. of Ins. Law Annot., ch. 17, § 5; [11] Gwertzman, A Legal Analysis of the Appraisal Agreement 12 (1957). We thus conclude that, at least initially, the appraisal provision is permissive. That is, litigation may be commenced without invocation of the appraisal process. It is not a condition precedent to litigation and compliance with the appraisal provision is not required by the policy or statute to litigate a claim. To the extent that the decision of the Court of Appeals in Marcotte v. Farmers Insurance Co., supra , can be read to hold that the appraisal procedure is mandatory in all circumstances, the decision is incorrect and is expressly disapproved. It is only when one party demands an appraisal that the process becomes mandatory and, to that extent, becomes a condition precedent to sustaining any claim in court. To the demanding party the process is permissive. However, to the non-demanding party the process is mandatory, once invoked. Thus, for purposes of constitutional analysis, the process is mandatory for the non-demanding party.