Appraisal Clauses Without “Disinterested” Appraisers Remain Arbitration Under Rhode Island’s Arbitration Act

Case: New England Property Services Group, LLC v. Vermont Mutual Insurance Company
Court: Supreme Court of Rhode Island
Date: March 10, 2025

1. Introduction

This appeal arose from a homeowners’ wind-damage claim in Greenville, Rhode Island. The insureds assigned their insurance claim to the plaintiff, New England Property Services Group, LLC, which then disputed the insurer Vermont Mutual Insurance Company’s estimate and invoked the policy’s appraisal clause to determine the “amount of loss.”

The key legal issues were not the merits of the loss valuation, but (i) whether the Superior Court had subject-matter jurisdiction to vacate an appraisal award under Rhode Island’s Arbitration Act where the policy did not state that appraisers must be “disinterested,” and (ii) whether the plaintiff—after having sought confirmation under the Arbitration Act—could later recast the proceeding as non-arbitral to undo an adverse vacatur order via a Rule 60(b)(4) “void judgment” theory.

2. Summary of the Opinion

The Supreme Court affirmed the Superior Court’s denial of the plaintiff’s Rule 60(b) motion (treated as a motion to vacate rather than a “motion to reconsider”). The Court held:

  • The Superior Court had subject-matter jurisdiction over the dispute (including petitions to confirm/vacate the award); the plaintiff’s “no jurisdiction” argument improperly conflated jurisdiction with alleged legal error.
  • An appraisal clause may constitute “arbitration” under Rhode Island law based on substance, not labels, and the omission of the word “disinterested” does not remove the process from the Arbitration Act.
  • The Arbitration Act itself does not require “disinterested” arbitrators; instead, it polices neutrality through vacatur for “evident partiality or corruption” under § 10-3-12(2).
  • The plaintiff’s post-loss change in position—after invoking the Arbitration Act to confirm the award—was treated as an attempted “repackage [of] a losing argument,” and the Court signaled the relevance of judicial estoppel principles.

3. Analysis

3.1. Precedents Cited

Appraisal as arbitration (substance over labels)

  • Grady v. Home Fire and Marine Insurance Company, 27 R.I. 435, 63 A. 173 (1906).
    The Court relied on Grady as an early Rhode Island decision treating insurance “appraisal” provisions as “arbitration,” even using the terms interchangeably. Grady contained a clause requiring “competent and disinterested appraisers” and a “disinterested umpire,” and it described a structured mechanism culminating in a binding written award by “any two.”
  • Waradzin v. Aetna Casualty and Surety Company, 570 A.2d 649 (R.I. 1990).
    Waradzin was central: it reaffirmed that appraisal can be equated with arbitration and emphasized that “labels” are not controlling; “the substance of the transaction” governs. It also supplied an important procedural rule: a party wishing to object to “arbitrability” must object at the hearing or refuse to submit to the process. The Court analogized the plaintiff’s conduct here to the objecting party’s delay in Waradzin.

Rule 60(b)(4) and “void judgment” standards

  • School Committee of City of Cranston v. Bergin-Andrews, 984 A.2d 629 (R.I. 2009).
    Cited for the procedural point that Rhode Island does not recognize a “motion to reconsider”; such motions are treated as motions to vacate.
  • In re Quigley, 21 A.3d 393 (R.I. 2011); Nisenzon v. Sadowski, 689 A.2d 1037 (R.I. 1997); Shannon v. Norman Block, Inc., 106 R.I. 124, 256 A.2d 214 (1969).
    These cases framed the de novo standard and the principle that a voidness inquiry is non-discretionary: the judgment is either valid or not; if void, relief is an “unqualified right.”
  • McLaughlin v. Zoning Board of Review of Town of Tiverton, 186 A.3d 597 (R.I. 2018); Allstate Insurance Co. v. Lombardi, 773 A.2d 864 (R.I. 2001).
    Used to state the voidness test under Rule 60(b)(4): lack of jurisdiction or a “plain usurpation of power” amounting to a due process violation.

