A federal district court in Connecticut has ruled that an insurance policy’s appraisal clause did not require arbitration of a dispute over coverage of the insured’s claim but only the amount of damage the insured asserted had gone unpaid once the court determined that there was coverage.

The Case Ice Cube Building, LLC, alleged that a building it owned in Groton, Connecticut, was damaged when snow and ice caused the roof to begin to leak and water to come into the building. Ice Cube submitted a claim to its commercial property insurer, Scottsdale Insurance Company. After Scottsdale accepted coverage in part and denied coverage in part, Ice Cub sued the insurer. In response, Scottsdale asserted a counterclaim against Ice Cube and sought a declaration as to whether its policy covered Ice Cube’s alleged losses. Ice Cube then moved to compel appraisal of its alleged losses and to stay the lawsuit until appraisal had concluded. Ice Cube argued that there was a disagreement on the amount of loss it had suffered, it had made a written demand for an appraisal of the loss, and, therefore, Connecticut law, Section 52-410, and the terms of its insurance policy required that Scottsdale appoint an appraiser to assess Ice Cube’s uncompensated losses. Scottsdale argued that an appraisal was premature because there were outstanding coverage issues that the court had to address as a condition predicate to the appraisal process.