Maplebrook Estates Homeowner's Association v. Hartford Fire Insurance Company

Background

A hailstorm on August 5, 2019 damaged eighty-nine of Maplebrook’s buildings. Maplebrook’s policy with Hartford covered direct physical loss or damage caused by covered causes, including windstorm or hail. The policy provided replacement-cost coverage, subject to limits and conditions, and required Hartford and Maplebrook to use an appraisal process if they disagreed about the amount of loss.

Hartford’s estimates assumed that some siding could be “harvested”—removed from buildings receiving full siding replacement and reused for spot repairs on buildings with less damage. Maplebrook instead sought full siding replacement. Maplebrook replaced the siding on its buildings and discarded the old siding before the appraisal hearing, although Hartford knew the siding was being replaced and wanted harvesting considered.

The appraisal panel issued an award in April 2021. The award included a “Siding and Electrical” subtotal and a separate “Siding Match and Electrical Match” subtotal. It also answered “No” to whether reasonable matching replacement siding of like kind and quality was available. The award listed a total of $7,917,925.19, while a footnote listed $1,921,071.11 for matching siding and electrical, which could produce a combined amount of $9,838,996.30.

Maplebrook sued Hartford for breach of contract and declaratory relief, alleging that Hartford had not paid the full replacement-cost amount. The parties later filed cross-motions for summary judgment. Hartford argued, among other things, that it had paid what the policy and appraisal award required, that Maplebrook violated the policy by discarding the siding, and that the award used 2019 rather than 2020 construction costs. Maplebrook argued that the panel awarded full siding replacement, that 2020 costs applied, and that Hartford owed additional replacement costs and interest.

Court’s Analysis

The court explained that appraisal panels determine the amount of an insurance loss but generally may not interpret the policy or decide whether the insurer must pay. Courts ordinarily defer to an appraisal panel’s factual valuation. But when an appraisal award is reasonably open to more than one interpretation, the court may send it back to the panel for clarification rather than affirming it without resolving the ambiguity.

The court concluded that both parties’ interpretations of this award were reasonable. Maplebrook read the panel’s “No” answer and the matching-siding figures as rejecting harvesting and including the cost of replacing siding throughout the community. Hartford offered several possible explanations, including that the panel’s answer referred to the lack of newly manufactured matching siding, that the matching-siding figures were informational, or that the panel was uncertain about harvesting. The award did not explain why it contained two different siding-related subtotals.

The court found that the asterisk and footnote referring to “Matching Siding and Electrical,” together with the table’s “Total Award,” created an irreconcilable ambiguity. It therefore declined to resolve the parties’ other disputes at that stage.

Disposition

The court REMANDED the case to the appraisal panel for clarification of three issues: why the panel found no reasonable matching replacement siding available; whether the award used harvesting or assumed replacement of every building with new siding; and whether the total award was $7,917,925.19 or $9,838,996.30.

The court ordered the parties to file the panel’s written response when received, RESERVED decision on the remaining issues in Hartford’s and Maplebrook’s summary-judgment motions, and STAYED the action pending the panel’s clarification. Judge Susan Richard Nelson did not decide the remaining disputes concerning additional payment, alleged policy violations, spoliation, construction-cost timing, or interest.