Court Opinion

ID: 5176215
Source: CourtListenerOpinion
Date Created: 2022-01-05 17:01:02.442692+00
Date Added: 2024-06-11T08:26:19.700252
License: Public Domain

Appellate Case: 19-1096   Document: 010110627537                         FILED Page: 1
                                                       Date Filed: 01/05/2022
                                                            United States Court of Appeals
                                                                      Tenth Circuit

                    UNITED STATES COURT OF APPEALS January 5, 2022
                                                                Christopher M. Wolpert
                                 TENTH CIRCUIT                      Clerk of Court

 FIREMAN’S FUND INSURANCE
 COMPANY, a California corporation,

       Plaintiff/Counterclaim
       Defendant - Appellant,

 v.                                                       No. 19-1096
                                              (D.C. No. 1:17-CV-01005-PAB-SKC)
 STEELE STREET LIMITED II, a                               (D. Colo.)
 Colorado limited partnership,

       Defendant/Counterclaim
       Plaintiff - Appellee.

                            ORDER AND JUDGMENT *

 Before HARTZ, KELLY, and HOLMES, Circuit Judges.

       Plaintiff–Appellant Fireman’s Fund Insurance Company (“Fireman’s

 Fund”) appeals from the District of Colorado’s decision to grant the motion for

 partial summary judgment of Defendant–Appellee Steele Street Limited II

 (“Steele”). Fireman’s Fund sought a declaratory judgment limiting the scope of

 an appraisal provision (“the Appraisal Provision”) in an insurance policy (“the

       *
              This order and judgment is not binding precedent, except under the
 doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
 however, for its persuasive value consistent with Federal Rule of Appellate
 Procedure 32.1 and 10th Circuit Rule 32.1.
Appellate Case: 19-1096   Document: 010110627537      Date Filed: 01/05/2022    Page: 2

 Policy”). Steele filed a counterclaim to enforce the Appraisal Provision. The

 Policy was issued by Fireman’s Fund and covers a building that Steele owned,

 located at 250 Steele Street in Denver, Colorado (“the Building”). On June 24,

 2015, a hailstorm allegedly caused the Building’s brick facade to “chip” or

 “flake,” prompting Steele to file an insurance claim with Fireman’s Fund (“the

 Brick Claim”). Fireman’s Fund acknowledged that some of the hail damage to

 the Building was covered under the Policy but argued that the Brick Claim was

 excluded because there had been no “direct physical loss . . . or damage” to the

 bricks from the hail within the meaning of the Policy. As a result of the district

 court’s grant of partial summary judgment to Steele, Fireman’s Fund is required

 to adhere to the Policy’s Appraisal Provision in addressing certain issues related

 to the Brick Claim.

       This appeal obliges us to determine, at the threshold, whether we have

 subject matter jurisdiction. 1 To do this, we must determine whether the district

 court’s order granting partial summary judgment to Steele—which required

 Fireman’s Fund to adhere to the Policy’s Appraisal Provision regarding the Brick

 Claim—was substantively an injunctive order that would allow for the exercise of

 appellate jurisdiction under 28 U.S.C. § 1292(a)(1). We conclude that the court’s

       1
              At the direction of our court, the parties separately filed memoranda
 on the jurisdictional question.

                                          2
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 order was indeed substantively injunctive, and, therefore, we may properly

 exercise jurisdiction over this interlocutory appeal.

       Because we have appellate jurisdiction, we next consider the merits.

 Fireman’s Fund contends that the district court erred in two central respects.

 First, according to Fireman’s Fund, the court erred by framing the parties’ dispute

 as “presenting an issue of factual causation rather than policy interpretation.”

 Aplt.’s Opening Br. at 14. And, second, Fireman’s Fund contends that even

 assuming the court properly determined that Steele presents a dispute involving

 factual causation—as opposed to policy interpretation—the court erred in

 enforcing the Policy’s Appraisal Provision because the appraisal process does not

 encompass questions of factual causation. After thoroughly considering the

 record and the relevant law, we reject both of Fireman’s Fund’s contentions of

 error. Accordingly, exercising jurisdiction under 28 U.S.C. § 1292(a)(1), we

 affirm the district court’s grant of partial summary judgment.

