Summary of Meyer v. State Farm Fire & Cas. Co.
Facts: common practice in fire insurance industry is to contain a clause requiring disputes concerning the amount of loss to be resolved through appraisal process in which both parties select appraiser, and two parties reach agreement; P’s purchased policy for fire insurance from D; a fire occurred at P’s home; parties disagreed, and D attempted to start appraisal process; P’s instead filed suit for damages contending the clause was invalid bc they were unaware of it
P/S: Trial court dismissed the action, FOR D
Issue: Whether the P’s can escape the clause because the policy was a contract of adhesion and they were unaware of the provision in the policy.
Holding: The appraisal clause is not invalid, AFFIRMED, FOR D
Rationale: A contract of adhesion does not mean that its terms are invalid. There was no ambiguity in the appraisal provision. Arbitration clauses are standard in insurance contracts.