Sylvester et al v. Safeco Insurance Company of America

Filing 56

MEMORANDUM OPINION AND ORDER Signed by Chief Judge Greg N. Stivers on 2/6/2024. Plaintiffs' Motion to Compel Appraisal DN 46 is GRANTED, and Plaintiffs' Objection to the Magistrate Judge's Order DN 44 is OVERRULED. cc: Counsel (KDY)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
OWENSBORO DIVISION
CIVIL ACTION NO. 4:22-CV-00140-GNS-HBB
LAURIE SYLVESTER; and
RICHARD FULKERSON

PLAINTIFFS

v.
SAFECO INSURANCE COMPANY OF
AMERICA

DEFENDANT

MEMORANDUM OPINION & ORDER
This matter comes before the Court on Plaintiffs’ Objection (DN 44) to the Magistrate
Judge’s Order (DN 33) and Plaintiffs’ Motion to Compel Appraisal (DN 46). For the reasons that
follow, the objection is OVERRULED, and the motion is GRANTED.
I.

BACKGROUND

Plaintiffs Laurie Sylvester and Richard Fulkerson (jointly “Plaintiffs”) own real property
in Hopkins County, Kentucky that was insured by a property insurance policy with Defendant
Safeco Insurance Company of America (“Safeco”). (Compl. ¶¶ 5-6, DN 1-1). Plaintiffs suffered
tornado damage to their property and made a claim with Defendant. (Compl. ¶¶ 8-9). Safeco
accepted coverage but paid an amount that Plaintiffs allege is insufficient to cover the full value
of their loss. (Compl. ¶ 10). Plaintiffs initiated this action in Hopkins Circuit Court (Kentucky),
asserting claims for breach of contract and violation of KRS 304.12-230. (Compl. ¶¶ 13-28).
Defendant removed the action to this Court under 28 U.S.C. § 1332. (Notice Removal 1-5, DN
1).
After some email communications, the parties had a conference and submitted a joint
discovery plan pursuant to Fed. R. Civ. P. 26(f) agreeing Plaintiffs’ statutory claims should be

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bifurcated and stayed while the parties resolved the breach of contract claims. (Joint Rule 26(f)
Report 2, DN 12). The parties also indicated that they may be able to resolve through appraisal
Plaintiffs’ breach of contract claim relating to “disputes over the amount of covered loss to certain
property for which Safeco previously issued payments . . . .” (Joint Rule 26(f) Report 2).
A scheduling order was put in place that set a January 16, 2023, deadline for Plaintiffs’
expert disclosures. (Scheduling Order 5, DN 17). Plaintiffs disclosed one expert on January 16
and attempted to serve an amended expert disclosure on February 21 identifying a second expert,
Jason Juday (“Juday”). (Order 2, DN 33). Safeco moved to strike the amended disclosure and
exclude the newly disclosed expert; Plaintiffs moved to extend their expert disclosure deadlines.
(Def.’s Mot. Strike & Exclude, DN 21; Pls.’ Mot. Extension, DN 22). The Magistrate Judge
granted Safeco’s motions and denied Plaintiffs’ motion. (Order 15, DN 33). The instant objection
and motion to compel appraisal followed. (Pls.’ Obj., DN 44; Pls.’ Mot. Compel Appraisal, DN
46 [hereinafter Pls.’ Mot. Appr.]).
II.

JURISDICTION

The Court has subject-matter jurisdiction over this action through diversity jurisdiction
because there is complete diversity between the parties and the amount in controversy exceeds the
sum of $75,000.00. See 28 U.S.C. § 1332.
III.
A.

DISCUSSION

Plaintiffs’ Objection (DN 44)
1.

