Court Opinion

ID: 9912430
Source: CourtListenerOpinion
Date Created: 2023-12-22 15:01:53.219525+00
Date Added: 2024-06-11T12:59:29.374167
License: Public Domain

Rel: December 22, 2023

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other
errors, in order that corrections may be made before the opinion is printed in Southern Reporter.

         SUPREME COURT OF ALABAMA
                             OCTOBER TERM, 2023-2024

                                _________________________

                                      SC-2023-0092
                                _________________________

                      Great American Insurance Company

                                                  v.

                   Crystal Shores Owners Association, Inc.

                       Appeal from Baldwin Circuit Court
                                 (CV-21-900497)

PER CURIAM.

       Great American Insurance Company ("Great American") appeals

from the Baldwin Circuit Court's order denying its motion to invoke the

appraisal procedure contained in a commercial-property insurance policy
SC-2023-0092

Great American issued to Crystal Shores Owners Association, Inc.

("Crystal Shores"), concerning the Crystal Shores Condominium complex

("the property") located on West Beach Boulevard in Gulf Shores. We

dismiss the appeal.

                                 I. Facts

     According to Crystal Shores' complaint, on September 30, 2019,

RSUI Indemnity Company ("RSUI") and Landmark American Insurance

Company ("Landmark") issued a commercial-property insurance policy

to Crystal Shores for a period of one year from the date of issuance.1 On

the same date, the complaint alleged, Great American issued a

commercial-property insurance policy to Crystal Shores for a period of

one year from the date of issuance. 2

     On September 16, 2020, Hurricane Sally made landfall on the

Alabama Gulf Coast. Crystal Shores' complaint alleged that Hurricane

     1In  its answer to Crystal Shores' complaint, RSUI agreed that
Landmark had issued a commercial-property insurance policy to Crystal
Shores, but it denied that RSUI was a party to the Landmark insurance
policy. That dispute is not before us in this appeal.

     2The   Great American insurance policy listed "Crystal Shores
Condominium" as the "Named Insured," but there appears to be no
dispute that "Crystal Shores Owners Association, Inc.," is the holder of
the policy.
                                 2
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Sally caused "substantial damages to the Crystal Shores Condominium."

According to its complaint, Crystal Shores "timely and properly reported

its Hurricane Sally claim to the Third-Party Defendants [Great

American, RSUI, and Landmark] for damage to [the property] sustained

as a result of the storm event."

     Crystal Shores alleged that the main water line to the property had

been turned off in preparation for the imminent landfall of Hurricane

Sally. However, the owner of Unit 606 had left on the faucet to the

bathtub in that unit before vacating the premises because of the

hurricane emergency. After Hurricane Sally had passed, the water flow

was restored to the property, and the faucet in Unit 606 ran for over 24

hours before it was discovered by persons returning to the property.

Crystal Shores alleged that the constant running of water in the bathtub

of Unit 606 resulted in an overflow of water that flooded an entire stack

of condominium units. Crystal Shores alleged that it "timely submitted

the Unit 606 tub overflow claim to third-party defendants RSUI,

Landmark, Great American [and fictitiously named defendants] seeking

coverage to mitigate and remediate the damage resulting from this

covered loss."

                                   3
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     According to Crystal Shores' complaint, it

     "retained Bowen Wilson, Inc., d/b/a Servpro of Montgomery to
     mitigate and remediate damage caused by Hurricane Sally as
     well as the Unit 606 tub overflow claim. Crystal Shores timely
     submitted to Third-Party Defendants all invoicing and
     supporting documentation provided by Servpro pertaining to
     mitigation and remediation scopes of work performed by
     Servpro to mitigate and repair damage caused by Hurricane
     Sally and the Unit 606 tub overflow claim.

           "27. However, third-party defendants RSUI, Landmark,
     Great American, and [fictitiously named defendants] have
     failed to fully compensate [Crystal Shores] for the Unit 606
     tub overflow claim and have further refused to compensate
     [Crystal Shores] for services allegedly rendered by Servpro to
     mitigate and remediate damage caused by both Hurricane
     Sally and the Unit 606 tub overflow."

     On May 6, 2021, Bowen-Wilson, Inc., d/b/a Servpro of Montgomery

("Servpro"), commenced an action in the Baldwin Circuit Court by filing

a complaint against Crystal Shores. In that complaint, Servpro alleged

that Crystal Shores had not fully compensated Servpro for the mitigation

and construction work Servpro had performed on the property pursuant

to a contract between Servpro and Crystal Shores. On June 11, 2021,

Crystal Shores filed an answer and counterclaim in response to Servpro's

complaint.

     On June 24, 2022, Crystal Shores filed in the Baldwin Circuit Court

a "Motion for Relief to File Third-Party Complaint" in which Crystal
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Shores alleged that one reason it had not fully paid Servpro's invoices

was that

     "Third-Party Defendants RSUI, Landmark and Great
     American refused to compensate [Crystal Shores] for all
     invoices [Crystal Shores] received from Servpro pertaining to
     the scopes of work allegedly performed by Servpro pertaining
     to both losses [the Hurricane Sally loss and the Unit 606 tub-
     overflow claim]. Accordingly, [Crystal Shores] was unable to
     fully compensate Servpro for services allegedly rendered
     mitigating and remediating the losses."

Crystal Shores thus sought leave to file a third-party complaint against

RSUI, Landmark, and Great American "[s]o that this case can be fully

and fairly litigated." On July 8, 2022, the circuit court granted Crystal

Shores' motion.

     On July 28, 2022, Crystal Shores filed a third-party complaint

against RSUI, Landmark, Great American, and fictitiously named

defendants. As we already have noted, Crystal Shores' complaint alleged

that it filed insurance claims for damage to the property stemming from

both Hurricane Sally and the Unit 606 bathtub overflow. In addition to

the allegations we already have detailed, Crystal Shores' complaint

asserted:

           "30. Third-Party Plaintiff Crystal Shores has incurred
     significant costs mitigating interior damage, replacing the
     roof and repairing exterior damage, as well as other damage
                                   5
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     the building sustained as a result of Hurricane Sally and the
     unit 606 tub overflow, all of which has been timely and
     properly reported to the third-party Defendants.

           "31. However, third-party Defendants RSUI, Landmark,
     Great American and [fictitiously named defendants] have
     failed to promptly and/or properly investigate [Crystal
     Shores'] losses.

            "32. Defendants RSUI, Landmark, Great American and
     [fictitiously named defendants] have further failed to timely
     and/or properly compensate Crystal Shores for losses
     sustained as a result of Hurricane Sally and the unit 606 tub
     overflow.

