National Association of Public Insurance Adjusters’ Summer 2013 Bulletin features Sauro & Bergstrom victory


A resort that sustained hail and wind damage was not bound by an appraisal award where the insurer’s appraiser and umpire improperly conducted their own investigation during deliberations and failed to allow the insured to present its evidence.

The case, Interlachen Property Owners v. American Family, went to appraisal in September of 2012. The insured submitted repair estimates ranging from $800,000 to $900,000. While still disputing coverage, the insurer submitted an estimate for $390,000. All of the estimates were for a full roof replacement.

The panel convened at the property location. The appraiser for American Family refused to allow the insured’s experts to accompany the panel onto the roof and, later, to present any testimony. The umpire agreed with the insurer’s appraiser.
Then, during deliberations, the insurer’s appraiser and the umpire each contacted their own selected roofers (that had never been to the property or seen the roof damage) and discussed resealing the roofs. Neither Plaintiff nor its attorneys were ever advised of this communication or given an opportunity to cross-examine the roofers.

After speaking with these roofers, the insurer’s appraiser and the umpire determined that the shingles could be resealed (despite the fact that none of the estimates contemplated resealing the shingles) and rendered a $41,000 award. The insured’s appraiser refused to sign the award.

The insured then challenged the appraisal award on the grounds that the award was invalid because the insured was not allowed to present its witnesses and was never advised of or given the opportunity to cross-examine the roofers called by two members of the panel. The Court agreed.

The Court found that the panel’s refusal to hear the witnesses justified setting aside the award. The Court also held that the two panel members exceeded their authority by improperly contacting new witnesses during deliberations without notice to the attorneys for the insured.

In January 2013, the case (including damages) was presented to a jury. Following a three-day trial, in which American Family disputed both causation and the amount owed for damages, the jury returned a $650,000 verdict in favor of the property owner. Following the verdict, the trial court also awarded the insured all of its legal fees incurred in bringing the motion to set aside the appraisal award and responding to American Family’s motion to uphold the award.

Click here to access the Bulletin in its entirety:  NAPIA Summer 2013 Bulletin