                                           I

       On June 24, 2015, a hailstorm damaged the Building. The Building was

 constructed in 1986, and its exterior is textured brick. 2 In May 2015, Fireman’s

       2
              The parties agree that the brick’s surface has upraised parts that can
 “flake” or “chip” off. Compare Aplt.’s App., Vol. II, at 286 (Knott Laboratory,
 LLC report, dated Sept. 19, 2016) (Fireman’s Fund’s expert, Knott Laboratory,
 LLC, finding that “[t]he bricks contain a surface consistency/texture wherein the
                                                                       (continued...)

                                           3
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 Fund issued the Policy for the Building, which covered “direct physical loss of or

 damage to” the Building from May 10, 2015 to May 10, 2016. Aplt.’s App., Vol.

 II, at 297, 319. Hail is a covered event under the Policy, which permits the

 insured to recover for at least some claims stemming from hail. 3

       To help assess the extent of the damage for filing an insurance claim with

 Fireman’s Fund, Steele retained public adjuster Derek O’Driscoll of Impact Claim

 Services (“Impact”). In May 2016, Impact sent Fireman’s Fund a letter stating

 there was “a significant amount of spalled and fractured fragments from the

 subject propert[y’s] brick facades, scattered around the property following the

 event in question.” Aplt.’s App., Vol. II, at 464 (Letter from Impact, dated May

 24, 2016). This, Impact asserted, “provide[d] an indication of the significant

 amount of brick that would have been damaged on the date of loss.” Id. Impact

       2
         (...continued)
 exterior face of the brick is intentionally distressed for architectural appearance”),
 with id. at 464 (Letter of Impact Claims Services, LLC, dated May 24, 2016)
 (Steele’s appraiser, Impact Claim Services, LLC, finding a “significant amount of
 spalled and fractured fragments from the subject propert[y’s] brick facades,
 scattered around the property”).
       3
               Both parties acknowledge that the Policy covers hail damage. More
 specifically, Fireman’s Fund’s correspondence with Steele regarding claims for
 hail damage states, “[t]he claim involves damage to the insured’s building located
 at 250 Steele Street in Denver, Colorado due to a hailstorm . . . .” Aplt.’s App.,
 Vol. II, at 470. Furthermore, the district court’s order states, “[h]ere, the parties
 do not dispute that plaintiff paid part of defendant’s claim, indicating that it was
 liable for damages to the building caused by the June 24, 2015 hailstorm.”
 Aplt.’s App., Vol. III, at 617 (Dist. Ct. Order, filed Feb. 13, 2019).

                                           4
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 also noted the “difference in color between the undamaged and hail spalled areas

 of brick facade.” Id. Ultimately, Impact concluded the following: “Given the

 extent of the damages, the availability of the brick, and the inability to return the

 property to a pre-loss condition through spot repairs, the brick facade must be

 removed and replaced in its entirety.” Id. at 467 (Letter from Impact, dated Dec.

 3, 2016).

       After Steele filed its claim, Fireman’s Fund hired Knott Laboratory, LLC

 (“Knott Laboratory”), an engineering firm, to separately inspect the Building for

 hail damage. Knott Laboratory issued its report in September 2016. The Knott

 Laboratory report recognized that it was “reasonable to conclude” that some of

 the flaking of the brick on the Building was due to the June 2015 hailstorm,

 stating: “Given the brick type and its propensity to display intentional distress, it

 is reasonable to conclude that a portion of the west-facing textured surfaces of the

 brick were removed during the recent hailstorm.” Id., Vol. II, at 287 (Knott

 Laboratory, LLC report, dated Sept. 19, 2016). However, it further found: that

 the brick’s “irregularities are random and intentional and will weather over

 time”—including, notably, due to hail impact; that “[r]egardless of causation,

 including that by hail impact, this change is expected and inherent in this type of

 brick and is intentional by the original designer”; that “[t]he functionality and

 life-expectancy of the brick has not been reduced and the overall aesthetic of the

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 brick has not been altered as a whole despite small chips being removed”; and,

 perhaps most significantly, that “any removal of chips from the brick via hail

 impact, or otherwise, is not damage to the brick.” Id. at 287–88.

       In a letter dated, October 17, 2016, Fireman’s Fund informed Impact that it

 intended to pay Steele a total of approximately $105,331.00 in satisfaction of

 Steele’s claims for damage to the Building caused by the June 2015 hailstorm.

