Court Opinion

ID: 9372109
Source: CourtListenerOpinion
Date Created: 2023-02-17 20:03:03.86707+00
Date Added: 2024-06-11T17:16:32.771696
License: Public Domain

FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

                                          Electronically Filed
                                          Intermediate Court of Appeals
                                          CAAP-XX-XXXXXXX
                                          17-FEB-2023
                                          08:30 AM
                                          Dkt. 115 OP

            IN THE INTERMEDIATE COURT OF APPEALS

                   OF THE STATE OF HAWAI#I

                          ---o0o---

EDMOND KRAFCHOW and KATHLEEN KRAFCHOW, Plaintiffs-Appellees,
                                v.
   DONGBU INSURANCE CO., LTD., nka DB INSURANCE CO., LTD.,
        JOHN MULLEN & CO., INC., Defendants-Appellants,
                               and
    JOHN DOES 1-10, JANE DOES 1-10, and DOE ENTITIES 1-10,
                           Defendants

                     NO. CAAP-XX-XXXXXXX

     APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
                   (CIVIL NO. 2CC191000266)

EDMOND KRAFCHOW and KATHLEEN KRAFCHOW, Plaintiffs-Appellees,
                                v.
   DONGBU INSURANCE CO., LTD., nka DB INSURANCE CO., LTD.,
        JOHN MULLEN & CO., INC., Defendants-Appellants,
                               and
    JOHN DOES 1-10, JANE DOES 1-10, and DOE ENTITIES 1-10,
                           Defendants

                     NO. CAAP-XX-XXXXXXX

     APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
                   (CIVIL NO. 2CC191000266)

                      FEBRUARY 17, 2023

       GINOZA, CHIEF JUDGE, HIRAOKA AND WADSWORTH, JJ.
  FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

                     OPINION OF THE COURT BY HIRAOKA, J.

          These consolidated appeals arise from first-party
insurance claims1 made by Plaintiffs-Appellees Edmund Krafchow
and Kathleen Krafchow (collectively, the Krafchows) under
insurance policies issued by Defendant-Appellant Dongbu Insurance
Co., Ltd. (now known as DB Insurance Co., Ltd.). We must decide
whether the appraisers and umpire who were to appraise "the
amount of loss" had the power to decide what amount was owed by
Dongbu to the Krafchows under the insurance policies. We hold
they did not. They were to decide the amount of the Krafchows'
loss irrespective of insurance coverage, not the amount of
covered loss. Accordingly, we vacate (1) the "Order Granting
Plaintiffs' Motion to Confirm Appraisal Summary and Awards"
entered on July 26, 2021; (2) the "Amended Order Denying
Defendants' Motion to Vacate and/or Modify Three Appraisal Awards
or, in the Alternate, to Stay, and Reconfirming the Appraisal
Awards" entered on June 13, 2022; and (3) the "Amended Order
Denying Defendants' Motion to Vacate and/or Modify Three
Appraisal Awards and Reconfirming Appraisal Awards" entered on
June 14, 2022.2

                      BACKGROUND AND PROCEDURAL HISTORY

               The Krafchows owned real property on the island of
Maui.       There were three structures on the property: the Villa;
the Cottage; and the Garage.           The structures were insured under
separate insurance policies issued by Dongbu to the Krafchows. A
homeowners policy covered the Villa. The Cottage and the Garage
were covered by dwelling fire policies.
          The structures and their contents were damaged because
of a wildfire. The Krafchows made insurance claims for their

      1
             A "first-party claim" is made under one's own insurance policy
"for losses suffered by the insured." Best Place, Inc. v. Penn Am. Ins. Co.,
82 Hawai#i 120, 124 n.4, 920 P.2d 334, 338 n.4 (1996).
        2
               The Honorable Kelsey T. Kawano presided.