            "33. Defendants RSUI, Landmark, Great American and
     [fictitiously named defendants] have further failed to submit
     [Crystal Shores'] claims to a cognitive evaluation or review
     and have breached the insuring agreements and committed
     bad faith by refusing to compensate [Crystal Shores] for
     damage the building and units sustained as a result of
     Hurricane Sally and the unit 606 tub overflow."

     Count I of Crystal Shores' complaint asserted against Great

American and the other third-party defendants bad-faith claims: failure

to pay insurance proceeds and failure to investigate. That count included

the allegation that Great American and the other third-party defendants

had "intentionally and/or recklessly failed to timely and/or properly

investigate and/or pay [Crystal Shores'] claim for damages sustained as

a result of the storm event and the Unit 606 tub overflow." Count II of

Crystal Shores' complaint asserted claims against Great American and
                                   6
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the other third-party defendants alleging breach of "the terms and

conditions of the insurance policies … by failing to timely and properly

investigate and pay [Crystal Shores] for losses sustained as a result of

the storm event and the Unit 606 tub overflow, said losses occurring

during the policy periods." Crystal Shores attached copies of the

insurance policies -- including a copy of the commercial-property

insurance policy issued by Great American -- to its complaint.

     On September 30, 2022, Great American filed in the circuit court a

"Motion to Dismiss, or in the Alternative to Stay and Compel Compliance

with the Appraisal Procedure Specified in the Policy." In that motion,

Great American argued that the parties' dispute about the amount of the

loss suffered by Crystal Shores was subject to an appraisal procedure

described in the insurance policy. Specifically, the appraisal clause in the

Great American insurance policy provided:

     "B. Appraisal

           "If [Great American] and [Crystal Shores] disagree on
     the value of the property, the amount of Net Income and
     operating expenses, 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
                                     7
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     value of the property, the amount of Net Income and
     operating expenses, or 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:

                 "1. pay its chosen appraiser; and

                "2. bear the other expenses of the appraisal
           and umpire equally.

           "If there is an appraisal, [Great American] will still
     retain [its] right to deny the claim.

           "Neither the appraisers nor the umpire shall attempt to
     resolve any issue of insurance coverage, policy exclusions,
     compliance with the Policy terms and conditions, or any issues
     concerning the Limits of Insurance available under the
     Policy."

(Bold typeface in original.) In its motion, Great American also noted that

a previous section of the insurance policy provided:

           "SELECT BUSINESS POLICY CONDITIONS

          "This Coverage Part is subject to the following
     conditions.

     "General Conditions

     "….

     "D. Legal Action Against Us

         "No one may bring a legal action against [Great
     American] under this Coverage Part unless:

                                    8
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                 "1. there has been full compliance with all of
           the terms of this Coverage Part; and

                "2. the action is brought within 2 years after
           the date on which the direct physical loss or
           damage occurred."

(Bold typeface in original.)

     In its September 30, 2022, motion, Great American asserted:

           "8. The individual appraisal process mandated by the
     Great American Policy fully encompasses the claims set forth
     against Great American in the Third-Party Complaint, and
     Crystal Shores' compliance with it will establish the amount
     of loss associated with the claims made under the Great
     American Policy for damages sustained by the Property.
     Crystal Shores does not contend that it has complied with the
     appraisal provision."

Because, according to Great American, "the appraisal provision in the

Great American Policy is mandatory once invoked," and because "[t]he

appraisal, once conducted, will resolve this controversy in its entirety,

since all claims in this action hinge upon the determination of the amount

of the 'loss' sustained by the Property," Great American contended that

the appraisal clause was a written arbitration agreement pursuant to the

Federal Arbitration Act ("the FAA"), 9 USC § 1 et seq. Great American

therefore requested that the circuit court dismiss Crystal Shores' claims

against it or stay the action and order Crystal Shores "to submit to the

                                    9
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individual appraisal process required under the express terms of the

policy."

      On December 1, 2022, Crystal Shores filed a response in opposition

to Great American's motion to compel an appraisal of the dispute over

the amount of the loss incurred by Crystal Shores. In that response,

Crystal Shores asserted that Great American had denied payment on its

submitted hurricane-damage insurance claim based on "certain

exclusions and 'coverage issues,' " not based on a disagreement over the

amount of the loss. In support of that argument, Crystal Shores cited --

and attached to its response -- an October 27, 2020, letter Great American

had sent to Crystal Shores. Relying on that letter and on Rogers v. State

Farm Fire & Casualty Co., 984 So. 2d 382, 392 (Ala. 2007), which Crystal

Shores argued stood for the proposition that " '[q]uestions of coverage and

liability should be decided only by the courts, not [by] appraisers,' "

Crystal Shores contended that its action should not be stayed for

purposes of an appraisal because there were questions about coverage,

not just the amount of the loss, at issue in the case.

      On December 19, 2022, Great American filed a "Supplemental

Submission in Support of its Motion to Dismiss, or in the Alternative to

                                    10
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Stay and Compel Compliance with the Appraisal Procedure Specified in

the Policy." In that supplemental submission, Great American argued

that the coverage-issues dispute between Crystal Shores and Great

American had concerned Crystal Shores' claim for damage stemming

from Hurricane Sally and that "[t]he Hurricane Sally Claim has been

resolved between Great American and Crystal Shores. The Hurricane

Sally Claim is also not part of Crystal Shores' Third-Party allegations

against Great American." The supplemental submission further asserted

that "[t]here are no coverage issues related to the Unit 606 Claim [the

bathtub-overflow claim] under Great American's policy, and the

Hurricane Sally Claim was resolved in Great American's December 16,

2020, correspondence disclaiming coverage." In support of those

contentions, Great American attached to its supplemental submission a

December 16, 2020, letter from Great American adjuster Mark

Erlandson, which stated that Great American had "completed its

investigation into this claim involving wind and water damage to the

Crystal Shores Condominium building that occurred during Hurricane

Sally" and that "the facts of the loss and the Policy terms … require us to

decline coverage for a portion of the claim as submitted." Additionally,

                                    11
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Great American attached to its supplemental submission an affidavit

from Erlandson stating that "Great American has not received any

correspondence from Crystal Shores or its attorneys disputing Great

American's handling of the [Hurricane Sally] claim itself." Because,

according to Great American, none of Crystal Shores' claims against it

involved insurance-coverage issues, Great American argued that its

motion to compel an appraisal of the dispute over the amount of the loss

incurred by Crystal Shores should be granted.

