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Lindford Lounge V.S. Michigan Basic Insurance


LINFORD LOUNGE, INC. v. MICHIGAN BASIC PROPERTY INSURANCE
ASSOCIATION
Docket No. 28816
Court of Appeals of Michigan
77 Mich. App. 710; 259 N.W.2d 201; 1977 Mich. App. LEXIS 1059
June 9, 1977, Submitted
August 23, 1977, Decided


SUBSEQUENT HISTORY: [***1] Leave to appeal applied for.
PRIOR HISTORY: Appeal from Wayne, Joseph B. Sullivan, J.
DISPOSITION: Affirmed.

HEADNOTES
1. Insurance -- Fire Insurance -- Standard Policy --
Appraisers -- Interested Party -- Computation of
Damages -- Statutes.
An appraiser who has been selected under the
provisions of the Michigan Standard Fire Insurance
Policy by one of the parties involved in a dispute as to the
amount of loss an insured suffered in a fire covered by a
fire insurance policy is not necessarily an "interested"
party just because he was once under contract with that
party to adjust the loss; similarly, the fact that an
appraiser appointed by an insured has previously made a
computation of loss does not automatically disqualify the
appraiser, absent a showing of prejudicial misconduct (
MCLA 500.2832; MSA 24.12832.)
2. Statutes -- Specific Statutes -- Civil Suits --
Judgment -- Interest Awards -- Insurance -- Fire
Insurance -- Insurance Contracts.
A specific statute providing for interest from the date
of filing of the complaint on a judgment awarding
damages in a civil suit controls a more general statute
which specifies only the time when a loss is payable;
therefore, a trial court was correct in awarding [***2] a
plaintiff in an action to recover damages under a fire
insurance contract interest from the date of the filing of
the complaint where the insurance policy did not
expressly provide for the payment of interest ( MCLA
500.2832, 600.6013; MSA 24.12832, 27A.6013).
SYLLABUS
Complaint by Linford Lounge, Inc., against
Michigan Basic Property Insurance Association for the
appointment of an umpire and an appraisal under an
insurance contract and for recovery of damages under the
contract. Summary judgment for plaintiff. Defendant
appeals.
COUNSEL: Bacalis & Associates, P. C. (by James C.
Klemanski), for plaintiff.
Denenberg, Tuffley & Thorpe (by John C. Patrick, Jr.),
for defendant.
JUDGES: J. H. Gillis, P. J., and Bronson and R. E.
Robinson, * JJ.
* Circuit judge, sitting on the Court of Appeals
by assignment.
OPINION BY: PER CURIAM
OPINION
Page 1
[*711] [**202] This is an appeal from a summary
judgment on an appraisal award of $ 47,000. The trial
court also awarded plaintiff interest from the date of
filing its complaint. Defendant appeals as of right.
On April 26, 1975, a fire occurred at plaintiff's
building, which was insured by defendant insurance
company. Two days later, [***3] on April 28, 1975,
Joseph Cohen, on behalf of Linford Lounge, Inc.,
contracted with Mr. Harry Kramer, a licensed public
adjuster, to adjust plaintiff's claim. Mr. Kramer's fee was
to be 7% of the amount paid by defendant on the claim.
As an adjuster, Mr. Kramer visited the building and
prepared a written estimate of loss. This statement of
loss was rejected by defendant. Plaintiff then demanded
appraisal pursuant to its insurance contract with
defendant, but this request was rejected by defendant on
the basis that the appraiser appointed by plaintiff, Harry
Kramer, was not "disinterested" as required by the
Michigan Standard Fire Insurance [*712] Policy,
MCLA 500.2832; MSA 24.12832. 1 The contract
between Mr. Kramer and Linford Lounge was canceled
before or at the time he was appointed as plaintiff's
appraiser. Following defendant's rejection of the demand
for appraisal, plaintiff filed a complaint for appointment
of an umpire and appraisal as provided in the Standard
Policy. An umpire was appointed and, after investigation,
he issued an opinion finding that the amount of the loss
exceeded the policy limit of $ 47,000. 2 Mr. Kramer
joined in this decision; defendant's [***4] appraiser did
not. 3 The trial court refused to set aside the award on
defendant's motion and awarded plaintiff summary
judgment for $ 47,000 plus interest from the date of filing
the complaint. 4
1 The relevant part of MCLA 500.2832; MSA
24.12832 provides:
"In case the insured and this Company shall
fail to agree as to the actual cash value or the
amount of loss, then, on the written demand of
either, each shall select a competent and
disinterested appraiser and notify the other of the
appraiser selected within twenty days of such
demand. The appraisers shall first select a
competent and disinterested umpire; and failing
for fifteen days to agree upon such umpire, then,
on request of the insured or this Company, such
umpire shall be selected by a judge of a court of
