[Cite as Hull v. Motorists Ins. Group, 2011-Ohio-2502.]
STATE OF OHIO ) IN THE COURT OF APPEALS )ss: NINTH JUDICIAL DISTRICT COUNTY OF SUMMIT )
DOUGLAS H. HULL, et al. C.A. No. 25643
Appellees
v. APPEAL FROM JUDGMENT ENTERED IN THE THE MOTORISTS INSURANCE GROUP COURT OF COMMON PLEAS COUNTY OF SUMMIT, OHIO Appellant CASE No. MS 2010-00-0010
DECISION AND JOURNAL ENTRY
Dated: May 25, 2011
DICKINSON, Judge.
BACKGROUND
{¶1} Motorists Mutual Insurance Company issued a commercial property policy to
Douglas Hull. According to Mr. Hull, his business suffered wind and hail damage on June 7,
2007. He filed a claim with Motorists, but they could not agree on the value of his property or
the amount of the loss because Motorists believed that any damage was from wear and tear,
which was not covered by the policy. Mr. Hull, therefore, invoked the policy’s appraisal
provision. When the appraisers chosen by the parties were unable to select an umpire, Mr. Hull
petitioned the trial court to appoint an umpire. He also asked the court to direct the appraisers to
use a “detailed, line item appraisal award form” when determining the amount of loss. In its
Answer, Motorists agreed that the court should appoint an umpire, but opposed Mr. Hull’s line-
item appraisal request, arguing that it was not required under the appraisal provision. The trial
court appointed an umpire, ordered the parties to bear the costs of their own appraiser, ordered 2
them to share the expenses of the umpire, ordered the appraisers and umpire to use a detailed
line-item appraisal award form, and ordered the appraisal panel not to “make any determination
as to whether or not the building repairs/losses submitted by [Mr. Hull] were or were not caused
by the subject wind and hail storm or make any other coverage or causation determination.”
Motorists has appealed, assigning as error that the trial court incorrectly ordered the appraisal
panel not to consider causation in determining the amount of storm or hail damage, if any, to Mr.
Hull’s buildings. We reverse because, under the insurance policy, the parties only agreed to
allow the court to select an umpire, not to restrict the means by which the appraisers and umpire
would determine the value of Mr. Hull’s property or the amount of loss.
THE INSURANCE POLICY
{¶2} Under the terms of Mr. Hull’s policy, Motorists agreed to pay him “for [any]
direct physical loss of or physical damage to Covered Property . . . caused by . . . any Covered
Cause of Loss.” The policy’s covered causes provision is broad, covering any “risks of direct
physical loss,” unless the risk is specifically excluded or limited by the policy. Among the risks
excluded is “[w]ear and tear.”
{¶3} According to the policy’s appraisal provision, “[i]f [Motorists] and [Mr. Hull]
disagree on the value of the property or the amount of loss, either may make written demand for
an appraisal of the loss. In this event, each party will select a competent and impartial appraiser.
The two appraisers will select an umpire. If they cannot agree, either may request that selection
be made by a judge of a court having jurisdiction. The appraisers will state separately the value
of the property and amount of loss. If they fail to agree, they will submit their differences to the
umpire. A decision agreed to by any two will be binding. Each party will: a. Pay its chosen
appraiser; and b. Bear the other expenses of the appraisal and umpire equally.” The appraisal 3
provision also provides that, “[i]f there is an appraisal, [Motorists] will still retain our right to
deny the claim.”
APPRAISAL ORDER
{¶4} Motorists’ assignment of error is that the trial court incorrectly ordered the
appraisal panel not to consider causation when determining the amount of storm damage, if any,
to Mr. Hull’s property. It has argued that, in order to determine the “amount of loss” that Mr.
Hull suffered, the appraisers must, necessarily, consider what caused the property damage. It has
also argued that, unless the appraisers are allowed to distinguish between covered causes and
non-covered causes of loss, the appraisal process will not avoid additional litigation.
{¶5} There is substantial debate over whether, and to what extent, appraisers and
umpires may consider causation when determining the amount of loss to a structure. Compare
State Farm Lloyds v. Johnson, 290 S.W.3d 886, 893 (Tex. 2009) (“[A]ny appraisal necessarily
includes some causation element, because setting the ‘amount of loss’ requires appraisers to
decide between damages for which coverage is claimed from damage caused by everything
else.”) and State Farm Fire & Cas. Co. v. Licea, 685 So. 2d 1285, 1288 (Fla. 1996) (explaining
that an amount of loss assessment “necessarily includes determinations as to . . . whether or not
the requirement for a repair or replacement was caused by a covered peril or a cause not covered,
such as normal wear and tear[.]”) with Quade v. Secura Ins., 792 N.W.2d 478, 482 (Minn. Ct.