 Significantly, however, this amount did not include payments relating to the Brick

 Claim—that is, for the flaking of the Building’s brick facade. Specifically, based

 on Knott Laboratory’s report and its own investigation, Fireman’s Fund

 “concluded that the hailstorm caused no identifiable ‘direct physical loss of or

 damage to’ the brick façade,” as required for policy coverage. Id., Vol. III, at

 570. Fireman’s Fund elaborated further on its rationale:

              Although the hail may have resulted in some flaking of the
              bricks, it is impossible to identify any particular flaking that was
              specifically caused by the hail, nor did the building experience
              any significant amount of flaking in addition to what has
              naturally occurred from normal exposure to the elements over the
              past 30 years. In sum the hailstorm does not appear to have
              demonstrably altered either the appearance or the functionality of
              the brick facade in any way.

 Id. at 570–71. After several exchanges between Fireman’s Fund and Impact about

 the Brick Claim, on March 6, 2017, Impact sent a letter to Steele stating that, in

 light of the absence in progress in resolving this claim, Steele should invoke the

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 Appraisal Provision outlined in Part E of the Policy, to allow an appraisal to be

 conducted to determine the amount of loss on the Brick Claim.

        The Appraisal Provision in the Policy reads:

               E. Property Loss Conditions
                     ....

                   2. Appraisal

                        If we and you disagree on the amount of the 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 amount of loss. If they
                        fail to agree, they will submit their differences to the
                        umpire. A decision agreed to by any two will be binding.
                        Each party will:

                        a. Pay its chosen appraiser; and

                        b. Bear the other expenses of the appraisal and umpire
                        equally.

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

 Id., Vol. I, at 112.

        On April 21, 2017, Fireman’s Fund filed a one-claim complaint in the U.S.

 District Court for the District of Colorado seeking a declaratory judgment that the

 issue related to the Brick Claim that Steele sought to pursue through the appraisal

 process was “not a proper subject for an appraisal under the subject insurance

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 policy.” Id. at 13 (Complaint, filed April 21, 2017). Steele filed an answer

 asserting five counterclaims. Only the first counterclaim—seeking enforcement

 of the Appraisal Provision—is relevant to this appeal. In the first counterclaim,

 Steele asked the district court to enter an order “directing Plaintiff and

 Counterclaim Defendant [Fireman’s Fund] to honor its Policy by engaging in

 proceedings in accordance with the appraisal provision of the Policy.” Id. at 43.

       The district court exercised diversity jurisdiction over the action. See 28

 U.S.C. § 1332. And, consistent with the parties’ briefing, the court applied the

 law of the forum state—Colorado. See, e.g., Cornhusker Cas. Co. v. Skaj, 786

 F.3d 842, 850 (10th Cir. 2015) (applying the substantive law of the forum state in

 a lawsuit invoking the court’s diversity jurisdiction).

       On August 31, 2017, Fireman’s Fund moved for partial summary judgment.

 It argued that the Brick Claim was not subject to the Appraisal Provision because

 the brick flaking did not cause Steele to suffer any “direct physical loss . . . or

 damage” within the meaning of the Policy. Steele cross-moved for partial

 summary judgment to enforce the Appraisal Provision. Steele maintained that

 “the undisputed facts demonstrate a single loss event for which Fireman’s

 Fund . . . admitted coverage.” Aplt.’s App., Vol. II, at 524. And Steele

 requested that “the Court enter partial summary judgment in its favor on its First

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 Counterclaim directing the parties to appraise the loss from the June 24, 2015

 storm.” Id. at 536.

       On February 13, 2019, the district court denied Fireman’s Fund’s motion

 for partial summary judgment, and granted Steele’s cross motion. Specifically,

 the district court found, “the insurance contract requires the parties to participate

 in an appraisal of the loss on the brick claim.” Id., Vol. III, at 617. And the

 district court accordingly “ordered that Defendant [Steele’s] Cross Motion for

 Partial Summary Judgment . . . is granted.” Id. at 620 (bold and capitalization

 omitted). The court, however, did not expressly indicate that its order was

 providing injunctive relief. It administratively closed the case pursuant to D.C.

 Colo. L. Civ. R. 41.2 (“A district judge . . . may order the clerk to close a civil

 action administratively subject to reopening for good cause.”) and also

 acknowledged that completion of the appraisal process would constitute good

 cause to reopen it.

