Appraisal Award for Damaged Roof Tiles Challenged

    The district court denied Travelers' motion for summary judgment and granted the insureds' motion in part regarding replacement of roof tiles damaged in a hail storm. Bertisen v. Travelers Home & Marine Ins. Co., 2023 U.S. Dist. LEXIS 159649 (D. Colo. Sept. 8,2023). 

    On May 8, 2017, the insureds' home was struck by a hailstorm that damaged their property. A Travelers inspector found damage to metal roof components, a deck, patio furniture and gutters. A partial payment of $6,381.04 was made. A further payment was made for personal property damaged by the storm. Travelers disputed that the hailstorm caused damage to all of the roof tiles. 

    Travelers' adjustor reinspected the property and observed additional damages caused by hail and another payment of $6,605.22 was issued. 

    The insureds demanded an appraisal regarding damaged roof tiles. Travelers agreed, but reserved for future resolution all coverage and causation defenses. Travelers' appraiser found approximately 191 cracked/fractured tiles. The appraiser noted that the manufacturer of the roof tiles not longer made such tiles. The insureds' appraiser found more damage and the two appraisers could not agree on the amount of loss. Linda McGown was appointed umpire and issued a total award with replacement cost value at $157,141.19 and actual cash value at $136,297.85. She noted that the replacement cost value was based on the fact that replacement tile could not be matched with the damaged tile. Travelers disputed the award because some damage was due to wear and tear. It made a total payment of $63,355.07. 

    The insureds filed suit. Ms. McGowan was deposed and testified that the appraisal award included the cost to replace roof tiles that were damaged apart from the hailstorm, including damage caused by wear and tear and other damage prior to the policy period. 

    The insureds and Travelers filed cross motions for summary judgment. Travelers did not seek to overturn the appraisal award. Travelers' motion seeking to dispose of the insureds' breach of contract claim was denied. Travelers could not challenge an award taking causation into account once the appraisal award was issued without moving to vacate, set aside, or modify the award. It was undisputed that Travelers had not paid to replace any roof tiles, including the 191 that its appraiser found were damaged by the hailstorm. 

    Further, Travelers could not challenge the appraisal panel's coverage determination on the cosmetic matching issue and the appraisal award was not binding. Travelers had not presented any motion to challenge the arbitration award. It was therefore confirmed by the court. 

    Turning to the insureds' motion, the court found Travelers had breached the policy by not payment for the replacement of 191 roof tiles. On the cosmetic matching issue, the court agreed whether the matching tile was covered under the policy was a coverage issue for the court to determine. Therefore, the motion for the remainder of the breach of contract claim was denied. 

    Finally, Travelers' motion to dismiss the insureds' bad faith claim was denied. There was no dispute that the hailstorm damaged at least some of the tiles and Travelers admitted it had not paid for any tiles.