Standard of Review

Under Fed. R. Civ. P. 72(a), upon timely objection to a magistrate judge’s order, the district
judge must “modify or set aside any part of the order that is clearly erroneous or is contrary to
law.” Fed. R. Civ. P. 72(a). “This standard requires the District Court to review findings of fact

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for clear error and to review matters of law de novo.” Bisig v. Time Warner Cable, Inc., 940 F.3d
205, 219 (6th Cir. 2019) (quoting EEOC v. City of Long Branch, 866 F.3d 93, 99 (3d Cir. 2017)).
“A [factual] finding is ‘clearly erroneous’ when although there is evidence to support it, the
reviewing court on the entire evidence is left with the definite and firm conviction that a mistake
has been committed.” Id. (alteration in original) (quoting United States v. U.S. Gypsum Co., 333
U.S. 364, 395 (1948)). An order is “contrary to the law when it fails to apply or misapplies relevant
statutes, case law, or rules of procedure.” Id. (internal quotation marks omitted) (quoting United
States v. Winsper, No. 3:08-CV-631-H, 2013 WL 5673617, at *1 (W.D. Ky. Oct. 17, 2013)).
2.

Analysis

Plaintiffs argue that the Magistrate Judge made several inaccurate factual findings and
ruled contrary to law by striking their amended expert disclosures and excluding Juday. (Pls’ Obj.
5-6).
a.

Factual Inaccuracies

Plaintiffs first object to seven assertions contained within the Magistrate Judge’s order that
they argue wrongly characterize the parties’ communications.

Plaintiffs initially contest the

order’s characterization that “Plaintiffs emphatically rejected” Safeco’s first memorandum of
appraisal. (Pls.’ Obj. 6-7). They assert that their letter rejecting appraisal was not in response to
Safeco’s proposed memorandum of appraisal but instead was sent independently. (Pls.’ Obj. 6-7).
On December 22, 2022, both parties’ counsel sent emails to one another almost
simultaneously—first, an email from Safeco’s counsel with a proposed memorandum of appraisal
followed one minute later by an email containing a letter from Plaintiffs’ counsel rejecting
appraisal. (See Pls.’ Mot. Extension Ex. 4, DN 22-4 (email from Safeco’s counsel with the
proposed memorandum of appraisal, sent December 22, 2022, at 12:44 PM); Pls.’ Obj. Ex. 1, at 1,

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DN 44-1 (email from Plaintiffs’ counsel with attached letter rejecting appraisal, sent December
22, 2022, at 12:45 PM)). Safeco’s counsel then acknowledged that the parties’ emails may have
“crossed paths” in a later email. (Pls.’ Obj. Ex. 1, at 1). Reviewing the emails, the Order seems
to have misinterpreted these communications and that Plaintiffs did not send their letter rejecting
appraisal in response to Safeco’s memorandum of appraisal. Overall, however, that appears to be
of little consequence.
Plaintiffs’ next three objections all relate to their insistence that Safeco acted in bad faith
by feigning agreement to an appraisal plan while actually intending to litigate the issues. (Pls.’
Obj. 7-8). As the Magistrate Judge observed, Plaintiffs’ argument that Safeco acted in bad faith
ignores Plaintiffs’ email stating that they believed litigation would be necessary on all claims.
(Pls.’ Mot. Extension Ex. 1, at 4, DN 22-1 [hereinafter Nov. Emails]). Later, Plaintiffs asserted in
an email to the Court that “Plaintiffs have objected to appraisal from the outset.” (Def.’s Resp.
Pls.’ Mot. Extension Ex. 1 at 1, DN 23-1). Even now, Plaintiffs refuse to offer any explanation
for the dissonance between these emails and their current position, and instead assert that they
have been working towards appraisal from the beginning. (See Pls.’ Obj. 2-4, 7-8). The Magistrate
Judge made no error with respect to his descriptions of the parties’ communications.
Plaintiffs’ final two objections relate to the Magistrate Judge’s assertion that Plaintiffs did
not provide Juday with materials necessary to formulate his opinions until twenty-one days after
their expert disclosure deadline. (Pls.’ Obj. 8-9). The Magistrate Judge acknowledged that
Plaintiffs had sent information for Juday to prepare his report in November, but pointed out that
they did not request information from Juday for their disclosure of his opinions, nor send Juday an
engineering report necessary for his opinion until February 6, 2023. (Order 5-9, DN 33; see Def.’s

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Resp. Pls.’ Mot. Extension Ex. 6, at 3, DN 24-6). The Magistrate Judge was not mistaken
regarding these facts.
In conclusion, Plaintiffs are correct that the Magistrate Judge appears to have misconstrued
one factual detail relating to the parties’ communications. Nevertheless, as explained below, the
Magistrate Judge still had proper bases for his conclusions.
b.

