Opinion
FSTCV136019847S
02-05-2016
Sally Kellogg v. Middlesex Mutual Assurance Company
UNPUBLISHED OPINION
MEMORANDUM OF DECISION ON PLAINTIFF'S CORRECTED AND AMENDED APPLICATION TO VACATE INSURANCE APPRAISAL (ARBITRATION) AWARD DATED SEPTEMBER 18, 2013 (#102.00)
Hon. Kevin Tierney, Judge Trial Referee.
At issue for the first time in this country the terms, conditions and procedures of the defendant's Restorationist insurance policy have been subjected to litigation This property insurance policy was issued on the plaintiff's 1846 historical Greek revival single-family residence located in a state and federally designated historic district.
On March 13, 2010 this historic property suffered a casualty loss as a result of a four and one-half ton tree collapsing onto the roof and chimney during a wind and rain storm. This caused extensive damage to the interior and exterior of the building as well as its structural foundation. The plaintiff made a claim on her Restorationist insurance policy No. 0006060014-9 issued by the defendant, Middlesex Mutual Assurance Company, who insured the property at 4 Lewis Street, Norwalk, Connecticut. The policy was in full force and effect on March 13, 2010. Ex. 2. There are variances in the policy numbers in the last digit of the above policy number Exhibit 2 has the last digit as " 7"; Exhibit 1 has the last digit as " 8"; Exhibit 3 has the last digit as " 8." The Application to Vacate has the last digit as " 9." The Corrected and Amended Application to Vacate Insurance Appraisal (Arbitration) Award has the last digit as " 9" in paragraph 5 to which the defendant plead " Admitted" in September 18, 2014 Response (#113.00) The different last digits were not testified to nor was it the subject of any brief or claim. The court will treat the policy in evidence as the full and complete insurance policy. Ex. 1, Ex. 2. The plaintiff made a timely claim under the policy. It was assigned claim number 06B24496. Negotiations to adjust under the policy were unsuccessful. In January 2012 an appraisal process was commenced pursuant to the policy terms.
The Restorationist insurance policy contained two unusual terms; the first was no monetary policy limit, and the second the policy paid for restoration cost without deduction for depreciation. Ex. 23.
The plaintiff appointed one appraiser. The defendant appointed a second appraiser. The third appraiser called an Umpire was thereafter appointed in accordance with the policy's appraisal process. The award was issued in two separate documents, both two to one in favor of the following award: $578,587.64 for " replacement or restoration cost, " $460,170.16 for the actual cash value loss to the building and $79,731.68 for the actual cash value loss to the personal property. Ex. 4, Ex. 5.
The plaintiff filed an application with the Superior Court on September 18, 2013 seeking to vacate the above insurance appraisal (arbitration) award. The operative Application is dated September 18, 2013 but was filed on October 23, 2008 and is titled " Corrected and Amended Application to Vacate Insurance Appraisal (Arbitration) Award." (#102.00.) The issues were joined by the defendant's September 18, 2014 Response. (#113.00.) In this Response the defendant filed a First Defense that stated: " The Petitioner's challenge of the award issued pursuant to the agreement dated January 11, 2012 is untimely." The pleadings were closed. The matter was claimed for a court trial.
The first day of the trial was September 22, 2014 and the trial concluded on July 24, 2015 after eight days of trial. Hundreds of pages of documents including photographs, bills and memorandum were furnished in support of the parties' respective positions in the 42 Exhibits offered before this court. (#118.00.) The defendant orally moved to dismiss the Application to Vacate pursuant to the First Defense during trial. The court has issued a separate Memorandum of Decision dated February 5, 2016 herewith addressed to the oral Motion to Dismiss.
The parties agreed that there was no need for the defendant to file an application to confirm the insurance appraisal (arbitration) award. The parties agreed that the decision on the instant Corrected and Amended Application to Vacate Insurance Appraisal (Arbitration) Award (#102.00) would suffice. The parties agreed that the appraisal provision in the insurance policy is to be judged in accordance with Connecticut arbitration case law and statutes.
