Ray et al v. QBE Specialty Insurance Company

Filing 30

ORDER granting 9 defendant's motion to compel appraisal and to stay. The appraisal process must be completed by June 9, 2025. Within one week after the appraisal concludes, the parties must promptly file a joint notice informing the court o f the outcome of the appraisal and attach a copy of the appraisal award. The parties must also contemporaneously file a joint motion to lift the stay and advise the court about the nature of any further proceedings that may be appropriate. The clerk is DIRECTED to place a STAY flag on this case pending completion of the appraisal. See order for applicable procedures and deadlines. Signed by Magistrate Judge Nicholas P. Mizell on 3/7/2025. (TLP)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
MICHAEL RAY and REBECCA RAY,
Plaintiffs,
v.

2:24-cv-873-SPC-NPM

QBE SPECIALTY INSURANCE COMPANY,
Defendant.
ORDER
In this breach-of-insurance-contract case arising from property damage after
Hurricane Ian, defendant QBE Specialty Insurance Company moved to compel an
appraisal and otherwise stay this action. (Doc. 9). Plaintiffs Michael and Rebecca
Ray filed an untimely response, 1 arguing that QBE’s motion should be denied
because they “did not elect to proceed with appraisal.” (Doc. 17 at 2). If the court
were to take plaintiffs’ word at face value, we would agree that QBE’s appraisal
request is not ripe because the policy’s appraisal provision requires mutual assent.
(Doc. 9-1 at 3). But plaintiffs’ opposition is disingenuous

1

QBE filed its motion to compel appraisal on September 26, 2024. However, not until almost one
month later did plaintiffs belatedly file their response in opposition, and in doing so, also failed to
provide any excusable neglect. QBE’s motion could be treated as unopposed. See M.D. Fla. R.
3.01(c) (“If a party fails to timely respond, the motion is subject to treatment as unopposed.”). We
have nevertheless considered plaintiffs’ response.

On November 20, 2023, QBE and plaintiffs agreed to appraisal and selected
their respective appraisers, Claudia Navia and Guillermo Saavedra, who, in turn,
selected umpire Darrell Davis. (Doc. 9-2 at 2, 5, 8-11; Doc. 9-3 at 2). Then, the
appraisers agreed to conduct an inspection on January 9, 2024, which later had to be
rescheduled because appraiser Saavedra could not attend the inspection on that date.
(Doc. 9-3 at 2). On January 15, 2024, plaintiffs wanted to terminate the appraisal.
(Doc. 9-2 at 2, 14).
Plaintiffs do not take issue with the fact that they agreed to appraisal and
appointed an appraiser. Instead, they argue—in a rather underhanded manner—that
they elected not to move forward with appraisal, as if they never agreed to appraisal
in the first place. We do not appreciate the lack of candor. Furthermore, plaintiffs
offer no legal authority for the absurd proposition that they may reverse course (at
any time) and rescind their agreement to appraisal. So, QBE’s motion is granted.
The clerk is directed to place a stay flag on the docket pending completion of the
appraisal. The following procedures and deadlines apply:
Discovery During Appraisal: The court’s experience in other insurancecoverage matters with appraisal issues has revealed that parties and appraisers
sometimes find that the tools of formal discovery can facilitate the appraisal process.
And as provided in the Federal Arbitration Act, a majority of the appraisal panel
“may summon in writing any person to attend before them or any of them as a
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witness and in a proper case to bring with him or them any book, record, document,
or paper which may be deemed material as evidence in the case.” See 9 U.S.C. § 7.2
Likewise, a party may, with the concurrence of at least two members of the appraisal
panel, conduct discovery concerning the amount-of-loss issues referred to the
appraisal panel for resolution.
Form of the Appraisal Award: For each covered subpart of the property (to
the extent there are multiple), the appraisal panel must delineate corresponding
replacement-cost values, actual-cost values, ordinance-or-law figures, and any other
policy-benefit figures as appropriate. See Fla. Stat. § 627.419(1) (“Every insurance
contract shall be construed according to the entirety of its terms and conditions as
set forth in the policy and as amplified, extended, or modified by any application
therefor or any rider or endorsement thereto.”); see also Auto-Owners Ins. Co. v.
Anderson, 756 So. 2d 29, 34 (Fla. 2000) (reasoning that each clause in an insurance
policy must be read in conjunction with the entire policy). RCV awards must further

2

See Milligan v. CCC Info. Servs. Inc., 920 F.3d 146, 152 (2d Cir. 2019) (appraisal constitutes an
arbitration for purposes of the FAA); Martinique Properties, LLC v. Certain Underwriters at
Lloyd’s London, 567 F. Supp. 3d 1099, 1106 (D. Neb. 2021), aff’d sub nom., 60 F.4th 1206 (8th
Cir. 2023) (same); Register v. Certain Underwriters At Lloyd’s, No. 5:20-cv-52-TKW-MJF, 2020
WL 6106624, *3 (N.D. Fla. Apr. 20, 2020) (same); Liberty Mut. Grp., Inc. v. Wright, No. CIV.A.
DKC 12-0282, 2012 WL 718857, *6 (D. Md. Mar. 5, 2012) (requests to appoint an appraisal
umpire are processed as motions under the FAA); see also Fit Tech, Inc. v. Bally Total Fitness
Holding Corp., 374 F.3d 1, 7 (1st Cir. 2004) (an agreed method to reach a binding resolution by a
third-party neutral about a fact in dispute constitutes an arbitration for purposes of the FAA).
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delineate separate figures for each component (e.g., roof, gutters, each window, each
door, the drywall for an interior room, etc.).3
To the extent the award includes any figures for replacing undamaged items
to match the replacement of damaged items,4 any such award must be separately set
forth in the RCV award and no portion of it should be included in the ACV award.
See Vazquez v. Citizens Prop. Ins. Corp., 304 So. 3d 1280, 1283-1285 (Fla. 3d DCA
2020) (the cost of matching is not relevant or recoverable when repairs have not been
made such that recovery is for actual cash value only).
Overall, the award must be made with full consideration of the provisions,
exclusions, and other terms of the insurance policy. After the appraisal panel
determines what was caused by the covered peril, as opposed to excluded causes,
and further determines the amounts and values of the losses attributed to the covered
peril, the court will account for policy limits, deductibles, and prior payments before
entering any judgment.
Completion of Appraisal: The appraisal process must be completed by June
9, 2025. Within one week after the appraisal concludes, the parties must promptly

3

Commonly done using software such as Xactimate or Symbility.

4

For example, replacing undamaged wood flooring when replacing damaged wood flooring
because the original flooring material is no longer available or suitable. This is distinct from the
replacement of an entire component, such as a roof, for any other reason (such as a regulatory
standard that requires the replacement of an entire system when a certain portion of it must be
repaired or replaced).
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file a joint notice informing the court of the outcome of the appraisal and attach a
copy of the appraisal award. The parties must also contemporaneously file a joint
motion to lift the stay and advise the court about the nature of any further
proceedings that may be appropriate.
ORDERED on March 7, 2025

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