     On January 6, 2023, the circuit court entered an order denying

Great American's motion to dismiss or to stay the action and compel

compliance with the insurance policy's appraisal procedure. The order

did not specify the circuit court's reasons for its decision. On February 2,

2023, Great American appealed. On April 14, 2023, Great American filed

in the circuit court a motion to stay the proceedings in the circuit court

pending resolution of its appeal; the circuit court did not rule on that

motion.

     On May 11, 2023, Crystal Shores filed in this Court a motion to

dismiss Great American's appeal for lack of jurisdiction because, Crystal

Shores argued, the appeal stemmed from a nonfinal interlocutory order.

                                    12
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Specifically, Crystal Shores contended that Great American's appeal was

not cognizable under Rule 4(d), Ala. R. App. P., because the appeal did

not stem from "[a]n order granting or denying a motion to compel

arbitration." In support of its argument, Crystal Shores attached to its

motion a copy of this Court's order dismissing an appeal by Baldwin

Mutual Insurance Company ("Baldwin Mutual") in Baldwin Mutual

Insurance Co. v. Dixon (No. 1100162, Jan. 12, 2011), in which the Court

stated that "the appeal is dismissed as from a non-appealable order." In

order to provide context for that order, Crystal Shores also attached to

its motion to dismiss a copy of Baldwin Mutual's appellate brief in Dixon,

seeking to demonstrate that Baldwin Mutual had, like Great American

in this case, appealed from a circuit court's order denying a motion to

dismiss and demand for an appraisal.

     On May 15, 2023, the Supreme Court Clerk's Office issued a show-

cause order requiring Great American to respond to Crystal Shores'

motion to dismiss the appeal. On the same date, Great American filed

with this Court an emergency motion to stay the proceedings in the

circuit court pending resolution of the appeal. On May 19, 2023, Great

American filed with this Court its response to the show-cause order.

                                   13
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Great American contended that "courts across the country have

recognized [that], '[u]nder the Federal Arbitration Act, [9 U.S.C. § 1 et

seq.], appraisal provisions are regularly treated as arbitration provisions

by the courts and enforced in the same manner.' Walker v. Allstate Prop.

& Cas. Ins. Co., No. 2:19-CV-701-RDP, … n.3 (N.D. Ala. Mar. 10, 2020)."

Great American further asserted that the order issued in Dixon "contains

no stated rationale and has no precedential value." In support of that

assertion, Great American attached to its response a copy of Baldwin

Mutual's response to a show-cause order from this Court requiring it to

explain why its appeal should not be dismissed in which Baldwin Mutual

had argued that "in Alabama appraisal under an insurance policy is

considered analogous to demands for arbitration and this Court has

applied the same standards to both." In contrast, Great American

contended, it had cited multiple cases from other jurisdictions showing

that appraisal clauses are treated as arbitration clauses.

     On May 23, 2023, Crystal Shores filed a reply to Great American's

response to the show-cause order. In its reply, Crystal Shores argued that

the case relied upon by Great American, Walker v. Allstate Property &

Casualty Insurance Co., No. 2:19-CV-701-RDP, Mar. 10, 2020 (N.D. Ala.

                                    14
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2020) (not reported in Federal Supplement), "has no applicability to the

present issue before this Court because the Walker Court "did not

analyze whether an appellate court has jurisdiction pursuant to Rule

4(d)[, Ala. R. App. P.,] for purposes of reviewing the denial of an

interlocutory non-final order such as the one presently before this Court."

Crystal Shores further argued that if Great American wanted to "avail

itself of the procedural mechanism within Rule 4(d) of the Alabama Rules

of Appellate Procedure to appeal the denial of a motion to compel

arbitration, Great American simply could have added an arbitration

clause to its contract of insurance."

     On May 26, 2023, this Court entered an order granting Great

American's emergency motion to stay the proceedings in the circuit court

pending resolution of the appeal and placing Crystal Shores' motion to

dismiss the appeal under submission.

                                II. Analysis

     As the rendition of facts details, the threshold issue in this case is

whether this Court has jurisdiction to consider Great American's appeal

of the circuit court's order denying its motion to dismiss or to stay the

action and compel compliance with the insurance policy's appraisal

                                    15
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procedure. It is undisputed that Great American's only asserted basis for

jurisdiction is Rule 4(d), Ala. R. App. P., which provides:

     "An order granting or denying a motion to compel arbitration
     is appealable as a matter of right, and any appeal from such
     an order must be taken within 42 days (6 weeks) of the date
     of the entry of the order, or within the time allowed by an
     extension pursuant to Rule 77(d), Alabama Rules of Civil
     Procedure."

(Emphasis added.) Jurisdiction under Rule 4(d) necessarily requires

Great American to contend that the appraisal clause is, in fact, an

arbitration clause. Great American does so by quoting snippets from a

few federal cases that have examined whether appraisal clauses in

insurance contracts should be treated as arbitration clauses. For

example, in Milligan v. CCC Information Services Inc., 920 F.3d 146, 152

(2d Cir. 2019), the United States Court of Appeals for the Second Circuit

concluded:

           "The appraisal process here constitutes arbitration for
     purposes of the FAA. The appraisal provision identifies a
     category of disputes (disagreements between the parties over
     'the amount of loss'), provides for submission of those disputes
     to specified third parties (namely, two appraisers and the
     jointly-selected umpire), and makes the resolution by those
     third parties of the dispute binding (by stating that '[a]n

                                    16
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     award in writing of any two will determine the amount of the
     loss')."3

     However, in citing Milligan and other federal cases, Great

American has neglected to mention that a threshold issue faced by

federal courts in determining whether a certain procedure qualifies as

"arbitration" under the FAA is whether federal or state law defines that

     3Great American also emphasizes the statement from a footnote in

Walker v. Allstate Property & Casualty Insurance Co., No. 2:19-CV-701-
RDP, Mar. 10, 2020, n.3 (N.D. Ala. 2020) (not reported in Federal
Supplement), that, "[u]nder the Federal Arbitration Act ('FAA'),
appraisal provisions are regularly treated as arbitration provisions by
the courts and enforced in the same manner." The Walker Court's sole
citation in support of that assertion was 200 Leslie Condominium
Association v. QBE Insurance Corp., No. 10-61984-CIV, June 21, 2011
(S.D. Fla. 2011) (not reported in Federal Supplement), in which the Leslie
Condominium Association court stated that " '[a]ppraisal provisions in
insurance policies ... have generally been treated as arbitration
provisions.' " But in making that statement, the Federal District Court
for the Southern District of Florida was discussing Florida law and
quoting from United States Fidelity & Guaranty Co. v. Romay, 744 So.
2d 467, 469 (Fla. Dist. Ct. App. 1999). In doing so, the federal district
court apparently overlooked the Florida Supreme Court's decision in
Allstate Insurance Co. v. Suarez, 833 So. 2d 762, 765 (Fla. 2002), in which
it concluded that "an unambiguous provision for appraisal" could not be
"construed as an agreement to arbitrate the underlying dispute." See also
Nationwide Mut. Fire Insurance Co. v. Schweitzer, 872 So. 2d 278, 279
(Fla. Dist. Ct. App. 2004) ("Suarez plainly held that an appraisal
provision is not an agreement to arbitrate. It follows from Suarez that an
order granting or denying an appraisal is not appealable as an order
involving entitlement to arbitration."). Thus, Walker's statement was not
supported by ample authorities.
                                     17
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term in the statute. That issue arises because, as the Milligan court itself