" Judicial review of arbitral decisions is narrowly confined . . . When the parties agree to arbitration and establish the authority of the arbitrator through the terms of their submission, the extent of our judicial review of the award is delineated by the scope of the parties' agreement . . . When the scope of submission is unrestricted, the resulting award is not subject to de novo review even for errors of law so long as the award conforms to the submission . . . Because we favor arbitration as a means of settling private disputes, we undertake judicial review of arbitration awards in a manner designed to minimize interference with an efficient and economical system of alternative dispute resolution." Bridgeport Board of Education v. NAGE, Local RI-200, 160 Conn.App. 482, 489-90, 125 A.3d 658 (2015); AFSCME, Council 4, Local 1565 v. Department of Correction, 298 Conn. 824, 834, 6 A.3d 1142 (2010). Despite that definitive language, the current case law indicates a willingness to vacate arbitration decisions. " Although we have traditionally afforded considerable deference to the decisions of arbitrators, we have also conducted a more searching review of arbitral awards in certain circumstances." Bridgeport Board of Education v. NAGE, Local RI-200, supra, 160 Conn.App. at 490. Over the years that willingness has expanded. " The judicial recognition of these grounds for vacatur evinces a willingness, in limited circumstances, to employ a heightened standard of judicial review of arbitral conclusions, despite the traditional high level of deference afforded to arbitrators' decisions when made in accordance with their authority pursuant to an unrestricted submission." (Internal quotation marks omitted.) Bridgeport Board of Education v. NAGE, Local RI-200, supra, 160 Conn.App. at 490; AFSCME, Council 4, Local 1565 v. Department of Correction, supra, 298 Conn. at 835.
There are three recognized grounds for vacating an arbitration award; (1) the award rules on the constitutionality of a statute . . . (2) the award violates clear public policy . . . or (3) the award contravenes one or more of the statutory proscriptions of Gen. Stat. § 52-418(a). Garrity v. McCaskey, 223 Conn, 1, 6, 612 A.2d 742 (1992). Gen. Stat. § 52-418(a) outlines four defects that support an order vacating an arbitration award.
(1) If the award has been procured by corruption, fraud or undue means; (2) if there has been evident partiality or corruption on the part of any arbitrator; (3) if the arbitrators have been guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown or in refusing to hear evidence pertinent and material to the controversy or of any other action by which the rights of any party have been prejudiced; or (4) if the arbitrators have exceeded their powers or so imperfectly executed them that a mutual final and definite award upon the subject matter submitted was not made.
Gen. Stat § 52-418(a).
The plaintiff is claiming vacatur of the award on the basis of two of the above statutory provisions: 'any other action by which the rights of any party have been prejudiced" as per Gen. Stat. § 52-418(a)(3) and " the arbitrators have exceeded their powers or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made" as per Gen. Stat. § 52-418(a)(4). (#119.00, page 15.) The plaintiff claims: " It is clear that Middlesex did not honor its insurance contract or its commitment to Kellogg, as its insured, to restore this historic dwelling. (Ex. 1, 2, 22 and 23.)" (#119.00, page 4.) " The Motion to Vacate should be granted under C.G.S. § 52-418(a)(3) and (4) in that: a. The failure of the Arbitrators to consider the historic nature of her house and award significant elements of damage has been to her prejudice; and b. By not considering entire damaged rooms or the personal property contents, and other elements of damage as set forth in the evidence, the Award was incomplete and was imperfectly executed so that there was not a mutual, final and definite award." (#119.00, page 15.); and, " An incomplete award, on its face, which subtracts depreciation and does not cover code requirements, is inadequate and should be overturned for this reason alone." (#119.00, page 22.)