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loss. Dongbu tendered over $300,000 to the Krafchows (under
reservations of rights)3 pending preparation of "final settlement
figures[.]" Dongbu also raised issues about coverage and limits
of liability, and asked the Krafchows for additional information
about their claims.
          The parties disagreed on the amount of the Krafchows'
loss (among other things). The homeowners and dwelling fire
policies contained substantially identical appraisal provisions:

            Appraisal

            If you and we fail to agree on the amount of loss, either
            may demand an appraisal of the loss. In this event, each
            party will choose a competent and impartial appraiser within
            20 days after receiving a written request from the other.
            The two appraisers will choose an umpire. If they cannot
            agree upon an umpire within 15 days, you or we may request
            that the choice be made by a judge of a court of record in
            the state where the ["residence premises"/Described
            Location] is located. The appraisers will separately set
            the amount of loss. If the appraisers submit a written
            report of an agreement to us, the amount agreed upon will be
            the amount of loss. If they fail to agree, they will submit
            their differences to the umpire. A decision agreed to by
            any two will set the amount of loss.

            Each party will:
            1.    Pay its own appraiser; and

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

(Bold italics added.)
          The Krafchows invoked the appraisal provisions of the
insurance policies, but Dongbu did not name an appraiser. The
Krafchows then sued Dongbu and its claims adjuster, Defendant-
Appellant John Mullen & Co., Inc. (collectively, DB). The

      3
            A reservation of rights "is a notice by the insurer to the insured
that the insurer . . . is not waiving any defenses it may have under the
[insurance] policy." First Ins. Co. of Haw. v. State, 66 Haw. 413, 422, 665
P.2d 648, 654 (1983) (original ellipsis omitted) (first quoting Crawford v.
Ranger Ins. Co., 653 F.2d 1248, 1252 (9th Cir. 1981); and then citing 7C J.
Appleman, Insurance Law & Practice § 4694 (Berdal 1979)).

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complaint alleged that Dongbu breached the insurance policies by
failing to participate in the appraisal process.4
          Dongbu's answer asserted these affirmative defenses:

                  38.   This action is barred by the terms and
            conditions in the subject policies.
                  . . . .
                  40.   Coverage under the subject policies is barred in
            whole or in part by the terms, exclusions, conditions, and
            limitations contained or incorporated in such policy,
            including any and all endorsements.
                  . . . .
                  42.   [The Krafchows]' claims for additional damages
            are barred to the extent [their] claims are for losses or
            damage that were not covered or excluded under the Policy.

                  . . . .

                  57.   To the extent that [the Krafchows] breached or
            failed to comply with the terms and conditions of the
            subject policies, [they] are barred from recovery.
                  . . . .

                  58.   To the extent that [the Krafchows], or someone
            acting on [their] behalf, has [sic] concealed,
            misrepresented or negligently failed to disclose material
            facts in their applications and/or claims for the purpose of
            inducing [Dongbu] to pay benefits, any claims for coverage
            under such policy are barred.

          The Krafchows filed a motion to compel appraisals. DB
opposed the motion. DB argued it was premature to appraise the
amount of loss because coverage issues had not been resolved.
The Krafchows' reply memorandum stated:

            To the extent that [DB], who have already paid out over
            $300,000 in covered losses to the KRAFCHOWS, believes there
            is information which would preclude coverage, that is a
            question which is separate from appraising the value of the
            loss. The appraisal of the claim only establishes the value

      4
            The complaint also alleged that DB: breached the implied covenant
of good faith and fair dealing; breached a fiduciary duty to the Krafchows;
intentionally or negligently inflicted emotional distress upon the Krafchows;
committed unfair and deceptive acts and practices in violation of Hawaii
Revised Statutes (HRS) § 480-2; negligently failed to adjust the Krafchows'
claims; and committed consumer fraud elder abuse in violation of HRS § 480-
13.5. The circuit court stayed proceedings on those claims pending the
disposition of these appeals.

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            of the loss and does not go to coverage. Insurance coverage
            is outside of the scope of an appraisal. Wailua Associates
            v. Aetna Cas. and Sur. Co., 904 F.Supp. 1142 (D. Haw., 1995)
            (stating the appraisal panel should not consider issues
            pertaining to coverage and liability under the insurance
            policy as these issues are beyond the scope of the
            parties['] agreement to arbitrate).

