FILED 6/18/15

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.




FIDELITY NATIONAL INSURANCE COMPANY, Plaintiff and Appellant, v. YOLANDA OWENS, Defendant and Respondent.


(Alameda County Super. Ct. No. RG11589323)

Fidelity National Insurance Company (Fidelity) appeals from a judgment confirming an insurance appraisal award. Fidelity contends the award must be vacated for the following reasons: (1) the trial court should have disregarded the insured’s response to Fidelity’s petition to vacate the award because the response was filed one day late; (2) the appraisal panel exceeded its authority by issuing an award that did not accurately reflect the extent of the insured’s loss; (3) the award was procured through fraud because the insured’s public adjuster misrepresented the scope of repairs to be performed; (4) the neutral umpire was corrupt; (5) the appraisal panel refused to allow one of Fidelity’s witnesses to testify by telephone; (6) the insured’s designated appraiser failed to disclose a ground for disqualification; and (7) the insured’s public adjuster engaged in the unauthorized practice of law by acting as the insured’s advocate during the appraisal hearing. Because we conclude that Fidelity has not established sufficient grounds to vacate the appraisal award, we affirm the judgment.


Yolanda Owens owned a two-bedroom rental property in Desert Hot Springs (the
“property”) that was damaged by fire in June 2010. The property was insured at the time of the fire under a Fidelity policy issued to Owens. The insurance policy provided that Fidelity would either pay the replacement cost or the actual cash value of damaged items depending upon the nature of the item, the extent of damage to covered buildings, and other considerations described in the policy.

Fidelity retained Alamo Claims Service (Alamo) to inspect the property and provide an estimate to repair any damage. Mike Bynum of Alamo, who described himself as an adjuster, inspected the property along with contractor Mike Ashcroft. Bynum arrived at an estimate of $148,718.57 as the replacement cost value to repair the damage to the dwelling, while he estimated a replacement cost value of $1,201.79 for repairing other damaged structures. Ashcroft reviewed and approved Bynum’s estimates. Fidelity issued payment to Owens for the replacement cost value of the dwelling and other structures as stated in the Alamo estimate, less an applicable $1,000 deductible, in addition to a sum for the loss of use of the property.

Owens retained licensed public adjuster Kevin Dawson to assist her in the presentation of her claim. In September 2010, Dawson disputed Fidelity’s valuation of the damages and demanded an appraisal pursuant to the terms of the Fidelity policy and Insurance Code section 2071. On behalf of Owens, Dawson nominated Keith Charleston to serve as her appraiser. Fidelity nominated Douglas Jackson as its appraiser. The parties’ nominated appraisers agreed to appoint William C. Thomas as the neutral umpire to oversee the appraisal. The appraisal panel of Charleston, Jackson, and Thomas personally inspected the property on January 7, 2011.

Each party submitted supporting documents to the panel before the appraisal hearing. The documents submitted by Dawson included an estimate prepared by Vanderbuilt Construction Inc. (Vanderbuilt). Vanderbuilt arrived at an estimate of
$287,473.29 for the replacement cost value, nearly twice the estimate provided by Alamo. The Vanderbuilt estimate did not segregate out amounts for structures other than the dwelling.

The appraisal hearing took place in Oakland on January 13 and 14, 2011. On the first day of the hearing, Dawson submitted a document to the panel consisting of a spreadsheet containing a line-by-line comparison of the Alamo and Vanderbuilt estimates. Dawson stated that the spreadsheet simply consolidated information previously provided by the parties but also explained that he had corrected errors in the Vanderbuilt estimate as well as errors in the cost detail contained in the Alamo estimate. The revised replacement cost value contained in Dawson’s spreadsheet was a little over
$278,700, or about $9,000 less than the Vanderbuilt estimate.

According to Fidelity, there were numerous errors in the Vanderbuilt estimate upon which Dawson’s spreadsheet was based. Among other things, Fidelity claimed the estimate was based on square footage calculations that were incorrect, included upgraded finishes and other items that did not exist at the time of the fire, included a price for rewiring with conduit where no conduit existed, and included a cost to replace a lazy susan in the kitchen even though there was no evidence the dwelling included a lazy susan at the time of the fire. It was also alleged that Dawson increased unit prices by 10 percent.

Owens did not appear at the hearing or testify telephonically. Dawson made an opening statement on behalf of Owens, interposed objections, and conducted direct examination and cross-examination of witnesses. Dawson called no witnesses but instead presented the evidence in support of Owens’s claim himself. Bynum testified with regard to the Alamo estimate on behalf of Fidelity.