This last section of Gen. Stat. § 52-418(a)(4) is commonly referred to as " manifest disregard of the law." " We conclude, therefore, that an award that manifests an egregious or patently irrational application of the law is an award that should be set aside pursuant to § 52-418(a)(4) because the arbitrator has " exceeded [his] powers or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made." " We emphasize, however, that the 'manifest disregard of the law' ground for vacating an arbitration award is narrow and should be reserved for circumstances of an arbitrator's extraordinary lack of fidelity to established legal principles" Garrity v. McCaskey, supra, 223 Conn. at 10. In 1992 our Supreme Court adopted a federal test in order to determine " manifest disregard of the law." Garrity v. McCaskey, supra, 223 Conn. at 9.
" The test consists of the following three elements, all of which must be satisfied in order for a court to vacate an arbitration award on the ground that the arbitration panel manifestly disregarded the law: (1) the error was obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator; (2) the arbitration panel appreciated the existence of a clearly governing legal principle but decided to ignore it; and (3) the governing law alleged to have been ignored by the arbitration panel is well defined, explicit and clearly applicable." Economos v. Liljedahl Brothers, Inc., 279 Conn. 300, 307, 901 A.2d 1198 (2006). This 1992 test has been applied in a number of cases. Saturn Construction Co. v. Premier Roofing Co., 238 Conn. 293, 305, 680 A.2d 1274 (1996). Although Garrity outlined the three elements of a manifest disregard of the law in 1992, it noted that the exception is narrow. Garrity v. McCaskey, supra, 223 Conn. at 10.
Despite that 1992 emphasis, three cases have been reviewed by our Appellate and Supreme Court in calendar year 2015 and have applied the manifest disregard of the law elements. Nxegen, LLC v. Carbone, 155 Conn.App. 264, 271, 109 A.3d 534 (2015); SBD Kitchens, LLC v. Jefferson, 157 Conn.App. 731, 742-43, 118 A.3d 550 (2015); AFSCME, Council 4, Local 2663 v. Department of Children and Families, 317 Conn. 238, 262, 117 A.3d 470 (Rogers, C.J., dissenting) (2015). " Although I recognize that the foregoing standard is a strict one, I believe that the unusually confused arbitration award in this case serves to satisfy it." AFSCME, Council 4, Local 2663 v. Department of Children and Families, supra, 317 Conn. at 265. " The arbitrator's appreciation and disregard of this fundamental requirement is evident from her strained and unconvincing attempt to demonstrate that it had been satisfied, despite the complete lack of evidence that a fall, caused by Listro's lapse in judgment, was a substantial factor in M's death, and the existence of only evidence to the contrary, which the arbitrator herself explicitly had credited." Id., 269. " The principle of vacating an award because of a manifest disregard of the law is an important safeguard of the integrity of alternative dispute resolution mechanisms. Judicial approval of arbitration decisions that so egregiously depart from established law that they border on the irrational would undermine society's confidence in the legitimacy of the arbitration process. Garrity v. McCaskey, supra, 223 Conn. at 10." Id., 270.
The defendant issued this Restorationist insurance policy for those limited properties that are of a historical nature. The purpose of the policy is to offer unlimited monetary coverage for damage to the dwellings and to be able to restore the historic nature of the dwelling to its former condition without using current modern construction techniques, supplies and materials. Because of the difficulty in replicating historical portions of residences hundreds of years old and the fact that their age would have exhausted any depreciation schedule, the Restorationist policy specifically contained an unlimited dollar amount of coverage.
In this case the court finds that this is a historical house. It has been placed on the National Registry of Historic Homes. It is part of the historic Green district located in central Norwalk, Connecticut. The house itself was constructed in 1846. A visual inspection of the house and view of the photographs clearly indicates the historic nature of both its interior and exterior. Ex. 6, Ex. 18.
