Full opinion text
MEMORANDUM OPINION AND ORDER REGARDING THE MOTION OF THE “IRI DEFENDANTS” FOR PARTIAL STAY OF PROCEEDINGS AND PLAINTIFF’S CROSS-MOTIONS FOR PROTECTIVE ORDERS BENNETT, District Judge. TABLE OF CONTENTS I. INTRODUCTION.........................................................585 A. Procedural Background .................................................585 B. Factual Background ....................................................586 II. LEGAL ANALYSIS.......................................................587 A. Preliminary Issues......................................................587 1. Power to stay proceedings............................................587 2. Rules of policy interpretation.........................................588 a. A summary of the rules...........................................588 b. Terms dictated by statute and contra proferentem...................588 B. Preconditions To Suit...................................................591 1. Requirements in case loss occurs......................................593 2. Appraisal...........................................................593 C. Fulfillment Of Preconditions To Suit......................................594 1. Proof of loss........................................................594 2. Examinations under oath.............................................595 D. Appraisal..............................................................595 1. Untimely demand pursuant to the policy................................596 a. The thirty-day deadline...........................................596 b. The sixty-day deadline............................................596 c. The policy requirement...........................................597 2. Preemption of appraisal by the filing of the lawsuit......................598 3. Waiver of the right to demand appraisal................................601 4. Protective order.....................................................604 5. Power to stay proceedings in part pending appraisal.....................606 6. Scope of appraisal...................................................606 E. Certification For Interlocutory Appeal.....................................607 III. CONCLUSION...........................................................609 When someone refers to a dispute as a “shape of the table dispute,” as counsel for one of the parties in this case did during oral arguments, what image is called to mind probably depends upon how old you are — do you instantly think of the peace talks in the 1950s to end the Korean War, the Paris peace talks in the late 1960s and early 1970s to end the Vietnam War, one of the protracted labor disputes of the late 1970s, the Mid-East peace talks of the 1980s and early 1990s, or presidential summits of the mid 1990s? Whatever the historical context that phrase calls to mind, it probably sends a cold chill of despair or a sick feeling of frustration through you to think that, while serious substantive issues are pending, the parties can’t even agree on the context in which those issues will be resolved. Yet, a “shape of the table” dispute does not necessarily suggest triviality or pointlessness of the dispute over the proper forum or procedure, at least not in a legal system founded upon the presumption that fair process is one of the best guarantors of substantial justice. The “shape of the table” dispute presented here is whether questions of the extent of loss from a catastrophic explosion should be determined through an appraisal process provided in an insurance policy or through the insured’s lawsuit. Although frustrating, the court finds this dispute over the proper forum for initial determination of at least some of the measurement disputes between the parties — with potentially hundreds of millions of dollars at issue, more than two years of claims evaluation already behind the parties, and the prospect of years of litigation ahead — is anything but trivial. I. INTRODUCTION A. Procedural Background This is one of several lawsuits to arise from the catastrophic explosion on December 13, 1994, of a fertilizer plant in northwest Iowa owned by plaintiff Terra Industries, Inc. in which four persons were killed, eighteen were injured, and the fertilizer plant and its owner sustained enormous damage now alleged to exceed $360 million. In this litigation, Terra has brought a declaratory judgment action against dozens of its insurers concerning the extent of their liability for Terra’s loss. In the last two-and-one-half years, the insurers and Terra have engaged in the enormous tasks of assessing the damage and the extent of Terra’s insurance coverage and repairing and rebuilding the facility. The insurers have paid just over $200 million of Terra’s claims, but approximately another $160 million in claims remained unresolved when Terra filed this lawsuit on April 11,1997. This matter comes before the court