COA Opinion: Appraisal process under property insurance policy does not constitute a “verdict” for purposes of case evaluation sanctions
The Court of Appeals published its per curiam decision in Acorn Investment Co. v. Michigan Basic Prop Ins. Ass’n, where it concluded that an appraisal of a property loss pursuant to an insurance policy does not constitute a verdict for purposes of the imposition of case evaluation sanctions. Specifically, in this case, the insurer had denied coverage for a fire loss and the insured had filed suit. The trial court awarded partial summary disposition to the insured, finding the loss to be covered under the policy. The parties then agreed to submit the amount of the loss to be determined by an appraisal panel as provided by the policy. That panel came back with a value that was higher than the case evaluation award that had been accepted by the insured and rejected by the insurer. The trial court granted a motion to enter judgment at the appraisal amount, but declined to award case evaluation sanctions to the insured, finding that the appraisal was not a “verdict” and thus did not trigger the award of sanctions under MCR 2.403(O). The Court of Appeals agreed and affirmed the trial court’s refusal to award sanctions. It found that appraisal effectively constitutes arbitration, and that case law has established that judgments entered pursuant to arbitration or settlement are not “verdicts” for the purposes of case evaluation sanctions.