Last September, I wrote about the federal court decision vacating a massive appraisal award arising from Hurricane Sally damage at the Portofino condominium complex on Pensacola Beach in When a $187 Million Appraisal Award Collapsed in the Courtroom.
At the time, I noted that the ruling had the potential to become one of the most significant appraisal decisions in recent memory because it struck at the heart of how appraisals are conducted and how much scrutiny courts may apply to the appraisal process itself.
The case is now before the United States Court of Appeals for the Eleventh Circuit, 1 and the appellate briefs have been filed. 2 Anybody involved with property insurance claims, whether as a policyholder advocate, public adjuster, contractor, attorney, appraiser, or insurer representative, should pay close attention to what happens next.
The underlying dispute arose from Hurricane Sally. The appraisal process ultimately resulted in awards totaling approximately $187 million. The insurers challenged those awards, and the federal district court vacated them. Now both sides are asking the appellate court to decide whether that ruling was correct.
What makes this case so important is that it raises fundamental questions about the nature of appraisal itself. Florida courts have repeatedly recognized that appraisal is not arbitration. In fact, the Florida Supreme Court has expressly stated that appraisal is intended to be an informal process rather than a formal arbitration proceeding. There are no established rules of evidence. There is no required transcript. There is no judge presiding over the proceedings. There is often no formal record of what occurred. The process depends heavily upon the expertise, judgment, and professionalism of the appraisers and umpire selected by the parties.
I personally know all three members of the appraisal panel involved in this dispute. All three are highly experienced professionals with substantial backgrounds in property loss valuation and appraisal work. That fact makes this case even more noteworthy because nobody can credibly suggest that the panel lacked experience or familiarity with complex property losses.
The insurers argue that the appraisal process failed because the policyholder’s appraiser allegedly admitted that he never actually stated an “amount of loss” as required by the appraisal provision. According to the insurers, the appraiser presented a collection of pricing scenarios and estimates that were never intended to be aggregated into a final repair figure. They contend that because the appraiser did not perform the fundamental contractual duty assigned to him, the resulting awards were invalid. They further argue that the appraisal process became corrupted by procedural irregularities, late document production, and issues regarding whether the appraiser was truly “disinterested” as required by the policy.
Portofino takes a very different view. The policyholder argues that the district court improperly transformed disagreements about appraisal methodology into a basis for vacating an award. Portofino points out that the appraisal panel spent years inspecting the property, hearing testimony, reviewing expert reports, considering competing estimates, and ultimately issuing written awards signed by at least two members of the panel. According to Portofino, whether one agrees with the valuation methodology or the final numbers is beside the point. The appraisal process occurred, disputes were presented, differences were resolved by the umpire, and awards were entered. Portofino argues that the district court improperly looked behind the appraisal awards and effectively retried the appraisal process.
The insurers say this is not about whether the appraisal reached the right answer. They contend this is about whether the appraisal process functioned at all. Portofino responds that courts are not supposed to second-guess appraisers and should not be permitted to reconstruct appraisal proceedings after the fact simply because one side is unhappy with the result.
My own view is that appraisal has always occupied a strange place within property insurance law. I have often described appraisal as having the potential to become a “kangaroo court.” My observation is not meant as criticism of appraisers themselves. Rather, it reflects the reality that appraisal operates without many of the procedural safeguards found in courts and formal arbitration proceedings. The process depends almost entirely upon the integrity, expertise, and diligence of the people selected to serve.
When appraisers and umpires approach the task professionally, appraisal can be an efficient and valuable method for resolving disputes. When problems arise, however, courts are often left trying to determine what happened without the benefit of a formal record. That is exactly why this appeal is so important.
The Eleventh Circuit will be asked to decide how far courts may go in reviewing an appraisal award before they begin invading territory traditionally reserved for appraisers. The court will also have to determine whether alleged failures in the appraisal process itself can justify vacating awards that otherwise appear final on their face. The outcome may significantly affect how future appraisals are conducted and challenged throughout Florida and perhaps other jurisdictions.
Anybody who participates in property insurance appraisals should watch this case carefully. It may become one of the most influential appraisal decisions issued in many years because it addresses the very foundation of what appraisal is, what it is supposed to accomplish, and how much judicial oversight should exist after the process is complete.
Thought For The Day
“Justice is the constant and perpetual wish to render every one his due.”
— Ulpian
1 Westchester Surplus Lines Ins. Co. v. Portofino Master Homeowners Assoc., No. 25-13710 (11th Cir. 2025).
2 Id., see, Portofino’s Opening Brief, and Westchester’s Response Brief.