Legal Conclusions

Plaintiffs argue that the Magistrate Judge made a clear error of law in striking their
amended Fed. R. Civ. P. 26 disclosures, excluding their expert Juday, and denying leave for an
extension of their expert disclosure deadline. (See Pl.’s Obj. 14). Fed. R. Civ. P. 26(a)(2)(A)
provides that “a party must disclose to the other parties the identity of any witness it may use at
trial to present evidence” as an expert witness. Rule 26(a)(2)(B) requires that the disclosure of
retained experts must be accompanied by a written report that contains:
(i)
a complete statement of all opinions the witness will express and the basis
and reasons for them;
(ii)
the facts or data considered by the witness in forming them;
(iii)
any exhibits that will be used to summarize or support them;
(iv)
the witness’s qualifications, including a list of all publications authored in
the previous 10 years;
(v)
a list of all other cases in which, during the previous 4 years, the witness
testified as an expert at trial or by deposition; and
(vi)
a statement of the compensation to be paid for the study and testimony in
the case.
Fed. R. Civ. P. 26(a)(2)(B).
Fed. R. Civ. P. 37(c)(1) states:
If a party fails to provide information or identify a witness as required by Rule 26(a)
or (e), the party is not allowed to use that information or witness to supply evidence
on a motion, at a hearing, or at a trial, unless the failure was substantially justified
or is harmless.

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Fed. R. Civ. P. 37(c)(1). Rule 37(c)(1) “‘puts teeth’ into the Rule 26 provisions . . . .” Campos v.
MTD Prods., Inc., No. 2:07-CV-00029, 2009 WL 2252257, at *9 (M.D. Tenn. July 24, 2009)
(citations omitted); accord Salgado v. Gen. Motors Corp., 150 F.3d 735, 741 n.6 (7th Cir. 1998).
Rule 37(c)(1) “mandates that a trial court punish a party for discovery violations in connection
with Rule 26 unless the violation was harmless or is substantially justified.” Vance ex rel.
Hammons v. United States, 182 F.3d 920, 1999 WL 455435, at *3 (6th Cir. 1999) (unpublished
table decision) (internal footnote omitted) (citation omitted). Rule 37(c)(1) “contemplates strict[]
adherence to discovery requirements, and harsh[] sanctions for breaches of this rule, and the
required sanction in the ordinary case is mandatory preclusion.” Id.; see also Roberts ex rel.
Johnson v. Galen of Va. Inc., 325 F.3d 776, 782 (6th Cir. 2003) (“Federal Rule of Civil Procedure
37(c)(1) requires absolute compliance with Rule 26(a) . . . .” (citation omitted)). The Sixth Circuit
has noted that the advisory committee notes to the 1993 amendment, which included passage of
Rule 37(c)(1), “strongly suggest[] that ‘harmless’ involves an honest mistake on the part of a party
coupled with sufficient knowledge on the part of the other party.” Howe v. City of Akron, 801
F.3d 718, 747 (6th Cir. 2015) (alteration in original) (quoting Vance, 1999 WL 455435, at *5).
In Howe, the Sixth Circuit instructed courts to consider the following five factors to
determine whether a discovery violation is “substantially justified” or “harmless”:
(1) the surprise to the party against whom the evidence would be offered; (2) the
ability of that party to cure the surprise; (3) the extent to which allowing the
evidence would disrupt the trial; (4) the importance of the evidence; and (5) the
nondisclosing party’s explanation for its failure to disclose the evidence.
Id. (quoting Russell v. Absolute Collection Servs., Inc., 763 F.3d 385, 396-97 (4th Cir. 2014)).
“District courts have broad discretion in applying these factors and need not apply each one rigidly.
The factors simply lend themselves to the task at the heart of Rule 37(c)(1): separating honest,
harmless mistakes from the type of underhanded gamesmanship that warrants the harsh remedy of
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exclusion.”