observed, "[t]he FAA does not define the term 'arbitration.' " Milligan, 920

F.3d at 151. See also Evanston Ins. Co. v. Cogswell Props., LLC, 683 F.3d

684, 693 (6th Cir. 2012) (same); Fit Tech, Inc. v. Bally Total Fitness

Holding Corp., 374 F.3d 1, 6 (1st Cir. 2004) ("The [FAA] itself does not

define 'arbitration.' "); Harrison v. Nissan Motor Corp. in U.S.A., 111 F.3d

343, 350 (3d Cir. 1997) ("We note first that the FAA does not define the

term 'arbitration,' and both courts and commentators have struggled to

do so."); Martinique Props., LLC v. Certain Underwriters at Lloyd's

London, 567 F. Supp. 3d 1099, 1104 (D. Neb. 2021) (observing that "the

law does not define what constitutes an arbitration," and that "the United

States Courts of Appeals are split on whether to use state law or federal

common law to define this term" and citing several cases to illustrate that

point). A commentator summarized current federal-court treatment on

the issue:

           "The United States Supreme Court has yet to issue an
     opinion on whether state or federal law should define
     arbitration. Circuit unity is highly improbable until the court
     grants certiorari and issues an opinion. Currently, the Fifth
     and the Ninth Circuits apply state law; the First, Second,
     Sixth, and Tenth Circuits apply federal common law."

                                    18
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Emily H. Slay, Evanston Insurance Co. v. Cogswell Properties: Which

Definition of "Arbitration" Should Control?, 38 Am. J. Trial Advoc. 377,

383 (2014) (footnotes omitted). See also Positano Place at Naples I Condo.

Ass'n v. Empire Indem. Ins. Co., 84 F.4th 1241, 1255 (11th Cir. 2023)

("We have not decided the question of whether an appellate court looks

to state or federal law in determining whether an appraisal process falls

within the definition of 'arbitration' for purposes of the FAA, nor has the

Supreme Court directly addressed the question.").

A. Defining FAA "Arbitration" Using Federal Law

     The federal circuits that have concluded that federal law should

determine the definition of the term "arbitration" in the FAA have done

so under the rationale that, as the Sixth Circuit Court of Appeals stated

in Evanston Insurance Company, it would be " 'counter-intuitive to look

to state law to define a term in a federal statute on a subject as to which

Congress has declared the need for national uniformity.' " 683 F.3d at 693

(quoting Portland Gen. Elec. Co. v. U.S. Bank Tr. Nat'l Ass'n, 218 F.3d

1085, 1091 (9th Cir. 2000) (Tashima & Lay, JJ., concurring)).

                                    19
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     Cases seeking to describe a federal-law definition of "arbitration"

provide various formulations. According to the Eleventh Circuit Court of

Appeals,

     "[o]ne widely-followed opinion asks whether the parties have
     agreed to submit a dispute to a third party for a decision. AMF
     Inc. v. Brunswick Corp., 621 F. Supp. 456, 460 (E.D.N.Y.
     1985) (Weinstein, J.). Other authority considers how closely
     the procedure chosen resembles 'classic arbitration' and
     whether enforcing it serves the intuited purposes of Congress.
     Fit Tech v. Bally Total Fitness, 374 F.3d 1, 6-7 (1st Cir. 2004);
     Salt Lake Tribune Publ'g Co. v. Mgmt. Planning Inc., 390 F.3d
     684, 689-90 (10th Cir. 2004). These differing verbal
     formulations do not constitute a real disagreement, because
     submitting a dispute to a third party for a binding decision is
     quintessential 'classic arbitration.' See Salt Lake Tribune,
     390 F.3d at 689 ('classic arbitration' is characterized by
     'empower[ing] a third party to render a decision settling [the]
     dispute'). Thus, when there is a dispute about whether any
     particular dispute resolution method chosen in a contract is
     FAA arbitration, we will look for the 'common incidents' of
     'classic arbitration,' including (i) an independent adjudicator,
     (ii) who applies substantive legal standards (i.e. the parties'
     agreement and background contract law), (iii) considers
     evidence and argument (however formally or informally) from
     each party, and (iv) renders a decision that purports to resolve
     the rights and duties of the parties, typically by awarding
     damages or equitable relief. See Fit Tech, 374 F.3d at 7. The
     presence or absence of any one of these circumstances will not
     always be determinative, and parties have great flexibility
     under the FAA to select pre-packaged dispute resolution
     procedures, or to craft their own."

Advanced Bodycare Sols., LLC v. Thione Int'l, Inc., 524 F.3d 1235, 1239

(11th Cir. 2008).
                                    20
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     Although Great American fails to expressly state that it believes

federal law should govern the definition of the term "arbitration" in the

FAA, Great American's argument that the appraisal clause is an

arbitration clause generally appears to agree with the foregoing

understanding of a federal definition of "arbitration." Great American

asserts that the question to be answered is: "[D]oes the [appraisal clause]

say that the parties will submit disputes of the type at issue to binding

resolution by third parties?" Great American's brief at 18. Great

American contends that the appraisal clause fulfills those elements of

arbitration because the appraisal clause provided that Crystal Shores

and Great American "would submit valuations disputes under the Policy

to binding resolution by third parties" and the appraisal clause "contains

the elements of an arbitration agreement: the use of third-parties

(appraisers and an umpire) to review the evidence and resolve the

dispute by issuing a binding, final resolution of the dispute." Id. at 19, 20.

     One flaw in Great American's argument is that the procedure

outlined in the appraisal clause does not, in fact, fulfill multiple elements

of so-called "classic arbitration" highlighted in Advanced Bodycare

Solutions. First, although the appraisal clause provides for third parties

                                     21
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to determine the amount of the loss, there is nothing in the appraisal

clause that dictates that the appraisers or the umpire must use some

specific standard in determining the value of the loss or that they must

consider evidence and arguments from the parties in doing so. That is

unsurprising given that insurance appraisals are often contrasted with

the formalities usually inherent in arbitration proceedings.

