John M. Kirby
Insurance; Appraisal provision; Patel (Liberty Inn) v. Scottsdale Insurance
In a case decided on July 3, 2012, the North Carolina Court of Appeals, in Patel v. Scottsdale Insurance, held that the parties to the insurance policy were required to proceed with the appraisal provision in the insurance policy. In this case, the Plaintiff's motel was damaged by fire. The insurance company obtained estimates for repair, and also determined the value of the building. The Plaintiff disputed the values rendered by the insurance company. The lower court ruled for the insurance company. On appeal, the parties vigorously argued about the method of computing the amounts payable under the policy. The court, however, dodged this issue, and held that the parties were required to send the dispute to appraisers, pursuant to a provision in the policy. The insured (plaintiff) argued that the appraisal process was voluntary, and not mandatory. The insurer argued that the insured could not pursue the claim because he had failed to pursue the appraisal provision. The Court of Appeals disagreed with both of the parties, and held that the lawsuit should have been stayed while the dispute (regarding the amount of damages) was sent to the appraisal process. This website contains other recent North Carolina cases.