Court Opinion

ID: 4317350
Source: CourtListenerOpinion
Date Created: 2018-10-02 14:22:13.993104+00
Date Added: 2024-06-11T14:18:02.835449
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.

                                                                 SUMMARY
                                                         September 20, 2018

                               2018COA144

No. 17CA1672 Andres Trucking v. United Fire — Insurance —
Regulation of Insurance Companies — Unfair Competition and
Deceptive Practices — Improper Denial of Claims — Remedies
for Unreasonable Delay or Denial of Benefits

     In this insurance case, a division of the court of appeals

concludes that participation in a contractual appraisal process does

not preclude an insured’s suit for breach of contract and statutory

bad faith under sections 10-3-1115 and -1116, C.R.S. 2017.

     After the parties participated in contractual appraisal, the

district court determined that the appraisal process resolved the

insured’s claims for breach of contract and statutory bad faith as a

matter of law and entered judgment in favor of the insurance

company under C.R.C.P. 12(b)(5).

     The division analyzes the appraisal provision and concludes

that (1) the contractual appraisal provision was enforceable; (2) the
appraisal process resulted in a binding determination of the value

of the insured property; but that (3) the appraisal process did not

resolve the insurance company’s liability for breach of contract or

statutory bad faith; and therefore (4) the district court erred in

entering judgment in favor of the insurance company under Rule

12(b)(5).

     Accordingly, the division affirms the order approving the

appraisal value but reverses the judgment and remands to the

district court for reinstatement of the insured’s complaint.
COLORADO COURT OF APPEALS                                        2018COA144

Court of Appeals No. 17CA1672
Routt County District Court No. 16CV30055
Honorable Shelley A. Hill, Judge

Andres Trucking Company,

Plaintiff-Appellant,

v.

United Fire and Casualty Company,

Defendant-Appellee.

          JUDGMENT REVERSED, ORDERS AFFIRMED IN PART
     AND VACATED IN PART, AND CASE REMANDED WITH DIRECTIONS

                                 Division VII
                         Opinion by JUDGE HARRIS
                       J. Jones and Ashby, JJ., concur

                       Announced September 20, 2018

McGill Professional Law Corporation, Scott A. McGill, Robert L. Grover,
Steamboat Springs, Colorado, for Plaintiff-Appellant

Stuart D. Morse & Associates, LLC, Stuart D. Morse, Joseph P. Kiley,
Greenwood Village, Colorado, for Defendant-Appellee
¶1    Plaintiff, Andres Trucking Company (Andres Trucking),

 appeals the judgment entered on its breach of contract and

 statutory bad faith claims in favor of defendant, United Fire and

 Casualty Company (United), after the district court determined that

 the completion of the appraisal process called for in the parties’

 policy necessarily resolved those claims.

¶2    Among questions we answer is whether Andres Trucking’s

 participation in the contractual appraisal process resolved its

 claims against United and effectively ended the litigation.

¶3    We conclude that the appraisal process did not fully resolve

 Andres Trucking’s claims. The appraisal process determined the

 value of the insured property, but it did not determine United’s

 liability for breach of contract or statutory bad faith delay under

 sections 10-3-1115 and -1116, C.R.S. 2017. Accordingly, we affirm

 the order approving the appraisal value but reverse the judgment

 and remand for reinstatement of the complaint.

                           I.    Background

¶4    Andres Trucking operates a dump truck in Steamboat Springs,

 Colorado. The truck was insured by United under a policy that

 included the following provision:

                                     1
           If you and we disagree on the amount of “loss,”
           either may demand an appraisal of the “loss.”
           In this event, each party will select a
           competent appraiser. The two appraisers will
           select a competent and impartial umpire. The
           appraisers will state separately the actual cash
           value and amount of the “loss.” If they fail to
           agree, they will submit their differences to the
           umpire. A decision agreed to by any two will
           be binding.

           ....

           If we submit to an appraisal, we will still retain
           our right to deny the claim.

