Gurdip V. Seneca Insurance Company

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Upon the foregoing papers, it is ordered that the petition (application) by petitioner for an order, inter alia: directing respondent to appoint a competent, impartial and disinterested appraiser pursuant to Insurance Law §3404 and the subject insurance policy; disqualifying Dominick Casale and his firm as appraiser; and awarding costs and attorneys fees, is granted in part and denied in part, as discussed below. 

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The underlying dispute between the parties involves the petitioner’s insurance claim to the respondent insurance company for losses resulting from a fire. that occurred at petitioner’s property. on or about September 26, 2022. Following the fire, the petitioner sought the services of United Public Adjusters & Appraisers, Inc. to conduct an evaluation of the damage to the property, which provided a repair estimate in the amount of $921,952.81. Respondent sought the services of Dominick Casale of Muscianesi-Casale Associates, Inc. to conduct an evaluation of the damage to the property, which provided a repair estimate in the amount of $217,728.60. On November 23, 2022, the petitioner subsequently made a demand for appraisal, pursuant to the subject insurance policy, the relevant appraisal condition terms of which state that: Appraisal 1. If we and you disagree on the value of the property or the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser and notify the other of the appraiser selected within 20 days of such demand. 2. If we or you fail to proceed with the appraisal of the covered loss after a written demand is made by either party, then either party may apply to a court having jurisdiction for an appraisal to comply with the demand for the appraisal of the loss. In this event, each party will select a competent and impartial appraiser and notify the other of the appraiser selected within 20 days of such order. 3. The two appraisers will select an umpire. If they cannot agree within 15 days upon such umpire, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property, the extent of the loss or damage and the amount of the loss or damage. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. (Petitioner’s Exhibit A, Page 56). Petitioner named Paul Zendler of Zendler Construction as their chosen appraiser. On January 30, 2023, the respondent informed petitioner that respondent “consents to an appraisal and names Dominick Casale of Muscianesi-Casale Associates, Inc. as its choice for appraiser” (Petitioner’s Exhibit C, Page 2). Petitioner objected to the respondent’s

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chosen appraiser via email, dated February 1, 2023, with the respondent subsequently declining to choose an alternate appraiser (Petitioner’s Exhibits D, F). Petitioner now moves for an order, inter alia: to compel the respondent to appoint an impartial and disinterested appraiser, pursuant to Insurance Law § 3404 and the assented-to insurance policy; to disqualify Dominick Casale and his firm as an appraiser; and to award the petitioner costs and attorneys fees. Petitioner’s main contention is that the respondent has failed to proceed with the appraisal demanded by naming Mr. Casale and his firm as their chosen appraiser, where Mr. Casale and his firm had previously provided the repair estimate for the respondent. Respondent argues that: the petitioner is seeking improper judicial intervention at this stage in the insurance claim process by objecting to its chosen appraiser; they are not impeding the appraisal process; and, Mr. Casale and his firm are an impartial appraiser and should not be disqualified. As an initial matter, in addition to the policy assented to by both parties stated above, Insurance Law § 3408(c) similarly states that “[i]n the event of a covered loss, whenever an insured or insurer fails to proceed with an appraisal upon demand of the other, either party may apply to the court in the manner provided in subsection (a) of this section for an order directing the other to comply with such demand.” The Court finds that the petitioner’s application is proper, in that the determination of this Court, as to whether the respondent has proceeded with the appraisal process in accordance to the policy and Insurance Law, is in fact determined by the impartiality of the chosen appraiser. Petitioner objects to the impartiality of the respondent’s chosen appraiser due to the undisputed fact that Mr. Casale and his firm were appointed by the respondent to conduct the initial evaluation and estimate of cost for the damage to the subject property. Petitioner cites to two cases from the Supreme Court of New York - Nassau and Suffolk Counties. In those cases, the appraisers appointed by their respective insurance companies were found to not be a disinterested appraiser, within the meaning of the New York Insurance Law in place at the time, due to their previous work of performing initial inspections and providing estimates (see Cohen v Tri-State Consumer Ins. Co., Index No. 601039/2017 (Sup. Ct. Nassau Cty., January 30, 2020); 30-40 E. Main St. Bayshore Inc. v

