Case Number: SC121418    Hearing Date: September 10, 2014    Dept: P

TENTATIVE RULING – DEPT. P

SEPT. 10, 2014 CALENDAR No: 4

SC121418 — JAVAHERI v. TRAVELERS COMCL. INS. CO., et al.

PLAINTIFF’S MOTION TO COMPEL APPRAISAL (CCP 1281.2 AND INS. 2071)

Evidentiary matters

All evidence is admitted.

Merits

This is an insurance bad faith action arising from storm damage to a Beverly Hills residence. Although Plaintiff’s motion is styled as one to compel arbitration, in actuality it is one to compel an appraisal of his loss pursuant to his Travelers insurance policy’s appraisal provision. (CCP 1281.2, and Insurance Code section 2071.) Travelers has opposed the motion on the basis that the matters which Plaintiffs seeks to present to the appraisal panel are outside the scope of the insurance policy’s appraisal provision. The Court agrees with Travelers. Accordingly, it will deny the motion.

Pursuant to Insurance Code section 2071, a standard form fire insurance policy must include “an appraisal provision to settle disagreements” between the insurance company and the insured “concerning the amount of loss.” Gebers v. State Farm General Ins. Co. (1995) 38 Cal.App.4th 1648, 1651. Insurance Code section 10082.3 requires all residential property insurance policies to contain substantially equivalent appraisal provisions.

“It is the insured’s initial responsibility to establish the ‘actual cash value’ of the property damaged. If the insured disagrees with a value suggested by the insurer, the appraisal process provides the means by which the dispute is to be settled.” Croskey et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2013) ¶ 15:356. “The statutory standard form specifies that insurer and insured are each to select ‘a competent and disinterested appraiser’ and that the umpire selected by these appraisers shall likewise be ‘competent and disinterested.'” Gebers, at 1651, quoting Ins. Code, § 2071 (fn. omitted.)

“[S]ection 2071 constrains the role of the appraiser to that of appraising ‘the loss, stating separately actual cash value and loss to each item….’ Appraisers have no power to interpret the insurance contract or the governing statutes. ‘ “The function of appraisers is to determine the amount of damage resulting to various items submitted for their consideration. It is certainly not their function to resolve questions of coverage and interpret provisions of the policy.” ‘ [Citations.] Under [Insurance Code] section 2071, an appraiser has authority to determine only a question of fact, namely the actual cash value or amount of loss of a given item. [Citation.]” Kirkwood v. California State Automobile Assn. Inter–Ins. Bureau (2011) 193 Cal.App.4th 49, 58-59; see also, Doan v. State Farm General Ins. Co. (2011) 195 Cal.App.4th 1082, 1094 (“‘The function of appraisers is to determine the amount of damage resulting to various items submitted for their consideration. It is certainly not their function to resolve questions of coverage and interpret provisions of the policy.'”) (emphasis added); Kacha v. Allstate Ins. Co. (2006) 140 Cal.App.4th 1023, 1032; Safeco Ins. Co. v. Sharma (1984) 160 Cal.App.3d 1060, 1063.

An agreement to conduct an appraisal in an insurance policy is an
“‘agreement’ within the meaning of section 1280, subdivision (a), and … is considered to be an arbitration agreement subject to the statutory contractual arbitration law.” Louise Gardens of Encino Homeowners’ Assn., Inc. v. Truck Ins. Exchange, Inc. (2000) 82 Cal.App.4th 648, 658 (fn. omitted); Kirkwood, supra, 193 Cal.App.4th at 57.
The strong public policy promoting private arbitration of civil disputes gives rise to a presumption in favor of arbitrability. Boghos v. Certain Underwriters at Lloyd’s of London (2005) 36 Cal.4th 495, 502. Nevertheless, of course, “[t]here is no public policy favoring arbitration of disputes which the parties have not agreed to arbitrate. [Citation.]” Engineers & Architects Assn. v. Community Development Dept. (1994) 30 Cal.App.4th 644, 653.

In this case, the parties are clearly disputing the scope of coverage; they dispute which damages are covered under the policy. As Travelers states in its opposition brief, this is far more than “simply a disagreement regarding the actual cash value” as to items which the respective parties agree are covered under the policy. See, Opp. at 8:24-25.

The Court rejects Plaintiff’s assertion that Travelers’ alleged violations of Department of Insurance regulations with regard to proofs of claim estopps it from raising coverage issues. In this regard, the following excerpt from
Advanced Network, Inc. v. Peerless Ins. Co. (2010) 190 Cal.App.4th 1054 is equally applicable here:

ANI’s reliance on Spray, Gould & Bowers v. Associated Internat. Ins. Co. (1999) 71 Cal.App.4th 1260, 84 Cal.Rptr.2d 552, is misplaced. In Spray, the court held summary judgment was improper because the insured raised a triable issue of fact as to whether estoppel applied, specifically whether it detrimentally relied on the insurer’s failure to inform it of the policy’s 12–month period within which a claim must be made. A regulation imposed on the insurer an affirmative duty to inform the insured of the limitation period. ( Id. at p. 1269, 84 Cal.Rptr.2d 552.) Through its ruling, the court sought to “help to insure that valid claims will not be lost by an unusually short limitations period.” ( Id. at p. 1274, 84 Cal.Rptr.2d 552.) Spray pertains to a condition of the policy rather than a coverage provision. Here, ANI tries to create coverage through estoppel.

Advanced Network, Inc. supra, 190 Cal.App.4th at 1066-1067.

Motion is denied with prejudice.

MOTION TO APPEAR PRO HAC VICE

This matter is advanced to this date and granted. The Court will sign the proposed order.

NOTICE

______ shall give notice of today’s rulings and timely file proof of service thereof, pursuant to CCP 1019.5 and CRC 3.1312