(Emphasis added.)
          The circuit court granted the motion to compel
appraisal, without referring to insurance coverage. The
Krafchows and Dongbu each appointed an appraiser: the Krafchows
appointed Chris Arnold; Dongbu appointed Jim Reinhardt. The
circuit court appointed a retired judge to serve as the umpire.5
          Arnold and Reinhardt each issued appraisals; they did
not agree on the amount of loss. Under the appraisal provisions
of the insurance policies, if the appraisers did not agree on the
amount of loss, the amount of loss would be the one with which
the umpire agrees. The umpire agreed with Arnold's appraisals.
Each of Arnold's appraisals stated:

            This is to certify that we, the undersigned, pursuant to our
            appointment as appraisers and umpire, have carefully
            examined the documents and/or the damaged property and/or
            evidence thereof and have determined the following values
            and loss:

(Bold omitted.)
          Each appraisal established replacement cost value,
depreciation, and actual cost value for various categories of
loss,6 reduced the appraised amount by a deductible amount, and
stated: "This award shall be payable within 20 calendar days.
. . . All prior payments shall be deducted [from] this award."

      5
            The orders granting the motion to compel and appointing the umpire
were entered by the Honorable Peter T. Cahill.
      6
            The categories were building; other structures; landscaping;
contents; and additional living expense/loss of use.

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            Each appraisal contained the following notation:

            The undersigned Umpire, pursuant to the footnote on page 2
            of the foregoing Appraisal and Award,[7] hereby makes the
            following notation at the request of appraiser Jim Reinhart
            [sic]. Mr. Reinhart [sic] has not executed the Award for
            the reason that, in view of Dongbu Insurance Co. Ltd., the
            Award includes amounts that are not covered by the
            applicable policy. More specifically, that the work for
            which awards are made is prohibited by Maui County
            Ordinance. The undersigned has forwarded this notation to
            both appraisers.

          The Krafchows moved to confirm the appraisals.                DB
moved to vacate them. At the hearing, Dongbu argued:

                  The function of appraisers is to determine the amount
            of damage resulting to various items submitted for their
            consideration. It is certainly not their function to
            resolve questions of coverage and interpret provisions of
            the policy.

            The Krafchows argued:

            [I]n this particular case, I think Judge Cahill had ordered
            the appraisal. It was clear there were no restrictions on
            it.

            The circuit court stated:

            [T]he Court determines and rejects the argument that the
            umpires [sic] exceeded their scope of authority in
            determining the appraisal amounts. And this is pursuant to
            the Court's order directing such appraisal.

                  The Court determines that pursuant to HRS Section
            658-23, there are no grounds for vacation of the award on
            grounds that the arbitrator exceeded the arbitrator's
            powers. . . .
                  . . . .
                  So clearly, the arbitrator's and umpire's decision did
            have to take into consideration arguments pertaining to
            scope of coverage and exclusions.

(Emphasis added.)
          The circuit court entered orders granting the motion to
confirm and denying the motion to vacate, expressly recognizing

      7
            The footnote stated: "Further detailed documents may be attached
to this summary of the award."

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that the appraiser's and umpire's values included "consideration
[of] . . . scope of [insurance] coverage and exclusions." In
CAAP-XX-XXXXXXX, DB appeals from the order granting the
Krafchows' motion to confirm the appraisals. In CAAP-XX-XXXXXXX,
DB originally appealed from the orders8 denying its motion to
vacate the appraisals; on temporary remand the circuit court
entered amended orders that denied the motion to vacate and also
reconfirmed the appraisals.9 We consolidated the appeals.

                              POINTS OF ERROR

          DB contends that the circuit court erred by granting
the motion to confirm and denying the motion to vacate the
appraisal awards, because the appraiser and the umpire exceeded
their authority when they considered insurance coverage issues
and decided whether the insurance policies provided coverage for
certain claimed loss.

                           STANDARDS OF REVIEW

          "[T]he scope of an agreement to arbitrate is an issue
that a court must decide." Nat'l Union Fire Ins. Co. v.
Reynolds, 77 Hawai#i 490, 494, 889 P.2d 67, 71 (App. 1995)
(cleaned up). The construction of, and legal effect given to, an
arbitration agreement is a question of law reviewed de novo.

      8
            The circuit court entered two orders denying DB's single motion to
vacate the three appraisals.
      9
             We temporarily remanded the case "to allow for the issuance of an
amended order denying the motion to vacate the appraisal awards and
reconfirming the appraisal awards under HRS § 658A-23. See Bennett v. Chung,
143 Hawai#i 266, 268, 428 P.3d 778, 780 (2018) (holding that although order
denying motion to vacate arbitration award was not appealable under Hawaii
Revised Statutes § 658A-28, subsequently-issued, amended order denying motion
to vacate was appealable where order also reconfirmed award).