The appraisal panel issued its award on February 11, 2011. All three panel members agreed to the award. The award listed the following amounts:

Dwelling Replacement Cost Loss: $262,805.44 Dwelling Actual Cash Value Loss: $258,099.58 Other Structures Replacement Cost Loss: $12,175.30 Other Structures Actual Cash Value Loss: $9,946.16 Loss of Use: Fair Rental Value per Unfurnished: $17,625.00 Loss of Use: Fair Rental Value per Furnished: $22,125.00

Attached to the award was an “award breakdown,” which consisted of a spreadsheet comparing the Vanderbuilt and Alamo estimates line by line, with two final columns for the replacement cost value and the actual cash value associated with each line item as determined by the panel. In a cover letter accompanying the appraisal award, the umpire explained that the panel had chosen an award format containing an itemized breakdown of the loss “for use by the parties after receipt of the Award for purposes of resolving any potential disagreements beyond the scope and authority of an Appraisal panel.” The umpire wrote: “The panel is obligated to value the loss as submitted by the insured, and then, the insurer having any disagreement with any of those items may thereafter enforce the policy of insurance in whatever manner they so deem appropriate. We believe this award format properly prices the amount of the damage to the insured’s property as presented by them, while providing adequate information and options for the insurer to apply policy benefits without any interpretation by the appraisal panel of coverage, damage, quality, cause and or decisions relating to potential extra contractual issues.”

On May 20, 2011, Fidelity filed a petition to vacate the appraisal award. Fidelity argued that the award was procured through fraud, corruption, or other undue means primarily because Owens’s public adjuster, Dawson, allegedly presented a false and misleading estimate. Fidelity also argued that the panel exceeded its authority in awarding unjustified loss-of-use damages. In addition, Fidelity urged that the award should be vacated because Dawson engaged in the unauthorized practice of law during the course of the appraisal hearing. In support of the petition, Fidelity submitted documents provided to the appraisal panel as well as declarations authored by Fidelity’s attorney as well as the appraiser appointed by Fidelity.

On June 7, 2011, Owens responded to Fidelity’s petition to vacate by filing her own petition to confirm the appraisal award. The evidence in support of the petition included declarations by Owens, Dawson, the umpire (Thomas), and Charleston, the appraiser appointed by Owens.

In response to Owens’s petition to confirm, Fidelity argued the petition to confirm should be disregarded and the allegations of its own petition to vacate should be deemed admitted because the response to Fidelity’s petition was filed one day late. Fidelity urged that the award should be vacated on the additional ground that the umpire condoned gender and ethnic bias displayed by Dawson during the appraisal hearing. Fidelity further alleged that the award should be vacated due to the misconduct of the umpire and Charleston, the appraiser nominated by Owens. More specifically, Fidelity claimed that Thomas had displayed bias by submitting a declaration in support of the award. As for Charleston, Fidelity claimed that he had failed to disclose an ongoing business relationship with Dawson in that he had been selected by Dawson on three prior occasions to serve as a disinterested appraiser.

On October 7, 2011, the trial court entered an order confirming the appraisal award. Judgment was entered the same day. The judgment specified that it was made
“without consideration of any coverage issues, policy limits, deductible amounts, and prior payments by Fidelity, non-covered items or other provisions of the policy of insurance issued to Yolanda Owens.” It further stated that “[t]his judgment is based solely on the scope of damages submitted and claimed by the insured and/or the insured’s representatives.”

Fidelity timely appealed the judgment.


1. Untimely Response to Fidelity’s Petition to Vacate

Fidelity contends that all of the allegations of its petition to vacate must be deemed admitted because Owens did not file a timely response. (See Code Civ. Proc.,3 § 1290; Evans Products Co. v. Millmen’s Union No. 550 (1984) 159 Cal.App.3d 815, 819.) We disagree with the proposition that the trial court was compelled to disregard Owens’s response.

A response to a petition to vacate must be served and filed within 10 days after service of the petition, although this time period may be extended for good cause by the court. (§ 1290.6.) The 10-day time period in section 1290.6 is not jurisdictional. (See Atlas Plastering, Inc. v. Superior Court (1977) 72 Cal.App.3d 63, 68.)

