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Owners Insurance Co. v. Dakota Station II Condominium Ass’n, Inc.

2021 COA 114. No. 20CA0254.  Insurance Policy—Appraisal Provision—Impartiality—Vacating Award.

August 26, 2021

Dakota Station II Condominium Association, Inc. (Dakota) represents the owners of a 49-building residential property. It filed two claims with its insurer, Owners Insurance Co. (Owners), after the property sustained storm damage. The parties couldn’t agree on the amount of the damage, so Dakota invoked the appraisal provision in its insurance policy. Dakota hired Benglen to serve as its public adjuster to handle the claims, and Benglen retained Haber initially as a policy and damage expert and later as Dakota’s appraiser. In accordance with the appraisal procedure, the parties’ respective appraisers submitted their estimates, and the umpire issued an award adopting some estimates from each appraiser. Owners later filed a motion to vacate the appraisal award, alleging, among other things, that Haber wasn’t impartial as required by the policy. The judge denied the motion. Owners appealed, and the Supreme Court remanded the case to determine whether Haber was impartial as required by the policy. The trial court then issued new findings and conclusions finding that Haber wasn’t impartial and vacated the award.

On appeal, Dakota contended that the remand court failed to follow the law of the case in its proceedings on remand. However, the remand court appropriately followed the Supreme Court’s broad direction to determine whether Haber’s conduct conformed to the appropriate impartiality standard. Further, the remand court wasn’t prohibited from reconsidering the prior factual findings on remand. Therefore, the court did not fail to follow the law of the case on remand.

Dakota also contended that the remand court abused its discretion by failing to rule on its pre-hearing motions to establish the scope of the remand, denying its requested stay, and ruling on evidentiary objections. Dakota didn’t articulate any harm from the court’s delay in addressing the scope of the remand, denying its requested stay, or ruling on evidentiary objections. Therefore, any alleged error was harmless.

Dakota also argued that the remand court applied the wrong legal standard when it vacated the appraisal award. Dakota’s policy unambiguously required that, for an appraisal award to be binding on the parties, it must be agreed to by an umpire and a competent impartial appraisal or two competent impartial appraisers. Here, the award was signed by the umpire and Haber, who was determined by the remand court not to be impartial, so the award was not binding. The remand court therefore did not err by vacating the award.

Lastly, Dakota argued that the remand court’s factual findings were unsupported by the record. However, the remand court’s findings were based on competent evidence. Further, Dakota’s argument that the remand court improperly judged the case lacked merit.

The judgment was affirmed.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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