A federal court recently held that ongoing insurance coverage issues should not prevent an appraisal from going forward as per an appraisal clause in the insurance policy. In DC Plastic Products Corp. v. Westchester Surplus Lines Insurance Co. Case No. 17-13092 (D.N.J. May 19, 2021), the District Court of New Jersey directed the parties to proceed with the appraisal process as set forth in the relevant policy, despite the defendant-insurer’s argument that appraisal is improper under New Jersey law where unresolved coverage issues exist.
Plaintiff DC Plastics Products Corporation (“DC Plastics”) made an insurance claim to its insurance carrier Westchester Surplus Lines Insurance Co. (“Westchester”) after DC Plastics’ premises in Bayonne, New Jersey was damaged as a result of Superstorm Sandy in 2012. Since that time, the parties have disagreed over whether certain additional payments were required under the terms of the policy. The policy at issue contained an appraisal provision that allowed either party to make a written demand for an appraisal if the parties disagreed on the amount of loss. This provision also specified that if the separate appraisers selected by both sides cannot agree on an umpire, “either may request that selection be made by a judge of a court having jurisdiction.” DC Plastics filed a motion for the court to appoint an umpire.Read more ›