In this case, Owens filed a response to Fidelity’s petition to vacate in the form of her own petition to confirm the appraisal award. (See § 1290.) Fidelity objected on the ground the response was one day late. At the hearing below, the trial court indicated it would not treat the response as untimely unless section 1290.6 is considered a statute of limitations—i.e., unless the time limit is jurisdictional. The trial court effectively overruled Fidelity’s untimeliness objection by proceeding to consider the merits of Owens’s response. In the absence of any showing that Fidelity was prejudiced by Owens’s one-day delay in submitting a response, the trial court acted well within its discretion in impliedly finding good cause to treat the response as timely. (See MJM, Inc. v. Tootoo (1985) 173 Cal.App.3d 598, 603; Atlas Plastering, Inc. v. Superior Court,

2. Governing Legal Principles

A. Scope and Standard of Review

“Appraisal hearings are a form of arbitration and are generally subject to the rules governing arbitration. Judicial review of an arbitration, or appraisal award, is circumscribed.” (Kacha v. Allstate Ins. Co. (2006) 140 Cal.App.4th 1023, 1031
(Kacha).) It is not the court’s role to review the merits of the controversy or to the determine whether the evidence is sufficient to support the appraisal award. (Ibid.)

The exclusive grounds for vacating an appraisal award are set forth in section
1286.2, subdivision (a). (See Maaso v. Signer (2012) 203 Cal.App.4th 362, 371.) Except as specified in the statute, appraisal awards “are immune from judicial review in proceedings to confirm or challenge the award.” (Ibid.) An appraisal award may be vacated on the following grounds: “(1) The award was procured by corruption, fraud or other undue means. [¶] (2) There was corruption in any of the arbitrators. [¶] (3) The rights of the party were substantially prejudiced by misconduct of a neutral arbitrator. [¶]
(4) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted. [¶] (5) The rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor or by the refusal of the arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title. [¶] (6) An arbitrator making the award either: (A) failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware; or (B) was subject to disqualification upon grounds specified in Section 1281.91 but failed upon receipt of timely demand to disqualify himself or herself as required by that provision.” (§ 1286.2, subd. (a).)

“We review the trial court’s ruling on a challenge to an appraisal award under a de novo standard, drawing every reasonable inference to support the award. [Citation.] To the extent the court’s ruling rests on issues of disputed fact, however, we apply the substantial evidence test.” (Kacha, supra, 140 Cal.App.4th at p. 1031.)

B. Law Governing Insurance Appraisals

All fire policies issued in California must be on a standard form that includes an appraisal provision as set forth in Insurance Code section 2071. (Ins. Code, §§ 2070,
2071.) Under the statutorily-mandated appraisal provision, the parties are required to participate in an informal appraisal proceeding in the event there is a disagreement about the actual cash value or the amount of the loss and the insurer or insured makes a written request for an appraisal.4 The Fidelity policy in this case included an appraisal provision consistent with Insurance Code section 2071.

The appraisal process is limited in scope. (Kirkwood v. California State Automobile Assn. Inter-Ins. Bureau (2011) 193 Cal.App.4th 49, 58 (Kirkwood).)
“[A]lthough an appraisal is a specific form of limited arbitration, there are significant differences between the powers of an arbitrator and those of an appraiser.” (Ibid.) An arbitrator typically exercises “ ‘essentially judicial functions,’ ” including deciding issues of law, and often resolves the entire dispute between the parties. (Id. at p. 59.) By contrast, “an appraiser has authority to determine only a question of fact, namely the actual cash value or amount of loss of a given item.” (Ibid.) “ ‘The function of appraisers is to determine the amount of damage resulting to various items submitted for their consideration. It is certainly not their function to resolve questions of coverage and interpret provisions of the policy.’ ” (Jefferson Ins. Co. v. Superior Court (1970)
3 Cal.3d 398, 403.)

Below, we briefly summarize three oft-cited cases that emphasize the limited function performed by appraisal panels. The cases are: (1) Safeco Ins. Co. v. Sharma
(1984) 160 Cal.App.3d 1060 (Sharma); (2) Kacha, supra, 140 Cal.App.4th 1023; and
(3) Devonwood Condominium Owners Assn. v. Farmers Ins. Exchange (2008)
162 Cal.App.4th 1498 (Devonwood).