     "The similarities and differences between the processes of
     appraisal and arbitration are not well defined, although it is
     generally conceded that appraisal is designed to be less formal
     than arbitration. [See, e.g., Allstate Ins. Co. v. Martinez, 790
     So. 2d 1151, 1152 (Fla. Dist. Ct. App. 2001) (holding that the
     appraisal process did not have to conform to rules of
     arbitration requiring attorney participation, court reporter
     transcriptions, and quasi-judicial hearing); Hirt v. Hervey,
     118 Ariz. 543, 545, 578 P.2d 624, 626 (Ct. App. 1978) ('While
     appraisals are generally less formal than arbitrations, both
     provide a contractual method for settling questions in a less
     complicated and expensive manner than through court
     adjudication.'); In re Delmar Box Co., 309 N.Y. 60, 62-66, 127
     N.E.2d 808, 810-13 (1955) (noting that appraisal should not
     be given the same recognition as arbitration because it is
     limited to specific issues, conducted in a less formal manner,
     is not bound by strict judicial investigation, and requires no
     hearing).] …

           "….

          "… In arbitration, parties want to present witnesses and
     evidence, and to cross-examine opponents' witnesses.
     [Andrew L. Pickens, Appraisement: An Old But Effective
     Form of ADR for Contract Liabilities, 60 Tex. Bar J. 18, 20
     (1997) (quoting City of Omaha v. Omaha Water Co., 218 U.S.
                                   22
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     180, 194 (1910)) (discussing differences between appraisal
     and arbitration).] Appraisal, on the other hand, has few clear
     rules. If the appraisers do not find it necessary, there may not
     be a formal hearing, presentation of witnesses, or taking of
     evidence. [See Richard C. Bennett, Appraisal, in 2 Insuring
     Real Property § 30.03[6] (Matthew Bender 2005).] Appraisers
     'act independently and apply their own skill and knowledge
     in reaching their conclusions.' [Budget Rent-A-Car of
     Washington-Oregon, Inc. v. Todd Inv. Co., 43 Or. App. 519,
     523, 603 P.2d 1199, 1201 (1979).] Appraisers can generally
     make their own decisions concerning what they wish to see
     and how they see it."

Timothy P. Law & Jillian L. Starinovich, What Is It Worth? A Critical

Analysis of Insurance Appraisal, 13 Conn. Ins. L.J. 291, 297-99 (2007)

(emphasis added). Those same differences in procedural formality were

highlighted by the Mississippi Supreme Court in Hartford Fire Insurance

Co. v. Jones, 235 Miss. 37, 41-42, 108 So. 2d 571, 572 (1959):

     " 'Appraisement, in particular, is perhaps most often confused
     with arbitration. While some of the rules of law that apply to
     arbitration apply in the same manner to appraisement, and
     the terms have at times been used interchangeably, there is a
     plain distinction between them. In the proper sense of the
     term, arbitration presupposes the existence of a dispute or
     controversy to be tried and determined in a quasi judicial
     manner, whereas appraisement is an agreed method of
     ascertaining value or amount of damage, stipulated in
     advance, generally as a mere auxiliary or incident feature of
     a contract, with the object of preventing future disputes,
     rather than of settling present ones. Liability is not fixed by
     means of an appraisal; there is only a finding of value, price,
     or amount of loss or damage. The investigation of arbitrators
     is in the nature of a judicial inquiry and involves, ordinarily,
                                   23
SC-2023-0092

     a hearing and all that is thereby implied. Appraisers, on the
     other hand, where it is not otherwise provided by the
     agreement, are generally expected to act upon their own
     knowledge and investigation, without notice of hearings, are
     not required to hear evidence or to receive the statements of
     the parties, and are allowed a wide discretion as to the mode
     of procedure and sources of information.' "

(Quoting 3 Am. Jur. Arbitration and Award § 3 at 830-31.) See, e.g., City

of Omaha v. Omaha Water Co., 218 U.S. 180, 198 (1910) (observing that

"in an appraisement … the strict rules relating to arbitration and awards

do not apply, and the appraisers were not rigidly required to confine

themselves either to matters within their own knowledge, or those

submitted to them formally in the presence of the parties; but might

reject, if they saw fit, evidence so submitted, and inform themselves from

any other source, as experts who were at last to act upon their own

judgment"); Fit Tech, 374 F.3d at 7 (holding that "common incidents" of

classic arbitration include "an independent adjudicator, substantive

standards..., and an opportunity for each side to present its case");

Allstate Ins. Co. v. Suarez, 833 So. 2d 762, 765 (Fla. 2002) (overruling a

Florida District Court of Appeals' decision because it "went beyond the

plain meaning of the appraisal clause when it considered that the

appraisers would have to 'exercise ... quasi-judicial authority to resolve

                                   24
SC-2023-0092

the dispute' " (quoting Florida Farm Bureau Cas. Ins. Co. v. Sheaffer, 687

So. 2d 1331, 1334 (Fla. Dist. Ct. App. 1997))); Black's Law Dictionary 126

(11th ed. 2019) (defining "appraisement" as "[a]n alternative-dispute-

resolution method used for resolving the amount or extent of liability on

a contract when the issue of liability itself is not in dispute. … Unlike

arbitration, appraisement is not a quasi-judicial proceeding but instead

an informal determination of the amount owed on a contract.").

     Second, authorities that rely upon the idea of "classic arbitration"

indicate that arbitration resolves the entire dispute between the parties,

whereas appraisal does not. See, e.g., Rastelli Bros. v. Netherlands Ins.

Co., 68 F. Supp. 2d 440, 446 (D.N.J. 1999) (" 'An agreement for

arbitration, as that term is now generally used, encompasses the

disposition of the entire controversy between the parties upon which

award a judgment may be entered, whereas an agreement for an

appraisal extends merely to the resolution of the specific issues of cash

value and the amount of loss, all other issues being reserved for

settlement by negotiation, or litigated in an ordinary action upon the

policy.' " (quoting George J. Couch, Ronald A. Anderson, and Mark S.

Rhodes, Couch on Insurance § 50:5 (2d ed. 1982))); 46A C.J.S. Insurance

                                   25
SC-2023-0092

§ 1900 (2018) ("Appraisal establishes only the amount of a loss and not

liability for the loss under the insurance contract, whereas arbitration is

a quasi-judicial proceeding that ordinarily will decide the entire

controversy."). Indeed, Great American steadfastly insists that "[t]he

only dispute remaining [between the parties] is whether Crystal Shores

is entitled to additional payments due to its assertion of a higher damage

valuation" and that this is one reason the appraisal clause is, in fact, an

arbitration clause. Great American's brief at 1.