The defendant sent Carroll O'Neill, an antique home specialist, to the home for an inspection before the insurance policy was issued. She followed up with an August 28, 2002 letter accompanied by a pamphlet and a brochure on the Restorationist's insurance policy. Ex 6, Ex 22, Ex. 23. In that letter the many detailed unique historical features of the home at 4 Lewis Street were noted. The August 28, 2002 letter explained the " unlimited" coverage. " For this reason, you may have noticed that your policy reads 'unlimited' for the dwelling coverage. This means that, if necessary, we will exceed the estimated restoration figure to bring your home back to its pre-loss condition replicating the materials and craftsmanship in your home." Along with the letter and pamphlet, the materials submitted at the time of the issuance of the policy to the plaintiff by the defendant set forth its Restorationist's claim philosophy. " We understand that antique home claims are different." " The plan will act as template for the restoration of your home back to its pre-loss condition." " Our goal is to make it like old again." Ex. 22, first page. Finally, to confirm its historical status, the Restorationist insurance policy was listed on the Middlesex Mutual Assurance Company website with a link to the Connecticut Trust for Historic Preservations, an " organization dedicated to protecting and preserving the state's irreplaceable historic resources." Ex. 40.
The matter was submitted to the appraisal process on January 11, 2012 in a Memorandum of Appraisal. Ex. 3. The appraisers conducted a series of investigations and meetings. The plaintiff's submitted Proof of Loss is over 300 pages with photographs of before and after, lists of damages in detail, and contractor's estimates. Ex. 6. They had the Proof of Loss for their appraisal use. That resulted in the issuance of an Award in two sections. Both sections of the Award were issued pursuant to the one Restorationist insurance policy #0006060014-9. Both sections of the Award stated that it was issued pursuant to the appraiser's appointment by the Memorandum of Appraisal dated January 11, 2012. Ex. 4, Ex. 5.
The building Award signed by the defendant's appraiser and the Umpire dated July 19, 2012, was marked as Exhibit 4 at trial and it states:
We, the undersigned, pursuant to our appointment as set forth in the Memorandum of Appraisal dated 1/11/2012, DO HEREBY CERTIFY that we have truly and conscientiously performed the duties assigned us, agreeably to the foregoing stipulations, and have appraised and determined and do hereby award the amount of loss as follows:
A. The replacement or restoration cost of that part of the building damaged by the windstorm and tree damage on March 13, 2010 for like construction and use on the same premises: $578,587.64;
B. The actual cash value loss to the building: $460,170.16;
C. The shortest time required to repair or replace the damage: 9 months.
Note: " The shortest time to repair" is the actual time to do physical repairs--It does not include time to estimate and adjust the loss The replacement cost amounts do not include any allowances for code requirements.
The appraiser appointed by the plaintiff found the building damage claim to be $1,656,275.32. Ex. 7, Column TOTAL, page 7 of 7, line 649.
The personal property Award signed by the defendant's appraiser and the Umpire dated August 23, 2013, was marked as Exhibit 5 at trial and it states:
We, the undersigned, Pursuant to our appointment as set forth in the Memorandum of Appraisal dated January 11, 2012, DO HEREBY CERTIFY that we have truly and conscientiously performed the duties assigned us, agreeably to the foregoing stipulations, and have appraised and determined and do hereby award the amount of loss as follows:
A. The replacement or restoration cost of that portion of the personal property damaged by windstorm and tree damage on March 13, 2010: $79,731.68;
B. The actual cash value loss to the personal property: $79,731.68.
This case involves the terms and conditions of the Restorationist insurance policy issued by the defendant. No reported case discussing this Restorationist insurance policy from outside Connecticut has been cited by the parties or revealed by this court's research. Only one claim on a Restorationist insurance policy has produced litigation. Middlesex Mutual Assurance Company v. Komondy, 120 Conn.App. 117, 119, 991 A.2d 587 (2010). The arbitration submission in that case was limited to the " appropriate numeric values and the time in which the restoration was to be completed." Id., 128.
The terms of standard fire and casualty loss insurance policies are established in Connecticut by statute. Gen. Stat. § 38a-307. " Section 38a-307 does not apply to 'restorationist' policies such as the one at issue in the present case because it expressly governs only coverage for actual cash value, not coverage for replacement cost. The distinction is made more clear by § 38a-313." Id., 126.