¶5    In June 2015, while covered by the insurance policy, the truck

 caught fire. Both parties agreed the truck was a total loss but

 disagreed about the truck’s value.

¶6    After the parties’ discussions failed to lead to an agreement,

 Andres Trucking filed an action against United on May 6, 2016.

 The complaint alleged that United unreasonably refused to pay the

 value of the truck and related damages, including storage fees, and

 asserted claims for breach of contract and bad faith denial and

 delay of an insurance claim under sections 10-3-1115 and -1116.

¶7    Two weeks later, in lieu of answering the complaint, United

 moved to compel appraisal and stay the proceedings; over Andres

                                   2
 Trucking’s objection, the court granted the motion.1 Before

 commencing the appraisal process, Andres Trucking filed an

 amended complaint. The amended complaint contained a third

 claim for relief challenging the enforceability of the contractual

 appraisal provision, but it was otherwise substantially similar to the

 initial complaint. The district court struck the amended complaint

 on the ground that the insurance policy required an appraisal.

¶8    The parties proceeded to appraisal. Andres Trucking

 submitted an appraisal valuing the truck at $42,500, United

 submitted an appraisal of $33,454, and the umpire obtained an

 appraisal of $54,289. The umpire ultimately settled on a value of

 $39,507 plus $3907 in taxes, which United paid.

¶9    In January 2017, after United paid Andres Trucking the

 appraised value of the truck, it moved for entry of judgment under

 C.R.C.P. 12(b)(5), contending that, as a matter of law, the

 completion of the appraisal process had resolved Andres Trucking’s

 1 United says that it invoked the appraisal provision earlier and, in
 its reply brief, Andres Trucking appears to concede that United
 “unequivocally requested the appraisal process be initiated” in
 January 2016. The precise date on which United invoked the
 appraisal provision is not material to our resolution of this issue.

                                    3
  claims. Andres Trucking objected, contending that “several issues”

  required determination by a jury, including whether United had

  unreasonably denied or delayed paying the claim and whether

  United had breached the insurance contract by failing to pay all of

  Andres Trucking’s damages.

¶ 10   While United’s motion for entry of judgment was pending,

  Andres Trucking again moved to amend its complaint. Its proposed

  second amended complaint included additional allegations

  concerning its damages and a fourth claim for unjust enrichment.

¶ 11   Relying on the enforceability of the appraisal provision, the

  court again denied the motion. It reasoned that, upon completion

  of the appraisal process, “the issues before the court were

  concluded,” and that “[a]ll that remains is for judgment to enter.”

¶ 12   The court then entered judgment in favor of United on Andres

  Trucking’s breach of contract and statutory bad faith claims. In its

  order entering judgment, the court determined that Andres

  Trucking’s claims “were subject to the appraisal process,” the

  “appraisal process was completed and a value determined,” and

  “[a]ccordingly, as a matter of law [Andres Trucking] can have no

  claim for breach of contract, much less bad faith breach of

                                    4
  contract.” Without analyzing Andres Trucking’s allegations, the

  court found “[t]here has been no breach of the insurance contract

  or any unreasonable delay or denial of the claim that was caused by

  [United].”

       II.     The District Court Erred in Dismissing Andres Trucking’s
                                      Complaint

¶ 13         Andres Trucking argues that the district court erred in

  dismissing its complaint, as the appraisal process did not resolve

  whether United had breached the insurance policy or unreasonably

  denied or delayed payment of benefits. We agree.

                             A.    Standard of Review

¶ 14         The purpose of a motion under C.R.C.P. 12(b)(5) is to test the

  legal sufficiency of the complaint to determine whether the plaintiff

  has asserted a claim or claims upon which relief can be granted.

  Hannon Law Firm, LLC v. Melat, Pressman & Higbie, LLP, 293 P.3d
55, 62 (Colo. App. 2011), aff’d, 2012 CO 61. In evaluating a motion

  to dismiss under Rule 12(b)(5), we must determine whether,

  accepting the complaint’s factual allegations as true and viewing

  them in the light most favorable to the plaintiff, id., the complaint

                                         5
  states a plausible claim for relief, Warne v. Hall, 2016 CO 50, ¶¶ 9,

  24.

