January 28, 2022

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Appointment Of Umpires and What Qualifications Matter to a Court?

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I received a number of comments and private messages about last week’s post, Do Appraisers Legally Need to Be Licensed Adjusters in Florida. One commentator raised the issue about whether umpires have to be licensed as adjusters. That question seemed novel. I cannot find anything suggesting that an umpire has to be licensed. Indeed, the policy does not call for the umpire to be licensed. No regulation on point requires an umpire to be licensed.

If the appraisers cannot agree on an umpire, what do parties argue to the judge about the qualifications of the umpire to be appointed?

I wrote about this eight years ago in Umpire Selection–Can a Neutral Umpire Really Be Selected. I encourage readers interested in this topic to read the entirety of that post since I highlight an insurance company attorney’s view on the matter. But I also wrote:

Is any umpire truly neutral? I am certain that many umpires answer this question with an emphatic ‘yes.’

Yet, this question is asked frequently by attorneys and public adjusters when they ask, ‘what is so and so like as an umpire?’ or ‘who would you suggest as an umpire in this case?’ I usually ask about the case and, especially, the appraisers already selected before answering the question. Then, I do what I expect everybody else does but is afraid to admit, I determine who may be a favorable umpire, weed out those that will probably favor the insurance company, and finally note those who appear neutral. But my answer is always speculation.

Some umpires are notorious fifty-fifty referees. That is not neutral. That is cowardly.

Some umpires are very knowledgeable about a given area of construction or type of damage. But preconceived bias and opinions are sometimes wrong. It is hard to get a person who knows he is right to admit when he is wrong or that someone else may understand the issue a little better. It is hard to teach humility during appraisal debate.

No party to an appraisal wants a person who is biased and adverse to their side before the appraisal starts. Neutrality, honesty, and fairness are the first traits all good umpires must possess. Competence and diligence are a close second. A recent case involving an appointment of an umpire highlighted these criteria where a court noted:

Risen Sun and Cincinnati agree that their respective appraisers, David Phalen and Mike Brueggemann, are unable to agree on an umpire and request that the Court select an umpire from six proposed candidates. They disagree solely on which candidate should be selected as the umpire. Through the extensive briefing on the issue, the parties essentially have narrowed their proposed candidates as follows: Risen Sun proposes that the Court appoint former Justice Mike Streit as the umpire… and Cincinnati proposes that the Court appoint Bradley Stephens as the umpire….

…the Court finds that both Justice Streit and Mr. Stephens would make appropriate umpires with respect to this case. There is nothing in the record that suggests either Justice Streit or Mr. Stephens would be unable or unwilling to perform the responsibilities of umpire in a fair and impartial manner. The Court gives the edge to Mr. Stephens based on his professional experience as an adjuster, appraiser, and umpire dealing with complex property loss issues in the insurance industry. The only actual objection leveled against Mr. Stephens by Risen Sun is that he may be biased given that he earns his principal source of income from working and handling claims on behalf of insurance companies. The Court is not willing to stereotype Mr. Stephens based on that single factor, especially when Cincinnati has indicated that Mr. Stephens has been appointed and/or accepted as an umpire for both insureds and insurers….1

The policyholder’s losing brief2 noted and argued that umpires do not need to be independent experts:

First, Justice Streit is competent, and Cincinnati admits that Justice Streit would be impartial. Having umpired for nearly ten years and serving as a judge for twenty-seven years (including ten years as a Justice on the Iowa’s Supreme Court), Justice Streit is experienced in handling hail losses involving windows and related ancillary costs resulting from damaged windows, the precise issues in this appraisal…. Before providing Mr. Brueggemann his proposed umpire panel, Mr. Phalen vetted and confirmed each of his proposed umpires were experienced and knowledgeable in handling hail losses involving windows. It is disingenuous to suggest that Mr. Phalen ‘confirmed’ that Justice Streit was not competent to serve as an umpire, yet recommended him as an umpire anyway.

Further, it is unnecessary for the umpire to be an independent expert as suggested by Cincinnati. Both Cincinnati and Risen Son have designated their appraisers, both of whom are subject experts regarding assessing hail losses and appraisals. An umpire’s role in an appraisal, however, is not to prove or disprove any damage or calculate the amount of the damage.

As the Court understands this process, the umpire’s primary role is not to undertake a new, third appraisal, but to evaluate the appraisers’ completed appraisals, and their differences. This is more akin to adjudicating competing experts’ opinions than to preparing a third, independent opinion or appraisal. This role is aptly filled by an arbitrator with experience weighing parties’ competing submissions, even when the subject matter is complex or technical. . . . Accordingly, given his extensive experience and unquestioned competency to fill such a role in this case, the Court grants Plaintiff’s request to appoint the Honorable John P. Leopold (ret.) as umpire.3

Umpires do not have to be licensed. But, licenses, credentials, experiences and a solid reputation of being fair can go a long way to a person being appointed as an umpire.

Thought For The Day

I never questioned the integrity of an umpire. Their eyesight, yes.
—Leo Durocher
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1 Risen Son Christian Village v. Cincinnati Ins. Co., No. 1:20-cv-00007 (S.D. Iowa Aug. 3, 2021).
2 Risen Son Christian Village v. Cincinnati Ins. Co., No. 1:20-cv-00007, [Doc. 38 Reply in Support of Motion for Appointment of Umpire] (S.D. Iowa).
3 PB Prop. Holdings, LLC v. Auto-Owners Ins. Co., 16-cv-1748, 2018 WL 10879450,
*2 (D. Colo. Jan. 3, 2018) (slip copy).

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