If you do not object to appraiser’s partiality timely, you waived the objection.

In this recent decision, the Eleventh Circuit Court of Appeals found the carrier waived its objection to the partiality of the insured’s appraiser when it did not object immediately upon the disclosure the appraiser was to receive payment on a contingency fee basis. 

The claim arose out of storm damage to the insured property. Ultimately, the claim went into appraisal, which lasted several months. The carrier initially objected to the public adjuster serving as the insured’s appraiser based on the adjuster receiving a contingency fee on the recovery and the insured agreed to replace him as the appraiser. During final negotiations, it was disclosed the second appraiser for the insured also had a “small percentage” contingency. According to the decision, the carrier did not object to the appraiser at that time, and an award was entered. After the award, the carrier sought to have the court vacate the award on the grounds the appraiser was not impartial. The trial court denied the motion.

The appellate court affirmed the trial court, finding the carrier waived its right to object to the appraiser and found that precedent followed the general rule, “a party must “timely object” to an arbitrator’s [or appraiser’s] partiality. See, Tecnicas Reunidas de Talara S.A.C. v. SSK Ingenieria y Construccion S.A.C., 40 F. 4th 1339, 1345 (11th Cir. 2022). When a party discovers an arbitrator’s [or appraiser’s] conflict, it must “contest” the partiality “at that time” or else “waive the right to object in the future.” Univ. Commons-Urbana, Ltd. v. Universal Constructors Inc., 304 F. 3d 1331, 1340 (11th Cir. 2002).”

The appellate court rejected the argument that the disclosure by the appraiser was too late in the process to first object to the appraiser. 

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