{ "id": 8528728, "name": "WAYNE J. McMILLAN, Plaintiff v. STATE FARM FIRE AND CASUALTY COMPANY and STATE FARM GENERAL INSURANCE COMPANY, Defendants", "name_abbreviation": "McMillan v. State Farm Fire & Casualty Co.", "decision_date": "1989-05-16", "docket_number": "No. 8816SC919", "first_page": "748", "last_page": "753", "citations": [ { "type": "official", "cite": "93 N.C. App. 748" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "349 S.E. 2d 599", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "opinion_index": 0 }, { "cite": "318 N.C. 417", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4732777, 4738513, 4738804, 4734109, 4737790 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc/318/0417-02", "/nc/318/0417-01", "/nc/318/0417-03", "/nc/318/0417-04", "/nc/318/0417-05" ] }, { "cite": "343 S.E. 2d 601", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "opinion_index": 0 }, { "cite": "81 N.C. App. 153", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8521969 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc-app/81/0153-01" ] }, { "cite": "269 S.E. 2d 547", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "opinion_index": 0 }, { "cite": "300 N.C. 381", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8562647 ], "year": 1980, "opinion_index": 0, "case_paths": [ "/nc/300/0381-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7\u00a7 1-567.6", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 58-176", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1982, "opinion_index": 0 }, { "cite": "229 S.E. 2d 297", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1976, "opinion_index": 0 }, { "cite": "291 N.C. 105", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8557369 ], "year": 1976, "opinion_index": 0, "case_paths": [ "/nc/291/0105-01" ] }, { "cite": "336 S.E. 2d 399", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1985, "opinion_index": 0 }, { "cite": "314 N.C. 664", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4689129, 4685964, 4687317, 4686872, 4687966 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc/314/0664-04", "/nc/314/0664-03", "/nc/314/0664-02", "/nc/314/0664-01", "/nc/314/0664-05" ] }, { "cite": "331 S.E. 2d 148", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "opinion_index": 0 }, { "cite": "75 N.C. App. 387", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525987 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc-app/75/0387-01" ] }, { "cite": "176 S.E. 271", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1934, "opinion_index": 0 }, { "cite": "207 N.C. 188", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8624409 ], "year": 1934, "opinion_index": 0, "case_paths": [ "/nc/207/0188-01" ] } ], "analysis": { "cardinality": 528, "char_count": 10308, "ocr_confidence": 0.767, "pagerank": { "raw": 2.616255949969356e-07, "percentile": 0.8208943841899663 }, "sha256": "15362ee09f8ea44ecf3cb049f0d084f0a331a3872b03695806db686cad85b3b8", "simhash": "1:0f6f1163431ef833", "word_count": 1654 }, "last_updated": "2023-07-14T17:06:43.799233+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Chief Judge HEDRICK and Judge EAGLES concur." ], "parties": [ "WAYNE J. McMILLAN, Plaintiff v. STATE FARM FIRE AND CASUALTY COMPANY and STATE FARM GENERAL INSURANCE COMPANY, Defendants" ], "opinions": [ { "text": "WELLS, Judge.\nPlaintiff contends that the appraisal provisions of the standard fire insurance policy do not operate to establish a final and binding determination of the amount of loss. Rather, he argues that the appraisal provisions are not binding upon the parties but are revocable at will, and that because any award calculated pursuant to them is not final and binding, there remains a genuine issue of fact as to the amount of loss. He contends that the trial court erred in granting summary judgment for defendants based upon the appraisal award.\nIn evaluating this argument we emphasize, however, that plaintiff\u2019s contract with defendants clearly provided that in the event they failed to agree upon the amount of loss, either party could \u201cdemand that the amount of the loss be set by appraisal.\u201d The agreement further provided that \u201c[i]f the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two of these three shall set the amount of the loss.\u201d (Emphasis added.) Defendants\u2019 forecast of evidence showed that the contractual provisions for appraisal were followed.