Contracting parties sometimes agree to designate a third-party
to make determinations relating to their agreement. The Michigan
Court of Appeals recently issued an opinion explaining the rules
and consequences of third-party determinations in Niewiek v
Berends Hendricks Stuit Insurance Agency, Inc.1
In Niewiek, a former shareholder sued an insurance
agency disputing valuation of his stock by an appraiser identified
in the contract as having a nationally recognized reputation for
valuing insurance agencies. The appraiser performed the analysis in
a manner similar to previous valuations of the agency, as well as
other insurance agencies at the time of the shareholder's
departure from the company. Unhappy with the buyout figure, the
shareholder engaged a valuation expert and filed a lawsuit in Kent
County Business Court to dispute the third-party's
findings.