      However, Crystal Shores strenuously contends that "coverage and

causation issues clearly exist" apart from the valuation dispute that

would be settled by the appraisal clause. Crystal Shores' brief at 14.

Specifically, Crystal Shores argues that, from the time it originally filed

its insurance claims, Great American has disputed whether the

insurance policy covers damage stemming from Hurricane Sally and

"whether the water damage to the condominium and units was caused by

the tub overflow, Hurricane Sally[,] or a combination of both." Id. at 14-

15.

      Great American counters by arguing that

      "because the Complaint limits the claims against Great
      American to the bathtub overflow claim, and because it is
                                    26
SC-2023-0092

     undisputed that Great American has accepted coverage on the
     bathtub overflow claim (and has actually already paid over $1
     million), the only remaining dispute at issue in this lawsuit is
     one that the parties agreed should be resolved only through
     the appraisal procedure: the proper amount of payment due
     under the bathtub overflow claim."

Great American's reply brief at 2.

     Great American's argument does not comport, however, with the

allegations stated in Crystal Shores' third-party complaint. As we related

in the rendition of the facts, in its complaint Crystal Shores expressly

stated that it had "timely and properly reported its Hurricane Sally

claim" to all of the third-party defendants, including Great American.

Crystal Shores then alleged in part that Great American had "refused to

compensate [Crystal Shores] for services allegedly rendered by Servpro

to mitigate and remediate damage caused by … Hurricane Sally …."

Crystal Shores further alleged in part that, even though it had timely

and properly reported the damage "sustained as a result of Hurricane

Sally," "third-party Defendants RSUI, Landmark, Great American and

[fictitiously named defendants] have failed to promptly and/or properly

investigate [Crystal Shores'] losses" and "Defendants RSUI, Landmark,

Great American and [fictitiously named defendants] have further failed

to timely and/or properly compensate Crystal Shores for losses sustained
                                     27
SC-2023-0092

as a result of Hurricane Sally …." (Emphasis added.) The specific counts

of the third-party complaint also included allegations against Great

American with respect to damage Crystal Shores allegedly had sustained

because of Hurricane Sally. Crystal Shores' bad-faith claims in part

included the allegation that Great American had "intentionally and/or

recklessly failed to timely and/or properly investigate and/or pay [Crystal

Shores'] claim for damages sustained as a result of the storm event …."

Crystal Shores' breach-of-contract claims in part included the allegation

that Great American had breached "the terms and conditions of the

insurance policies … by failing to timely and properly investigate and pay

[Crystal Shores] for losses sustained as a result of the storm event …."

     In short, viewing the allegations in the complaint in the light most

favorable to Crystal Shores -- as we are supposed to do in reviewing a

motion to dismiss4 -- Crystal Shores plainly leveled allegations against

Great American pertaining to damage caused by Hurricane Sally even

though Great American insists that "Crystal Shores' third-party

     4See, e.g., Morton v. Prescott, 564 So. 2d 913, 916 (Ala. 1990) ("In

considering a motion to dismiss, a court construes the allegations of the
complaint in a light most favorable to the plaintiff, with all doubts and
allegations resolved in his favor.").
                                      28
SC-2023-0092

complaint did not name Great American in the allegations regarding the

Hurricane Sally loss and did not accuse Great American of any wrong

with regard to that claim." Great American's brief at 11. In other words,

Crystal Shores has alleged that it was entitled to coverage that Great

American did not provide under the insurance policy with respect to

damage allegedly caused by Hurricane Sally. Crystal Shores also asserts

that Great American's denial of further payments on Crystal Shores'

bathtub-overflow claim is tied to Great American's insistence that at

least some of the remediation performed by Servpro was for damage

caused by Hurricane Sally, compensation for which, Great American

contends, it is not responsible under the insurance policy. Thus,

outstanding coverage issues exist that would not be resolved by the

appraisal procedure, and so the appraisal would not resolve the entire

dispute between the parties. A procedure that does not fully and finally

settle the dispute between the parties does not comport with the

definition of "arbitration" under federal law.

     In short, the appraisal clause does not require the appraisers or the

umpire to consider evidence and arguments from the parties, the

appraisal clause does not require the appraisers or the umpire to base

                                    29
SC-2023-0092

their valuation on a substantive legal standard, and submission of the

valuation issue to the appraisal process would not settle the entire

dispute between Crystal Shores and Great American. Thus, the appraisal

clause fails to meet most of the elements of "classic arbitration" described

in cases that have chosen to define the term "arbitration" in the FAA

using federal law. We must conclude, therefore, that the appraisal clause

is not an arbitration clause under the FAA according to that standard --

the only standard argued by Great American.

B. Defining FAA "Arbitration" Using State Law

     The federal circuits that have concluded that state law should

determine the definition of the term "arbitration" in the FAA have done

so under the rationale that as long as a state's laws do not interfere with

the goals of the FAA, state law should apply because the FAA only

preempts state laws to the extent that they stand as an obstacle to the

accomplishment of the purposes and objectives of the FAA. See, e.g.,

Portland Gen. Elec., 218 F.3d at 1089 (applying Oregon law); Hartford

Lloyd's Ins. Co. v. Teachworth, 898 F.2d 1058, 1062-63 (5th Cir. 1990)

(applying Texas law); Wasyl, Inc. v. First Boston Corp., 813 F.2d 1579,

1582 (9th Cir.1987) (applying California law). Cf. Volt Info. Scis., Inc. v.

                                    30
SC-2023-0092

Board of Trs. of Stanford Univ., 489 U.S. 468, 478 (1989) (holding that

the FAA preempts state laws to the extent that they "would undermine

the goals and policies of the FAA").

     Even if Great American had argued that the definition of the term

"arbitration" in the FAA should be determined by Alabama law, the

argument would have fared no better. With respect to Alabama law, the

parties bicker about what can be read into our order dismissing Baldwin

Mutual's appeal in Dixon, which stated that "the appeal is dismissed as

from a non-appealable order." Crystal Shores is correct that Baldwin

Mutual contended that its appeal from a circuit court's order denying its

motion to dismiss and demand for appraisal was proper under Rule 4(d),

Ala. R. App. P. Conversely, Great American is correct that Baldwin

Mutual only argued that insurance appraisals are "considered analogous

to demands for arbitration," not specifically that an appraisal clause is

an arbitration clause, and Baldwin Mutual did not cite the federal

authorities Great American has cited to us. Ultimately, Dixon is not

decisive for either party in this case because our order in Dixon did not

expressly address the issue presented here.