pursuant to the May 23, 1997, motion of the so-called called “IRI defendants” a group of Terra’s insurers who are responsible for approximately half of Terra’s insurance coverage, for a partial stay of proceedings pending completion of alternative dispute resolution procedures the movants assert are required under the Industrial Risk Insurers Property Insurance Policy for Minorca U.S.A., Complaint, Exhibit 1 (hereinafter the “IRI Policy”). The IRI defendants contend that Terra filed this litigation prematurely, because Terra had not yet complied with all of the requirements. Specifically, the IRI defendants contend that Terra had failed to file a formal proof of loss, to submit to examinations under oath, or to pursue appraisal procedures prior to filing suit. The IRI defendants contend that these steps precedent to suit are required by the terms of the IRI Policy and the Iowa insurance statute that dictates those terms. Terra contends that these requirements have been either waived or substantially complied with under the circumstances of this ease, including the two- and-one-half year investigation of Terra’s claim undertaken by Terra and the insurance companies. Terra also contends that appraisal simply is not a prerequisite to suit and that the IRI defendants’ demand for appraisal is simply too late to be effective. In addition, this matter comes before the court pursuant to Terra’s cross-motions for protective orders, filed July 1, 1997, and August 12, 1997, respectively. In those motions, Terra seeks protection from what Terra describes as the IRI defendants’ belated attempts to take examinations under oath and to compel recourse to the appraisal procedures. Terra contends that the IRI defendants are attempting to delay litigation that all parties recognized was inevitable by asserting procedures that have been waived or that are not reasonably required. Terra also contends that the IRI defendants are attempting to use these procedures for premature, duplicative, and one-sided discovery in this lawsuit. The IRI defendants contend that Terra should not obtain the protection of this court from execution of provisions of the relevant insurance policy, particularly where those provisions are dictated by Iowa law. The parties have submitted extensive briefs and exhibits, and the court heard oral arguments on September 30, 1997. Terra submitted some additional exhibits following the oral arguments by agreement of the parties. B. Factual Background The record reveals the following factual context for the present motions. On December 13, 1994, a catastrophic explosion occurred at Terra’s fertilizer plant at Port Neal, Iowa. The amount of damage to Terra’s Port Neal facility as a result of the explosion was unprecedented, as was the scale of the response to that disaster by both Terra and its insurers. Terra immediately marshaled investigation and reconstruction efforts and provided access to the site by a large team of engineers and investigators employed by the insurers. For approximately four months, the parties exchanged information, Terra’s invoices were reviewed to determine whether they stated “incident related (IR)” or “non-incident related (NIR)” expenses, and those invoices were paid accordingly by the insurers. However, at the end of that period, Terra informed its insurers that it wished to concentrate exclusively on repairing and rebuilding its facility, and, although it would continue to submit invoices, it wished to be relieved of the necessity of submitting to claims evaluations until it could make a final submission. The insurers acceded to that request. For approximately the next year, the insurers were still allowed to maintain their investigators on the site, but they made preliminary IR and NIR determinations without Terra’s participation. Claims were not paid during this period, although the insurers had paid over $200 million of Terra’s claims up to that time. Throughout this period, Terra requested extensions of time to file a final proof of loss of its claim and to institute suit if required. Those requests for extensions were granted by the insurers. On October 3, 1996, Terra made what it considered to be its final submission of documents concerning the repair and rebuilding of the Port Neal facility at a meeting "with all insurers at the Sioux City Hilton Hotel. That submission consisted of forty-seven boxes containing tens of thousands of documents. Counsel for the IRI defendants represented that , seventy to eighty percent of the documents provided to the insurers on October 3, 1996, had never before been submitted or evaluated, and Terra did not dispute that characterization. Terra contends, however, that the submission of documents on October 3, 1996, satisfied its obligation to make a final proof of loss under the IRI Policy. Notwithstanding that assertion, after submitting documents on October 3, 1996, Terra again sought