¶ 15    Because it presents a question of law, we review de novo an

  order granting a motion to dismiss under Rule 12(b)(5). Hannon,
293 P.3d at 63.

                               B.   Analysis

¶ 16    The district court did not reach any conclusions about the

  sufficiency of the complaint’s allegations or the plausibility of the

  claims for relief. Instead, the district court determined that Andres

  Trucking could not state any claim for relief because completion of

  the appraisal process, like arbitration, precludes breach of contract

  and statutory bad faith claims as a matter of law.

¶ 17    An appraisal is “an act of estimating” or “a valuation of

  property by the estimate of an authorized person,” Unetco Indus.

  Exch. v. Homestead Ins. Co., 67 Cal. Rptr. 2d 784, 789 (Cal. Ct.

  App. 1997) (quoting Webster’s Third New International Dictionary

  105 (1986)), and determines “only the amount of loss,” Hartford

  Lloyd’s Ins. Co. v. Teachworth, 898 F.2d 1058, 1062 (5th Cir. 1990).

  By its own terms, the appraisal provision in United’s policy was

  triggered only when the parties disagreed “on the amount of ‘loss,’”

                                     6
  and the provision allowed either party to “demand an appraisal of

  the ‘loss.’” (Emphasis added.)

¶ 18   The provision did not purport to be a mechanism for resolving

  any other disagreements between the parties. Indeed, the provision

  expressly reserved to United the right to contest liability,

  notwithstanding the parties’ participation in the appraisal process.

  See Auto-Owners Ins. Co. v. Summit Park Townhome Ass’n, 129 F.

  Supp. 3d 1150, 1153-54 (D. Colo. 2015) (unlike arbitration,

  appraisal “establishes only the amount of a loss,” and not other

  issues including liability and coverage (quoting Minot Town &

  Country v. Fireman’s Fund Ins. Co., 587 N.W.2d 189, 190 (N.D.

  1998))); Hartford, 898 F.2d at 1062 (An appraisal does not “resolv[e]

  issues such as whether the insurer is liable under the policy.”).

¶ 19   Thus, “an appraisal award, by itself, does not entitle either the

  insured or the insurer to judgment in its favor” on the insured’s

  claims of breach of contract or statutory bad faith. Sec. Nat’l Ins.

  Co. v. Waloon Inv., Inc., 384 S.W.3d 901, 905 (Tex. App. 2012); see

  also Hometown Cmty. Ass’n v. Phila. Indem. Ins. Co., Civ. A. No. 17-

  cv-00777-RBJ, 2017 WL 6335656, at *6 (D. Colo. Dec. 12, 2017)

  (an appraisal is determinative of the amount of loss, but issues

                                     7
  outside of the scope of the appraisal must be resolved by the court

  or fact finder). Judgment does not follow directly from an appraisal

  because, unlike arbitration, the “function of an appraisal award is

  not to determine the merits of any claim.” Waloon Inv., 384 S.W.3d

  at 905.

¶ 20   In American Family Mutual Insurance Co. v. Barriga, 2018 CO
42, ¶ 2, for example, the insurance company demanded an

  appraisal, an appraiser fixed an award, and American Family paid

  the award. Thereafter, the insured sued the insurer for breach of

  insurance contract and statutory bad faith under section 10-3-

  1116(1). Id. at ¶ 3. The jury found in favor of the insured on both

  claims and awarded separate damages. Id. On appeal, the

  supreme court concluded that where “the payments . . . were

  unreasonably delayed but eventually paid . . . pursuant to the

  third-party appraisal process outlined in the insurance agreement,”

  the insured could keep the amount paid pursuant to the appraisal

  process, recover any damages resulting from a breach of the

  insurance contract, and receive an additional “two times the

  covered benefit” under section 10-3-1116. Id. at ¶¶ 8-12 (quoting §

  10-3-1116(1)). Thus, under Barriga, appraisal and litigation of

                                    8
  breach of contract and bad faith claims are not mutually exclusive.