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Republic Franklin Ins. Co., Index No. 28790/2002 (Sup. Ct. Suffolk Cty., March 12, 2007). The Court notes that the petitioner’s annexed exhibit does not include the decision and order, in 30-40 E. Main St. Bayshore Inc., that is cited to in the affirmation in support (see Agulnick Affr. ¶13; Petitioner’s Exhibit H). Respondent argues that Mr. Casale and his firm are impartial, providing Mr. Casale’s resume and a sworn affidavit stating as much. Respondent cites to several cases, including several that concern the goals of alternative dispute resolution. Respondent notes that those cases cited deal with arbitration disputes. Respondent argues that the arbitration and appraisal is a “distinction without a difference” (see Binsky Affr., Pg. 6). Indeed, the need for an impartial or neutral arbiter is crucial to the alternative dispute resolution process, so much so that a Court may vacate an arbitrator’s decision on the basis of an arbitrator’s partiality when appointed as being neutral (see CPLR 7511(b)(1)(ii)).) To meet the standard of vacatur on those grounds, a party must “present evidentiary proof of actual bias or the appearance of bias on the part of the arbitrator” (Wisner Professional Bldg., Inc. v Zitone Const. & Supply Co., Inc., 224 AD2d 538 [2d Dept 1996])(internal citations omitted). However, under the circumstances here, the Court agrees with the petitioner’s contention that Mr. Casale and his firm’s previous work of conducting the initial estimate creates an appearance of bias or partiality that would likely prevent them from impartially conducting an appraisal of the damage to the subject property. Further, this appointment, in effect, results in the respondent failing to proceed with the appraisal process and warranting judicial intervention pursuant to Insurance Law § 3408(c). Thus, this Court finds that Mr. Casale and his firm cannot be considered an impartial appraiser in this instance, not due to their prior work history with the respondent overall, nor due to their qualifications or professionalism. Here, Mr. Casale and his firm cannot be considered an impartial appraiser in this specific instance where they previously conducted the evaluation of the damage to the subject property that is the very reason for the petitioner engaging in the appraisal process in the first place. The very demand for an appraiser is meant to resolve a dispute over the estimates provided by each party. Allowing Mr. Casale and his firm to proceed as appraiser would render this stage of the process a mere formality, leading to a court having to directly appoint an umpire to settle

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this dispute pursuant to the insurance policy and Insurance Law §3404. By the Court disqualifying Mr. Casale and his firm, and in ordering the respondent to appoint an impartial appraiser, the Court hopes that there is some chance that this dispute may be resolved without further judicial intervention. Regarding the petitioner’s branch of the petition seeking an award of costs and attorneys’ fees, the Court, in its discretion, declines to impose such costs and sanctions against the respondent (see Strunk v New York State Bd. of Elections, 126 AD3d 779, 782 [2d Dept. 2015]). The Court also advises the parties, in particular the petitioner’s counsel, to exercise more professionalism in both the documents submitted to the Court and with correspondence to opposing counsel, so as to hopefully bring a quick and amicable resolution to this case for their clients. Accordingly, it is ORDERED that the application by the petitioner is granted in part and denied in part; in that: it is ORDERED that the branch of petitioner’s application for an order compelling the respondent to appoint a competent, impartial, and disinterested appraiser, pursuant to Insurance Law § 3404 and the subject insurance policy, is granted; and it is further ORDERED that the branch of petitioner’s application for an order disqualifying Dominick Casale and Muscianesi-Casale Associates, Inc., as appraisers, is granted; and it is further ORDERED that the branch of petitioner’s application awarding petitioner costs and attorneys’ fees is denied. Dated: September 13, 2023 TIMOTHY J. DUFFICY, J.S.C.