In a decision filed July 14, 2017, the US District Court for the Central District of California invoked the Federal Arbitration Act (FAA) in refusing to vacate an insurance appraisal award determining the value of insured tools stolen from their owner. The decision, James Dickey, Inc. v. Alterra Insurance Company, is reported at 2017 U. S. Dist. LEXIS 109811.
There was a twist: The court used state law to find that federal law applied.
The parties, insurer and insured, had been unable to agree on the value of the stolen tools, so defendant, the insurer, successfully moved the federal court to compel appraisal under the terms of the insurance policy. The policy appraisal provision required each party to select an appraiser and called for the appraisers to agree on and appoint an impartial “umpire.” If the appraisers cannot agree on the dollar amount of the loss, that determination is made when the umpire and one of the two appraisers agree on an award in writing.