extensions of time to make a final formal submission of its proof of loss and to bring suit. Those requests for extensions were granted. Terra’s final sworn proof of loss was submitted on April 17, 1997, six days after Terra filed the present lawsuit. On October 3, 1996, Terra also presented the insurers with a “protocol” or schedule of what Terra anticipated would be the time frame for final resolution of its insurance claims. IRI Defendants’ Hearing Exhibit 3. According to that “protocol,” responses to and discussions of Terra’s claims were expected through March of 1997, with a discussion of options for dispute resolution anticipated on March 10, 1997. Discussions of Terra’s claims did continue into the early Spring of 1997. On April 10, 1997, Terra sent its insurers a proposed agenda for a meeting on April 14 and 15,1997, in Houston, Texas, concerning the Port Neal claim recovery. However, on April 11, 1997, Terra filed this lawsuit, and the Houston meeting was cancelled. Terra asserts that three things prompted it to file suit instead of proceeding with claims negotiations. First, in January of 1997, a Terra official was told by the lead certified public accountant for the IRI defendants that the property damage dispute between Terra and its insurers was “headed for the courtroom.” The IRI defendants contend that this remark was made by someone not involved in actual determination of claims. Second, Terra contends that a report from the insurers in March of 1997, the “MDD Report,” Exhibit A attached to the Shaffer Affidavit, was a clear cut denial of substantial parts of its claim, creating an impasse. The IRI defendants characterize this report as a statement of positions for further discussions, not a formal denial of any formal claim. Finally, Terra asserts that it filed suit in response to a denial of payment on a further $50 million of its claim. The IRI defendants characterize their action on these claims as also constituting a statement of positions for discussion, not a denial of the claims. The IRI defendants suggest that Terra’s suit was filed primarily to obtain leverage in settlement discussions. The court need not resolve any dispute about the motivation for Terra’s suit. Instead, the court has presented the positions of the parties to identify the actions taken by the parties in the early part of 1997 and to indicate the climate of the negotiations at that time. Even after Terra’s suit was filed, there were efforts on both sides to attempt to reopen negotiations. Eventually, however, on July 23, 1997, in a reply brief pertaining to motions presently pending before the court, the IRI defendants made a formal demand for appraisal of remaining disputes over the amount of Terra’s loss pursuant to the terms of the IRI Policy. II. LEGAL ANALYSIS The court believes that the key question for resolution of the pending motions is whether the IRI defendants’ demand for an appraisal was made within a reasonable time after the parties reached an impasse on amount-of-loss issues. Nonetheless, the pending motions present numerous other issues to be addressed before or in addition to resolution of this key question. The court finds that some of those issues appear to have been resolved by the efflux of time since the filing of the motions or by the agreement of the parties at oral argument, while still others will be resolved or mooted by the court’s disposition of related issues. What remains for the court to resolve, however clear the basic question may be, is substantial. The court was presented with excellent briefing and advocacy by both parties, which demonstrated how difficult and close some of the remaining issues are. A. Preliminary Issues 1. Power to stay proceedings Although the parties raise numerous issues in their motions, no party denies the court’s power to stay these proceedings, if the court is so disposed. Instead, the parties dispute only whether a stay is appropriate. Nonetheless, the court concludes that it must first determine what authority it may have to stay the litigation pending exhaustion of the appraisal and other procedures under the applicable insurance policy. The court finds that the necessary authority comes from the court’s inherent power to grant a stay in order to control its docket, conserve judicial resources, and provide for a just determination of a case pending before it. See, e.g., Lunde v. Helms, 898 F.2d 1343, 1345 (8th Cir.) (a stay of federal litigation pending exhaustion of state administrative and judicial proceedings was a “matter of docket management” within the court’s inherent power), cert. denied, 498 U.S. 897, 111 S.Ct. 249, 112 L.Ed.2d 208 (1990); Webb v. R. Rowland Co., Inc., 800 F.2d 803, 808 (8th Cir.1986) (whether or not the Arbitration Act provided authority for a stay in that case, “[t]he district court also has the inherent power to grant a stay in order to control its docket, conserve judicial resources, and provide for a just determination of the cases pending before it”); City of Bismarck v. Toltz, King, Duvall, Anderson & Assocs., Inc., 767 F.2d 429, 433 (8th Cir.1985) (whether or not the Arbitration Act applied, the district court had the inherent power to grant a stay in order to control its docket, conserve judicial resources, and provide for a just determination of the ease pending before it); Contracting Northwest, Inc. v. City of Fredericksburg, Iowa, 713 F.2d 382, 387 (8th Cir.1983) (a stay was appropriate pursuant to the court’s inherent power even if the Arbitration Act did not apply to a stay of proceedings between parties with no arbitration agreement). 