  And, contrary to United’s argument, partial payment of benefits is

  not a complete defense, as a matter of law, to a bad faith claim. Id.

  at ¶¶ 12-13.

¶ 21   In concluding that an appraisal necessarily precludes further

  litigation, the district court appears to have relied on its

  determination that “the appraisal process cannot be a violation of

  an insurance company’s contractual or statutory duty to adjust a

  claim.” In the same vein, United insists that Andres Trucking’s

  complaint does not state a claim because “[i]t cannot be bad faith,

  as a matter of law, to insist upon the enforcement of a valid

  contractual provision.”

¶ 22   We do not disagree with these general propositions, but they

  miss the point of Andres Trucking’s allegations. Andres Trucking

  does not contend that adherence to the appraisal process itself

  amounts to a breach of contract or bad faith. The crux of its

  complaint is that United unreasonably delayed paying the claim;

  attempted to pressure Andres Trucking into accepting less than the

  full value of the insured property; refused to pay additional

  damages related to the loss; did not invoke the appraisal provision

                                      9
  until months after submission of the claim; and then, during the

  appraisal process, valued the claim at a lower amount than it had

  offered during earlier negotiations. In later filings, Andres Trucking

  suggested that United had also delayed paying the full appraisal

  amount. (This allegation was not included in either of the proposed

  amended complaints, however.)

¶ 23   The insurer’s mere invocation of the appraisal provision, at

  some point during the dispute, does not immunize it from liability

  for a claim of bad faith. Bad faith conduct may occur “before,

  during, and after the appraisal process.” Hometown Cmty. Ass’n,

  2017 WL 6335656, at *6.

¶ 24   Nor are we persuaded by United’s related, and unsupported,

  argument that “there could be no breach [of the contract] as a

  matter of law until the amount of the benefit was determined”

  through the appraisal process.

¶ 25   A breach of insurance contract may be based not merely on

  the insured’s ultimate financial liability, but also on “the insurer’s

  conduct in unreasonably refusing to pay a claim,” “delaying

  payments,” and “failing to act in good faith.” Goodson v. Am.

  Standard Ins. Co. of Wis., 89 P.3d 409, 414 (Colo. 2004). And,

                                     10
  consistent with our earlier conclusion, the insurer’s failure to act in

  good faith may occur before invocation of the appraisal provision.

¶ 26    Finally, we reject United’s contention that any error by the

  district court in dismissing the claims based on its

  misapprehension of the appraisal process was harmless. According

  to United, the claims should nevertheless have been dismissed

  because Andres Trucking “presented no evidence that convinced the

  trial court that United Fire had acted unreasonably with respect to

  paying the claim,” and, “[a]s the trial court found, any delay in

  payment of the claim was due to Andres [Trucking’s] refusal to

  participate in appraisal.”

¶ 27    Andres Trucking was not required, at this stage, to “present

  evidence” of United’s unreasonableness in handling or paying the

  claim. And the district court could not have properly “found” under

  Rule 12(b)(5) that any delay in payment was attributable to Andres

  Trucking. On a Rule 12(b)(5) motion to dismiss, the court had to

  accept Andres Trucking’s allegations as true and construe those

  allegations in the light most favorable to it. Hannon, 293 P.3d at

  62.

                                    11
¶ 28   To the extent United asserts that the district court bypassed

  Rule 12(b)(5) and moved directly to summary judgment under

  C.R.C.P. 56, as United suggested at oral argument, we disagree.

¶ 29   First, United’s “motion for entry of judgment” argued that

  Andres Trucking “failed to state a claim upon which relief can be

  granted” and requested relief under Rule 12(b)(5).

¶ 30   Second, when the court granted United’s motion, United had

  not yet answered the complaint, the parties had not engaged in

  discovery, neither party had filed a motion for summary judgment,

  and the court did not tell the parties in advance that it would treat

  the motion as one for summary judgment. Accordingly, the claims

  were not susceptible of resolution under Rule 56.

