Appraisal and First-Party Bad-faith Claim

Greenbrier Hotel Corporation, et al., v. Lexington Insurance Company, et al., Civ. Action No.: 5:14-cv-15201 (S.D. W. Va. June 11, 2018)

The district court affirmed an appraisal award in favor of Mound Cotton’s clients, finding that the insurers timely demanded appraisal and timely paid the appraisal award. The court first dismissed Counts I and II of the complaint, which alleged breach of contract and sought a declaration that appraisal was not required, and thereafter dismissed Count III, which alleged unfair claim practices.

After retaining new counsel, the insured moved for reconsideration, which the court denied as to the dismissal of Counts I and II. As to Count III, the court held that since the “bad faith” claim was dependent on the existence of either a breach of contract or a wrongful invocation of appraisal, and since there was no breach of contract in the first instance, the claim could not survive.

Lexington Insurance Company was represented by partners Wayne Glaubinger and James Dennis.


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