       Fireman’s Fund timely filed a notice of appeal, seeking to proceed on an

 interlocutory basis under 28 U.S.C. § 1292(a)(1)—on the view that the district

 court’s order constituted an appealable injunction. Fireman’s Fund also moved to

 have the district court certify its February 13, 2019, order as either an appealable

 “final judgment” pursuant to Fed. R. Civ. P. 54(b), or a “controlling question of

 law” appropriate for interlocutory appeal under 28 U.S.C. § 1292(b). See, e.g.,

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  Miller v. Basic Research, LLC, 750 F.3d 1173, 1176 n.2 (10th Cir. 2014). On

  August 12, 2019, the district court denied this motion.

                                              II

         Generally, a federal court “may not rule on the merits of a case without first

  determining that it has jurisdiction[.]” Kelley v. City of Albuquerque, 542 F.3d

  802, 817 n.15 (10th Cir. 2008) (quoting Sinochem Int’l Co. v. Malay. Int’l

  Shipping Corp., 549 U.S. 422, 430–31 (2007)). Here, the district court’s order

  required Fireman’s Fund to adhere to the Appraisal Provision of the Policy;

  consequently, the district court ordered Fireman’s Fund to specifically perform a

  contractual obligation. See Buell v. Security Gen. Life Ins. Co., 987 F.2d 1467,

  1469 (10th Cir. 1993); Chacon v. American Family Mut. Ins. Co., 788 P.2d 748,

  750 (Colo. 1990) (“An insurance policy is a contract . . . .”). “Specific

  performance [of a contract provision] is an equitable remedy, and an interim grant

  of specific relief is a preliminary injunction.” Westar Energy, Inc. v. Lake

  (“Westar”), 552 F.3d 1215, 1222–23 (10th Cir. 2009). Therefore, we conclude

  that we have jurisdiction under 28 U.S.C. § 1292(a)(1), which extends appellate

  jurisdiction to “[i]nterlocutory orders of the district courts . . . granting . . .

  injunctions.”

         “From the very foundation of our judicial system the object and policy of

  the acts of [C]ongress . . . ha[s] been to save the expense and delays of repeated

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  appeals in the same suit, and to have the whole case and every matter in

  controversy in it decided in a single appeal.” McLish v. Roff, 141 U.S. 661,

  665–66 (1891) (citing Forgay v. Conrad, 47 U.S. 201, 205 (1848)). 28 U.S.C.

  § 1291 codifies this principle by allowing federal circuit courts to review only

  “final decisions” of district courts. New Mexico v. Trujillo, 813 F.3d 1308, 1316

  (10th Cir. 2016) (citing 28 U.S.C. § 1291). Nevertheless, Congress found

  § 1291’s rigid application to present an undue hardship, so it created exceptions

  to the “final decision” principle. See Abbott v. Perez, 138 S. Ct. 2305, 2319

  (2018) (citing Carson v. Am. Brands, Inc., 450 U.S. 79, 83 (1981)). One of these

  exceptions is 28 U.S.C. § 1292(a)(1)—which permits appeals as of right from

  “[i]nterlocutory orders of the district courts . . . granting, continuing, modifying,

  refusing or dissolving injunctions.”

        Under § 1292(a)(1), appeals from orders expressly granting or denying

  interlocutory injunctive relief generally raise few jurisdictional questions.

  Hutchinson v. Pfeil, 105 F.3d 566, 569 (10th Cir. 1997) (“An ‘order expressly

  granting or denying injunctive relief fits squarely within the plain language of

  § 1292(a)(1)’ and is reviewable on interlocutory appeal . . . .” (quoting Tri–State

  Generation & Trans. v. Shoshone R. Power, 874 F.2d 1346, 1351 (10th Cir.

  1989))). But § 1292(a)(1) is “a limited exception to the final-judgment rule of 28

  U.S.C. § 1291 and the ‘long-established policy against piecemeal appeals.’”

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  Pimentel & Sons Guitar Makers, Inc. v. Pimentel, 477 F.3d 1151, 1153 (10th Cir.

  2007) (quoting Gardner v. Westinghouse Broad. Co., 437 U.S. 478, 480 (1978));

  see Switzerland Cheese Ass’n v. E. Horne’s Market, Inc., 385 U.S. 23, 24 (1966)

  (“[W]e approach [§ 1292(a)(1)] somewhat gingerly lest a floodgate be opened that

  brings into the exception many pretrial orders.”). Thus, “courts of appeals insist

  on looking beyond the captions and vocabulary attached to district court orders to

  determine the actual, practical effect of an order before exercising appellate

  jurisdiction under § 1292(a)(1).” Pimentel, 477 F.3d at 1153. Therefore, we

  consider “the substance rather than the form of the motion and caption of the

  order” to determine “whether a district court order ‘granting’ an injunction is

  appealable under § 1292(a)(1).” Id. at 1153–54 (citing Sierra Club v. Marsh, 907

  F.2d 210, 213 (1st Cir. 1990)).