¶ 31   We conclude that the district court erred in determining that

  appraisal necessarily precluded Andres Trucking from pursuing its

  breach of contract and statutory bad faith claims. We therefore

  reverse the judgment and remand for reinstatement of the

  complaint.

¶ 32   In light of our disposition, we vacate the district court’s order

  awarding United its costs as the prevailing party. See Bainbridge,

  Inc. v. Douglas Cty. Bd. of Comm’rs, 55 P.3d 271, 274 (Colo. App.

                                    12
  2002) (“[W]here a judgment has been successfully appealed, an

  award of costs previously entered on that judgment is no longer

  valid because, upon remand, that judgment no longer exists.”).

      III.    The Appraisal Award is a Binding Determination of the Value
                               of the Insured Property

¶ 33         Having determined that the appraisal process does not, as a

  matter of law, preclude Andres Trucking from litigating its claims,

  we now address its various challenges to the appraisal process

  itself. For the reasons explained below, we reject those challenges

  and conclude that the appraisal award is a binding determination of

  the value of the insured property, and thus Andres Trucking may

  not further litigate that issue.

                    A.   The Appraisal Provision is Enforceable

¶ 34         In its briefing, Andres Trucking asserts that the district court

  should not have enforced the appraisal provision because the

  appraisal procedure “violates the constitutional right of litigants to

  a speedy trial.” Andres Trucking offers no argument or relevant

  authority to support this assertion.2 Ordinarily, we decline to

  2Andres Trucking cites Huizar v. Allstate Insurance Co., 952 P.2d
342 (Colo. 1998), but that case involves a trial de novo provision of

                                          13
  address contentions that “lack any meaningful explanation.” Holley

  v. Huang, 284 P.3d 81, 87 (Colo. App. 2011) (declining to address

  “bald assertions of error”).

¶ 35   Moreover, at oral argument, Andres Trucking clarified that its

  objection to the appraisal provision stems from the court’s

  interpretation of the provision as an alternative to litigation.

  Because we have reversed the court’s judgment in this regard, that

  would seem to settle the matter.

¶ 36   Still, to the extent Andres Trucking contends that appraisal

  provisions are generally unconstitutional because they delay

  litigation of the insured’s claims, we disagree.

¶ 37   For one thing, we are not aware of a constitutional right to

  resolve civil claims within a specific period. And even if there were

  such a right, Andres Trucking has not alleged that the deprivation

  of that right prejudiced its ability to litigate its claims against

  United — for example, that witnesses’ memories have faded or

  documents have been misplaced.

  a binding arbitration clause and its analysis is inapplicable to the
  appraisal provision at issue.

                                      14
¶ 38   Furthermore, for nearly 100 years, appraisal provisions like

  the one in Andres Trucking’s policy have been held enforceable

  under Colorado law. See Norwich Union Fire Ins. Soc’y v. Rayor, 70
Colo. 290, 201 P. 50 (1921); see also Wagner v. Phoenix Ins. Co.,

  141 Colo. 367, 348 P.2d 150 (1960). At this point, “[m]ost, if not

  all, property insurance policy contracts include an appraisal clause

  which may be invoked if there is a dispute between the insured and

  the insurer over the amount of loss.” Colo. Div. of Ins., Bulletin No.

  B-5.26(III) (Oct. 26, 2015), https://perma.cc/RAW4-FXAN. As

  courts have uniformly recognized, these provisions provide a “plain,

  speedy, inexpensive and just determination of the extent of the

  loss.” Auto-Owners Ins. Co. v. Summit Park Townhome Ass’n, 100 F.

  Supp. 3d 1099, 1103 (D. Colo. 2015) (quoting 46A C.J.S. Insurance

  § 1889 (2015)).

¶ 39   Accordingly, we conclude that the district court did not err in

  enforcing the appraisal provision.

                     B.   United Invoked Appraisal

¶ 40   Next, Andres Trucking insists that United did not properly

  invoke appraisal because it “never demanded appraisal.” We reject

  that contention.

