Interference with the Appraisal Process: What an Insurance Company Cannot Do!

Attorney Brianna K. Robert and Attorney Jon D. Biller obtained a favorable decision for Connecticut policyholders against Liberty Mutual Insurance for its interference in the appraisal process. This decision is significant in that it makes clear insurers cannot interfere with the appraisal process. In Connecticut, when insurance companies issue policies and guidelines for the appraisal process it must be in compliance with Connecticut Standard Fire Insurance Policy C.G.S §38a-307. This particular Connecticut statute sets forth the requirements of what the appraisal proceeding shall consist of. In Patrick Mussolini v. Liberty Mutual Insurance Company et al., 2022 WL 19040569 (Conn.Super.)

Attorneys Robert and Biller successfully argued plaintiff’s Motion to Compel Appraisal against Liberty Mutual Insurance Company. Connecticut Superior Court Judge Rupal Shah issued an order concurring with our client’s position.

In Mussolini v. Liberty Mutual Insurance Company, the insured brought suit against the insurer for its failure to provide coverage after the subject property suffered a covered loss. Liberty Mutual agreed to go to appraisal but refused to extend the two-year timeframe to file suit contained within in its policy. Accordingly, litigation was necessary to protect our client’s rights. Subsequently, both parties had their appraisers appointed and a disinterested umpire selected. Each party must abide by the appraisal proceeding outlined in C.G.S. §38a-307, which provides that, “[t]he appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire.”

However, in this case Liberty Mutual chose to not only delay the appraisal process by refusing to comply with its own appraisal language but it also communicated directly with the appraisal panel through its counsel. When Mr. Mussolini, through our office, challenged Liberty Mutual’s conduct, Liberty Mutual argued the insured was attempting “to deprive Liberty Mutual of its opportunity to present witness testimony and evidence to the panel directly related to the ‘amount of loss’ and prevent Liberty Mutual from having an opportunity to review and respond to any evidence Mr. Mussolini has presented to the panel”.

Attorneys Robert and Biller advocated on behalf of our client and argued to the Court the appraisal had been stalled for months by the insurance company’s actions since their appraiser refused to present his estimate of the amount of loss. Further, Attorneys Robert and Biller also argued Liberty Mutual’s direct communication through its counsel to the appraisal panel was fundamentally improper.

On behalf of Mr. Mussolini our office filed a Motion to Compel appraisal pursuant to C.G.S §52-410 and § 38a-307. The motion requested the Court order the appraisal to move forward by requiring Liberty Mutual’s appraiser to provide its own estimate of the amount of loss as set forth in its policy. In Mussolini, the insurer’s appraisal did not timely submit his estimate of loss as required by the policy. In addition, the Motion to Compel sought an order from the Court preventing the defendants and/or their counsel from interfering with the appraisal proceeding.

Following Liberty Mutual’s objection to our office’s Motion to Compel Appraisal, Judge Shah ordered that the parties are to participate in the appraisal process through their designated appraisers and that, “Liberty Mutual shall refrain from engaging in direct communications with the appraisal panel and allow its appraiser to prepare his statement of the loss and let the appraisers identify differences for the resolution by the umpire”. Judge Shah also ordered that Liberty Mutual’s appraiser submit “its amount of loss” and disclose it by a date certain to the insured’s appraiser.

Judge Shah’s decision in Mussolini v. Liberty Mutual represents another significant decision in favor of Connecticut policyholders and insureds. Insurance companies cannot directly communicate with the appraisal panel and their appraisers must timely submit their evaluations of damages. The entirety of Judge Shah’s substitute order can be read here: Mussolini v. Liberty Mut. Ins. Co., 2022 WL 19040569 (Conn.Super.)

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