The Restorationist insurance policy issued to the plaintiff provided no limit for damage to the building and a $619,500 dollar limitation for contents. The policy and its Declaration Page was offered in evidence. The Declaration Page states in the box " SECTION 1A. DWELLING" where a dollar amount of the building coverage dollar limitation would appear: " UNLIMITED." Ex. 2. The policy did not permit any deduction for depreciation. " We will pay the cost to repair, restore or replace, without deduction for depreciation, but not more than the least of the following amounts: a. The replacement or restoration cost of that part of the building damaged for like construction and use on the same premises; or b. The necessary amount actually spent to repair, restore or replace the damaged building." Ex. 1, page 13 of 25 and page 14 of 25. This section of the Restorationist insurance policy is listed under the section described as " Guaranteed Restoration Costs on Coverage A Dwellings." Ex. 1, page 13 of 25. Despite the prohibition from using depreciation, the spread sheet breakdown in the Award column lists a percentage for depreciation for many of the majority arbitrators' findings. Ex. 7. Under this section, the Restorationist insurance policy must be construed in a manner to require the award of a specific monetary amount to repair regardless of depreciation.
The Restorationist insurance policy further provides: " We will pay no more than the actual cash value of the damage until actual repair, restoration or replacement is complete. Once actual repair, restoration or replacement is complete, we will settle the loss according to the provisions of a.1 above." Ex. 1, page 14 of 25. This clause was rejected in Northrop v. Allstate Insurance Co., 247 Conn. 242, 251, 720 A.2d 879 (1998). Northrop found that the court's interpretation of this policy term permitted the homeowner to obtain an estimate for repairs which estimate would satisfy the purpose of this provision for the homeowner to " spend." Id., 249-50. The Superior Court held that the insurance company was not entitled to withhold depreciation. In this case the plaintiff, Sally Kellogg, had obtained cost estimates to repair the building in the amount of $1,695,746 on October 21, 2011. Ex. 30.
The withholding of depreciation in an old building was reversed in 1998 because to do so would defeat the coverage purpose of the policy. " Indeed, if the insured first were required to pay out the money for the repair or replacement, rather than merely to incur a valid debt for the completed repair, in a case in which the damaged building was quite old and the loss extensive, the withheld depreciation could be so great as to make the replacement cost coverage largely illusory. We will not interpret insurance policy language to yield such a result." Northrop v. Allstate Insurance Company, supra, 247 Conn. at 251. " Where the terms of the policy are of doubtful meaning, the construction most favorable to the insured will be adopted." Beach v. Middlesex Mutual Assurance Company, 205 Conn. 246, 249, 532 A.2d 1297 (1987).
The court has reviewed the arbitration award in detail and has reviewed the hundreds of pages of material furnished to the court in support of the parties' respective positions. The court has examined the terms and conditions of the Restorationist insurance policy with its unlimited coverage, elimination of depreciation and the restoration of historic property to its former ancient condition.
The tree was immediately adjacent to the 3, 423-square-foot house. It was extremely large and overhung a large portion of the roof. The swaying tree damaged the structure of the house. The tree then fell. The broken section of the tree fell across the entire roof. The roots were exposed, which damaged the house foundation. The weight of the tree caused damage to the truss and supporting beams throughout the house. The house had to be plumb bobbed to straighten the house structure. The tree opened holes in the roof permitting water during the storm to inundate the house including directly above the kitchen and shed roof. Photographs of the tree post March 13, 2010 were before this court. Ex. 6. There was extensive water damage and asbestos release damage throughout the house. A combination of water, dirt, dust, grime, and asbestos caused damage throughout all of the rooms of the house including those that were not directly damaged by the concussion of the tree. The first appraiser hired by the defendant poked holes in the walls and ceilings further releasing asbestos contamination in the building's interior. Despite the fact that the policy permitted no deduction for depreciation, such a deduction was made. Ex. 7. Virtually no award was made for the contents including personal property, pictures, cloth furnishings, clothing, bric-a-brac and the like. Despite the fact that the house was historic and had to be repaired to meet its historic standards replacing what was old with old, the house still had to be upgraded to meet certain electrical and other utility code requirements. No award was made for code requirements. The submitted Proof of Loss was over 300 pages and was offered into evidence as a loose leaf binder. Ex. 6, Ex. 32, Ex. 33. Included within the Proof of Loss was an environmental expert's report, other reports, damage lists, and photographs The Umpire prepared spread sheet covered 560 separate items. Ex. 7.