                                    15
¶ 41   As we have noted, Andres Trucking conceded that in a

  January 2016 letter, United “unequivocally requested the appraisal

  process be initiated.” An unequivocal request to proceed with

  appraisal is sufficient to invoke the process. The absence of the

  word “demand” in United’s letter is certainly not fatal. As a general

  rule, we do not require that litigants use “talismanic language,” see

  People v. Juarez, 2017 COA 127, ¶ 25 (cert. granted Mar. 12, 2018),

  nor do we “elevate form over substance,” Perfect Place v. Semler,

  2016 COA 152M, ¶ 32 (cert. granted Nov. 13, 2017).

       C.   The Appraisal Process Produced a Valid Loss Amount

¶ 42   Andres Trucking contends that the appraisal process did not

  result in a binding loss valuation because (1) contrary to the policy

  requirements, no two appraisals matched; and (2) the umpire’s

  valuation was mathematically flawed.

¶ 43   To resolve the first contention, we must construe the

  insurance policy. We construe an insurance policy like any other

  contract, Smith v. State Farm Mut. Auto. Ins. Co., 2017 COA 6, ¶ 6,

  giving words their plain and ordinary meanings and avoiding

  strained constructions, Allstate Ins. Co. v. Huizar, 52 P.3d 816, 819

  (Colo. 2002).

                                    16
¶ 44   The appraisal provision directs that, in the event of a

  disagreement as to the amount of loss, each party will select a

  competent appraiser who will “state separately” the amount of the

  loss. If the appraisers fail to agree, they will “submit their

  differences” to an impartial umpire. “A decision agreed to by any

  two will be binding.”

¶ 45   The appraisal process may therefore involve up to three actors:

  the insured’s appraiser, the insurer’s appraiser, and the umpire. If

  “any two” of the three “agree” to a “decision” as to the amount of

  loss, that decision is “binding” on the parties. Thus, under the

  plain language of the provision, the appraisal process will produce a

  binding loss amount if, for example, the umpire and one of the

  appraisers agree to a decision on the amount of the loss. That is

  what occurred in this case. Though United’s appraisal was nearly

  twenty percent lower than the umpire’s valuation, United’s

  appraiser later agreed to the umpire’s loss amount, and thus a

  decision was “agreed to by any two.”

¶ 46   Andres Trucking’s reading of the policy would require that we

  substitute the phrase “[a] decision agreed to by any two will be

  binding” with “the umpire’s decision will be binding if it matches

                                     17
  one of the party’s appraisals.” Because we “may not rewrite clear

  and unambiguous contract provisions,” Bledsoe Land Co. LLLP v.

  Forest Oil Corp., 277 P.3d 838, 842 (Colo. App. 2011), we may not

  write that phrase into the contract.

¶ 47   Andres Trucking counters that the district court, in clarifying

  the appraisal provision, instructed the parties that if the appraisers

  could not agree on a value, “the umpire previously selected by them

  will offer his/her opinion of value,” and that “[i]f two of the three do

  not match in their opinions, the appraisal process is completed.”

  Because United’s appraiser and the umpire did not “match in their

  opinions,” Andres Trucking says, the umpire’s decision, though

  ultimately agreed to by United’s appraiser, is not binding. We

  commend the district court for attempting to provide guidance to

  the parties during a somewhat contentious process, but like us, the

  district court was bound by the policy language and could not

  change the terms of the appraisal process. The district court

  recognized as much in a later order, in which it construed the

  appraisal provision and determined that the loss amount agreed to

  by the umpire and United’s appraiser satisfied the provision,

  resulting in a binding loss determination. We therefore reject

                                     18
  Andres Trucking’s reliance on the district court’s initial instructions

  regarding appraisal.

¶ 48   We also reject Andres Trucking’s second contention — that the

  umpire erred in calculating the loss amount.

¶ 49   The appraisal award issued under an insurance policy is

  binding so long as the appraisers (including the umpire) have

  performed the duties required of them by the policy. Dufrene v.