Bisig, 940 F.3d at 219 (internal quotation marks omitted) (quoting Bentley v.

Highlands Hosp. Corp., No. 15-97-ART-EBA, 2016 WL 5867496, at *10 (E.D. Ky. Oct. 6, 2016)).
After applying Howe, the Magistrate Judge concluded that Plaintiffs’ failure to abide by
the scheduling order was neither substantially justified nor harmless.

(Order 15, DN 33).

Therefore, the Court must consider, de novo, whether their late disclosure was either substantially
justified or harmless such that it may avoid exclusion under Rule 37(c)(1). See Bisig, 940 F.3d at
219 (“Thus, whether the magistrate judge failed to apply Howe is a legal question that the district
court was required to review de novo.” (footnote omitted)).
i.

Surprise

Plaintiffs attempt to downplay the surprise caused by the late disclosure of Juday and his
opinions by explaining that Safeco already knew that Juday would be providing an estimate which
would relate to the same loss as Safeco’s estimate and include the same dimensions for the home.
(Pls.’ Obj. 11-12). Plaintiffs state, “Where the parties differ on this issue is related to method of
repairs and associated costs.” (Pls.’ Obj. 12). Juday’s opinions on the method of repairs and
associated costs are clearly the most important parts of his opinions with respect to the disputed
valuation, and failing to provide the report containing those opinions until long after the deadline
clearly caused surprise. Therefore, this factor weighs in favor of Safeco.
ii.

Ability to Cure

No trial date has been set in this case. Therefore, in theory, surprise to Safeco could be
cured through an extension of deadlines and the reopening of discovery as needed. Such a solution,
however, “would . . . reward [Plaintiffs] for [their] untimeliness and suggest that deadlines bend
to a party’s will.” EQT Prod. Co. v. Magnum Hunter Prod., Inc., No. 5:16-CV-150-JMH-REW,
2017 WL 2295906, at *4 (E.D. Ky. May 25, 2017) (quoting Bentley, 2016 WL 5867496, at *10).

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While Plaintiffs have since supplied an amended expert report, the discovery deadlines are too
long past. (Pls.’ Obj. Ex. 4, DN 44-4; Sched. Order 5). This could have been avoided if they had
simply moved for an extension prior to the expiration of the deadline. This factor weighs in favor
of Safeco.
iii.

Trial Disruption

As with the previous factor, no trial date has been set and the Court could, in theory, extend
deadlines and reopen discovery as needed without needing to reschedule a trial, but doing so would
naturally delay the resolution of this action. By failing to seek leave to extend their disclosure
deadline prior to its running, Plaintiffs have significantly prolonged this litigation. Therefore, this
factor weighs in favor Safeco.
iv.

Importance of the Evidence

“On its own, this factor can cut both ways. ‘The more important the proof, the greater the
effect of preclusion, but also the greater the harm in tardy disclosure.’” Bisig, 940 F.3d at 220
(quoting EQT Prod., 2017 WL 2295906, at *5). As the Magistrate Judge noted, Juday’s opinions
are clearly important to Plaintiffs’ claims. (Order 14, DN 33). Therefore, this factor weighs in
their favor, although only slightly.
v.