            In the future, if a circuit court grants a motion to confirm an
arbitration award and denies a motion to vacate the award, we suggest both
motions be disposed of in a single order. See HRS § 658A-23(d) (2016);
Bennett, 143 Hawai#i at 280, 428 P.3d at 792 ("[I]n the interest of judicial
economy, absent the filing of a motion to vacate, a circuit court should wait
to file an order confirming an arbitration award until the ninety-day period
in which to file a motion to vacate has elapsed.").

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Yamamoto v. Chee, 146 Hawai#i 527, 533, 463 P.3d 1184, 1190
(2020) (quoting Brown v. KFC Nat'l Mgmt. Co., 82 Hawai#i 226,
239, 921 P.2d 146, 159 (1996)). The determination whether an
arbitration agreement is ambiguous is also a question of law
reviewed de novo. Id.

                                DISCUSSION

          The appraisal provisions in the insurance policies are
arbitration agreements, subject to Hawaii Revised Statutes (HRS)
Chapter 658A.10 See Wailua Assocs. v. Aetna Cas. & Sur. Co., 904
F. Supp. 1142, 1148 (D. Haw. 1995) (Wailua I) (relying upon
former HRS Chapter 658 and relevant Hawai#i case law to determine
what constitutes an "agreement to arbitrate" under the Federal
Arbitration Act) (first citing Hung Wo Ching v. Hawaiian Rests.,
50 Haw. 563, 566, 445 P.2d 370, 372 (1968); then citing Leeward
Bus Co. v. City & Cnty. of Honolulu, 58 Haw. 64, 69-70, 564 P.2d
445, 448-49 (1977); and then citing Loyalty Dev. Co. v. Wholesale
Motors, Inc., 61 Haw. 483, 487-88, 605 P.2d 925, 928 (1980)).
          HRS Chapter 658A contains these relevant provisions:

                 Confirmation of award. After a party to an
           arbitration proceeding receives notice of an award, the
           party may make a motion to the court for an order confirming
           the award at which time the court shall issue a confirming
           order unless the award is modified or corrected pursuant to
           section 658A-20 ["Change of award by arbitrator"] or 658A-24
           ["Modification or correction of award"] or is vacated
           pursuant to section 658A-23.

                 Vacating award. (a) Upon motion to the court by a
           party to an arbitration proceeding, the court shall vacate
           an award made in the arbitration proceeding if:
                 . . . .

                 (4)   An arbitrator exceeded the arbitrator's
                       powers[.]

                 . . . .
                 (d)   If the court denies a motion to vacate an award,

     10
            HRS Chapter 658A applies to "an agreement to arbitrate made on or
after July 1, 2002." HRS § 658A-3 (2016). The insurance policies were issued
in January and February 2018.

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            it shall confirm the award . . . .
                  Judgment on award; attorney's fees and litigation
            expenses. (a) Upon granting an order confirming . . . an
            award, the court shall enter a judgment in conformity
            therewith. The judgment may be recorded, docketed, and
            enforced as any other judgment in a civil action.

HRS §§ 658A-22, -23, -25 (2016).

      I.    The Appraiser and the Umpire Had No Power to
            Decide What Amounts Dongbu Owed to the Krafchows
            What issues, if any, are beyond the scope of a contractual
            agreement to arbitrate depends on the wording of the
            contractual agreement to arbitrate. An arbitration
            agreement is interpreted like a contract, and as with any
            contract, the parties['] intentions control. Further, we
            have long expressed our disapproval of interpreting a
            contract such that any provision be rendered meaningless.