\nIn Young v. New York Underwriters Insurance Co., 207 N.C. 188, 176 S.E. 271 (1934), the North Carolina Supreme Court addressed a similar issue arising out of a fire insurance contract that also provided for appraisal to establish the amount of loss. The Court stated that \u201c[t]he parties entered into a valid and definite written agreement for submission of the controversy to appraisers. . . . The appraisers and the umpire [complied with the contractual procedure and] signed and delivered an award. . . . Such award so made is presumed to be valid. . . . Consequently, such award must stand, unless there is evidence of fraud, mistake, duress, or other impeaching circumstance.\u201d\nWe hold that plaintiff was bound by the terms of his contract with defendants, which clearly established the procedure for determining the amount of loss when in dispute. The forecast of evidence indicates that this procedure was properly followed as detailed in the contract; the awards, therefore, were final and binding.\nThere being no evidence of fraud, mistake, duress or other impeaching circumstances in the appraisal process and award, the trial court properly granted summary judgment for defendants.\nPlaintiff also argues that the trial court erred in dismissing his claim for recovery of punitive damages based upon defendants\u2019 alleged bad faith. Relying on Dailey v. Integon General Insurance Corp., 75 N.C. App. 387, 331 S.E. 2d 148, disc. rev. denied, 314 N.C. 664, 336 S.E. 2d 399 (1985), plaintiff contends that defendants\u2019 tortious bad faith refusal to settle the claim entitled him to punitive damages. This Court made clear in Dailey that tortious conduct in connection with a breach of contract must \u201c \u2018partake of some element of aggravation before punitive damages will be allowed.\u2019 \u201d Id. (quoting Newton v. Standard Fire Insurance Co., 291 N.C. 105, 229 S.E. 2d 297 (1976)).\nIn support of this argument plaintiff asserts that defendants failed to conduct a reasonable investigation before demanding appraisal, and that their settlement offer was unreasonably low. Plaintiff also characterizes defendants\u2019 action in initiating the appraisal process when he had been without the use of his home for approximately two months as unreasonable, given their duty to relieve the financial distress of their insured. See Dailey, supra. These examples of purportedly unreasonable actions do not rise to the level of aggravated conduct, such as were found in Dailey, supra.\nIn his brief, plaintiff attempts to challenge the constitutionality of the statutory provision which requires the inclusion of the appraisal clause in all fire insurance contracts in North Carolina. See N.C. Gen. Stat. \u00a7 58-176 (1982). As plaintiff points out, the required appraisal clause makes no provision for hearing or the taking of evidence, and provides no rules for the role of the appraisers. While we agree that the required appraisal clause carried with it serious due process implications, plaintiff did not raise the constitutional issue or argument at trial, but instead attempted to rely on the provisions of the North Carolina Uniform Arbitration Act which require notice and hearing. See N.C. Gen. Stat. \u00a7\u00a7 1-567.6 and 1-567.7 (1983). Under these circumstances, plaintiff\u2019s constitutional arguments are not properly before us. See Commissioner of Insurance v. North Carolina Rate Bureau, 300 N.C. 381, 269 S.E. 2d 547 (1980) and cases cited therein; Ratcliff v. County of Buncombe, 81 N.C. App. 153, 343 S.E. 2d 601, appeal dismissed, 318 N.C. 417, 349 S.E. 2d 599 (1986).\nWe have considered plaintiffs remaining assignments of error, find them to be without merit, and overrule them.\nAffirmed.\nChief Judge HEDRICK and Judge EAGLES concur.", "type": "majority", "author": "WELLS, Judge." } ], "attorneys": [ "Murray, Regan and Regan, by Cabell J. Regan, for plaintiff-appellant.", "Anderson, Broadfoot, Johnson & Pittman, by John H. Anderson, II, for defendant-appellees." ], "corrections": "", "head_matter": "WAYNE J. McMILLAN, Plaintiff v. STATE FARM FIRE AND CASUALTY COMPANY and STATE FARM GENERAL INSURANCE COMPANY, Defendants\nNo. 8816SC919\n(Filed 16 May 1989)\n1. Insurance \u00a7 131.1\u2014 fire insurance \u2014 standard appraisal provisions \u2014 binding\nThe trial court properly granted summary judgment for defendants in an action arising from a fire insurance claim where plaintiff\u2019s contract with defendants clearly provided that in the event they failed to agree upon the amount of loss, either party could demand that the amount of the loss be set by appraisal; this procedure was properly followed as detailed in the contract; and there was no evidence of fraud, mistake, duress or other impeaching circumstances in the appraisal process and award. Plaintiff was bound by the terms of his contract and the appraisal provisions were not revocable at will.