Plaintiff Statewide Commercial Cleaning, LLC (hereinafter Statewide)
performed certain clean up, restoration, and reconstruction work after
fire damaged a church building owned by First Assembly of God
(hereinafter First Assembly) in August 2011. Two years after the work
was done, Statewide filed suit against First Assembly for $1,855,412.11
in unpaid construction costs. First Assembly filed an answer and
counterclaim and also sued Mercer Insurance for indemnification.
Parties subsequently resolved the matter through mediation, where among
other agreements, the parties agreed to an appraisal process to
determine the value of loss suffered by First Assembly, which was then
to be awarded to Statewide.
The appraisal process required that
Statewide and Mercer appraise the amount of loss and if they cannot
agree on value, then submit the difference to an umpire. Statewide and
Mercer each retained their own appraiser and agreed to a third-party
umpire.
By June 7, 2017, Mercer appraiser had submitted his report to the umpire, but Statewide’s appraiser had not. Statewide’s appraiser promised on June 20, 2017 to submit the appraisal by June 30, 2017, but failed to meet that deadline. Umpire continued to press Statewide’s appraiser for the report, finally sending the following email on July 21, 2017:
“This panel awaits your loss value . . . . Deadlines . . . have come and gone without receipt of your position paper/brief or loss value. . . . In the event your loss value is not received by end business on July 28th, this panel reserves the right to take all necessary actions needed to arrive at a fair loss value. Please note, an award signed by any TWO of the three party panel is a binding award. I hope you elect to participate in this panel[‘]s effort to find a reasonable value.”
Statewide’s appraiser continued to fail to submit a report to the umpire despite repeated prompts throughout August 2017. “This led to an August 15, 2017 email to Arsenault[, Statewide’s appraiser] and Provencher[, Mercer’s appraiser], which stated: Due to [Arsenault’s] inability to provide his loss value on established dates and . . . subsequent silence, I have reached out to representatives of [Statewide] to advise them that their interests were not being represented during this appraisal. I [spoke] with [Statewide’s counsel] . . . [and he] stated that he spoke with [Arsenault] and asked that this panel provide additional time to allow submission of his loss value. As you are both aware, we have extended this courtesy before, however, in the interest of making sure both parties are represented, I have agreed to extend loss value and position submission to [the end of business on September 8, 2017]. Please be advised-this date will NOT be extended and an award will be provided shortly thereafter with or without a loss value from [Statewide’s] appraiser.”
hockingly, Statewide’s appraiser still did not submit any report to the umpire. In September, Umpire rendered his decision in the absence of Statewide’s appraiser’s report in the amount of $971,947.15. Statewide filed a motion with the trial court to vacate the umpire’s award.
Unsurprisingly, the trial court denied the motion to vacate and the subsequent motion for reconsideration, noting that Statewide’s appraiser failed to submit a report despite being given numerous opportunities to do so.
On appeal, the Appellate Division affirmed the rulings of the trial court. The Court explained that “Statewide should have diligently pursued its claim by overseeing or replacing its appraiser to ensure its interests were represented. Despite adequate notice and opportunity, it did not do so. As a result of that failure, Mercer’s appraisal was uncontested. Determining the value of the loss based on the uncontested appraisal was appropriate under the terms of the Agreement. Consequently, the trial court correctly denied Statewide’s motion to vacate the award.”
The case is Statewide Commercial Cleaning, LLC v. First Assembly of God v. Mercer Insurance Company of New Jersey, Inc., Docket No. A-3792-17T1.
About J. Elliott Stolz, Esq.
Jared Elliott
Stolz is an attorney in New Jersey, focusing on insurance law and
litigation. He is the managing partner of Stolz and Associates. Jared
Stolz received his undergraduate education at Drew University in
Madison, New Jersey and graduated with honors from Seton Hall University
School of Law. Jared E. Stolz has been the managing partner of Stolz
and Associates since 2004, specializing in providing individual and
customized attention to insurance carriers needs on substantial coverage
disputes. Mr. Stolz has nearly two decades of experience in the
insurance industry and strives to offer the clients a combination of
tried and true legal analysis along with tactic, brought to it by
today’s technology, with a focused eye on expenses. He has represented
prominent clients in numerous noteworthy cases with published opinions
and has published and given seminar on insurance law topics.
Contact
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Stolz & Associates, LLC
203 Main Street, Ste. 395
Flemington, NJ 08822
Tel. (908) 371-1350
Fax (908) 271-6500
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Jared E. Stolz, Attorney in New Jersey 