        A substantively injunctive order—and, therefore, an appealable order— is

  “[1] directed to a party, [2] enforceable by contempt, and [3] designed to accord

  or protect some or all of the substantive relief sought by a complaint in more than

  a temporary fashion.” 16 Charles Alan Wright, Arthur R. Miller & Edward H.

  Cooper, F EDERAL P RACTICE AND P ROCEDURE § 3922 (3d ed. 2021); see also

  Cohen v. Bd. of Trs. of the Univ. of Med. & Dentistry of N.J., 867 F.2d 1455,

  1465 n.9 (3d Cir. 1989) (en banc); I.A.M. Nat’l Pension Fund v. Cooper Indus.,

  Inc., 789 F.2d 21, 24 (D.C. Cir. 1986). This framework ensures appellate

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  jurisdiction does not extend to court orders merely because they direct parties “to

  do something.” S. Ute Indian Tribe v. Leavitt, 564 F.3d 1198, 1207 (10th Cir.

  2009) (quoting Mercer v. Magnant, 40 F.3d 893, 896 (7th Cir. 1994)). “Only

  orders awarding relief on the merits, or effectively foreclosing some element of

  relief, may be appealed as injunctions.” Id. (emphasis omitted) (quoting Mercer,

  40 F.3d at 896).

        Under this framework, ordinarily, orders requiring a party to specifically

  perform a contractual condition can be appealed. Westar, 552 F.3d at 1222–23.

  This conclusion is also accepted by our sister circuits. See Cohen, 867 F.2d at

  1468 (“[S]pecific enforcement of contractual undertakings by an order against the

  person has been regarded as a classic form of equitable relief. . . . [I]f it is

  granted the order falls within section 1292(a)(1).”); Union Oil Co. of California v.

  Leavell, 220 F.3d 562, 566 (7th Cir. 2000) (holding that jurisdiction was

  established under § 1292(a)(1) where, even though “[t]he district judge did not

  use the magic word ‘injunction,’ . . . his order is injunctive in nature, requiring [a

  party] to perform enumerated steps under threat of the contempt power”); Pac.

  Ins. Co. v. Gen. Dev. Corp., 28 F.3d 1093, 1096 (11th Cir. 1994) (holding that an

  order directing an insurer to advance legal fees pursuant to an insurance policy

  was an immediately appealable injunction).

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        The district court’s decision to grant Steele’s motion for partial summary

  judgment and thus to enforce the Policy’s Appraisal Provision was not a final

  order resolving the litigation. But it acted as an injunction, because it required

  Fireman’s Fund to specifically perform the actions stated in the Appraisal

  Provision. We have already held that mandating the “[s]pecific performance [of a

  contract provision] is an equitable remedy, and an interim grant of specific relief

  is a preliminary injunction.” Westar, 552 F.3d at 1222–23. We also have ruled

  that insurance polices are considered contracts under Colorado law. See Buell

  987 F.2d at 1469. Thus, even though the district court did not specifically call its

  order an injunction, it granted injunctive relief. See Hutchinson, 105 F.3d at

  569–70.

        Contrary to Steele’s suggestion, the rubric of Carson v. American Brands,

  Inc., 450 U.S. 79 (1981), is inapplicable here. “Under Carson, an interlocutory

  order with the ‘practical effect’ of denying an injunction is only appealable if the

  litigant can show a ‘serious, perhaps irreparable, consequence’ and the order can

  only be ‘effectually challenged’ upon interlocutory appeal.” Westar, 552 F.3d at

  1223 (emphasis added) (quoting Carson, 450 U.S. at 84). Here, however, the

  district court’s order did not deny an injunction—in practical effect or otherwise.

  Instead, though not expressly denominated an injunction, it clearly granted

  injunctive relief by requiring a party to specifically perform a contractual

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  condition. See id. (“Since the district court’s order expressly granted relief, it is

  immediately appealable notwithstanding the court’s failure to label the relief as

  injunctive.”); id. at 1223 n.6 (“This eliminates the need to determine whether the

  heightened Carson showing is necessary when an interlocutory order has the

  practical effect of granting, rather than denying, a preliminary injunction.”).

