845 F.3d 997
10th Cir.2017Background
- Hayes Family Trust (insured) invoked the policy appraisal clause after dispute with State Farm over storm damage to commercial property; Hayes demanded appointment of an umpire under the policy.
- State Farm delayed, Hayes filed a petition to appoint an umpire; the district court appointed an umpire and the parties completed appraisal, producing a unanimous award of $347,254.
- Before the court acted on Hayes’s motion to confirm the award, State Farm voluntarily paid the balance and sent a letter reserving rights; Hayes accepted the payment without reservation.
- The district court initially confirmed the appraisal award and entered judgment for Hayes, prompting Hayes to move for prejudgment interest, fees, and costs under the Oklahoma Insurance Code.
- State Farm moved under Rules 59(e)/60(b) to vacate or amend, arguing (1) the appraisal award was not binding on it (it did not invoke appraisal) under Oklahoma law and (2) its voluntary payment + Hayes’s acceptance settled the amount of loss; the district court vacated its earlier confirmation and judgment.
- Hayes appealed; the Tenth Circuit affirmed, holding (a) appraisal awards under Oklahoma law bind only the party who invoked appraisal, (b) State Farm’s voluntary payment and Hayes’s acceptance settled the amount in controversy, and (c) because the judgment was vacated Hayes is not a "prevailing party" under Okla. Stat. tit. 36, § 3629(B).
Issues
| Issue | Plaintiff's Argument (Hayes) | Defendant's Argument (State Farm) | Held |
|---|---|---|---|
| Whether the district court’s order vacating judgment is appealable final | Vacatur was improper; confirmation had already fixed rights and order was final | Vacatur ended litigation; order is final for §1291 purposes | Order vacating judgment was a final decision for appellate jurisdiction, so appeal allowed |
| Whether State Farm’s payment converted the non-binding appraisal award into a confirmable, judgment-entitling determination | Payment equated to a confession of judgment / final determination; court should confirm award and enter judgment | Payment was voluntary and, with Hayes’s acceptance, constituted a settlement resolving amount of loss | Payment was voluntary and acceptance settled the dispute over amount; payment did not operate as confession of judgment; vacatur affirmed |
| Whether an appraisal award under Oklahoma law binds both parties | Award fixed amount of loss; confirmation appropriate once paid | Oklahoma law (and the policy) makes appraisal binding only on the party who invoked it; non-invoking party not bound | Oklahoma law binds only the invoking party to appraisal awards (citing Massey); appraisal was non-binding on State Farm |
| Whether Hayes is entitled to prejudgment interest, attorney’s fees, and costs under §3629(B) as the prevailing party | Judgment had been entered in Hayes’s favor before vacatur; thus Hayes is prevailing party | No final judgment exists (vacated); without a judgment Hayes cannot be prevailing party under §3629(B) | Prevailing-party relief requires a judgment; because judgment was vacated Hayes is not a prevailing party under §3629(B) |
Key Cases Cited
- Catlin v. United States, 324 U.S. 229 (finality for §1291 jurisdiction)
- McClendon v. City of Albuquerque, 630 F.3d 1288 (10th Cir. 2011) (final-decision analysis for appealability)
- Massey v. Farmers Ins. Grp., 837 P.2d 880 (Okla. 1992) (Oklahoma appraisal awards bind only the party invoking appraisal)
- Stubblefield v. Windsor Capital Grp., 74 F.3d 990 (10th Cir. 1996) (Rule 60(b) and finality principles)
- Yousuf v. Cohlmia, 741 F.3d 31 (10th Cir. 2014) (§3629(B) requires a judgment for prevailing-party fees)