In Sharma, the insured filed a claim for items stolen in a home burglary. (Sharma, supra, 160 Cal.App.3d at p. 1062.) The insured and insurer could not agree on the value to assign to a set of 36 eighteenth century “Bundi School” miniature paintings. The insured demanded an appraisal. (Ibid.) The insured claimed the paintings were a matched set, which would be more valuable than an unmatched set of paintings. In valuing the paintings, the appraisal panel effectively concluded the paintings were an unmatched set based upon an expert’s opinion that there were no matched sets of Bundi School paintings on the west coast and that any such sets would be in a museum or a well-known private collection. (Id. at pp. 1064–1065.) Consequently, the panel determined the missing artwork was of “average quality” and valued it accordingly.
(Id. at p. 1063.)

The court in Sharma concluded the appraisal panel had exceeded its authority by a deciding a factual issue not properly before it. (Sharma, supra, 160 Cal.App.3d at p. 1066.) According to the court, “[i]n no authority is it suggested that an appraisal panel is empowered to determine whether an insured lost what he claimed to have lost or something different. [¶] When an insurer disputes an insured’s description or identification of the lost or destroyed property, it necessarily claims the insured misrepresented—whether innocently or intentionally—the character of the loss in filing a proof of loss. In turn, this claim opens the door to allegations of fraud. Were an insurer permitted to include the former issue within the scope of an appraisal, a determination in the insurer’s favor would foreclose a court from determining one essential element of fraud in any subsequent litigation. Certainly, an insurer is free to litigate whether the insured has misrepresented what he lost; but it beyond the scope of an appraisal.” (Id. at pp. 1065–1066.)


In Kacha, the insured presented a claim for fire and smoke damage resulting from a wildfire. (Kacha, supra, 140 Cal.App.4th at p. 1026.) Like Owens in this case, the insured retained public adjuster Kevin Dawson, who in turn demanded an appraisal and selected Keith Charleston as appraiser. (Id. at p. 1027.) In its appraisal brief, the insurer pointed out that the value of the loss was not the only disputed issue because the parties had not resolved issues regarding the existence and scope of damage. The insurer claimed that damage to some items was not caused by the wildfire. (Id. at pp. 1027–
1028.) In arriving at an appraisal award, the panel assigned an amount of zero for numerous items submitted by Dawson on behalf of the insured. (Id. at p. 1029.)

Citing Sharma, the Kacha court concluded that the award should have been vacated because the appraisal panel exceeded its authority. (Kacha, supra,
140 Cal.App.4th at pp. 1035–1037.) The court reasoned that the panel effectively determined that any claimed damage to various items submitted by Dawson was caused by something other than the wildfire. By deciding causation issues instead of just limiting itself to valuing the items within the scope of loss presented by the insured, the appraisal panel exceeded its authority by making determinations that certain claimed losses were not covered by the insured’s policy. (Id. at p. 1036.)


Devonwood addressed the form of judgment used to confirm an appraisal award when there is a dispute about which losses are covered under the applicable policy.

There, a condominium owners association submitted a claim for fire damage to a unit.
(Devonwood, supra, 162 Cal.App.4th at p. 1501.) The insurer took the position it had no obligation under the policy to pay for interior painting. (Id. at p. 1502.) The appraisal panel issued an award that segregated out of the replacement cost for interior painting from the replacement cost for all other items. The award specified that the segregation of costs was made “ ‘without consideration of . . . any coverage or other provision of the above policy which might affect the amount of the insurer’s liability thereunder. . . .”
(Id. at p. 1501.) In confirming the appraisal award, the trial court issued a money judgment for the entire amount of the appraisal. (Id. at p. 1503.)

The appellate court concluded the judgment had to be vacated because it did not conform to the appraisal award, which merely established replacement cost values for the claimed items of damage but did not address liability. (Devonwood, supra,
162 Cal.App.4th at pp. 1503, 1506.) Under those circumstances, the court “was limited to the issuance of a judgment which brought finality to the dollar amount of the replacement cost values, and nothing more.” (Id. at p. 1506.) The Devonwood court confirmed that “a judgment after confirmation of an appraisal award fixing the cash value of loss does not preclude further litigation on other issues between parties to an insurance policy.” (Id. at p. 1507, fn. 4.)

A Devonwood itemization permits an appraisal panel to fulfill its obligation to assign values to damaged items without exceeding its authority by deciding issues that bear upon causation, coverage, or misrepresentation of the claim by the insured. Although the appraisal process establishes the replacement cost values, the parties are free to dispute the insurer’s liability to pay for disputed categories of loss in subsequent litigation.

With these principles in mind, we proceed to consider the substance of Fidelity’s claims.