Plaintiffs’ Explanation

In their original response to Safeco’s Motion to Strike, Plaintiffs stated: “The main
explanation is that the dispute regarding damage to the property other than the foundation is no
longer being resolved through the appraisal process as the discovery plan and Scheduling Order
contemplated.” (Pls.’ Resp. Def.’s Mot. Strike 8, DN 24). The Court agrees with the Magistrate
Judge’s conclusion that this explanation “is impossible to square with Plaintiffs’ multiple
assertions in emails to both the Court and [Defendant]’s counsel that they never agreed to the

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appraisal process.” (Order 14, DN 33). Plaintiffs, despite their internal communications with
Juday evidencing an intent to go through appraisal, repeatedly told Safeco that they wanted to
resolve the claims through litigation. (See Pls.’ Obj. Ex. 2, at 1-11, DN 44-2; Nov. Emails 4). If
Plaintiffs had some strategic reason for expressing a preference for litigation, they should have
also been ready to actually litigate their claims within the Court’s deadlines, or at least moved for
an extension of deadlines as their plans changed. While not charging Plaintiffs with “underhanded
gamesmanship,” in light of their apparent lack of candor regarding their position on appraisal, the
Court cannot deem their untimeliness an “honest, harmless mistake[].” Bisig, 940 F.3d at 219
(internal quotation marks omitted) (quoting Bentley, 2016 WL 5867496, at *10). Therefore, this
factor weighs in favor of Safeco.
vi.

Conclusion

Based on the foregoing, the Magistrate Judge was correct in finding that Plaintiffs’ late
disclosure was neither substantially justified nor harmless. Therefore, Plaintiffs’ objection to the
Magistrate Judge’s Order is overruled.
B.

Plaintiff’s Motion to Compel Appraisal (DN 46)

Plaintiffs also move the Court to compel the appraisal provision within the policy. (Pls.’
Mot. Appr. 1; see Notice Removal Ex. A (PageID # 52), DN 1-1). In relevant part, the policy
provides:
If you and we do not agree on the amount of loss, including the amount of actual
cash value or replacement cost, then, on the written demand of either, each shall
select a competent and disinterested appraiser and notify the other of the appraiser
selected within 20 days of such demand. The appraisers shall first select a
competent and disinterested umpire; and failing for 15 days to agree upon such
umpire, then, on request of you or the company, such umpire shall be selected by a
judge of a court of record in the state in which the property covered is located. The
appraisers shall then resolve the issues surrounding the loss, appraise the loss,
stating separately the actual cash value or replacement cost of each item, and,
failing to agree, shall submit their differences, only, to the umpire. An award in
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writing, so itemized, of any two of these three, when filed with the company shall
determine the amount of loss.
Each party will:
a.
pay its own appraiser; and
b.
bear the other expenses of the appraisal and umpire equally.
(Notice Removal Ex. A (PageID # 52)). Safeco opposes the motion arguing that: (1) Plaintiffs
have failed to identify an authority pursuant to which the Court may compel an appraisal; (2) they
have expressly waived their right to an appraisal; and (3) they have impliedly waived their right to
an appraisal. (Def.’s Resp. Pls.’ Mot. Compel Appraisal 1-2, DN 51 [hereinafter Def.’s Resp.
Appr.]).
1.

The Court’s Authority

Safeco argues that the Court lacks the authority to compel appraisal because Plaintiffs did
not state a claim to enforce the appraisal provision in the Complaint. (Def.’s Resp. Appr. 6-10).
Plaintiffs cite to three cases, two from this Court and one from the Eastern District, in which the
court compelled appraisal to support the notion that such relief is appropriate here. (Pls.’ Mot.
Appr. 6 (citing Motorists Mut. Ins. Co. v. Post, No. 04-487-JBC, 2005 WL 2674987, at *4 (E.D.
Ky. Oct. 20, 2005); Bachelor Land Holdings, LLC v. Chubb Custom Ins. Co., No. 3:11-CV-152,
2011 WL 5389197, at *6 (W.D. Ky. Nov. 4, 2011); Woods Apartments, LLC v. U.S. Fire Ins. Co.,
No. 11-41-C, 2012 WL 12996188, at *1 (W.D. Ky. May 30, 2012)). Safeco distinguishes these
cases by arguing that in each of them, the plaintiffs had specifically sought to compel appraisal in
their complaints, whereas here the Complaint does not explicitly seek to compel, nor even mention,