  Certain Interested Underwriters at Lloyd’s of London Subscribing to

  Certificate No. 3051393, 91 So. 3d 397, 403 (La. Ct. App. 2012). As

  a general matter, an appraisal award entered by an umpire may be

  disregarded only if the award was made without authority or was

  made as a result of fraud, accident, or mistake. Barnes v. W. All.

  Ins. Co., 844 S.W.2d 264, 267 (Tex. App. 1992); see also Emmons v.

  Lake States Ins. Co., 484 N.W.2d 712, 715 (Mich. Ct. App. 1992)

  (judicial review of appraisal award is limited to instances of bad

  faith, fraud, misconduct, or manifest mistake). The burden of

  demonstrating that the appraised loss amount should be set aside

  falls on the party challenging it. Dufrene, 91 So. 3d at 403.

¶ 50   Andres Trucking asserts that the umpire’s calculation was

  fatally flawed because rather than relying on his own third

                                    19
  appraisal, he averaged all three appraisals to arrive at a loss

  amount. And, in averaging the appraisals, the umpire failed to take

  into account that United’s appraisal was “artificially lower” because

  it did not include taxes.

¶ 51   But Andres Trucking does not point to any provision of the

  policy prohibiting this valuation method. And within the area in

  which they are authorized to act, appraisers are “clothed with a

  certain degree of discretion with the result that an award will not be

  set aside merely because the reviewing judge does not agree with

  the conclusion reached by them.” Steven Plitt et al., Couch on

  Insurance § 213:2, Westlaw (3d ed. database updated June 2018).

¶ 52   We are certainly in no position to second-guess the

  mathematical process adopted by an umpire whose competence and

  impartiality were never challenged. That is why we require that

  “[p]arties, after having selected their own judges . . . be bound by

  the result.” Wilson v. Wilson, 18 Colo. 615, 620, 34 P. 175, 177

  (1893).

¶ 53   Under the circumstances, Andres Trucking has failed to carry

  its burden to establish a “manifest mistake” in the umpire’s

  valuation. Emmons, 484 N.W.2d at 715. Accordingly, the district

                                    20
  court did not err in refusing to invalidate the umpire’s decision.

  See Harleysville Mut. Ins. Co. v. Narron, 574 S.E.2d 490, 496 (N.C.

  Ct. App. 2002) (“[M]istakes by appraisers, like those made by

  arbitrators, are insufficient ‘to invalidate an award fairly and

  honestly made.’” (quoting N.C. Farm Bureau Mut. Ins. Co. v. Harrell,

  557 S.E.2d 580, 582 (N.C. Ct. App. 2001))).

                            IV.   Attorney Fees

  A.   Attorney Fees for Andres Trucking’s Motion for Clerk’s Entry of
                                  Default

¶ 54   On November 30, 2016, after completion of the appraisal

  process, the parties filed conflicting notices to the court. Andres

  Trucking, relying on the court’s clarification order, maintained that

  the appraisal process had failed to produce a binding loss amount,

  as the umpire’s appraisal did not “match” one of the appraiser’s.

  United, on the other hand, asserted that the umpire’s award

  constituted a binding loss amount.

¶ 55   In response, the court requested that counsel “clarify the file”

  and explain whether the appraisal process was complete. On

  December 22, Andres Trucking filed its response to the court’s

  request for clarification. It also filed a motion for clerk’s entry of

                                     21
  default. Andres Trucking’s theory was that, upon the unsuccessful

  completion of the appraisal process, the stay was automatically

  lifted, and United was obliged to file an answer to the complaint.

  When United failed to do so within twenty days, Andres Trucking

  concluded that it was entitled to entry of default.

