Stone Creek Condominium Owners Association, Inc. v. The Charter Oak Fire Insurance Company, 3:19-cv-00862

Background

Plaintiff Stone Creek Condominium Owners Association (Wisconsin HOA) had commercial property policies with Charter Oak effective Dec 14, 2015–Dec 14, 2017, which included an appraisal clause for disagreements "on the value of the Property, the amount of Net Income and operating expense or the amount of the loss."
A hail event on Sept. 19, 2016 led to a 2016 claim for limited damage; Charter’s estimate listed modest RCV/ACV and apparently addressed only some buildings and not roofs.
In 2017–2018, the Association hired a contractor and public adjuster who identified substantially greater hail damage (TAF estimate ~ $1.96M RCV/ACV) and the Association submitted a new claim dated June 16, 2017; Charter provided much smaller estimates and disputed date/causation/extent.
On July 31, 2019 the Association demanded appraisal; Charter’s Aug. 21, 2019 letter identified its appraiser, said appraisal only addresses amount of loss (not coverage/causation), requested specifics on disputed items, and reserved coverage defenses.
The Association sued (Sept. 16, 2019) seeking declaratory relief to compel appraisal, breach of contract, and bad faith. Charter moved to dismiss the declaratory claim; the court converted the motion to partial summary judgment and considered cross-motions limited to the declaratory/appraisal issue.
Court held as a matter of law that appraisal is limited to amount, not coverage, but found disputed factual issues (e.g., whether Charter actually relied on coverage disputes or waived them), so denied both parties’ motions and sent the declaratory/appraisal issues (and related contract/bad-faith claims, including timeliness under the two-year filing bar) to the jury.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Scope of appraisal — can appraisal determine coverage/causation?	Appraisal panel can decide causation and coverage-related items.	Appraisal is limited to amount of loss; coverage/cause are for litigation.	Court: appraisal limited to amount of loss, not coverage/causation.
Whether Charter legitimately raised coverage disputes (or merely stalled)	Charter’s request for clarification was a pretext/stall to avoid appraisal costs — no real coverage dispute.	Charter reasonably sought specifics and reserved coverage defenses (date/causation/matching) and declined to submit coverage issues to appraisal.	Court: question of fact exists whether Charter actually raised coverage defenses or waived them; summary judgment denied.
Whether declaratory relief to compel appraisal is appropriate on summary judgment	Entitled to declaratory judgment ordering appraisal because Charter refused without valid basis.	Declaratory relief not appropriate because coverage disputes preclude appraisal.	Court: denied both sides’ motions; declaratory relief must await trial.
Timeliness / two-year filing bar (2016 claim)	Association contends Charter waived/estopped application of the two-year bar via extensions and conduct.	Charter asserts the two-year suit limitation applies; timeliness is a defense.	Court: disputed mixed-fact-and-law issue remains unresolved and is for the jury/trial.

Key Cases Cited

St. Croix Trading Co./Direct Logistics, LLC. v. Regent Ins. Co., 370 Wis. 2d 248, 882 N.W.2d 487 (2016) (appraisal panels may determine amount of loss but not coverage questions)
Lynch v. American Family Mut. Ins. Co., 163 Wis. 2d 1003 (1991) (appraisal is an agreement to have experts determine value, not coverage)