\n2. Damages \u00a7 11.1\u2014 refusal to settle fire insurance claim \u2014 not aggravated conduct \u2014 punitive damages properly dismissed\nThe trial court did not err in an action arising from a fire insurance claim by dismissing plaintiff\u2019s claim for recovery of punitive damages based upon defendant\u2019s alleged bad faith in refusing to settle the claim where defendant\u2019s purportedly unreasonable actions did not rise to the level of aggravated conduct.\n3. Insurance \u00a7 131.1\u2014 fire insurance contracts \u2014 mandatory appraisal clause \u2014 constitutionality\u2014not raised at trial\nPlaintiff\u2019s challenge to the constitutionality of the statutory provision which requires the inclusion of an appraisal clause in all fire insurance contracts in North Carolina was not raised at trial and was not properly before the Court of Appeals. N.C.G.S. \u00a7 58-176 (1982).\nAPPEAL by plaintiff from Ellis, Craig B., Judge. Judgment entered 20 April 1988 in ROBESON County Superior Court. Heard in the Court of Appeals 10 April 1989.\nPlaintiff\u2019s home was damaged by fire on 15 December 1985. Defendants were plaintiff\u2019s fire insurers, and one of their agents on 2 January 1986 offered to settle the damage to the residence for $12,354.97. Plaintiff responded by submitting an appraisal and building estimate indicating that the total amount of loss was at least $69,936.50.\nDefendants demanded an appraisal pursuant to the terms of the policy, relevant portions of which appear as follows:\n5. Appraisal. If you and we fail to agree on the amount of loss, either one can demand that the amount of the loss be set by appraisal. If either makes a written demand for appraisal, each shall select a competent, independent appraiser and notify the other of the appraiser\u2019s identity within 20 days of receipt of the written demand. The two appraisers shall then select a competent, impartial umpire. If the two appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the residence premises is located to select an umpire. The appraisers shall then set the amount of the loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon shall be the amount of the loss. If the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two of these three shall set the amount of the loss. Each appraiser shall be paid by the party selecting that appraiser. Other expenses of the appraisal and the compensation of the umpire shall be paid equally by you and us.\nDefendants appointed William Cutler and plaintiff appointed Lee Werner, who was subsequently replaced by Thomas Hatched, as appraisers. The Honorable E. Lynn Johnson appointed Greve Grinnell to act as umpire. Defendants\u2019 attorney wrote to ad parties concerned on 21 May 1986 that \u201cState Farm is guaranteeing the payment of Mr. Grinnell\u2019s fee in acting as an umpire and will deduct one-half of such from any payment to Wayne J. McMillan and Attorney Cabell Regan once the claim has been resolved.\u201d\nThe appraisers failed to agree on the amount of loss and submitted documentation of their evaluations by 30 June 1986 to umpire Grinned. Plaintiff\u2019s appraiser estimated the loss to the dwelling at $69,936.00 and to the personal property at $25,000.00. Defendants\u2019 appraiser, however, estimated the loss to the dwelling at $21,062.47 and to the personal property at $1,719.80. On 15 July 1986 the three met to review the opinions of both appraisers, after which the umpire and defendants\u2019 appraiser signed an agreement as to the amount of the fire loss damage. The amount of the loss involving dwelling damages was set at $27,252.69, and the actual cost to repair was set at $29,466.10. The amount of personal property loss was set at $5,649.30.\nDefendants issued checks to plaintiff on 31 July 1986 in the amounts of $27,252.69 and $5,649.30, which plaintiff returned on 5 June 1987. Plaintiff did not pay his portion of the umpire\u2019s fee, and defendants eventually paid the entire amount of $550.00. Plaintiff filed suit on the policy on 23 June 1987, and defendants filed a counterclaim seeking to recover one-half of the umpire\u2019s fee. The trial court denied plaintiff\u2019s motion to vacate the appraisal award and for summary judgment, granted defendants\u2019 motion for summary judgment, and entered judgment for defendants in the amount of $275.00.\nMurray, Regan and Regan, by Cabell J. Regan, for plaintiff-appellant.\nAnderson, Broadfoot, Johnson & Pittman, by John H. Anderson, II, for defendant-appellees." }, "file_name": "0748-01", "first_page_order": 778, "last_page_order": 783 }