Coppins v. Allstate Indemnity Co.
2014 WI App 125
| Wis. Ct. App. | 2014Background
- A duplex owned by Alyce Armstrong was destroyed by fire in July 2011; her daughter Daryl Rose Coppins (personal representative) sued Allstate after dispute over the loss valuation.
- Policy provided dwelling coverage “up to $298,358” on an actual cash value (ACV) basis and included a 10% code-upgrade endorsement; policy emphasized ACV may include depreciation.
- Allstate initially adjusted ACV at ~$113,000 (Allstate adjuster Van Caster), then procured a market-value appraisal of $50,000 (Krafcheck) and informed Coppins it would pay $50,000; Coppins disputed the amount.
- The policy’s appraisal clause triggered: parties selected appraisers and an umpire; the umpire’s award set ACV at $74,198.42 (plus $5,000 mold remediation = $79,298.42), using a weighted average that relied heavily on market-value figures and did not meaningfully use the stated replacement-cost figure of ~$287,798.76.
- Trial court confirmed the appraisal award and granted Allstate summary judgment; the court of appeals reviewed de novo, limited review of the appraisal to its face for fraud, bad faith, material mistake, or lack of understanding/completion of the assigned task.
- Court of appeals concluded the appraisal award substituted market value for ACV (replacement cost minus depreciation), set the award aside, reversed the summary judgment, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper method to calculate "actual cash value" under the policy | ACV means replacement cost minus depreciation; Allstate should have paid repair/replacement minus depreciation (and consider the 10% code-upgrade) | The appraisal award is presumptively valid; appraiser used broad-evidence/market factors and the award shows no fraud or material mistake | Held for Coppins: ACV must be calculated consistent with policy and common definitions (replacement cost minus depreciation); the award was set aside as showing lack of understanding of the task |
| Validity of the appraisal award | Appraisal award is defective on its face because the umpire ignored replacement-cost-based ACV and relied on market value | Appraisal award should be confirmed; appraisal process is favored and award is presumptively valid absent fraud/bad faith/mistake | Held: Award set aside because it substituted market value for ACV and did not follow the contractually indicated method |
| Whether summary judgment was proper on breach/bad faith/promissory estoppel claims | Allstate’s insistence on market-value calculations after selling ACV coverage is a breach and supports bad faith/promissory estoppel; facts raise triable issues | Allstate argued it discharged duties by paying per appraisal award and no material mistake or bad faith appears on the award’s face | Held: Summary judgment improper — factual disputes exist about Allstate’s conduct (choice of appraisers, insistence on market value) that preclude summary judgment |
| Scope of permissible "broad evidence" in ACV determinations | Broad evidence cannot replace the core ACV method when the policy indicates ACV is replacement cost minus depreciation | Broad evidence/market data can be considered under certain facts; appraisal discretion should be respected | Held: Broad evidence may be used, but here policy and common definitions did not authorize disregarding replacement-cost-minus-depreciation; broad-evidence use here showed lack of understanding and was improper |
Key Cases Cited
- Farmers Auto Ins. Ass'n v. Union Pac. Ry. Co., 319 Wis. 2d 52 (2009) (appraisal process favored; appellate review of appraisal award limited to face of award for fraud/bad faith/material mistake/lack of understanding)
- Quinn v. New York Fire Ins. Co., 22 Wis. 2d 495 (1964) (appraisal award void if it fails to calculate actual cash value when policy requires that method)
- American Mut. Liab. Ins. Co. v. Fisher, 58 Wis. 2d 299 (1973) (judicial notice of dictionary definitions to determine common meaning)
- Doelger & Kirsten, Inc. v. Nat'l Union Fire Ins. Co., 42 Wis. 2d 518 (1969) (use of replacement cost minus depreciation for certain unique property types)
- Strauss Bros. Packing Co. v. American Ins. Co., 98 Wis. 2d 706 (1980) (broad-evidence rule applied where market evidence was relevant to actual cash value of livestock)
- Wisconsin Screw Co. v. Fireman's Fund Ins. Co., 297 F.2d 697 (7th Cir. 1962) (market-value evidence used to determine ACV for complex machinery losses)
- Appleton Chinese Food Serv., Inc. v. Murken Ins., Inc., 185 Wis. 2d 791 (1994) (reviewing court may consider definitions of ACV outside the policy relied upon by the parties)