County of Hawaii v. UNIDEV, LLC, 129 Hawai#i 378, 394-95, 301
P.3d 588, 604-05 (2013) (cleaned up) (emphasis omitted).
          The appraisal provisions in the homeowners and dwelling
fire policies state that the appraisers and the umpire, if
necessary, are to determine the "amount of loss." None of the
policies defined the word "loss." Thus, the word "should be
interpreted according to [its] plain, ordinary, and accepted
sense in common speech unless it appears from the [insurance]
policy that a different meaning is intended." Dairy Rd. Partners
v. Island Ins. Co., 92 Hawai#i 398, 411, 992 P.2d 93, 106 (2000)
(cleaned up).
          A common meaning of the word "loss" is "decrease in
amount, magnitude, value, or degree[.]" Loss, Merriam-Webster,
https://www.merriam-webster.com/dictionary/loss (last updated
Jan. 30, 2023). The word appears 258 times in the homeowners
policy and 149 times in each of the dwelling fire policies — with
and without qualifiers.11 For example, the homeowners policy

      11
            According to Merriam-Webster, an alternate definition of "loss" is
"the amount of an insured's financial detriment by death or damage that the
insurer is liable for[.]" Loss, Merriam-Webster, https://www.merriam
-webster.com/dictionary/loss (last updated Jan. 30, 2023). That definition is
                                                                (continued...)

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provides:12

            SECTION I — PERILS INSURED AGAINST

            We insure against risk of direct loss to property described
            in Coverages A, B and C, only if that loss is a physical
            loss to property.

            We do not insure, however, for loss:

                  1.    Under Coverages A, B and C:

                        a.    Excluded under Section I — EXCLUSIONS[.]

                        . . . .
            B.    Coverage C — Personal Property

                  We insure for direct physical loss to the property
                  described in Coverage C caused by any of the following
                  perils unless the loss is excluded in Section I —
                  Exclusions.
                  . . . .
            SECTION I — EXCLUSIONS

            A.    We do not insure for loss caused directly or
                  indirectly by any of the following. Such loss is
                  excluded regardless of any other cause or event
                  contributing concurrently or in any sequence to the
                  loss. These exclusions apply whether or not the loss
                  event results in widespread damage or affects a
                  substantial area.

                  . . . .
            SECTION I - CONDITIONS

            A.    Insurable Interest And Limit Of Liability

                  Even if more than one person has an insurable interest
                  in the property covered, we will not be liable in any
                  one loss:

      11
            (...continued)
inconsistent with the language of the insurance policies, which specifically
refer to "loss" that is "excluded" or not "covered" or for which Dongbu "will
not be liable."
      12
            The homeowners policy is 55 pages long. The dwelling fire policy
is 46 pages long. Each contains, in addition to the declarations, a number of
notices, schedules, forms, and endorsements, some of which replace or modify
the terms or conditions of other portions of the policy. However, "mere
complexity" does not create ambiguity. Sturla, Inc. v. Fireman's Fund Ins.
Co., 67 Haw. 203, 209, 684 P.2d 960, 964 (1984). Ambiguity exists "only when
the contract taken as a whole, is reasonably subject to differing
interpretation." Id. at 209–10, 684 P.2d at 964. The policy provisions
material to the disposition of this appeal are not ambiguous.

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             1.     To an "insured" for more than the amount of such
                    "insured's" interest at the time of loss; or

             2.     For more than the applicable limit of liability.

        B.   Duties After Loss

             In case of a loss to covered property, we have no duty
             to provide coverage under this policy if the failure
             to comply with the following duties is prejudicial to
             us. These duties must be performed either by you, an
             "insured" seeking coverage, or a representative of
             either:
             . . . .
        C.   Loss Settlement

             In this Condition C., the terms "cost to repair or
             replace" and "replacement cost" do not include the
             increased costs incurred to comply with the
             enforcement of any ordinance or law, except to the
             extent that coverage for these increased costs is
             provided in E.11. Ordinance Or Law under Section I —
             Property Coverages. Covered property losses are
             settled as follows:
             . . . .
        F.   Other Insurance And Service Agreement

             If a loss covered by this policy is also covered by:

             1.     Other insurance, we will pay only the proportion
                    of the loss that the limit of liability that
                    applies under this policy bears to the total
                    amount of insurance covering the loss[.]

             . . . .
                  PERSONAL PROPERTY REPLACEMENT COST
                            LOSS SETTLEMENT
        A.   Eligible Property

             1.     Covered losses to the following property are
                    settled at replacement cost at the time of the
                    loss:

                    a.    Coverage C; and

                    b.    If covered in this policy:

                          (1)    Awnings, outdoor antennas and
                                 outdoor equipment; and

                          (2)    Carpeting and household appliances;

                          whether or not attached to buildings.