  Accordingly, the Carson rubric is inapplicable here.

        In sum, the district court’s order granted Steele’s request for equitable

  relief—requiring Fireman’s Fund to specifically perform under the Policy’s

  Appraisal Provision. And because requiring specific performance is “equitable in

  nature and constitutes the grant of a preliminary injunction,” the district court’s

  order is substantively an injunctive order and thus appealable on an interlocutory

  basis. Westar, 552 F.3d at 1224. Consequently, we properly exercise jurisdiction

  over this appeal under § 1292(a)(1).

                                            III

        Having determined that we may exercise jurisdiction under § 1292(a)(1),

  we turn to the merits of the district court’s order, reviewing the district court’s

  grant of partial summary judgment de novo and applying the same legal standard

  as the district court. Phila. Indem. Ins. Co. v. Lexington Ins. Co., 845 F.3d 1330,

  1336 (10th Cir. 2017) (citing Cornhusker, 786 F.3d at 849). After thoroughly

  considering the parties’ arguments—through the prism of the relevant law and the

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  record—we conclude that Fireman’s Fund cannot prevail. Therefore, we uphold

  the district court’s order.

                                           A

        Although appraisal, like the arbitration remedy, is “designed to be

  consistent with the public policy of discouraging litigation,” unlike the broad

  mandate that comes with arbitration, appraisal limits the parties to “refer[ing]

  some . . . matter involving only the ascertainment of facts to selected persons for

  disposition.” 15 Steven Plitt, et al., C OUCH ON I NSURANCE § 209:8, Westlaw (3d

  ed., database updated Dec. 2021); cf. J.A. Walker Co., Inc. v. Cambria Corp., 159

  P.3d 126, 128 (Colo. 2007) (“Colorado law favors the resolution of disputes

  through arbitration.” (citing Huizar v. Allstate Ins. Co., 952 P.2d 342, 346 (Colo.

  1998))). Fireman’s Fund contends that the district court erred by framing the

  parties’ dispute as “presenting an issue of factual causation rather than policy

  interpretation.” Aplt.’s Opening Br. at 14. We disagree.

        In advancing this position, Fireman’s Fund underscores that it does not

  dispute that the June 24, 2015, hailstorm was the factual cause of some flaking of

  the Building’s brick facade. See id. at 22 (stating that “Fireman’s does not

  factually dispute the consequence of the occurrence—here that hail caused

  irregular surface texture to flake off the bricks”). Accordingly, Fireman’s Fund

  contends that there is no factual-causation question presented in Steele’s claim for

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  an appraiser to resolve. Thus, reasons Fireman’s Fund, Steele necessarily seeks

  to send to an appraiser an issue of policy coverage—not factual

  causation—relating to whether the hailstorm’s effects on the Building’s brick

  constitute “direct physical loss or . . . damage” within the meaning of the Policy.

  And, under Colorado law, it would be improper for an appraiser to resolve such

  coverage questions because doing so falls within the courts’ remit. See, e.g.,

  I.M.A., Inc. v. Rocky Mountain Airways, Inc., 713 P.2d 882, 887 (Colo. 1986)

  (noting that “the interpretation of an established written contract is generally a

  question of law for the court”); accord Essex Ins. Co. v. Vincent, 52 F.3d 894,

  896 (10th Cir. 1995) (applying Colorado law).

        However, we do not believe that legal questions of coverage are directly

  implicated by Steele’s invocation of the Appraisal Provision. Steele seeks an

  appraiser’s judgment regarding the nature and scope of the hailstorm’s effects on

  the Building’s brick facade and the resulting costs to remedy those effects.

  Boiled down to their essence, the questions Steele seeks to resolve through the

  appraisal process raise at least the following overarching, factual-causation

  issues: whether the hailstorm’s effects extend beyond or are distinct from the

  flaking that ordinarily would be intended or expected from the type of brick found

  on the Building and, relatedly, what are the costs of remedying those effects. See

  BonBeck Parker, LLC v. Travelers Indem. Co. of Am., 14 F.4th 1169, 1178, 1182

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  (10th Cir. 2021) (noting that “as here, ‘the causation question involves separating

  loss due to a covered event from a property’s pre-existing condition’” (quoting

  State Farm Lloyds v. Johnson, 290 S.W.3d 886, 892 (Tex. 2009))); Philadelphia

  Indem. Ins. Co. v. WE Pebble Point, 44 F. Supp. 3d 813, 817–18 (S.D. Ind. 2014)