record in the state in which the property covered
is located. The appraisers shall then appraise the
loss, stating separately actual cash value and loss
to each item; and, failing to agree, shall submit
their differences, only, to the umpire. An award in
writing, so itemized, of any two when filed with
this Company shall determine the amount of
actual cash value and loss. Each appraiser shall
be paid by the party selecting him and the
expenses of appraisal and umpire shall be paid by
the parties equally." (Emphasis added.)
[***5]
2 The umpire found the value of the loss to be $
42,856.12 for the building and $ 8,561 for the
contents.
3 There is no record of the amount at which
defendant's appointee appraised the loss.
4 Plaintiff had amended its complaint for an
umpire and appraisal by leave to include a breach
of contract count based on defendant's refusal to
pay the appraisal award.
Defendant first contends that Mr. Kramer was not a
"disinterested" appraiser within the meaning of the
statutory policy, by reason of his prior contract 5 with
plaintiff to adjust the loss, and that [*713] the trial court
therefore erred in granting summary judgment on that
award.
5 Defendant does not dispute that Mr. Kramer's
contract to adjust the loss was canceled before or
at the time he was appointed as plaintiff's
appraiser.
The general requirement that appraisers be "fair,
impartial and disinterested" was stated in Northern
Assurance Co, [***6] Ltd, of London v Melinsky, 237
Mich 665; 213 NW 70 (1927). Significantly, that case
held that an appraiser is not necessarily "interested" if he
has previously acted as an appraiser for a party. In the
instant case, Mr. Kramer submitted an estimate of loss
while under contract with plaintiff as an adjuster. This
was the first business relationship [**203] plaintiff had
had with Mr. Kramer. We hold that the instant case is
within the rule stated in Melinsky: An appraiser is not
necessarily "interested" because he was once under
contract with a party to adjust the loss. Similarly, the fact
that an appraiser appointed by an insured has previously
made a computation of the loss does not automatically
disqualify the appraiser, absent a showing of prejudicial
misconduct. 44 Am Jur 2d, Insurance, ยง 1716, p 628.
Page 2
77 Mich. App. 710, *; 259 N.W.2d 201, **;
1977 Mich. App. LEXIS 1059, ***2
Therefore, the trial court did not err in refusing to set
aside the appraisal award. As there was no showing of
prejudicial misconduct, the trial court was correct in
finding that Mr. Kramer was a "competent and
disinterested appraiser", as required by the statutory
policy.
Defendant also contends that the trial court erred in
awarding plaintiff interest on the judgment [***7] from
the date of filing the complaint as provided by MCLA
600.6013; MSA 27A.6013. 6 Defendant argues that as the
statutory policy provides [*714] that the loss is payable
60 days after an appraisal award, 7 the court is not
required to award interest on the judgment from the date
of filing the complaint, but only from 60 days after the
award.
6 "Interest shall be allowed on any money
judgment recovered in a civil action, such interest
to be calculated from the date of filing the
complaint at the rate of 6% per year unless the
judgment is rendered on a written instrument
having a higher rate of interest in which case
interest shall be computed at the rate specified in
the instrument if such rate was legal at the time
the instrument was executed."
7 But see MCLA 500.2836(2); MSA
24.12836(2):
"All losses under any fire insurance policy
shall be paid within 30 days, the provisions of any
contract or statute to the contrary
notwithstanding."
The standard policy does not specify the date from
which [***8] interest on a judgment is payable. MCLA
600.6013; MSA 27A.6013, however, specifically states
that interest shall be paid on a money judgment in any
civil action from the date of filing the complaint.
Obviously, a specific statute providing for interest
controls a more general statute which specifies only when
a loss is payable.
This Court has held that MCLA 600.6013; MSA
27A.6013 controls an award of interest on a money
judgment in a civil action, even though there is an
express provision in the insurance policy providing for
interest from the date of judgment. Cates v Moyses, 57
Mich App 405; 226 NW2d 106 (1975), Cosby v Pool, 36
Mich App 571; 194 NW2d 142 (1971). A fortiori, MCLA
600.6013; MSA 27A.6013 should control the interest
award in the instant case where the insurance policy does
not expressly provide for interest.
The summary judgment [***9] for plaintiff is
affirmed. Costs to plaintiff.
Page 3
77 Mich. App. 710, *713; 259 N.W.2d 201, **203;
1977 Mich. App. LEXIS 1059, ***6