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appraisal.1 (Def.’s Resp. Appr. Ex. B, DN 51-2; Def.’s Resp. Appr. Ex. C, DN 51-3; Def.’s Resp.
Appr. Ex. D, DN 51-4).
Oddly, neither party mentioned Ball v. Liberty Mutual Group Inc., No. 5:22-179-DCR,
2022 WL 21304646 (E.D. Ky. Sept. 27, 2022).2 There, the court considered a defendant insurance
company’s motion to compel appraisal pursuant to an appraisal provision with almost identical
terms to the one at issue here. Id. at *1; (see Notice Removal Ex. A (PageID # 52)). Although the
court noted that the lack of any response from the plaintiff was a factor in granting the motion, the
court also reasoned that,
An insurance policy is a contract and is governed solely by its terms. Paragraph 6
of the Policy makes clear that, if the parties disagree regarding the amount of loss,
either may demand an appraisal. The plain language of this provision indicates that
once a party has invoked the right to appraisal, the other party is required to
participate.
Id. at *2 (internal citation omitted). The court also noted that “[a]s a general matter, public policy
favors alternate resolution procedures like the appraisal process.” Id. (alteration in original)
(quoting Post, 2005 WL 2674987, at *4). The amount determined in the appraisal was later used
as the basis for summary judgment. See Ball v. Liberty Mut. Grp. Inc., No. 5:22-179-DCR, 2023
WL 6961557, at *2 (E.D. Ky. Oct. 20, 2023).
While, like the other cases cited by the parties, Ball does not discuss limitation of the
Court’s authority, it presents the most factually similar circumstance: a party seeking to compel
appraisal based on a largely identical policy provision. See Ball, 2022 WL 21304646, at *1-2.
Like in Ball, the policy here contemplates that either party may require the other to participate in

1

While not expressly demanding an appraisal in the Complaint, Plaintiffs did demand “[a]ll other
relief considered by this Honorable Court to be reasonable and appropriate.” (Compl. 4).
2
Attorneys of record in Ball were identical to the counsel of record in the instant case. See Ball,
2023 WL 6961557.
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appraisal to determine the amount of loss. (Notice Removal Ex. A (PageID # 52)). Accordingly,
Safeco’s argument that this Court lacks the authority to compel an appraisal is not well-taken.
2.

Waiver

Safeco also argues that Plaintiffs waived, expressly and impliedly, their right to compel an
appraisal. (Def.’s Resp. 6-10). Under Kentucky law, a waiver is a “voluntary and intentional
surrender of a known right, or an election to forego an advantage . . . .” Temple v. Temple, 298
S.W.3d 466, 469 (Ky. App. 2009) (alteration in original) (quoting Vinson v. Sorrell, 136 S.W.3d
465, 469 (Ky. 2004)). “To decide whether a waiver has occurred, the court focuses on the actions
of the person who held the right; the court seldom considers the effects of those actions on the
opposing party.” Morgan v. Sundance, 596 U.S. 411, 417 (2022). “[Waiver] may be express, or
it may be implied from the conduct of a party.” Clift v. RDP Co., 200 F. Supp. 3d 660, 672 (W.D.
Ky. 2016) (citing Bates v. Grain Dealers Nat’l Mut. Fire Ins. Co., 283 S.W.2d 3, 5 (Ky. 1955)).
Throughout the parties’ communications, Plaintiffs expressed an intent to decline appraisal
and resolve the case through litigation. First, in emails discussing the parties’ Fed. R. Civ. P 26(f)
report, Plaintiffs’ counsel relayed that, “Given the exten[t] of the coverage issues I believe the
entire dispute should be handled in litigation.” (Nov. Emails 4). In the same email chain,
Plaintiffs’ counsel later softened this position, saying, “We are willing to reconsider our position
regarding appraisal if we can agree on a Memorandum of Appraisal including procedure and
questions to be appraised.” (Nov. Emails 1). Later, in their a joint report the parties stated that
“[t]he parties believe that other disputes, particularly disputes over the amount of covered loss to
certain property for which Safeco previously issued payments, might be resolved through a private
appraisal process as provided in the Policy.” (Joint Rule 26(f) Report 2).