The evidence submitted to this court has established that the information, documentation and photographs that were before the two majority arbitrators as well as the results of their personal inspection of the building, that the following claims made by the plaintiff were obviously disregarded by the majority arbitrators in issuing the Award. In this regard the plaintiff claims: " It is not simply a question of the umpire looking at two different estimates of value, and making his own independent determination of the value of a particular items. Rather, it is the utter disregard for the damaged items in the initial instance. In this manner, the Award is incomplete and inadequate and does not meet the standards under C.G.S. § 52-418." (#121.00, pages 9-10.)
The plaintiff's cost estimated was $1,695,746 prepared by a contractor who specializes in historic restorations for building damage, yet the arbitrators only awarded the replacement or restoration cost of $578,587.64, Ex. 4, Ex. 7, which is only 34% of the plaintiff's claim. Ex. 30, Ex. 31, Ex. 32, Ex. 33.
The plaintiff's personal property damage claim was $481,123, well under the $619,500 policy limits, yet the arbitrators only awarded the sum of $79,731.68, Ex. 5, Ex. 7, which is only 16% of the plaintiff's claim. Ex. 8, Ex. 12, Ex. 33.
The $79,731.68 personal property award was based on storage charges and cleaning bills, of which $75,231.68 had already been paid by the defendant, plus an additional sum of $4,500 for future moving costs. Ex 9, Ex. 12. No award was made for repairing and/or replacement of any personal property. Ex. 6, pages 152-210 and photographs on pages 211-75.
Kitchen, with over $59,000 claimed damage and a zero award.
Maid's bedroom on 2nd floor, with over $43,000 claimed damage and a zero award.
Stairs to maid's bedroom, with over $8,000 claimed damage and a zero award.
Lower shed roof, with over $18,000 claimed damage and a zero award.
Cellar crawl space, with over $60,000 claimed damage and a zero award.
Nogging (the brick filing between wood studs), removal, cataloguing, repair and/or replacement in twelve rooms, with a $69,000 claimed damage and a zero award.
Mortise and tenor (hole and tongue woodworking procedure) not provided for in award.
Removal, cataloguing and reinstallation of historic millwork in thirteen rooms with over $169,000 claimed damage and a zero award.
Lap joints, peg system and other joining techniques not represented in Award, which requires hand crafted repairs and replacement.
Damaged roof rafters and other damage in roof with over $168,000 claimed damage and an award of $8,780 for temporary protection and fascia replacement. See Ex. 18, photographs.
Finishing floors damaged by dust, debris, asbestos and water with a $14,000 damage claim and a zero award.
No award to upgrade electric service to meet Building Code requirements from 110 amps to 220 amps.
No additional award to replace chimney to meet Fire Code.
No award for other general code compliance requirements.
The chimney award of $19,000 was wholly incomplete to an order to catalogue, repair and replace the historic brick chimney with the claimed damages of $151,250.02.
Hazardous material remediation including asbestos removal throughout entire home with $94,953 claimed damages and a one-time Award of $15,400 in Exhibit 7, page 7 of 7, line 604.
Removal of lead paint.
Failure of majority of appraisers to follow the remediation ruling of the Connecticut Health Department. Ex. 15, Ex. 16, Ex. 34.
Failure to consider the room by room hazardous diagram. Ex. 6, page 119.
Heating system not included in Award.
