New Amsterdam Casualty Co. v. J. H. Blackshear, Inc.

An insurance policy contained the following provision: "CONDITION J.: In case of a disagreement as respects loss under Insuring Agreement (3) such loss shall, upon written demand of either party hereto, be determined by two appraisers, one to be appointed by each party. If these two appraisers cannot agree, they may select a third and the award in writing of any two appraisers shall determine the nature and extent of the loss. Each appraiser shall be paid by the party appointing him, but the other expenses of the appraisal and of the third appraiser, if any, shall be paid equally by the parties."

In a suit on the policy the defendant insuror filed a plea in abatement to the declaration to which plea the court sustained a demurrer. The plea was in substance as follows:

"That it is provided in and by said policy, among other things, to-wit:

" 'CONDITION J: In case of a disagreement as respects loss under Insuring Agreement (3) such loss shall, upon written demand of either party hereto, be determined by two appraisers, one to be appointed by each party. If these two appraisers cannot agree, they may select a third and the award in writing of any two appraisers shall determine the nature and extent of the loss. Each appraiser shall be paid by the party appointing him, but the other expenses of the appraisal and of the third appraiser, if any, shall be paid equally by the parties.' that after the occurrence of the supposed loss to plaintiff a disagreement arose as respects the loss under the insurance agreement and this defendant, prior to the institution of suit, made written demand that the said loss be determined by appraisers in accordance with said Condition J but that said plaintiff failed and refused to agree thereto and that the amount of such loss was not prior to the institution of suit and has not been determined in accordance with the terms of said policy."

Covenants in policies of insurance which provide for appraisal by arbitrators of the amount of any loss claimed by an insured, are valid and are binding upon the parties if they are appropriately invoked. Appraisals, as provided for in such covenants, are conditions precedent to the right of the insured to maintain an action on the policy. Southern Home Ins. Co. v. Faulkner, 57 Fla. 194, 49 Sou. Rep. 542, 131 Am. St. Rep. 1098.

The object of an appraisal clause like that above quoted is to fix by the contract of insurance itself, a certain mode by which the amount of any claim required to be paid shall be ascertained. And the insured cannot compel payments of any amount claimed as a loss under the policy unless he shall procure the particular kind of evidence required by the contract when applicable, or show that by time or accident he is unable to do so. North British Merchantile Ins. Co. v. Robinett Green, 112 Va. 754, 72 S.E. Rep. 668; Duval County v. Charleston Engineering Contracting Co., 101 Fla. 341, 134 Sou. Rep. 509.

But to entitle the insurer to the benefit of such an appraisal clause as that involved in this case, the clause must have been invoked in good faith by the insurer. And since the object of the appraisal clause is merely to fix the amount of recoverable damage, it follows that unless liability under the policy for some recoverable amount is affirmatively admitted by the insurer when appraisal is demanded, a refusal of the insured to submit to an appraisal would not be unjustified, since the law does not require the insured to submit to a purely speculative appraisal of damages as to which it may be contended no liability at all exists.

In this case the plea in abatement failed to aver all the essentials required for the setting up of a good plea under Condition J of the policy sued on, because the plea did not sufficiently and definitely show that insurer had invoked the condition as a means of determining a disagreement with insured as to the mere amount of a loss. The plea being susceptible of construction to the effect that the condition was attempted to be invoked to determine not only the amount, but the liability as well, it was not sufficient to establish that insured's refusal to have appraisers was in violation of the policy, therefore the plea was bad on that score.

Other assigned errors have been considered by the Court, but are not sustained as being of such prejudicial nature as to warrant reversal. The evidence clearly showed liability. And the amount of the recovery being the sum of $370.20 as against a claim of $495.20 occasioned by collision, is supported by ample proof and is not unreasonable nor outside the scope of what is recoverable under the policy.

After the appeal was lodged in this Court counsel for the defendant in error filed a petition here for allowance of an additional attorney's fee for services required to be rendered in this Court on this appeal. It appears that the recovery of $150.00 attorney's fees already allowed in the Court below with respect to this suit, is ample compensation for the enforcement of the claim which has resulted in a judgment of the amount here involved, even if additional attorney's fees in this Court can be allowed at all. The petition for additional fees is therefore denied, and the judgment is affirmed.

Affirmed.

DAVIS, C. J., and WHITFIELD, TERRELL and BUFORD, J. J., concur.

ELLIS and BROWN, J. J., dissent.