2. Rules of policy interpretation a. A summary of the rules Also, because an essential part of the court’s analysis here is interpretation of the IRI Policy, the court will touch briefly on the rules for interpretation of insurance contracts under Iowa law. Those standards were recently summarized by the Iowa Supreme Court in Morgan v. American Family Mut. Ins. Co., 534 N.W.2d 92 (Iowa 1995): The construction and interpretation of an insurance policy is a question of law for the court to decide. Johnson v. Farm Bureau Mut. Ins. Co., 533 N.W.2d 203, 206 (Iowa 1995). The policy is to be construed as a whole, giving the words used their ordinary, not technical meaning to achieve a practical and fair interpretation. Gracey v. Heritage Mut. Ins. Co., 518 N.W.2d 372, 373 (Iowa 1994). When the terms of an insurance policy are ambiguous, we will construe them against the insurer. Id. However, the mere fact that the parties disagree on the meaning of a particular term does not establish ambiguity. Id. We will not give a strained or unnatural reading to the words of the policy to create ambiguity where there is none. West Trucking Line, Inc. v. Northland Ins. Co., 459 N.W.2d 262, 263 (Iowa 1990). Morgan, 534 N.W.2d at 99. The standards stated in Morgan are mirrored in myriad decisions by Iowa courts. See, e.g., AMCO Ins. Co. v. Rossman, 518 N.W.2d 333, 334 (Iowa 1994) (terms given ordinary meaning as reasonable person would understand them, and disagreement between parties over meaning does not establish ambiguity); Farm Bureau Mut. Ins. Co. v. Sandbulte, 302 N.W.2d 104, 108 (Iowa 1981) (disagreement between parties as to meaning does not establish ambiguity); Pappas v. Bever, 219 N.W.2d 720, 721 (Iowa 1974) (terms must be given their plain and ordinary meanings); Tom Riley Law Firm, P.C. v. Tang, 521 N.W.2d 758, 759 (Iowa.Ct.App.1994) (disagreement of parties as to meaning does not establish ambiguity, citing Sandbulte, and terms must be given their ordinary meaning, citing Pappas). Furthermore, this court has recounted, amplified, and applied these Iowa rules for interpretation of insurance contracts on more than one occasion. See Coulter v. CIGNA Property & Cas. Cos., 934 F.Supp. 1101, 1114-15 (N.D.Iowa 1996); Utica Mut. Ins. Co. v. Stockdale Agency, 892 F.Supp. 1179, 1201-02 (N.D.Iowa 1995). b. Terms dictated by statute and contra proferentem A much contested issue at the oral arguments was whether different rules apply when the terms of the insurance policy in question are dictated by statute. Iowa Code § 515.138(2) provides that “[i]t shall be unlawful for any insurance company to issue any policy of fire insurance ... other or different from the standard form of fire insurance policy herein set forth.” The terms of a fire insurance policy dictated by statute are set forth in Iowa Code § 515.138(6). Terra asserts that, even though the terms of the IRI Policy are dictated by statute, the rule of contra proferentem — -the principle that the policy is construed against the insurer, because insurance policies are contracts of adhesion — still applies. Terra contends that the silence of the IRI Policy on whether suit preempts appraisal or vice versa requires the court to construe the policy to permit Terra’s suit to continue unimpeded, because under the rule of contra proferentem, appraisal cannot be construed to be a precondition to Terra’s suit. Thus, the question the parties pose is whether the rule of contra proferentem still applies to insurance policies in which the terms of the policy are dictated by statute. Terra relies on the decision of the Iowa Supreme Court in Hoekstra v. Farm Bureau Mut. Ins. Co., 382 N.W.2d 100 (Iowa 1986). In Hoekstra, the question was whether the insureds had substantially complied with conditions precedent to suit when the insureds had refused to provide documents demanded by the insurer on the ground that the documents were not “reasonably required” as stated in the policy. Hoekstra, 382 N.W.2d at 105. The insurer objected to submitting to the jury the question of the reasonableness of its demands for documents, contending that, because the contract provisions in question were dictated by statute, the court should have determined, as a matter of