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As explained above, on December 22, 2022, Plaintiffs’ counsel emailed a letter rejecting
appraisal one minute after Safeco sent an email with a proposed memorandum of appraisal. (See
Pls.’ Mot. Extension Ex. 4; Pls.’ Obj. Ex. 1, at 1). Plaintiffs’ counsel sent an additional letter on
January 3, 2023, reiterating his clients’ unwillingness to go through appraisal. (Def.’s Mot. Strike
Pls.’ Am. Expert Disclosures Ex. 4, DN 21-4 [hereinafter Pl.’s Jan. 3 Letter]). In that letter,
Plaintiffs’ counsel even asserted that Safeco had waived its right to appraisal by failing to promptly
produce a memorandum of appraisal. (Pl.’s Jan. 3 Letter).
Plaintiffs argue that their conduct was prompted by Safeco’s bad faith, consisting of its
conduct in serving “extensive written discovery specifically on topics the parties agreed to resolve
in appraisal . . . .” (Pls.’ Mot. Appr. 3). As explained above regarding Plaintiffs’ objections to the
Magistrate Judge’s order, the Court finds no evidence that Safeco acted in bad faith through its
conduct in this case. Regardless, while Plaintiffs trod close to waiving their right to demand an
appraisal, the Court finds that they did not commit such a waiver, either explicitly or impliedly.
The effect of Plaintiffs’ initial statement that they believed litigation was the appropriate forum for
all of their claims is undercut by their subsequent agreement to the Rule 26(f) report stating that
the parties believed some of their claims could be resolved in appraisal. (Joint Rule 26(f) Report
2). Plaintiffs’ subsequent letters both indicate frustration with the lack of progress the parties had
made towards submitting their claims to appraisal, especially the first letter, which was apparently
sent before Plaintiffs’ counsel was aware that Safeco had sent a proposed memorandum of
appraisal. (Pls.’ Obj. Ex. 1, at 1). Plaintiffs’ counsel’s communications with Juday reveal that
Plaintiffs were expecting Juday to participate in the appraisal process until February 1, 2023, when
Plaintiffs’ counsel informed Juday that Safeco had advised him that it no longer wished to
participate in the appraisal. (Pls.’ Obj. Ex. 2, at 1-11). Considering all of these communications

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together it appears that, despite some statements to the contrary, Plaintiffs contemplated at least
some of their claims might proceed through appraisal as the parties indicated in their joint Rule
26(f) report. (See Joint Rule 26(f) Report 2).
It is significant that the Magistrate Judge, who has dealt more intimately with the parties,
clearly believed that appraisal was still an option when he considered the motion to strike and
exclude. (Order 15, DN 33 (“The undersigned is aware that this is a harsh sanction, however, the
severity of the sanction is tempered by the fact that Plaintiffs still have the ability to present the
evidence in the context of the appraisal process provided in the contract of insurance.”)).
Accordingly, Plaintiffs’ valuation claims should proceed through appraisal as required by the
insurance policy. (Joint Rule 26(f) Report 2; Notice Removal Ex. A (PageID # 52)). Thus, this
motion is granted, and the parties are ordered to appoint appraisers and comply with the appraisal
process as described in the insurance policy.
IV.

CONCUSION

For the foregoing reasons, IT IS HEREBY ORDERED that Plaintiffs’ Motion to Compel
Appraisal (DN 46) is GRANTED, and Plaintiffs’ Objection to the Magistrate Judge’s Order (DN
44) is OVERRULED.

February 6, 2024

cc:

counsel of record

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