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Gary Burger tried a case on April 13, 2015 for West End Diving against Lloyd’s of London Insurance Company in a property damage claim. We won every issue in the case. The court ruled that Lloyd’s adjuster Olivia Renteria vexatiously refused to pay under the insurance policy, that she failed to comply with a binding appraisal process, and that her partial payment to West End Diving did not constitute an accord and satisfaction.

West End Diving owns an old train depot in Bonne Terre, Missouri, which is on the national register of historical buildings, operates as a B&B and is the most photographed building in St. Francois County. The Depot was damaged in a fall 2010 wind storm. West End Diving made a claim against Lloyd’s that went nowhere. Renteria would not pay anything (despite contrary promises) so West End Diving filed an initial proof of claim for $88,000 in January 2012. Renteria rejected the proof of claim within 24 hours and refused to pay anything for another year. This forced the parties to enter into an appraisal process. The court found they:

[E]ach hired an appraiser. The appraisers worked together to determine the cost to repair the damages to The Depot caused by the wind storm. In February 2013, the appraisers submitted an appraisal award of $112,594.86 as the actual cash value of the covered repairs. Despite the appraisers’ determination, which followed the rules set out in Lloyd’s insurance policy on The Depot, Renteria ignored the award amount and instead sent West End Diving a check for $87,061.55. In addition, Renteria and Lloyd’s provided no written explanation for how the amount of $87,061.55 was determined and provided no written information showing the reason or reasons why they were not paying the appraisers’ award amount … . Lloyd’s failed to honor the appraisers’ award of $112,594.86….

Missouri law tries to protect people with insurance claims in R.S.Mo. § 375.420: if a Court finds that the insurer refused to pay a loss “without reasonable cause or excuse,” it may award “interest [and] twenty percent of the first fifteen hundred dollars of the loss, and ten percent of the amount of the loss in excess of fifteen hundred dollars and a reasonable attorney’s fee,” in addition to the amount of the loss.  This applies to all insurance but automobile. That the insurance company pays, paid or eventually pays all or part of the amount owed under the policy does not eliminate a claim under § 375.420.  Dhyne v. State Farm Casualty Co., 188 S.W.3d 454 (Mo.banc 2006).

The Court agreed that Lloyd’s underpaid $25,533.31 and imposed penalties and interest under the vexatious refusal statute against Lloyd’s for a total of $51,489.11. Lloyd’s must also pay attorneys’ fees and daily interest until the judgment is satisfied. With our attorney’s fees, we anticipate the judgement to be around $80,000.  It is hard to confront and fight big multinational insurance companies like Lloyd’s, but West End Diving did so and succeeded with Gary’s help. Insurance companies too often drag their feet and slowly pay claims hoping the insured will give up and take less. Unfortunately, this improper tactic often works.

Lloyd’s totally ignored their own appraisal process:  “A provision in an insurance policy for the amount of the loss to be ascertained by appraisers in case of disagreement between the parties is binding and enforceable.” Hawkinson Tread Tire Service v. Indiana Lumberman’s Mut. Ins. Co., 245 S.W.2d 24 (Mo. Banc 1951). When the appraisal resulted in a higher figure, Ms. Renteria paid the original lower estimate submitted (two years late). Lloyd’s refused to pay the agreed-upon binding appraisal award and forced litigation. Their heavy handed and unfair conduct is exactly why we have the vexatious refusal statute and regulations governing claims adjustment.

Renteria and Lloyd’s also argued their March 2013 payment completely resolved the claim.  At common law, an “accord and satisfaction” is a contract for the settlement of a disputed claim for an amount less than that claimed. But no accord and satisfaction occurred here because neither the March 2013 check nor any accompanying or prior correspondence indicated the check was being tendered in full satisfaction of the claim. It didn’t say anything like that.  And, at Gary’s instruction, West End Diving sent three letters to Renteria saying this was only a partial payment – let us know if you disagree and we will not cash the check.  In sum – you can’t trick someone into accord and satisfaction like Renteria and Lloyd’s tried to do.

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