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Insurance - Fire. Sellors v. State Farm
In Sellors v. State Farm (Div Court, 2023) the Divisional Court considered a JR of an insurance umpire's fire insurance ruling [s.128 Insurance Act]. The following extracts are a useful, albeit incompletely-attended, walk-through of the appraisal-umpire procedure which is common for fire claims:Background
[2] This case arises out of a fire at Mr Sellors’ property in Osprey, Ontario on March 30, 2012. Mr Sellors was insured under a homeowner’s insurance policy written by the Respondent, State Farm, which provided coverage as follows:(a) Dwelling: $214,900
(b) Contents: $161,175
(c) Additional Living Expenses: as incurred, subject to the terms of the policy. [3] Mr Sellors commenced an action against State Farm on March 18, 2014, and, in separate proceedings, commenced an application against State Farm invoking the appraisal process under the Insurance Act, RSO 1990, s.I.18 (the “Insurance Act”), seeking an order requiring State Farm to appoint an appraiser.
[4] In response to Mr Sellors’ application, State Farm appointed an appraiser (Mr Kinghorn). Mr Sellors appointed Steven Sobel as his appraiser.
[5] The appraisers appointed Peter Volaric as the Umpire for the appraisal in late 2014.
[6] The two appraisers apparently worked together to try to appraise outstanding claims until the spring of 2015, at which time the Umpire scheduled the appraisal hearing for July 20, 2015. He directed the appraisers to provide him with their appraisal briefs, in duplicate, by July 7, 2015. He directed that he would provide each side with the other side’s brief after he received them.
[7] State Farm’s appraiser sent his appraisal brief to the Umpire, in duplicate, on June 29, 2015. As of July 13, 2015, Mr Sellors’ appraiser had not delivered his appraisal brief.
[8] The Umpire conducted a conference call with the appraisers on July 13, 2015. On that call, Mr Sellors’ appraiser advised that the appraisal hearing would have to be postponed. Thereafter, Mr Sellors’ appraiser did not deliver an appraisal brief and took no steps to reschedule the appraisal hearing. At the end of 2015, Mr Sobel ceased to be Mr Sellors’ appraiser.[1]
[9] From the cessation of Mr Sobel’s involvement in late 2015 until early 2019, Mr Sellors did not appoint a replacement appraiser and no further progress was made in the appraisal process.[2]
[10] Mr Sellors commenced a separate action against 1659311 Ontario Ltd. related to claims respecting construction work done on his dwelling. Counsel for the defendant in that action moved for an order providing (among other things) that this separate action proceed together with Mr Sellors’ claims against State Farm. State Farm consented in principle to an order that the two actions proceed together, conditional on the appraisal process being completed before other steps were taken in the litigation. Mr Sellors agreed that the legal proceedings should proceed together but opposed the requirement that the appraisal be completed before further steps in the actions.
[11] By handwritten endorsement on December 13, 2018, Sproat J. ordered (among other things), that (i) Mr Sellors appoint an appraiser; (ii) that the appraisal be completed before the actions proceed further; and (iii) that the schedule for the remainder of the actions be negotiated among the parties after completion of the appraisal process. Sproat J. ordered costs against Mr Sellors of $5,000 in the aggregate.
[12] Following the order of Sproat J., Mr Sellors appointed his current solicitor, Ms Sung, as his appraiser.
[13] The Umpire scheduled a teleconference for August 20, 2019, to schedule the appraisal hearing.[3] State Farm’s appraiser attended the conference call. Mr Sellors’ appraiser, Ms Sung, did not attend the conference call. Instead, Mr Sellors attended the conference call himself.
[14] During the conference call, the Umpire scheduled the appraisal for either October 18, 2019, or October 21, 2019, depending on Ms Sung’s availability, with appraisal briefs to be provided to the Umpire in advance. Neither Mr Sellors nor Ms Sung got back to the Umpire respecting Ms Sung’s availability, so on August 27, 2019, the Umpire set October 21, 2019 as the date for the appraisal hearing.
[15] On October 8, 2019, the Umpire wrote to Ms Sung, confirming again the appraisal date of October 21, 2019, and reminding Ms Sung that appraisal briefs were to be provided to the Umpire by October 15, 2019. Ms Sung responded that she would not be providing an appraisal brief and would not be attending the scheduled appraisal hearing.
[16] State Farm’s appraiser updated his appraisal brief and sent it to the Umpire the week of October 7, 2019. A copy of this brief was provided to Ms Sung on October 11, 2019.
[17] The appraisal hearing proceeded, as scheduled, on October 21, 2019, at the Umpire offices. State Farm’s appraiser attended with two other persons. No one attended on Mr Sellors’ behalf. Mr Sellors did “call in” to the appraisal hearing by telephone. He asked permission to record the call. The Umpire denied this request, after which Mr Sellors terminated the call.
[18] The Umpire then conducted the appraisal hearing and released the award. In the award, the Umpire and State Farm’s appraiser made global findings of the total replacement cost and total cash value for each of the claims for the Dwelling and the Contents, and a global finding of additional living expenses based on a period of indemnity of eleven months, to January 28, 2013.
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