             2.     This method of loss settlement will also apply
                    to the following articles or classes of property

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                      if they are separately described and
                      specifically insured in this policy and not
                      subject to agreed value loss settlement:

                      . . . .
                Personal Property Replacement Cost loss settlement
                will not apply to other classes of property separately
                described and specifically insured.

(Bold italics and underscoring added.)
          Similarly, each dwelling fire policy provides:13

          PERILS INSURED AGAINST
          A.    Coverage A - Dwelling And Coverage B - Other
                Structures

                1.    We insure against risk of direct physical loss
                      to property described in Coverages A and B.

                2.    We do not insure, however, for loss:

                      a.       Excluded under General Exclusions[.]

                      . . . .
          B.    Coverage C - Personal Property

                We insure for direct physical loss to the property
                described in Coverage C caused by a peril listed below
                unless the loss is excluded in the General Exclusions.

                . . . .
          GENERAL EXCLUSIONS

          A.    We do not insure for loss caused directly or
                indirectly by any of the following. Such loss is
                excluded regardless of any other cause or event
                contributing concurrently or in any sequence to the
                loss. These exclusions apply whether or not the loss
                event results in widespread damage or affects a
                substantial area.
                . . . .
          B.    We do not insure for loss to property described in
                Coverages A and B caused by any of the following.
                However, any ensuing loss to property described in
                Coverages A and B not precluded by any other provision
                in this policy is covered.

                . . . .

     13
          See supra note 12.

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          CONDITIONS
          A.    Policy Period

                This policy applies only to loss which occurs during
                the policy period.
          B.    Insurable Interest And Limit Of Liability

                Even if more than one person has an insurable interest
                in the property covered, we will not be liable in any
                one loss:

                1.     For an amount greater than the interest of a
                       person insured under this policy at the time of
                       loss; or

                2.     For more than the applicable limit of liability.

          C.    Concealment Or Fraud

                We provide coverage to no persons insured under this
                policy if, whether before or after a loss, one or more
                persons insured under this policy have:

                1.     Intentionally concealed or misrepresented any
                       material fact or circumstance;

                2.     Engaged in fraudulent conduct; or

                3.     Made false statements;

                relating to this insurance.
          D.    Duties After Loss

                In case of a loss to covered property, we have no duty
                to provide coverage under this policy if the failure
                to comply with the following duties is prejudicial to
                us. These duties must be performed either by you or
                your representative:

                . . . .
          E.    Loss Settlement

                In this Condition E., the terms "cost to repair or
                replace" and "replacement cost" do not include the
                increased costs incurred to comply with the
                enforcement of any ordinance or law except to the
                extent that coverage for these increased costs is
                provided in Other Coverage F.12. Ordinance Or Law.
                Covered property losses are settled as follows . . . .

(Bold italics and underscoring added.)
          Dongbu and the Krafchows disagreed on the amount of the
Krafchows' loss because of the wildfire. The insurance policies
require that the amount of loss be determined by the appraisers

