McDonald v. State Farm Fire & Casualty

Court of Special Appeals of Maryland

McDonald v. State Farm Fire & Casualty

Court of Special Appeals of Maryland·Decided August 26, 2026·No. 2104/24·Published

Opinion

Carvet Carlyle McDonald v. State Farm Fire and Casualty Company, No. 2104, Sept. Term, 2024. Opinion by Arthur, J.

ARBITRATION—PETITION TO CONFIRM ARBITRAL AWARD

When a party contends that a putative arbitration award is not really an award, the party need not move to modify, correct, or vacate the alleged award within the deadlines set forth in sections 3-222(a), 3-223(a), and 3-224(a) of the Courts and Judicial Proceedings Article. Instead, the party may wait until such time, if ever, when the other side petitions to confirm the alleged award. Then, the party may endeavor to persuade the court that the alleged award is not really an award. A court may not confirm an alleged award simply because the party that disputes the existence of the award did not move to modify, correct, or vacate it within the statutory deadlines.

DECLARATORY JUDGMENT—DISMISSAL WITHOUT DECLARING PARTIES’ RIGHTS

Ordinarily, a court should dismiss a claim for a declaratory judgment only when the plaintiff has no right to a declaration at all. The court in this case erroneously dismissed the appellant’s entire pleading, including a portion that requested a declaratory judgment. Because the court did not declare the parties’ rights, the proper remedy was to vacate the dismissal and remand the case for the purpose of issuing a declaratory judgment.

Circuit Court for Baltimore City Case No. 24-C-23-001389

REPORTED

IN THE APPELLATE COURT

OF MARYLAND

No. 2104

September Term, 2024

CARVET CARLYLE MCDONALD

v.

STATE FARM FIRE AND CASUALTY COMPANY

Graeff,

Arthur,

Wright, Alexander, Jr.

(Senior Judge, Specially Assigned),

JJ.

Opinion by Arthur, J.

Filed: August 26, 2026

Pursuant to the Maryland Uniform Electronic Legal Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic.

2026.08.26

'00'04- 14:29:20

Gregory Hilton, Clerk

The Circuit Court for Baltimore City denied a petition to confirm an arbitration award, finding that the arbitrators had never actually issued an award. The petitioner appealed. We affirm the denial of the petition but remand the case so that the court may declare the parties’ rights, as the petitioner had requested.

FACTUAL AND PROCEDURAL BACKGROUND Appellant Carvet Carlyle McDonald had a homeowners’ policy with appellee State Farm Fire and Casualty Co. Mrs. McDonald made a claim under her policy when a pipe burst and damaged her dwelling and her belongings.

Mrs. McDonald’s State Farm policy authorized her to demand an appraisal of the amount of her loss if she and State Farm could not agree on the amount. Under the terms of the policy, Mrs. McDonald and State Farm would each choose an appraiser. If the appraisers agreed on the amount of the loss, they would submit a written report of agreement to State Farm, which, presumably, would pay the agreed amount. If the appraisers did not agree on the amount of the loss, they would “submit their differences” to an “umpire” chosen by both appraisers. The umpire’s decision would bind the parties.

Mrs. McDonald exercised her right to an appraisal. She named Michael Durlewanger as her appraiser; State Farm named James Torrence as its appraiser.

The appraisers could not agree on the amount of the loss. Consequently, they were required to agree on an umpire. After some controversy, the parties agreed to appoint Kerry Kirtley as the umpire.

On December 2, 2021, Mrs. McDonald’s appraiser, Mr. Durlewanger, sent a one-

page document captioned “Declaration of Appraisers” to Mr. Kirtley, the umpire. The

document memorialized the selection of Mr. Kirtley as the umpire. It contained a place for Mr. Kirtley to sign in order to accept the appointment as umpire and to affirm his qualifications to serve. In addition, in a section captioned “Award,” it recited that “[w]e have carefully examined the premises and remains of the property” and have determined the “Actual Cash Value Loss” to be $130,663.00. The document had a second signature line below the “Award” section.

On December 3, 2021, Mr. Kirtley signed the Declaration of Appraisers in two places—first, on the signature line below the section in which he accepted the appointment and affirmed; second, on the signature line below the “Award.”

Mrs. McDonald characterizes the signed Declaration of Appraisers as an arbitration award. Her public adjuster1 sent the alleged award to State Farm on December 6, 2021. He demanded payment.

In response, State Farm’s attorney, Anne K. Howard, spoke with State Farm’s appraiser, Mr. Torrence. Mr. Torrence told her that he had not participated in any aspects of the appraisal process with the umpire, Mr. Kirtley. Ms. Howard also spoke with Mr. Kirtley, who told her that the Declaration of Appraisers did not reflect his opinions as to the loss; that he had not yet conducted any work on the matter; that he had not yet

1 Section 10-401(g)(1) of the Insurance Article of the Maryland Code (1995, 2017 Repl. Vol.) defines a “public adjuster” as a person who acts or aids an insured in negotiating or settling claims for loss or damage under an insurance policy covering the insured’s property; solicits employment as a public adjuster for first-party insurance claims; or investigates or adjusts losses or advises the insured about claims for losses or damages under the insurance policy. The term “public adjuster,” however, does not include persons who adjust claims related to motor vehicle insurance policies. Id. § 10- 401(g)(2).

formulated any opinions as to the cost of the repairs; and that he had signed the “Award” section of the Declaration of Appraisers “by mistake.”

Mr. Kirtley himself reported that he had signed the Declaration of Appraisers online. He stated that he did not print out the document and did not read it carefully before he signed it. He insisted that, in signing the document, he did not intend to issue any award. To the contrary, he said that he had done no work on the claim, had received no materials or input from State Farm’s appraiser, and had formed no opinion as to the amount of the loss. He said that he signed the document solely to identify himself as the umpire for Mrs. McDonald’s claim. The document, he said, was not his “official determination of damages.”

In February 2022 Mr. Kirtley informed Mrs. McDonald’s representative that he had signed the Declaration of Arbitrators by mistake, that he had conducted no work on the matter, that the document did not reflect his opinions as to the amount of the loss, and that he had yet to formulate any opinions. State Farm paid nothing.

On March 6, 2023, Mrs. McDonald commenced this case by filing a petition to confirm an arbitral award under the Maryland Uniform Arbitration Act, sections 3-201 to 3-234 of the Courts and Judicial Proceedings Article of the Maryland Code (1974, 2020 Repl. Vol.).2 Mrs. McDonald later amended the petition to include a request for a declaratory judgment.

2 “[N]otwithstanding the distinctions between an appraisal under an insurance policy appraisal clause and arbitration, appraisal is analogous to arbitration.” Aetna Cas. & Sur. Co. v. Ins. Comm’r, 293 Md. 409, 422 (1982). “Consequently,” Maryland courts have “applied arbitration law to appraisal clauses in insurance policies.” Id.

Mrs. McDonald’s legal theory was straightforward. Under sections 3-222(a) and 3-223(a) of the Courts and Judicial Proceedings Article, a party may move to modify or correct an arbitration award on certain limited grounds,3 provided that the party acts within a short period of time after the delivery of the award—20 days if the party presents the motion to the arbitrators; 90 days if the party presents the motion to a court. Similarly, under section 3-224(a) of the Courts and Judicial Proceedings Article, a party may move to vacate an arbitration on another set of limited grounds,4 provided that the

Free access — add to your briefcase to read the full text and ask questions with AI