3. Claim that Appraisal Panel Exceeded its Authority

Fidelity’s main complaint appears to be that the panel exceeded its authority by issuing an award “they knew did not reflect the extent of the insured’s loss.” The crux of the claim is that the appraisal panel purportedly assigned values to items that did not exist or were not damaged because Dawson, the insured’s representative, included them within the scope of loss presented to the panel. Fidelity argues that the panel’s appraisal of these items results from a misreading of Sharma, which it contends has been misconstrued to require appraisers to assign values to any items an insured may present to the panel, even if they do not exist or were not damaged. Fidelity invites this court to revisit Sharma and its progeny, urging that appraisers should have the authority to correct the scope of any loss claimed by an insured. For reasons we explain, we are not convinced that the appraisal panel exceeded its authority under the circumstances presented here. Accordingly, we decline the invitation to revisit Sharma and its progeny. That issue is best left to a case in which there is clear evidence that the appraisal panel assigned loss values to items that are undamaged or never existed simply because the insured submitted them to the appraisal panel for valuation. This is not such a case.

In Sharma, the appraisal panel was faced with the task of valuing an item that had been stolen. As Fidelity correctly points out, the court distinguished between the panel’s authority to determine the identity of property—which is beyond the scope of the appraisal—and the panel’s authority to assess the property’s quality or condition—which is a necessary aspect of assigning value to a loss. (Sharma, supra, 160 Cal.App.3d at p. 1066.) According to Fidelity, in order to assess the quality or condition of an item damaged in a fire, an appraisal panel must necessarily consider whether the item is actually damaged or is of the quality claimed by the insured. Further, although Fidelity acknowledges that Kacha precludes a panel from making coverage decisions regarding causation, it claims that Kacha and Sharma cannot be read to require a panel to “rubber13 stamp” an insured’s loss estimate or prevent a panel from resolving factual disputes necessary to value the loss.

We agree with Fidelity to the extent that Sharma and Kacha cannot be read to preclude the appraisal panel from resolving disputed questions of fact regarding the valuation of an item where the quality or condition of the item is readily ascertainable or observable. It would be absurd for a panel to assign a value to replace a 10,000 squarefoot mansion that is claimed by an insured when it is readily apparent that the damaged property is actually a small condominium. A panel cannot abdicate its duty to arrive at a value for the loss simply because the parties disagree about the quality of the damaged items.

In this case, Fidelity’s claim that the appraisal panel simply rubber-stamped the insured’s estimate and adopted an improper scope of loss is belied by the record. Among other things, Fidelity claims that the insured’s representative, Dawson, relied upon an inaccurate square footage measurement, based estimates on upgraded finishes that did not exist, estimated the cost of re-wiring with conduit where no conduit existed, and included the cost of a lazy susan in the estimate of the replacement cost in the kitchen. Notably, Fidelity’s support for these claims is largely contained in an attorney declaration that is very general in nature. Fidelity does not identify where the claimed errors appear in the appraisal award or offer any specificity as to the actual cost difference attributable to the purported errors.

In fact, a review of the award and the appellate record indicates that the panel largely addressed the scope of loss issues Fidelity identifies and did not simply rubber stamp the insured’s estimate. The square footage measurements adopted by the panel were in some cases those proposed by Vanderbuilt and in other cases measurements proposed by Alamo. In the case of the wiring, as well as with various other listed items in the award, the panel adopted the unit pricing in Alamo’s estimate. Although Fidelity claims that Dawson and Vanderbuilt included upgraded finishes in their estimate, it has failed to demonstrate that the panel actually valued the loss using upgraded finishes. For example, in the case of the kitchen countertops, there is no reference to “premium” tile in the actual award, and Dawson explained why he thought the unit price adopted by the panel was justified. In short, our review of the appraisal award does not support an inference that the panel neglected to make factual determinations necessary to value the loss.

Fidelity also disputes the award for loss of use of the property, claiming there is
“no law allowing an insured to recover loss of use damages for the period her claim is in the appraisal process.” The issue Fidelity raises concerns the available policy coverage under the law and is outside the limited scope of an appraisal hearing.

Bearing in mind that it is not our role to assess the sufficiency of the evidence to support the appraisal, we conclude that the panel did not exceed the scope of its authority in discharging its obligation to value the loss. If Fidelity believes that coverage did not extend to certain claimed items included within the scope of loss, it has legal options available to it outside the appraisal process.