  (noting that where the parties “disagree[d] . . . on the amount of loss that is

  attributable to covered storm damage rather than excluded causes such as ‘wear

  and tear’ or faulty roof installation,” that “it would be extraordinarily difficult, if

  not impossible, for an appraiser to determine the amount of storm damage without

  addressing the demarcation between ‘storm damage’ and ‘non-storm damage’”);

  cf. Wausau Ins. Co. v. Herbert Halperin Distrib. Co., 664 F. Supp. 987, 988–89

  (D. Md. 1987) (presenting a hypothetical example of a dispute subject to an

  appraisal provision in which the insured “was disputing that as a factual matter a

  larger area than that immediately damaged by the occurrence had to be repaired in

  order to repair the immediate damage itself[;] this would constitute an ‘amount of

  loss’ question”).

        And, in denying coverage, Fireman’s Fund puts just such factual-causation

  issues front and center. As the district court noted, Fireman’s Fund’s coverage

  decision was actually “based not on policy definitions but on a causation

  analysis.” Aplt.’s App., Vol. III, at 616. In sound reasoning, the court elaborated

  as follows:

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               [I]n order to reach its conclusion that no “physical loss” or
               “damage” occurred under the policy, [Fireman’s Fund] made a
               causation determination – whether the hailstorm caused flaking
               or other damage to the brick facade. [Fireman’s Fund’s]
               causation analysis is therefore of the type that is contemplated
               by the appraisal process.

  Id. at 616–17.

        As validation for the district court’s view, we need merely recall Fireman’s

  Fund’s rationale in denying coverage:

               Fireman’s Fund has concluded that the hailstorm caused no
               identifiable “direct physical loss of or damage to” the brick
               façade. Although the hail may have resulted in some flaking of
               the bricks, it is impossible to identify any particular flaking that
               was specifically caused by the hail, nor did the building
               experience any significant amount of flaking in addition to what
               has naturally occurred from normal exposure to the elements
               over the past 30 years.

  Id. at 570 (emphases added). In light of the Knott Laboratory report, Fireman’s

  Fund effectively reasoned that the brick on the Building’s facade was designed to

  have an “intentionally distressed” look and that “irregularities are random and

  intentional and will weather over time”; consequently, any hail-induced flaking

  would not reduce the “functionality and life-expectancy of the brick.” Id. at

  569–70 (quoting the Knott Laboratory report, Aplt.’s App., Vol. II, at 287).

  Consequently, as Fireman’s Fund assessed the matter, there was no foundation for

  coverage—that is, there was no “direct physical loss of or damage to” the brick

  facade, within the meaning of the Policy.

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        In effect, Fireman’s Fund has sought to resolve disputed factual-causation

  issues related to the Brick Claim by fiat, rather than through the appraisal process.

  Permeating Fireman’s Fund’s rationale for denying coverage are precisely the

  kinds of factual-causation issues underlying Steele’s request for an appraisal: in

  particular, the issue of whether the hailstorm’s effects extend beyond or are

  distinct from the flaking that ordinarily would be intended or expected from the

  type of brick found on the Building and, relatedly, the costs of remedying those

  effects. And this set of factual issues is not put to rest—as Fireman’s Fund

  suggests—by its general acknowledgment that the June 24, 2015, hailstorm was

  the factual cause of some flaking of the Building’s brick facade. The central

  effect of Fireman’s Fund’s argument is to repackage factual-causation issues

  about the hailstorm’s effects on the Building’s bricks as a legal issue of coverage

  under the Policy. We are not persuaded by this effort.

        Based on the foregoing, we reject Fireman’s Fund’s contention that the

  district court erred by framing the parties’ dispute as “presenting an issue of

  factual causation rather than policy interpretation.” Aplt.’s Opening Br. at 14.

                                            B

        Fireman’s Fund nevertheless contends that the district court took a second

  critical misstep—which effectively sealed its fate—when it determined that

  factual causation is a proper subject for consideration by appraisers.

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  Consequently, as Fireman’s Fund reasons, even assuming that Steele has

  advanced a factual-causation dispute—as opposed to one involving policy

  coverage—the district court erred in enforcing the Policy’s Appraisal Provision

  because factual-causation issues are not appropriately resolved through the

  appraisal process. However, we must disagree again.