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and, if necessary, the umpire. But not all of the Krafchows'
loss is necessarily insured or covered under their insurance
policies; Dongbu's liability to pay for a "loss" is limited by
the coverage provisions, exclusions, and other terms and
conditions of the policies. The appraisal provision does not
limit itself to covered loss; it does not preclude appraisal of
non-covered or excluded loss, or loss for which Dongbu is
otherwise not liable; and it does not empower the appraisers to
consider policy or coverage defenses.
          Nothing in the appraisal provision empowers the
appraisers and umpire to determine whether any part of the "loss"
being appraised is or is not covered under the insurance
policies. See, e.g., Wailua I, 904 F. Supp. at 1149 ("Clearly,
the appraisal panel should not consider issues pertaining to
coverage and liability under the insurance policy as these issues
are beyond the scope of the parties['] agreement to arbitrate.");
St. Paul Fire & Marine Ins. Co. v. Wright, 629 P.2d 1202, 1203
(Nev. 1981) ("The function of the appraisers is to determine the
amount of damage resulting to various items submitted for their
consideration. It is certainly not their function to resolve
questions of coverage and interpret provisions of the [insurance]
policy.") (quoting Jefferson Ins. Co. of N.Y. v. Superior Ct. of
Alameda Cnty., 475 P.2d 880, 883 (Cal. 1970)).
          The Krafchows argue that Dongbu waived the issue of
whether the appraisers and umpire had the power to decide
insurance coverage issues because Dongbu failed to appeal from
the order granting the Krafchows' motion to compel appraisals.
The argument is without merit. First, the order granting the
motion to compel appraisals was not an appealable order. See HRS
§ 658A-28(a) (2016). Second, the Krafchows' reply memorandum in
support of their motion to compel appraisals cited Wailua I and
acknowledged that "[t]he appraisal of the claim only establishes
the value of the loss and does not go to coverage. Insurance
coverage is outside of the scope of an appraisal." Accordingly,
the order granting the Krafchows' motion to compel appraisals
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cannot be interpreted to empower the appraisers and umpire to
decide insurance coverage issues. Indeed, the order itself makes
no reference to insurance coverage issues.14
          The insurance policy provisions are not ambiguous
because, read as a whole, they are not reasonably subject to
differing interpretation with respect to the word "loss." See
Sturla, Inc. v. Fireman's Fund Ins. Co., 67 Haw. 203, 209-10, 684
P.2d 960, 964 (1984). Under the circumstances of this case, the
unqualified word "loss" in the appraisal provision refers to the
Krafchows' loss because of the wildfire, not what Dongbu is
obligated to pay under any of the Krafchows' insurance policies.
Simply put, the appraisers and umpire had the power to appraise
what the Krafchows lost because of the wildfire. The appraisers
and the umpire had no power to decide what amounts Dongbu owed to
the Krafchows under the insurance policies, because what Dongbu
actually owes to the Krafchows depends upon coverage issues that
must be decided by the circuit court.

      II.   The Appraiser and the Umpire Exceeded Their Powers
            by Deciding How Much Dongbu Must Pay to the
            Krafchows, and When the Payment Must Be Made

           Citing Tatibouet v. Ellsworth, 99 Hawai#i 226, 233, 54
P.3d 397, 404 (2002), the Krafchows argue that their appraiser
(Arnold) and the umpire did not exceed their powers, but made
only "mistakes in the application of law and in their findings of
fact" that are not a basis to vacate the awards.
           It is well-established that "parties who arbitrate a
dispute assume 'all the hazards of the arbitration process
including the risk that the arbitrators may make mistakes in the
application of law and in their findings of fact.'" Tatibouet,
99 Hawai#i at 233, 54 P.3d at 404 (quoting Wayland Lum Constr.,

      14
            Dongbu argues that the Krafchows are judicially estopped from
taking a legal position contrary to Wailua I, which they cited in support of
their successful motion to compel appraisals. We need not address the
judicial estoppel argument.

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Inc. v. Kaneshige, 90 Hawai#i 417, 422, 978 P.2d 855, 860
(1999)). The Tatibouet court also noted, however:
          [T]his court has, thus far, reserved the phrase "exceeded
          their powers" as reference to arbitrators' improper
          consideration of matters outside the scope of the
          arbitration agreement:
                [P]recisely because "the scope of an arbitrator's
                authority is determined by agreement of the parties,"
                it follows that "[a]n arbitrator must act within the
                scope of the authority conferred upon him by the
                parties and cannot exceed his power by deciding
                matters not submitted." Clawson v. Habilitat, Inc.,
                71 Haw. 76, 78, 783 P.2d 1230, 1231 (1989) (citations
                omitted). Accordingly, . . . where an arbitrator has
                exceeded his or her powers by deciding matters not
                submitted, this court has held, pursuant to HRS
                § 658–9(4), that the resulting arbitration award must
                be vacated. Brennan v. Stewarts' Pharmacies, Ltd., 59
                Haw. 207, 223, 579 P.2d 673, 681–82 (1978).

          Mathewson[ v. Aloha Airlines, Inc.], 82 Hawai#i [57], 75,
          919 P.2d [969], 987 [(1996)] (some alterations in original
          and bracket omitted).