App. 2011) (concluding that, if an insurer alleges that an exclusion completely eliminates
coverage, then that question “can be resolved only by analysis and application of the policy by
the . . . court.”) and Massey v. Farmers Ins. Group, 837 P.2d 880, 882 (Okla. 1992) (“[A]ppraisal
provisions permit appraisers or umpires to determine one issue, to wit, the amount of damage to 4
the property.”). We do not need to join the debate at this time because we conclude that the trial
court’s causation instruction was outside of the scope of its authority under the parties’ contract.
{¶6} Under the insurance policy, the parties agreed that, if the appraisers could not
select an umpire, they could petition the court to appoint one. Accordingly, when the appraisers
could not decide on an umpire, Mr. Hull petitioned the court to “select and appoint a neutral
umpire pursuant to the insurance contract[.]” Although selection of an umpire was the only thing
that the parties had agreed to let the court decide, Mr. Hull also “request[ed]” that it enter “an
order directing the appraisers and umpire to value what has been submitted in appraisal using a
detailed, line item appraisal award form addressing only the amount of the loss regardless of
issues as to whether the insurer is liable under the policy.”
{¶7} Mr. Hull’s request went beyond the ambit of the contract, asking the court to limit
the way in which the appraisers and umpire determined the value of his property and the amount
of loss that he suffered. No such authority, however, appears on the face of the parties’ contract.
{¶8} We note that Mr. Hull did not, in his complaint, ask for a declaratory judgment
regarding the appraisal provision under Section 2721.03 of the Ohio Revised Code. Under
Section 2721.03, “any person interested under a . . . written contract . . . may have determined
any question of construction or validity arising under the . . . contract . . . and obtain a
declaration of rights, status, or other legal relations under it.” Instead of merely requesting that
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[Cite as Hull v. Motorists Ins. Group, 2011-Ohio-2502.]
STATE OF OHIO ) IN THE COURT OF APPEALS )ss: NINTH JUDICIAL DISTRICT COUNTY OF SUMMIT )
DOUGLAS H. HULL, et al. C.A. No. 25643
Appellees
v. APPEAL FROM JUDGMENT ENTERED IN THE THE MOTORISTS INSURANCE GROUP COURT OF COMMON PLEAS COUNTY OF SUMMIT, OHIO Appellant CASE No. MS 2010-00-0010
DECISION AND JOURNAL ENTRY
Dated: May 25, 2011
DICKINSON, Judge.
BACKGROUND
{¶1} Motorists Mutual Insurance Company issued a commercial property policy to
Douglas Hull. According to Mr. Hull, his business suffered wind and hail damage on June 7,
2007. He filed a claim with Motorists, but they could not agree on the value of his property or
the amount of the loss because Motorists believed that any damage was from wear and tear,
which was not covered by the policy. Mr. Hull, therefore, invoked the policy’s appraisal
provision. When the appraisers chosen by the parties were unable to select an umpire, Mr. Hull
petitioned the trial court to appoint an umpire. He also asked the court to direct the appraisers to
use a “detailed, line item appraisal award form” when determining the amount of loss. In its
Answer, Motorists agreed that the court should appoint an umpire, but opposed Mr. Hull’s line-
item appraisal request, arguing that it was not required under the appraisal provision. The trial
court appointed an umpire, ordered the parties to bear the costs of their own appraiser, ordered 2
them to share the expenses of the umpire, ordered the appraisers and umpire to use a detailed
line-item appraisal award form, and ordered the appraisal panel not to “make any determination
as to whether or not the building repairs/losses submitted by [Mr. Hull] were or were not caused
by the subject wind and hail storm or make any other coverage or causation determination.”
Motorists has appealed, assigning as error that the trial court incorrectly ordered the appraisal
panel not to consider causation in determining the amount of storm or hail damage, if any, to Mr.
Hull’s buildings. We reverse because, under the insurance policy, the parties only agreed to
allow the court to select an umpire, not to restrict the means by which the appraisers and umpire
would determine the value of Mr. Hull’s property or the amount of loss.
THE INSURANCE POLICY
{¶2} Under the terms of Mr. Hull’s policy, Motorists agreed to pay him “for [any]
direct physical loss of or physical damage to Covered Property . . . caused by . . . any Covered
Cause of Loss.” The policy’s covered causes provision is broad, covering any “risks of direct
physical loss,” unless the risk is specifically excluded or limited by the policy. Among the risks
excluded is “[w]ear and tear.”
{¶3} According to the policy’s appraisal provision, “[i]f [Motorists] and [Mr. Hull]
disagree on the value of the property or the amount of loss, either may make written demand for
an appraisal of the loss. In this event, each party will select a competent and impartial appraiser.