        More specifically, Fireman’s Fund acknowledged in its briefing that

  whether appraisers may decide this causation subject has not been conclusively

  resolved by the Colorado Supreme Court. Yet it argued that “[t]he better rule is

  that the scope of appraisals should be limited to the unambiguous meaning of the

  word ‘amount’—the value of loss only.’” Id. at 14. Further, Fireman’s Fund has

  reasoned that “the existence of a covered ‘loss’ is a sine qua non for an

  appraisal”; more specifically, “an appraisal is not appropriate unless the parties

  agree that a loss has occurred and they disagree over the amount of that loss.”

  Aplt.’s Reply Br. at 24. Accordingly, Fireman’s Fund has argued that, even

  assuming Steele has raised factual-causation issues, they are not properly

  addressed by an appraiser because, notably, there is no agreed-upon covered loss

  as to the Brick Claim.

        However, since the parties submitted their briefs and we heard oral

  argument, our court has predicted that the Colorado Supreme Court would

  conclude that factual causation is an appropriate subject for resolution by

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  appraisers. BonBeck, 14 F.4th at 1178, 1182. We did so by construing the plain

  meaning of the term “amount of loss” in an insurance-policy appraisal provision

  that, in all material respects, is like the one at issue here. See id. at 1178 (“We

  therefore conclude that the Colorado Supreme Court, if faced with the issue,

  would join these courts in recognizing that in the insurance context, the ordinary

  meaning of the phrase ‘amount of loss’ encompasses causation.”). Moreover, in

  reaching this conclusion, we rejected essentially the same argument that

  Fireman’s Fund advances here—that the term “amount of loss” should be

  understood as relating to “the value of loss only,’” Aplt.’s Opening Br. at 15, 32.

  See BonBeck, 14 F.4th at 1180–81 (rejecting the argument that the scope of

  appraisals is limited to monetary determinations, that is, the value of loss).

        We conceive of no reason why BonBeck’s reasoning should not apply to

  these facts. Accordingly, its prediction regarding the position of the Colorado

  Supreme Court binds us. See, e.g., Wankier v. Crown Equip. Corp., 353 F.3d 862,

  866 (10th Cir. 2003) (“[W]hen a panel of this Court has rendered a decision

  interpreting state law, that interpretation is binding on district courts in this

  circuit, and on subsequent panels of this Court, unless an intervening decision of

  the state’s highest court has resolved the issue.”). And this conclusion fatally

  undercuts Fireman’s Fund’s second contention. That is, under BonBeck’s

  prediction, the district court did not err in enforcing the Policy’s Appraisal

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  Provision—even though Steele has presented a dispute involving factual

  causation.

        Lastly, it bears emphasizing that nothing in our decision suggests that the

  appraiser is authorized to opine on the ultimate question of coverage. The

  appraisal process that Steele seeks is intended to produce a binding resolution

  concerning certain factual issues bearing on coverage for the Brick Claim. Any

  incidental legal determination regarding the ultimate coverage question would be

  outside the scope of the appraisal process and subject to review. See 15 Plitt,

  supra, § 209:8; cf. Colo. Rev. Stat. § 13-22-223(1)(d) (requiring courts to vacate

  arbitration awards when arbitrators exceed their powers).

        Thus, Fireman’s Fund can still exercise its right to deny the claim for a

  variety of reasons that are not inconsistent with the appraiser’s factual findings.

  See Aplt.’s App., Vol. I, at 112 (“If there is an appraisal, we will still retain our

  right to deny the claim.”); see also BonBeck, 14 F.4th at 1179–80 (“The

  [Appraisal] Panel makes a factual finding on how much hail damage occurred.

  After the appraisal, Travelers can’t rehash that finding, but it can deny the claim

  for a host of other reasons having nothing to do with the cause of the damage.”).

  In short, Fireman’s Fund is bound by the appraisal’s factual findings and the cost

  computations associated with those findings, but it can still contest in court the

  ultimate coverage question under the Policy as a legal matter.

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        In sum, we reject Fireman’s Fund’s contention that the district court erred

  when it determined that factual causation is a proper subject for consideration in

  the Policy’s appraisal process.

                                           IV

        For the forgoing reasons, we AFFIRM the district court’s order granting

  partial summary judgment to Steele, which effectively enforces the Policy’s

  Appraisal Provision.

                                         ENTERED FOR THE COURT

                                         Jerome A. Holmes
                                         Circuit Judge

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