Id. at 235, 54 P.3d at 406.
          The appraisals themselves do not reveal whether Arnold
or the umpire made mistakes in finding facts or applying the law.
Arnold and the umpire may or may not have made factual or legal
mistakes when they valued what the Krafchows lost, but that is
not at issue in these appeals. At issue is Arnold's and the
umpire's decision about how much Dongbu owed the Krafchows under
the insurance policies, and when Dongbu's payment must be made.
The appraisals specifically state how much Dongbu was to pay the
Krafchows (after subtraction of deductibles and prior payments),
and when payment was to be made. Those awards could not have
been made without considering the scope of insurance coverage.
They show that Arnold and the umpire purported to appraise what
they believed to be covered loss, because under the insurance
policies Dongbu is not obligated to pay uncovered or excluded
loss, or loss for which Dongbu is otherwise not liable. Indeed,
in granting the Krafchows' motion to confirm and denying DB's
motion to vacate the appraisals, the circuit court stated that
the appraiser and umpire included "consideration . . . of
[insurance] coverage and exclusions."
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          Rather than issue awards directing Dongbu to pay,
Arnold and the umpire should have appraised the value of what the
Krafchows lost because of the wildfire, irrespective of insurance
coverage. See Koolau Radiology, Inc. v. Queen's Med. Ctr., 73
Haw. 433, 834 P.2d 1294 (1992) (arbitration agreement limited
scope of arbitration to determining lease values and did not give
arbitrator power to decide legal issues such as statute of frauds
or parol evidence rule related to alleged oral agreement); Wailua
Assocs. v. Aetna Cas. & Sur. Co., 27 F. Supp. 2d 1208, 1211 (D.
Haw. 1997) (Wailua II) ("The Court recognizes that the Award
includes a number of 'appraised values' and that there are
additional issues to be adjudicated which may or may not affect
the final amount to be awarded under the policy."); cf. Nat'l
Union Fire Ins. Co. v. Reynolds, 77 Hawai#i 490, 494, 889 P.2d
67, 71 (App. 1995) (holding, under arbitration clause of
underinsured motorist policy, that arbitration on question of
whether insured was "legally entitled to recover damages" is
limited to determining tortfeasor's fault and amount of insured's
damages, and did not include whether underinsured motorist
coverage applied under any particular circumstance).
          The Krafchows also argue that Dongbu waived its right
to challenge the appraisals because Dongbu's statement of the
points of error on appeal did not include the circuit court's
denial of Dongbu's request to stay enforcement of the appraisal
awards. The argument lacks merit. Dongbu challenges the
entirety of the appraisals, which include provisions that "[t]his
award shall be payable within 20 calendar days." Under HRS
§ 658A-25 the Krafchows could have, but did not, request entry of
a judgment on each of the appraisals. The resultant judgments
could have been recorded and executed against Dongbu. When
Dongbu filed its notice of appeal before the Krafchows moved for
entry of a judgment on the order confirming the appraisals,
Dongbu's stay request became moot because there were no potential
enforcement procedures to stay.

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                              CONCLUSION

          For the foregoing reasons, we hold that the Krafchows'
appraiser and the umpire exceeded their powers by deciding what
amounts Dongbu owed to the Krafchows, rather than appraising the
value of the Krafchows' loss because of the wildfire. Because
the appraiser and umpire exceeded their powers, the circuit court
erred by granting the Krafchows' motion to confirm the
appraisals, and by denying DB's motion to vacate the appraisals.
The following orders are vacated: (1) "Order Granting Plaintiffs'
Motion to Confirm Appraisal Summary and Awards" entered on
July 26, 2021; (2) "Amended Order Denying Defendants' Motion to
Vacate and/or Modify Three Appraisal Awards or, in the Alternate,
to Stay, and Reconfirming the Appraisal Awards" entered on
June 13, 2022; and (3) "Amended Order Denying Defendants' Motion
to Vacate and/or Modify Three Appraisal Awards and Reconfirming
Appraisal Awards" entered on June 14, 2022. This case is
remanded to the circuit court for further proceedings.

On the briefs:
                                       /s/ Lisa M. Ginoza
Wesley H. H. Ching,                    Chief Judge
Nadine Y. Ando,
Jennifer Cook Clark,                   /s/ Keith K. Hiraoka
for Defendants-Appellants              Associate Judge
Dongbu Insurance Co., Ltd.,
nka DB Insurance Co., Ltd.             /s/ Clyde J. Wadsworth
and John Mullen & Co., Inc.            Associate Judge

Peter N. Martin,
Thomas C. Zizzi,
for Plaintiffs-Appellees
Edmond Krafchow and Kathleen
Krafchow.

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