Subject-matter jurisdiction: power to hear vs. correct exercise of power

  • E.T. Investments, LLC v. Riley, 262 A.3d 673 (R.I. 2021); Decathlon Investments v. Medeiros, 252 A.3d 268 (R.I. 2021); Federal National Mortgage Association v. Malinou, 101 A.3d 860 (R.I. 2014).
    These cases supported that subject-matter jurisdiction challenges may be raised at any time and cannot be waived, but they also sharpened what “subject-matter jurisdiction” means: the “power of the court to hear the case.”
  • Cronan v. Cronan, 307 A.3d 183 (R.I. 2024); Cranston Teachers Association v. Cranston School Committee, 120 R.I. 105, 386 A.2d 176 (1978).
    Cited to caution against misuse of “subject-matter jurisdiction” to describe mere legal error; jurisdiction is about power to adjudicate, not whether the court should (or correctly did) exercise that power.
  • DeMarco v. Travelers Insurance Company, 102 A.3d 616 (R.I. 2014); Narragansett Electric Co. v. Saccoccio, 43 A.3d 40 (R.I. 2012).
    Reinforced that jurisdiction is the power to hear/decide, not the correctness of the decision.
  • Barone v. O'Connell, 785 A.2d 534 (R.I. 2001); Chase v. Bouchard, 671 A.2d 794 (R.I. 1996).
    These cases were used for the proposition that the Superior Court is a court of general jurisdiction unless jurisdiction is assigned elsewhere by statute.
  • Gallop v. Adult Correctional Institutions, 182 A.3d 1137 (R.I. 2018).
    Invoked to distinguish subject-matter jurisdiction from the court’s “authority to proceed” (i.e., the propriety of its actions once jurisdiction exists).

Arbitrability objections may be raised, but timing and conduct matter

  • State Department of Corrections v. Rhode Island Brotherhood of Correctional Officers, 115 A.3d 924 (R.I. 2015) (quoting Woonsocket Teachers' Guild, Local 951, AFT v. Woonsocket School Committee, 770 A.2d 834 (R.I. 2001)).
    Quoted for the principle that arbitrability can be raised “at any time,” but the Court’s substantive reliance on Waradzin underscores that a party’s participation without objection has consequences in appraisal/arbitration contexts.

Statutory interpretation methodology

  • Sosa v. City of Woonsocket, 297 A.3d 120 (R.I. 2023); Epic Enterprises, LLC v. Bard Group, LLC, 186 A.3d 587 (R.I. 2018); In re Brown, 903 A.2d 147 (R.I. 2006).
    These cases supplied interpretive canons: plain meaning when clear; read provisions in context and as part of the whole statutory scheme.

Judicial estoppel warning (fast and loose litigation)

  • Gaumond v. Trinity Repertory Company, 909 A.2d 512 (R.I. 2006) (quoting Patriot Cinemas, Inc. v. General Cinemas Corp., 834 F.2d 208 (1st Cir. 1987)).
    The Court noted the risk of inconsistent positions and highlighted the doctrine of judicial estoppel where a litigant “play[s] fast and loose with the courts.” Although not formally applied as a dispositive holding, its placement and tone function as a clear admonition—especially given the Court’s observation of the plaintiff’s repeated similar litigation.

3.2. Legal Reasoning

(A) The case was decided as a jurisdiction/voidness challenge—not a merits appeal

The Court emphasized a procedural posture that drove the analysis: the plaintiff did not appeal the underlying order that vacated the award and denied confirmation. Instead, it pursued Rule 60(b)(4) relief claiming the judgment was “void” for lack of subject-matter jurisdiction. That posture narrowed the inquiry to whether the Superior Court had the power to adjudicate the petitions at all, not whether it correctly applied the Arbitration Act.

(B) Superior Court subject-matter jurisdiction existed regardless of “arbitration” labeling

Applying general-jurisdiction principles (Barone; Chase) and the monetary threshold statute, the Court held jurisdiction was “clearly” present under G.L. 1956 § 8-2-14 because the amount in controversy exceeded $10,000. The plaintiff’s attempt to make jurisdiction depend on whether the appraisal clause was “true arbitration” was rejected as conflating jurisdiction with an alleged error of law—precisely the misuse of “subject-matter jurisdiction” criticized in Cronan and McLaughlin.