                                   31
SC-2023-0092

     But our order in Dixon is revealing for the authorities Baldwin

Mutual did cite and those it could not. Baldwin Mutual had noted in its

response to the show-cause order that, in determining whether a party

has waived its right to invoke an appraisal clause, this Court has applied

the test it commonly uses to determine whether a party has waived its

right to invoke an arbitration clause. See Rogers, 984 So. 2d at 386

("Although this Court has never ruled on what standard should be

applied to determine whether there has been a waiver of the right to

invoke an appraisal clause in an insurance policy, the former Court of

Appeals previously indicated that the same standard applies to both

appraisal and arbitration clauses."). However, despite the fact that this

Court had employed the same test for waiver with respect to both types

of clauses, Baldwin Mutual merely contended that an appraisal clause

was "analogous to" an arbitration clause, not that it was an arbitration

clause. Why?

     One problem was that the Rogers Court itself went on to distinguish

appraisal clauses from arbitration clauses by hearkening back to this

Court's decision in Casualty Indemnity Exchange v. Yother, 439 So. 2d

77 (Ala. 1983). In Yother, the Court declared: "We agree that an appraisal

                                   32
SC-2023-0092

is distinguishable from arbitration and is not subject to the various

procedural requirements imposed upon the arbitration process." Id. at 79.

The Yother Court went on to explain:

           "Arbitration and appraisal are generally distinguished
     in the following manner:

           " 'A distinction is often drawn between an
           arbitration and a mere appraisal or valuation, or
           proceeding in the nature of an appraisal, the
           fundamental difference between the two
           proceedings being held to lie in the procedure to be
           followed and the effect of the findings. In other
           words, the point is made that appraisers, unlike
           arbitrators, act without hearing or judicial inquiry
           upon their own knowledge or information acquired
           independent of the evidence of witnesses; and that
           the appraisal ordinarily settles only a subsidiary
           or incidental matter rather than the main
           controversy as does an arbitration award.'

     "6 C.J.S. Arbitration, § 3 (1975)."

Id. at 79-80 (emphasis added). The Rogers Court picked up on and

repeated the analysis in Yother:

            "In Yother, this Court distinguished arbitration clauses
     from appraisal clauses in a situation in which the insured
     contended that it was entitled to the procedural protections
     applicable to arbitration as set forth in [Ala. Code 1975,] § 6-
     6-1.[5] The insurer contended that it was subject to the law

     5Section 6-6-1, Ala. Code 1975, is the first section of the Alabama

Arbitration Act, providing: "It is the duty of all courts to encourage the
settlement of controversies pending before them by a reference thereof to
                                     33
SC-2023-0092

     applicable to appraisals and not § 6-6-1. At issue in Yother
     was the value of a stolen tractor. The Court, quoting Corpus
     Juris Secundum and American Jurisprudence, noted typical
     differences between arbitration and appraisal -- arbitration
     settles an entire controversy, whereas an appraisal resolves a
     subsidiary issue, such as the valuation of loss. This Court
     observed:

                 " ' "An agreement for arbitration ordinarily
           encompasses the disposition of the entire
           controversy between the parties upon which
           award a judgment may be entered, whereas an
           agreement for appraisal extends merely to the
           resolution of the specific issues of actual cash
           value and the amount of loss, all other issues being
           reserved for determination in a plenary action
           before the court. Furthermore, appraisers are
           generally expected to act on their own skill and
           knowledge; they may reach individual conclusions
           and are required to meet only for the purpose of
           ironing out differences in the conclusions reached;
           and they are not obliged to give the rival claimants
           any formal notice or to hear evidence, but may
           proceed by ex parte investigation so long as the
           parties are given opportunity to make statements
           and explanations with regard to matters in issue." '

     "439 So. 2d at 80 (quoting 5 Am. Jur.2d Arbitration and
     Award § 3 (1962)). However, the Court in Yother found it
     unnecessary to determine whether the valuation at issue
     there was the result of an arbitration or an appraisal, because
     it disposed of the case on the basis of applicable due-process
     considerations independent of § 6-6-1, Ala. Code 1975. This
     Court's distinguishing of arbitration and appraisal in Yother
     is consistent with other jurisdictions. See Merrimack Mut.

arbitrators chosen by the parties or their attorneys and, on motion of the
parties, must make such order and continue the case for award."
                                    34
SC-2023-0092

     Fire Ins. Co. v. Batts, 59 S.W.3d 142, 150 (Tenn. Ct. App.
     2001) ('Insurance appraisals are generally distinguished from
     arbitrations.... [A]n arbitration agreement may encompass
     the entire controversy between parties or it may be tailored to
     particular legal or factual disputes. In contrast, an appraisal
     determines only the amount of loss, without resolving issues
     such as whether the insurer is liable under the policy.'), and
     Smithson v. United States Fid. & Guar. Co., 186 W. Va. 195,
     202, 411 S.E.2d 850, 857 (1991) ('The narrow purpose of an
     appraisal and the lack of an evidentiary hearing make it a
     much different procedure from arbitration.')."

984 So. 2d at 388-89. Thus, similar to the United States Supreme Court

in City of Omaha, the Florida Supreme Court in Suarez, and the

Mississippi Supreme Court in Jones, this Court in both Yother and

Rogers emphasized the differences in scope and formality between

arbitration and appraisal.

     Tellingly, Great American does not discuss the Yother and Rogers

Courts' distinctions between appraisal and arbitration. Indeed, Great

American fails to cite a single case from our courts indicating that an

insurance-appraisal clause is, in fact, an arbitration clause. The dearth

of Alabama authority is also telling because insurance-appraisal clauses

such as the one at issue in this case have been adjudicated by our courts

for a long time. For example, in Headley v. Aetna Insurance Co., 202 Ala.

384, 80 So. 466 (1918), this Court interpreted an insurance-appraisal

                                   35
SC-2023-0092

clause very similar to the one in this case, and it distinguished between

a predispute arbitration clause and the appraisal clause at issue:

           "A covenant in a contract, whether of insurance or of
     other matters, to submit every matter of dispute between the
     parties, growing out of such contract, to arbitration or to a
     board of appraisers, to the end of defeating the jurisdiction of
     courts as to the subject-matter, are universally held to be void,
     as against public policy. There need be no such express intent
     to so defeat the jurisdiction; if the necessary effect of the
     covenant will inevitably so operate, it is held to be void
     because against public policy. Agreements, however, which
     merely provide a mode or manner for ascertaining the value
     of property, or the amount of damages, losses, or profits, are
     valid, and may be made conditions precedent to the right of
     action to recover damages based on such values, damages,
     losses, or profits. Western Assur. Co. v. Hall, 112 Ala. 318, 20
     South. 447 [(1896)]; Niagara [Fire] Ins. Co. v. Bishop, 154 Ill.
     9, 39 N.E. 1102, 45 Am. St. Rep. 105 [(1894)]. The clause of
     the insurance policy in question falls within the latter class,
     and is valid and enforceable."