4. Purported Fraud Due to Misrepresentation of Scope of Loss

Section 1286.2, subdivision (a)(1) “requires judicial vacation of an arbitration award if that award was ‘procured by corruption, fraud or other undue means.’ The section applies when ‘fraud’ is perpetrated by either the arbitrator or a party involved.”
(Pacific Crown Distributors v. Brotherhood of Teamsters (1986) 183 Cal.App.3d 1138,
1146–1147, fn. omitted.) Fidelity contends the appraisal award must be vacated because Dawson misrepresented the scope of the loss suffered by Owens. It argues that Dawson submitted an estimate that included high-grade finishes the home did not have, estimated a cost for re-wiring with conduit where there was no conduit, included a cost to replace a lazy susan without evidence that the home contained one, and increased the dwelling’s square footage by duplicating rooms in the estimate. As we explain, even assuming Dawson knowingly presented false information, there was no extrinsic fraud that would require vacating the appraisal award.

As an initial matter, we note that Dawson disputes Fidelity’s claim that he intentionally presented any false or misleading information to the appraisal panel. Dawson’s statement is substantial evidence supporting the trial court’s implied conclusion that there was no fraud requiring vacation of the award. Without more, we would be justified in rejecting Fidelity’s fraud argument. Further, despite Fidelity’s characterization that Dawson “admitted” presenting false claims to the panel, our reading of the record suggests he acknowledged that some of the items in the Vanderbuilt estimate were incorrect or mischaracterized the nature of the item. For example, with respect to high grade finishes and appliances, Fidelity’s counsel stated that Dawson admitted the home did not contain them but purported to justify the additional cost in the estimate because the contractor would have been required to travel from San Diego to complete the work. While that explanation may not have satisfied Fidelity’s counsel, Dawson did not attempt to mislead the panel, which was free to reject his rationale.

Moreover, Dawson’s alleged “fraud” in presenting inflated estimates is not the type of fraud that requires vacating an appraisal award. “Not every incidence of fraud will be allowed a remedy; vacation of an award will lie only for occurrences of ‘extrinsic’ fraud and not for ‘intrinsic’ fraud. [Citation.] ‘Extrinsic’ fraud is that conduct which
‘results in depriving either of the parties of a fair and impartial hearing to their substantial prejudice.’ ” (Pacific Crown Distributors v. Brotherhood of Teamsters, supra,
183 Cal.App.3d at p. 1147.) The essential characteristic of extrinsic fraud is that the aggrieved party is deliberately deceived or in some way prevented from presenting a claim or defense. (Maaso v. Signer, supra, 203 Cal.App.4th at p. 372.)

Here, Fidelity had a full and fair opportunity to respond to the purported misrepresentations made by Dawson or contained in the Vanderbuilt estimate. It was not deprived of an opportunity to offer a response to what it perceived as false information. Consequently, even if one could characterize Dawson’s conduct in allegedly presenting inflated repair estimates as fraudulent, it was not extrinsic fraud that would require vacating the appraisal award.

5. Claim that Umpire was Corrupt

Fidelity claims that the appraisal award must be vacated because the umpire was corrupt. (§ 1286.2, subd. (a)(2).) The claim is meritless.

As the basis for its corruption claim, Fidelity argues that the umpire, William C. Thomas, displayed bias by submitting a declaration in support of Owens’s petition to confirm the appraisal award. Fidelity contends the umpire became an advocate for Owens and cast doubt on the impartiality of the award by submitting the declaration. It also argues that Thomas did nothing to curtail Dawson’s “sexist and discriminatory comments at the hearing.” Fidelity asserts that Dawson repeatedly referred to Fidelity’s witness, Bynum, as a “Texican”—supposedly equating him with a “redneck”—and made derogatory comments directed at Fidelity’s female attorney, purportedly stating that people wearing skirts should not have mouths.

Fidelity cites no authority for the proposition that an umpire should be considered
“corrupt” if he or she files a declaration in proceedings to confirm or vacate an appraisal award. Instead, Fidelity relies on a rule of evidence providing that an arbitrator shall not
“be competent to testify, in any subsequent civil proceeding, as to any statement, conduct, decision, or ruling, occurring at or in conjunction with” the arbitration.
(Evid. Code, § 703.5.) The cited statute governs the admissibility of evidence offered by an arbitrator; it does not suggest the submission of an inadmissible declaration by an umpire is evidence of corruption. Further, there is nothing in the proffered declaration to suggest Thomas was somehow biased in favor of Owens. While all or a portion of the declaration may have been inadmissible, it did not reveal that Thomas was biased in favor of Owens at the time of the appraisal.

