Opinion ID: 886550
Heading Depth: 1
Heading Rank: 5

Heading: issues

Text: ¶ 33 Did the District Court err in its interpretation of the insurance contract? ¶ 34 Nelsons contend the District Court erred in concluding that Farmers complied with the payment terms of the insurance contract, arguing that Farmers failed to effectuate prompt settlement within the allotted sixty-day time limit when according to Nelsons, it was faced with clear liability. While Nelsons' argument is not altogether clear, it appears they are contending that the joint appraisal established that Nelsons' siding was in fact damaged by the hail and further assert that Farmers should have relied on the July 1990 First General appraisal for determining replacement costs. Nelsons contend that Farmers never disputed the amount or reasonableness of the First General estimate, but instead contested only whether the siding was in fact damaged by the hail. In reply, Farmers contends it was reasonable to seek current bids for replacement costs from contractors, and argues that the sixty-day time period runs if there is a valid appraisal. It argues that once Nelsons contested the joint appraisal, there was no valid appraisal to trigger the sixty days. ¶ 35 The evidence establishes that the joint appraisal did not definitively conclude that the siding was so damaged that it required replacement. In fact, the joint appraisal suggested the $11,834.00 could be used to either professionally paint the buildings or apply new pre-finished siding with the installation costs to be paid by Nelsons. ¶ 36 More to the point, Nelsons' arguments in this regard are inherently inconsistent. Nelsons appear to promote a strict interpretation of the policy in contending that Farmers failed to meet the sixty-day requirement. Were we to agree with them, the ultimate effect would be to reduce Nelsons' loss recovery from $46,002.09 to $11,834.00. In other words, requiring compliance with the sixty-day time period would trump Nelsons' rejection of the joint appraisal and their ultimate receipt much later of $46,002.09. Clearly, this is not the relief Nelsons want. ¶ 37 Nelsons' insurance policy includes the following relevant provisions: Appraisal. If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the residence premises is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss. [Emphasis added.] Loss Payment. We will adjust all losses with you. We will pay you unless some other person is named in the policy or is legally entitled to receive payment. Loss will be payable 60 days after we receive your proof of loss and: a. reach an agreement with you; b. there is an entry of a final judgment; or c. there is a filing of an appraisal award with us. [Emphasis added.] ¶ 38 For the sixty-day time period to apply, Nelsons needed to provide a proof of loss, and either (a), (b), or (c) of the Loss Payment clause had to also occur. Given the lengthy dispute over the amount of damages, the significant disparity between the estimates, and Nelsons' rejection of the joint appraisal, it is clear that the parties did not reach the agreement called for in subsection (a), such as would trigger the sixty-day provision. Nor was there an entry of final judgment or a filing of an appraisal award with Farmers following the joint appraisal. The March 12, 1993 joint appraisal did not constitute an agreement between the parties, given Nelsons' contention that the appraisal omitted replacement costs and Farmers' efforts to obtain bids for such costs in light of that rejection. Therefore, we conclude the District Court did not err when it declined to conclude Farmers should have made payment to Nelsons within sixty days of the joint appraisal. Accordingly, we conclude that based on the record before us, the District Court did not err in interpreting the insurance contract between Nelsons and Farmers.