Appellate Court Lacks Jurisdiction Over Order Compelling Appraisal

    The Eleventh Circuit recently held that the district court's order compelling appraisal and staying the proceedings pending appraisal was an interlocutory order that was not immediately appealable under 28 U.S.C. 1292 (a) (1). Positano Place at Naples Condominium Association, Inc. v. Empire Indem. Ins. Co., 2023 U.S. App. LEXIS 27961 (11th Cir. Oct. 20, 2023).

    Postiano Condominium Association suffered damage from Hurricane Irma. Pastiano notified its insurer, Empire, seven months later. Empire investigated the claim and inspected the property. Positano sent a written request for appraisal. Empire did not respond and Pastiano filed suit, alleging that the parties' dispute was not a coverage dispute but a dispute over the amount of the loss. Postiano moved to compel appraisal and to stay the proceedings pending completion of the appraisal. 

    The district court accepted and adopted the magistrate's report and recommendation to grant the motion. It noted that participation in the appraisal process would not remedy the damages caused by Hurrican Irma; it would simply be one step in the process, supplying an extra-judicial mechanism to calculate the amount of the loss. The appraisal would not dispose of any of the claims or defenses. 

    Empire appealed. The parties were asked to address the basis of appellate jurisdiction to review the order compelling appraisal as well as whether an order compelling appraisal was treated the same as an order compelling arbitration for purposes of appellate jurisdiction. 

    The Eleventh Circuit noted that for an order to be appealable, it must either be final or fall into a specific class of interlocutory orders that were made appealable by statute or jurisprudential exception. 

    The court concluded that the order compeling appraisal was not a final order appealable under section 1291. The district court explicitly contemplated further proceedings, and explained that the appraisal would not dispose of any of the claims in the case nor Empire's coverage defenses. Further, in Florida, appraisal existed for a limited purpose – the determination of the amount of the loss. Therefore, the court did not have appellate jurisdiction to review the order compelling appraisal under section 1291 because it was not a final order. 

    Nor did not order compelling appraisal fall within one of the classes of appealable, interlocutory orders under section 1292. Section 1292 gave courts of appeals jurisdiction over certain classes of interlocutory orders, including interlocutory orders granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions. 

    Empire argued the district court's order explicitly granted an injunction, but the court disagreed. Postiano did not move for an injunction, but simply moved to compel an appraisal. Further, in granting the motion, the district court did not make findings of fact and conclusions of law that normally supported an order granting injunctive relief. Instead, in compelling the parties to appraisal, the district court emphasized that the appraisal process was not remedial. The court noted that appraisal would not dispose of any claims or defenses. Thus, the district court did not intend to issue an injunction when it entered the order compelling appraisal.

    The court next considered whether the order compelling appraisal was appealable under the Federal Arbitration Act (FAA). Under 9 U.S.C. 16 (a) (3), an appeal could be taken from "a final decision with respect to an arbitration." Conversely, under section 16 (b) (1) and (3), an appeal could not be taken from an interlocutory order that granted a stay of any action under 9 U.S.C. 3, which provided for stays of proceedings where an issue in the suit was referable to arbitration. Nor could an appeal be taken from an order compelling arbitration under 9 U.S.C. 206. 

    The district court's order compelling appraisal and staying the case pending appraisal was not a final decision. Because section 16 (b) (3) specifically stated that "an appeal may not be taken from an interlocutory order . . . compelling arbitration" – and section 16 (b) (1) likewise made "an interlocutory order . . . granting a stay" pending referral of arbitrable issues to arbitration not immediately appealable – the court lacked appellate jurisdiction over the order compelling appraisal even if appraisal were to be considered arbitration for purposes of the FAA.