As for the claim that Thomas tolerated a discriminatory atmosphere at the appraisal hearing, the evidence is in conflict concerning whether Dawson even made the alleged comments. Dawson disputes making the comments, as Fidelity acknowledged in the trial court. Consequently, there was substantial evidence to support the trial court’s implied rejection of Fidelity’s claim of corruption premised upon a supposedly discriminatory atmosphere. Our conclusion does not condone such an atmosphere or suggest that an umpire has no obligation to reign in behavior that is derogatory or discriminatory. Rather, it simply recognizes that we uphold the trial court’s implied ruling if it is supported by substantial evidence. (Kacha, supra, 140 Cal.App.4th at p. 1031.)

6. Refusal to Allow Witness to Testify

Before the appraisal hearing commenced, Fidelity’s counsel informed the panel that it intended to present the testimony of Ashcroft, the contractor who had signed off on the Alamo estimate. According to Fidelity, the panel declined its counsel’s request during the hearing to allow Ashcroft to testify by telephone. On appeal, Fidelity argues that its rights were substantially prejudiced by the failure of the panel to consider Ashcroft’s testimony. (§ 1286.2, subd. (a)(5).)

Fidelity did not present this argument to the trial court as a basis for vacating the appraisal award. Because the issue was not presented to the trial court, it is not properly before this court and is considered forfeited. (Cf. In re Marriage of Eben-King & King
(2000) 80 Cal.App.4th 92, 110–111 [party generally may not assert new basis for relief on appeal].) In any event, we fail to see how Fidelity was substantially prejudiced by the absence of Ashcroft’s testimony. The Alamo adjuster, Bynum, testified as to the basis for the Alamo estimate relied upon by Fidelity. Ashcroft would have simply confirmed that he was willing to perform the work for the amount of the estimate prepared by Bynum. Ashcroft’s testimony was unnecessary to establish that fact, which could have been confirmed by Bynum. (See Ins. Code, § 2071 [appraisal proceeding does not apply formal rules of evidence].)

7. Failure of Appraiser to Disclose Ground for Disqualification

Section 1286.2, subdivision (a)(6)(A) requires a trial court to vacate an arbitration award when an arbitrator fails to disclose a ground for disqualification of which the arbitrator is aware. Fidelity argues that the award must be vacated because the appraiser designated by Owens, Keith Charleston, failed to disclose that he had an ongoing business relationship with Owens’s public adjuster, Dawson. We are not persuaded.

As an initial matter, the statutory scheme providing that an arbitrator is automatically disqualified for failing to timely disclose a ground for disqualification is applicable to neutral umpires but not to party-appointed appraisers, such as Charleston.
(Mahnke v. Superior Court (2009) 180 Cal.App.4th 565, 576, 578 (Mahnke); see
§§ 1281.9, 1281.91.) Nevertheless, a party-appointed appraiser is supposed to be “disinterested” (Ins. Code, § 2071) and may be disqualified if the appraiser has an ongoing business relationship with the umpire, a party, its counsel, or a witness.
(Mahnke, supra, at p. 579.) An appraiser must disclose the existence of the relationship, but only if it is “substantial.” (Id. at pp. 579–580.) We apply de novo review to the question of whether the undisputed facts might cause a reasonable person to doubt a party-appointed appraiser’s impartiality. (Id. at p. 580, fn. 9; Haworth v. Superior Court
(2010) 50 Cal.4th 372, 383.)

Here, Fidelity points to three prior occasions dating back to 2004 in which Dawson selected Charleston as an appraiser. These prior appointments do not establish a
“substantial” business relationship with Dawson, particularly in light of Charleston’s statement that he has been involved in more than 1,100 appraisals, including roughly 200 on behalf of insurers, 600 for policyholders, and 300 as neutral umpire. As the court noted in Mahnke, supra, 180 Cal.App.4th at page 581, “[i]mposing overly rigorous standards on party-selected appraisers in informal proceedings under Insurance Code section 2071 would be both shortsighted and naïve about the realities of modern litigation practices.” It is not surprising that an appraiser would have worked with a public adjuster on more than one occasion over a period of several years. These facts would not cause a reasonable person to question Charleston’s impartiality.