¶ 56   The district court found the motion substantially vexatious

  and awarded United its attorney fees and costs:

            The court has no idea why Plaintiff filed a
            request for entry of clerk’s default. It was filed
            a full 17 days after the court requested
            clarification on what in the world was going on
            in the appraisal process, given the conflicting
            pleadings. Clearly, the court was not of the
            belief that any default by Defendant could even
            be imagined, since it had requested
            information from both counsel. C.R.C.P. 55(a)
            states, as noted by Defendant, that when a
            party “has failed to plead or otherwise defend”
            the other party may have a clerk’s default.
            Rarely has this court seen such intense and
            disputed litigation over such a seemingly
            simple issue as this appraisal process.
            Clearly, Defendant was in the process of
            “defending.” And this process was far from
            complete on December 22, 2016, when Plaintiff
            filed his request for a clerk’s default. Caution
            certainly dictated a Response from Defendant.
            Plaintiff’s request for entry of clerk’s default
            was substantially vexatious.

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¶ 57   We review an award of attorney fees under section 13-17-102,

  C.R.S. 2017, for an abuse of discretion. In re Estate of Shimizu,

  2016 COA 163, ¶ 16. A court abuses its discretion where its

  decision is manifestly arbitrary, unreasonable, or unfair. Id.

¶ 58   An award of attorney fees under section 13-17-102 is

  warranted if a party’s conduct is “substantially frivolous,

  substantially groundless, or substantially vexatious.” § 13-17-

  102(4) “An action is substantially vexatious if brought or

  maintained in bad faith to annoy or harass another, and

  vexatiousness includes conduct that is arbitrary, abusive,

  stubbornly litigious, or disrespectful of the truth.” In re Parental

  Responsibilities Concerning I.M., 2013 COA 107, ¶ 29.

¶ 59   C.R.C.P. 55(a) empowers the clerk to enter default when “a

  party against whom a judgment for affirmative relief is sought has

  failed to plead or otherwise defend.”

¶ 60   Andres Trucking insists that, when United failed to file an

  answer after completion of the appraisal process, it sought entry of

  default in good faith. But Andres Trucking could not have had a

  good faith belief that it was entitled to a clerk’s entry of default on

  December 22 because (1) United was actively defending against

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  Andres Trucking’s claims and (2) the court had ordered

  clarifications from the parties on December 5.

¶ 61   We agree with the district court that the parties were involved

  in “intense and disputed litigation” and that United was “in the

  process of defending” against Andres Trucking’s claims when

  Andres Trucking requested a clerk’s entry of default. Accordingly,

  the district court did not abuse its discretion in finding Andres

  Trucking’s motion “substantially vexatious” and awarding United its

  reasonable attorney fees. See Shimizu, ¶ 30.

                       B.   Appellate Attorney Fees

¶ 62   United requests appellate attorney fees due to the “frivolous,”

  “futile, irrational and unjustified” nature of Andres Trucking’s

  appeal. But we have determined the appeal to be meritorious.

  Accordingly, we deny United’s request for appellate attorney fees.

  See Rademacher v. Becker, 2015 COA 133, ¶ 30 (denying the

  appellee’s request for attorney fees as a sanction for filing a

  frivolous appeal because the appellant prevailed on appeal).

¶ 63   Andres Trucking requests appellate attorney fees in a single

  sentence of its opening brief: “Plaintiff hereby requests that

  reasonable attorney fees and costs be awarded against Defendant

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  pursuant to C.A.R. 39 and 39.5 or other applicable statute.” But

  C.A.R. 39.1 provides that “the party claiming attorney fees must

  include a specific request” and “explain the legal and factual basis”

  for an award of attorney fees. Andres Trucking failed to provide any

  factual recitation or legal authority for its request for attorney fees.

  Accordingly, we will not consider its request. See Sos v. Roaring

  Fork Transp. Auth., 2017 COA 142, ¶ 59 (declining to consider an

  “undeveloped request” for attorney fees where the requesting party

  failed to state any legal or factual basis for an award).

                             V.    Conclusion

¶ 64   The order approving the appraisal value is affirmed but the

  judgment is reversed and the case is remanded to the district court

  for reinstatement of Andres Trucking’s complaint. The order

  awarding United costs as the prevailing party is vacated but the

  order awarding United its attorney fees for its response to Andres

  Trucking’s motion for clerk’s entry of default is affirmed.

       JUDGE J. JONES and JUDGE ASHBY concur.

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