(C) Appraisal remained arbitration under Rhode Island law; “disinterested” is not a statutory prerequisite

Turning to the plaintiff’s core textual argument—no “disinterested” requirement in the policy—the Court held that this omission did not remove the proceeding from the Arbitration Act:

  • Statutory anchor: Section 10-3-12(2) requires vacatur for “evident partiality or corruption,” not for failure to include “disinterested” in the contract. Put differently, the Arbitration Act polices bias through post-award judicial review standards, not through a mandatory adjective in the arbitration clause.
  • Precedential anchor: Under Waradzin (and the Court’s reading of Grady), appraisal clauses with a structured, binding award mechanism are substantively arbitral. “What labels are used … are not controlling. Rather … it is the substance of the transaction that determines the character.”
  • Textual similarity: The clause here (two appraisers, selection of an umpire, separate valuations, submission of differences, award by any two) was “nearly the same” as in Grady and Waradzin; dropping a single adjective was not enough to “radically transform” the process.

(D) Conduct and consistency: litigants cannot invoke the Arbitration Act then disavow it after losing

The Court was particularly skeptical because the plaintiff initially invoked § 10-3-11 to confirm the award, and only after losing sought to void the judgment by claiming the Superior Court never had jurisdiction under the Arbitration Act. The Court characterized this as an “about-face” and a “clear attempt to repackage a losing argument.”

While subject-matter jurisdiction itself cannot be waived (E.T. Investments), the Court’s reasoning separates two ideas: (1) jurisdiction existed, and (2) the plaintiff’s litigation strategy looked inconsistent enough to implicate judicial estoppel concerns (Gaumond).

3.3. Impact

  • Clarification of Rhode Island appraisal law: The decision reinforces that insurance appraisal provisions may be treated as arbitration under the Arbitration Act based on substantive features (binding valuation by appraisers/umpire), even if the clause does not expressly say appraisers must be “disinterested.”
  • Vacatur pathway preserved: By anchoring the neutrality requirement in § 10-3-12(2) (“evident partiality or corruption”), the Court confirms that challenges to biased appraisers/umpires remain viable even without “disinterested” language in the contract.
  • Limits on post-loss relabeling: Litigants who petition to confirm under the Arbitration Act risk judicial estoppel-type consequences if they later deny the process is arbitration after receiving an adverse ruling.
  • Procedural discipline: The opinion signals that Rule 60(b)(4) cannot be used as a substitute for a direct appeal by rebranding alleged legal error as “voidness” for lack of jurisdiction.
  • Insurance dispute litigation in Rhode Island: Given the Court’s express note that “dozens” of similar Superior Court cases involve the plaintiff, the decision may shape how appraisal contractors and insurers structure appraisal demands, appraiser selection, and post-award litigation strategy.

4. Complex Concepts Simplified

  • Appraisal vs. arbitration: An “appraisal” in insurance often determines the amount of loss (a valuation) rather than legal liability. Rhode Island treats some appraisal mechanisms as “arbitration” when they function like a binding adjudicative process: two party-selected decisionmakers, an umpire, and a binding award by a majority.
  • “Disinterested” vs. “partiality”: “Disinterested” is contract language suggesting no stake in the outcome. The Arbitration Act does not require that word to appear; instead, it provides a remedy if an arbitrator shows “evident partiality or corruption” (§ 10-3-12(2)).
  • Subject-matter jurisdiction: This is the court’s basic power to hear the type of case. Even if a court makes a legal mistake, that usually does not mean it lacked subject-matter jurisdiction.
  • Rule 60(b)(4) “void judgment”: A narrow tool to set aside a judgment only if the court lacked jurisdiction or committed a due-process-level “usurpation of power.” It is not meant to re-litigate ordinary legal errors that could have been appealed.
  • Judicial estoppel: A doctrine preventing a party from gaining advantage by taking inconsistent positions in different phases of litigation—especially when the shift appears tactical.

5. Conclusion

New England Property Services Group, LLC v. Vermont Mutual Insurance Company fortifies a Rhode Island rule with practical bite: insurance appraisal procedures that operate like binding valuation adjudications will be treated as arbitration under the Arbitration Act, and the absence of the word “disinterested” in the policy does not defeat that classification. The decision also draws a sharp line between true jurisdictional defects and attempts to reframe legal disagreement as “voidness,” while cautioning litigants against strategic position-switching after an adverse result.