The cases relied upon by Fidelity do not alter our conclusion. In Gebers v. State Farm General Ins. Co. (1995) 38 Cal.App.4th 1648, 1652–1654, the court vacated an appraisal award because the appraiser appointed by the insurer failed to disclose an ongoing business relationship with the insurer. There, the appraiser was employed by the insurer as an expert witness in two pending cases. (Id. at p. 1648.) Unlike in this case, where Charleston had a limited, past relationship with Dawson, the appraiser in Gebers had a present business relationship with the insurer that created an impression of possible bias.

In the other case relied upon by Fidelity, Figi v. New Hampshire Ins. Co. (1980)
108 Cal.App.3d 772, 777, the court vacated an appraisal award where the neutral umpire was doing business with the insurer-appointed appraiser “while the appraisal procedure was pending.” In contrast, the court found that the umpire’s prior dealings with the insurer did not form a basis to vacate the award where there was no showing of the quantum of business transacted or that any of it was done during the appraisal procedure.
(Ibid.) The court was “[m]indful of the difficulty of securing competent appraisers who have never done business with the insurance company involved . . . .” (Ibid.) Here, of course, there was no showing that Charleston had an ongoing business relationship with Dawson at the time of the appraisal. We cannot expect appraisers who regularly participate in appraisals to have had no prior working relationship with particular adjusters or insurance companies. While there may be instances where the substantial nature of the relationship between a party-selected appraiser and another party gives rise to a disclosure obligation, we are not convinced that this is such a case.

8. Dawson Purportedly Practicing Law Without a License

Fidelity’s final contention is that Owens’s public adjuster, Dawson, “impugned the integrity of the appraisal process” by practicing law without a license. It argues that he performed tasks normally performed by lawyers by offering evidence on behalf of Owens, cross-examining witnesses, making objections, drafting briefs with legal citations, and arguing the law to the appraisal panel.

Although a public adjuster is not authorized to practice law unless he or she is licensed (Ins. Code, § 15002), a public adjuster is allowed to “act[] on behalf of or aids in any manner, an insured” in adjusting and settling a claim for losses. (Ins. Code,
§ 15007.) As Fidelity concedes, an appraisal hearing is informal, with no formal rules of evidence, formal discovery, and no court reporter. (Kirkwood, supra, 193 Cal.App.4th at p. 58.) The direction to maintain informality was inserted into the Insurance Code section 2071 in 2001 in response to complaints of insurer abuses and was intended “to equalize the positions of insurers and insureds and to streamline the appraisal process by reducing the opportunity for delaying tactics by insurers . . . .” (Mahnke, supra,
180 Cal.App.4th at p. 573.) Nevertheless, in reliance on case law predating the 2001 statutory changes mandating informality, Fidelity maintains that an attorney is required to represent an insured at an appraisal hearing because it is a “quasi-judicial proceeding.” (But see Hartford Lloyd’s Ins. Co. v. Teachworth (5th Cir. 1990) 898 F.2d 1058, 1061–
1062 [informal insurance appraisal, unlike arbitration, is not “quasi-judicial” proceeding].)

We need not decide whether an appraisal hearing is sufficiently informal that an insured may be represented by a public adjuster at the hearing. Section 1286.2, which sets forth the exclusive grounds for vacating an award, is silent concerning the representation of parties at an arbitration or appraisal. Fidelity fails to cite any authority that suggests an appraisal award may be vacated because an insured was represented by a licensed public adjuster rather than an attorney. Further, we are not persuaded by the authority from Arizona cited by Fidelity to support the proposition that a public adjuster who represents a party at an arbitration is practicing law without a license. That authority does not apply California law and, more importantly, does not establish that an appraisal or other arbitration award must be vacated when a public adjuster acts as an attorney.

Moreover, Fidelity has failed to establish it suffered any prejudice as a result of Dawson’s representation of Owens. It claims the award was procured through “undue means” as a result of Dawson’s purportedly illegal activity. (§ 1286.2, subd. (a)(1).) But we fail to see how Dawson’s advocacy on behalf of Owens, even if considered the unlawful practice of law, afforded Owens some unfair advantage in the appraisal proceeding or constituted the type of activity that would call into question the legitimacy of the award. Fidelity cannot honestly claim that its interests were prejudiced by a public adjuster acting on behalf of its insured when it was represented by a licensed attorney at the appraisal proceeding. Accordingly, under the circumstances presented here, the fact that Dawson acted as Owens’s advocate during the appraisal hearing is not a ground to vacate the appraisal award.


The judgment confirming the appraisal award is affirmed. Respondent shall be entitled to costs on appeal.

McGuiness, P.J.

We concur:

Pollak, J.

Siggins, J.