The Connecticut Supreme Court recently handed down an important decision reiterating the high bar to overturning arbitration awards while, at the same time, clarifying a portion of the applicable statute providing for vacating an arbitration award as well as a prior ruling concerning the timing of payment of heldback depreciation.

In Kellogg v. Middlesex Mutual Assurance Company, the plaintiff insured her historic property under the defendant’s restorationist policy. Unlike traditional homeowners policies, the restorationist policy had no policy limit; rather, if repairs were completed, it provided for the full replacement or restoration cost of the property without deduction for depreciation. The insured property was damaged when a large tree fell on the roof and chimney during a storm. When the parties could not agree as to the amount of the loss, the insured submitted the dispute to appraisal. Following seven site visits, the submission of voluminous materials, and hearings with multiple witnesses concerning the correct amount of the claim ($1.6 million v. $476,000), the umpire and the insurer’s appraisal awarded the insured nearly $580,000 on a replacement cost basis. The insured filed an application with the Connecticut Superior Court to vacate the arbitration award under Conn. Gen. Stat. § 52-418. Following an eight day trial that covered the entirety of the claim and appraisal process, the court vacated the award and ordered a new arbitration hearing.
Continue Reading Connecticut Supreme Court Reaffirms Court’s Limited Power To Review Appraisal Awards