Westside addition of the house was damaged and no Award was made.
Failure to repair expansion of preexisting hairline cracks. See Ex. 18 photograph.
Foundation damage.
Repairs needed due to spreading of asbestos dust caused by negligence of defendant's adjuster.
Failure to evaluate the two trailers of personal property stored at the property: red tags claimed salvagable, green tags claimed to be discarded. Each trailer is 7' x 10' x 40'.
No replacement of personal property damaged by water, dust, debris, asbestos including clothing, furniture, rugs, household supplies, clothes, and drapes with a damage claim of $411,366.
Removal of plaster on wood lathing of the 7, 468 square feet of lathing and only 20% was included in the Award. Ex. 28.
Replacement of skin coated plaster walls on wood lathing in a two-stage process to meet historical standards.
Rewiring of copper wiring.
Sand, stain and refinish flooring.
Small percentage of damage claims in certain rooms For example, family room claimed damages of $50,000 with an Award of $15,000, approximately 30% of claim.
The plaintiff concludes her Application to Vacate the Award with her claimed amount of damages in excess of $1,000,000. (#119.00, page 33.) These items claimed incomplete by the plaintiff are:
| Asbestos | $56,058 |
| Specialized historic construction | 222, 652 |
| No damage to five areas | 190, 823 |
| Significant omissions in numerous areas | 123, 875 |
| Personal property damage | 411, 366 |
| Total | $1,004,774 |
The court concludes that there was a complete failure by the majority of the appraisers to recognize the historic nature of the dwelling, which dwelling was specifically insured by this Restorationist insurance policy with a full knowledge of the historic nature of the building and the obligation of the insurance company to restore the same as old. It is clear that the majority appraisers had never dealt with a Restorationist insurance policy and their arbitration decision failed to conform to the terms and conditions of the historic nature of the house and the terms of insurance policy covering claims made under the Restorationist insurance policy.
The court finds that the two majority arbitrators evidenced a manifest disregard of the nature and terms and conditions of the Restorationist insurance policy. The court finds that by disregarding the terms of the Restorationist insurance policy, the two majority arbitrators committed " action by which the rights of any party has been prejudiced" i.e. the plaintiff, Sally Kellogg. The Umpire did not meet with the plaintiff but he did read her two recorded statements. The court further finds for the reasons stated above that the plaintiff has met her burden of proof to vacate the Award under Gen. Stat. § 52-418(a)(3), in that the substantial monetary rights of the plaintiff have been prejudiced by the Award. The court finds that the plaintiff has sustained her burden of proof under Gen. Stat. § 52-418(a)(3).
This court has applied the three factors of the test for determining manifestly disregard of the law. It finds that the two majority appraisers were in obvious error when they calculated depreciation in a Restorationist insurance policy that provides for no depreciation: That the damage caused by water, debris, dust, and asbestos was obvious; these deficiencies could be readily and instantly perceived by the average person as erroneous. The court finds that the first factor has been met. The second factor has also been met. The governing law on the unlimited nature of this claim in an old house in which depreciation is irrelevant and the legal effect of the Northrop decision were well defined. The majority arbitrators ignored these governing legal principles. The court finds that the third factor has been met. The governing law is explicit and clearly applicable under the Northrop decision on the nature of the restoration required by the terms of the Restorionist insurance policy. The court finds that the plaintiff has sustained her burden of proof to vacate the Award under Gen. Stat. § 52-418(a)(4).
As to the FIRST DEFENSE filed by the defendant on September 18, 2014 (#113.00), the issues therein are found for the plaintiff for the reasons stated in a separate Memorandum of Decision filed on February 5, 2016.
The court hereby grants the plaintiff's Corrected and Amended Application to Vacate Insurance Appraisal (Arbitration) Award dated September 18, 2013. (#102.00.) The court vacates the arbitration award and remands the matter for a new arbitration hearing in accordance with the terms and conditions of the Restorationist insurance policy #0006060014-9.