Wednesday, December 25, 2013

Meyer v. State Farm Fire & Casualty Co. case brief

Meyer v. State Farm Fire & Cas. Co. case brief summary
582 A.2d 275 (Md. App. 1990)

CASE SYNOPSIS
Appellant policy holders sought review of a decision of the Circuit Court for Wicomico County (Maryland), which dismissed the policy holders' suit for damages against appellee insurance carrier for failure to state a claim upon which relief could be granted. The policy holders argued that the trial court's enforcement of an appraisal provision, after being invoked by the insurance carrier, violated their constitutional right to a trial by jury.

CASE FACTS
Policy holders had purchased a fire insurance policy from an insurance carrier. After a fire occurred at the policy holders' home, and the policy holders and the insurance carrier could not agree on the amount of loss, the insurance carrier invoked the policy's appraisal provision. The policy holders countered by filing a suit for damages against the insurance carrier. On a motion by the insurance carrier, the trial court dismissed the policy holders' suit for failure to state a claim upon which relief could be granted.

DISCUSSION
  • On appeal, the court affirmed. 
  • Specifically, the court held that although all insurance policies are contracts of adhesion, that fact alone does not make an appraisal provision unconscionable. 
  • Moreover, the court ruled that judicial enforcement of an appraisal provision that makes an appraisal, if invoked by the insurer, a condition precedent to a suit by the policy holders, is not an unconstitutional deprivation of the right to trial by jury. 
  • Accordingly, the court concluded that the appraisal provision in this case was not invalid, and that the procedure required by it must be used in good faith.
CONCLUSION
The court affirmed the trial court's dismissal of the policy holders' suit for damages against the insurance carrier. In particular, the court held that judicial enforcement of an otherwise valid appraisal provision in an insurance policy does not deprive the policy holders of their constitutional right to a trial by jury, and that there was no basis for determining that the appraisal provision in this case was invalid.

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