The two appraisers will select an umpire. If they cannot agree, either may request that selection
be made by a judge of a court having jurisdiction. The appraisers will state separately the value
of the property and amount of loss. If they fail to agree, they will submit their differences to the
umpire. A decision agreed to by any two will be binding. Each party will: a. Pay its chosen
appraiser; and b. Bear the other expenses of the appraisal and umpire equally.” The appraisal 3
provision also provides that, “[i]f there is an appraisal, [Motorists] will still retain our right to
deny the claim.”
APPRAISAL ORDER
{¶4} Motorists’ assignment of error is that the trial court incorrectly ordered the
appraisal panel not to consider causation when determining the amount of storm damage, if any,
to Mr. Hull’s property. It has argued that, in order to determine the “amount of loss” that Mr.
Hull suffered, the appraisers must, necessarily, consider what caused the property damage. It has
also argued that, unless the appraisers are allowed to distinguish between covered causes and
non-covered causes of loss, the appraisal process will not avoid additional litigation.
{¶5} There is substantial debate over whether, and to what extent, appraisers and
umpires may consider causation when determining the amount of loss to a structure. Compare
State Farm Lloyds v. Johnson, 290 S.W.3d 886, 893 (Tex. 2009) (“[A]ny appraisal necessarily
includes some causation element, because setting the ‘amount of loss’ requires appraisers to
decide between damages for which coverage is claimed from damage caused by everything
else.”) and State Farm Fire & Cas. Co. v. Licea, 685 So. 2d 1285, 1288 (Fla. 1996) (explaining
that an amount of loss assessment “necessarily includes determinations as to . . . whether or not
the requirement for a repair or replacement was caused by a covered peril or a cause not covered,
such as normal wear and tear[.]”) with Quade v. Secura Ins., 792 N.W.2d 478, 482 (Minn. Ct.
App. 2011) (concluding that, if an insurer alleges that an exclusion completely eliminates
coverage, then that question “can be resolved only by analysis and application of the policy by
the . . . court.”) and Massey v. Farmers Ins. Group, 837 P.2d 880, 882 (Okla. 1992) (“[A]ppraisal
provisions permit appraisers or umpires to determine one issue, to wit, the amount of damage to 4
the property.”). We do not need to join the debate at this time because we conclude that the trial
court’s causation instruction was outside of the scope of its authority under the parties’ contract.
{¶6} Under the insurance policy, the parties agreed that, if the appraisers could not
select an umpire, they could petition the court to appoint one. Accordingly, when the appraisers
could not decide on an umpire, Mr. Hull petitioned the court to “select and appoint a neutral
umpire pursuant to the insurance contract[.]” Although selection of an umpire was the only thing
that the parties had agreed to let the court decide, Mr. Hull also “request[ed]” that it enter “an
order directing the appraisers and umpire to value what has been submitted in appraisal using a
detailed, line item appraisal award form addressing only the amount of the loss regardless of
issues as to whether the insurer is liable under the policy.”
{¶7} Mr. Hull’s request went beyond the ambit of the contract, asking the court to limit
the way in which the appraisers and umpire determined the value of his property and the amount
of loss that he suffered. No such authority, however, appears on the face of the parties’ contract.
{¶8} We note that Mr. Hull did not, in his complaint, ask for a declaratory judgment
regarding the appraisal provision under Section 2721.03 of the Ohio Revised Code. Under
Section 2721.03, “any person interested under a . . . written contract . . . may have determined
any question of construction or validity arising under the . . . contract . . . and obtain a
declaration of rights, status, or other legal relations under it.” Instead of merely requesting that
the court select an umpire as permitted under the contract, Mr. Hull asked it to impose specific
conditions regarding the way in which they would complete their task. Because the parties did
not agree that the court could restrict the method by which the appraisers and umpire valued his
property and loss, we conclude that the trial court erred when it ordered “[t]he appraisal panel
[to] not make any determination as to whether or not the building repairs/losses submitted by 5
[Mr. Hull] were or were not caused by the subject wind and hail storm or make any other
coverage or causation determination.” Motorists’ assignment of error is sustained. Because
Motorists has not contested the court’s instructions regarding fees or the use of a line-item
appraisal form, however, those provisions remain intact.
CONCLUSION
{¶9} Because Mr. Hull did not request a declaratory judgment, the trial court did not
have authority to define the appraisers’ and umpire’s role under the commercial property
insurance policy. The judgment of the Summit County Common Pleas Court is reversed.
Judgment reversed. and cause remanded.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(E). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellees.
CLAIR E. DICKINSON FOR THE COURT 6
CARR, J. BELFANCE, P. J. CONCUR
APPEARANCES:
MERLE D. EVANS, Attorney at Law, for Appellant.
JOSEPH R. SPOONSTER, Attorney at Law, for Appellees.