202 Ala. at 385, 80 So. at 467.

     That Alabama law would not automatically construe an appraisal

clause to be an arbitration clause is unsurprising given that

           "[a] trial court may not order arbitration of the issue of
     arbitrability except upon ' " 'clea[r] and unmistakabl[e]'
     evidence" ' that the parties agreed to arbitrate that issue.
     Commercial Credit Corp. v. Leggett, 744 So. 2d 890, 892 (Ala.
     1999) (quoting First Options of Chicago, Inc. v. Kaplan, 514
     U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995))."

                                    36
SC-2023-0092

Custom Performance, Inc. v. Dawson, 57 So. 3d 90, 96 (Ala. 2010). The

most direct evidence of the parties' intent is the language of the

agreement itself. See, e.g., id.; Strickland v. Rahaim, 549 So. 2d 58, 60

(Ala. 1989) ("In order to ascertain the intention of the parties, the clear

and plain meaning of the terms of the contract are to be given effect, and

the parties are presumed to have intended what the terms clearly

state.").

            "When determining how to construe the provisions of an
      insurance policy, this Court is guided by the following
      principles:

                       " ' "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.
                 1992); St. Paul Fire & Marine Ins. Co.
                 v. Edge Mem'l Hosp., 584 So. 2d 1316
                 (Ala. 1991). If, under this standard,
                 they are reasonably certain in their
                 meaning, they are not ambiguous as a
                 matter of law and the rule of
                 construction in favor of the insured
                 does not apply. Bituminous Cas. Corp.
                 v. Harris, 372 So. 2d 342 (Ala. Civ. App.
                 1979). …"

                                    37
SC-2023-0092

           "'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,
     1169-70 (Ala. 2009)."

Mid-Century Ins. Co. v. Watts, 323 So. 3d 39, 50 (Ala. 2020).

     In this case, the clause at issue seeks to settle disputes between

Great American and Crystal Shores involving the amount of a loss by

using appointed appraisers and an umpire. In other words, the clause

seeks to appraise the amount of the loss sustained to the property covered

by the insurance policy. The language of the clause reflects that the

parties intended the clause to be what it states it is: an appraisal clause.

There is no ambiguity in the clause's language that would lead to a

conclusion that the parties intended the clause to be anything other than

what it states. As Crystal Shores observes, "[h]ad Great American

desired to insert an arbitration clause in the insurance contract [it] could

have done so …." Crystal Shores' brief at 33. Instead, the insurance policy

contains an appraisal clause.

     It seems that Great American's only response to such reasoning is

the Milligan court's statement that "the term 'arbitrate' need not appear

in the contract in order to invoke the benefits of the FAA." Milligan, 920
                                    38
SC-2023-0092

F.3d at 151. But the Milligan court's statement was made in the context

of concluding that federal common law defines the term "arbitration" in

the FAA, a subject we dealt with in Part II.A. of this analysis. Here we

address the definition of the term "arbitration" under Alabama law. As

we have noted, Alabama cases have consistently drawn distinctions

between appraisal and arbitration, Alabama law focuses on whether the

parties to the contract intended to arbitrate the dispute at issue based on

the language of the contract, and, despite the prolific presence of

appraisal clauses such as the one at issue in insurance contracts, our

courts have never held that "appraisal" is the same procedure as

"arbitration." Therefore, we conclude that under Alabama law an

appraisal clause in an insurance contract does not qualify as a clause

calling for "arbitration" under the FAA.

                             III. Conclusion

     Based on the foregoing, we conclude that, regardless of whether

federal law or Alabama law controls the definition of the term

"arbitration" in the FAA, the appraisal clause at issue in this case does

not qualify as a clause calling for "arbitration" under the FAA. Therefore,

Great American's motion to compel an appraisal of the loss did not

                                    39
SC-2023-0092

constitute a motion to compel arbitration. It follows that the circuit

court's denial of Great American's motion was not "[a]n order … denying

a motion to compel arbitration" under Rule 4(d), Ala. R. App. P. Rule 4(d)

is Great American's only claimed basis for jurisdiction to immediately

appeal the circuit court's January 6, 2023, order. Accordingly, we dismiss

the appeal as one stemming from a nonfinal judgment.

         APPEAL DISMISSED.

         Wise, Bryan, Sellers, Mendheim, Stewart, and Cook, JJ., concur.

         Shaw, J., concurs in the result.

         Mitchell, J., concurs in the result, with opinion, which Parker, C.J.,

joins.

                                       40
SC-2023-0092

MITCHELL, Justice (concurring in the result).

     In my view, the operative question in this appeal is whether an

appraisal is an "arbitration" under Rule 4(d), Ala. R. App. P., not whether

it is an "arbitration" under the Federal Arbitration Act ("the FAA"), 9

U.S.C. § 1 et seq. That is a question of Alabama law, and I believe our

law fully supplies the answer. Accordingly, I would dismiss this appeal

on State-law grounds only.

     The main opinion focuses on the meaning of "arbitration" under the

FAA and discusses the two leading standards applied by federal courts

for defining FAA arbitration. But the main opinion does not cite -- and I

am not aware of -- any precedent from our Court tying the meaning of

"arbitration" under Rule 4(d) to the meaning of "arbitration" under the

FAA. Thus, what federal courts have done to interpret the meaning of

"arbitration" in the FAA is, at most, persuasive in determining what

"arbitration" means in Rule 4(d). West v. American Tel. & Tel. Co., 311

U.S. 223, 236 (1940) ("[T]he highest court of the state is the final arbiter

of what is state law."); Ex parte James, 836 So. 2d 813, 834 (Ala. 2002)

(Houston, J., concurring specially) ("[T]he Supreme Court of Alabama is

the final arbiter of Alabama law."). I see no need to consider federal

                                    41
SC-2023-0092

authority here because our own precedents have determined that an

appraisal does not constitute arbitration. See Rogers v. State Farm Fire

& Cas. Co., 984 So. 2d 382, 388-89 (Ala. 2007); Casualty Indem. Exch. v.

Yother, 439 So. 2d 77, 79-80 (Ala. 1983); Headley v. Aetna Ins. Co., 202

Ala. 384, 385, 80 So. 466, 467 (1918). For that reason, I would dismiss

the appeal based on Alabama law alone.

     Parker, C.J., concurs.

                                  42