50 Exchange Terrace LLC suffered losses from frozen burst pipes that caused water damage to its property and tendered a claim to its insurer, Mount Vernon Specialty Insurance Company. The parties disputed the cost of repairs (i.e., the amount of the loss) and Mount Vernon demanded appraisal to resolve the dispute. Rather than proceeding with appraisal, 50 Exchange filed suit in California state court, asserting that Mount Vernon had wrongfully withheld policy benefits pending the appraisal. Mount Vernon removed the case to federal court based on diversity jurisdiction. The federal district court then dismissed the suit for lack of ripeness and Article III standing.

The Ninth Circuit affirmed, reasoning that 50 Exchange had not sustained any actionable injury pending resolution of the amount of loss dispute through appraisal. That is because the extent of 50 Exchange’s loss could not be determined in court until the parties had completed appraisal. Until then, “[a]ny alleged injury before appraisal is too speculative to create an actionable claim.” 2025 WL 666363 at *2.

The Ninth Circuit did “not break new ground here.” Recognizing several non-precedential decisions of the Court and district court orders requiring appraisal before allowing an insured to sue for the wrongful delay or withholding of policy benefits, the Ninth Circuit explained: 

We have chosen to issue this decision as a precedential opinion in the hope of deterring or at least short-circuiting other similarly premature cases where the agreed insurance appraisal process has not yet been completed.

2025 WL 666363 at *2.