law, that the insurer’s requests for documents were reasonable. Id. The Iowa Supreme Court agreed that statutory interpretation is a question of law for the court, but that various eases stood for the proposition that it is for the jury to decide whether the conduct or acts of a party are reasonable under the circumstances when facts are in dispute. Id. The court continued: [The insurer] seeks to distinguish these cases on the ground it is the statutory language, literally incorporated in the contract provisions, that is at issue here, and we cannot abandon our duty to be the final arbiter in the construction of Iowa statutes ... by submitting the question of “reasonableness” to the jury. This contention ignores the general rule that though the form of a policy is prescribed by statute, it is not to be treated as a legislative enactment after it has been accepted by the parties, but as a voluntary contract, which, like any other contract, derives its force and efficacy from the consent of the parties. [citations omitted.] Hoekstra, 382 N.W.2d at 105 (citations and internal quotation marks omitted). The court therefore found no error in the trial court’s denial of summary judgment on the “reasonableness” question and submission of that question to the jury. Id. at 106. The insurer next argued that, because the statutory language of the policy required that compliance with the policy provisions was a precondition to suit, strict compliance with those preconditions, not “substantial compliance,” was required. Id. The court’s conclusion was as follows: [The insurer] argues that because the statute is incorporated into the policy the general rule of constructing the policy liberally in favor of the insured is not implicated and strict compliance should be required. This position is untenable in view of the general rule [that] [w]hen the contract has been accepted voluntarily by the parties, it is treated like any other contract, and the same rules apply. Hoekstra, 382 N.W.2d at 106. The court therefore held that only “substantial compliance” with policy requirements was a precondition to suit. Id. The court concludes that Hoekstra can be read as a reaffirmation of the applicability of the rule of contra proferentem to the construction and interpretation of insurance policies, even where the terms of those policies are dictated by statute. After all, Hoekstra requires that the policy be “treated like any other [insurance] contract, and the same rules apply,” id., and among the “fundamental rules” of interpretation of insurance contracts under Iowa law is the principle that such contracts must be construed in the light most favorable to the insured. Cincinnati Ins. Co. v. Hopkins Sporting Goods, Inc., 522 N.W.2d 837, 839 (Iowa 1994); AMCO Ins. Co. v. Rossman, 518 N.W.2d 333, 334 (Iowa 1994) (“When the meaning of terms of an insurance policy is susceptible to two interpretations, the one favoring the insured is adopted. ”); Jensen v. Jefferson County Mut. Ins. Ass’n, 510 N.W.2d 870, 871 (Iowa 1994); A.Y. McDonald Indus., Inc. v. Insurance Co. of N. Am., 475 N.W.2d 607, 619 (Iowa 1991); North Star Mut. Ins. Co. v. Holty, 402 N.W.2d 452, 454 (Iowa 1987); Rich v. Dyna Technology, Inc., 204 N.W.2d 867, 872 (Iowa 1973) (“Where insurance contracts are ambiguous, require interpretation, or are susceptible to equally proper constructions, the court will adopt the construction most favorable to the insured. ”); The Travelers v. Mays, 434 N.W.2d 133, 134 (Iowa.Ct.App.1988) (quoting Rich). The reason for this rule is that insurance contracts are contracts of adhesion. Cincinnati Ins. Co., 522 N.W.2d at 839; Jensen, 510 N.W.2d at 871; A.Y. McDonald Indus., Inc., 475 N.W.2d at 619. However, application of such a rule is clearly at odds with the greater weight — and what this court finds to be the better reasoned — of authority in other jurisdictions. The courts of Massachusetts have been particularly firm in their rejection of the applicability of the contra proferentem rule when the terms of the policy in question are prescribed by statute, but other states also reject application of the contra proferentem rule in such a situation. This court is of the opinion that rules of statutory interpretation, rather than the contra proferentem rule, ought to apply when the terms of an insurance contract are dictated by statute, because, in such circumstances, the real question is or ought to be the intent of the legislature, not the intent of the parties to a contract in which neither has any real say as to the terms of the “agreement.” Accord Paul Revere Life Ins. Co. v. Haas, 137 N.J. 190, 644 A.2d 1098, 1103 (1994) (“When terms in an insurance policy are included by statutory mandate, however, courts no longer construe the policy against the insurer; rather, the ordinary rules of statutory construction apply.”); State Farm Mut. Auto. Ins. Co. v. Messinger, 232 Cal.App.3d 508, 519, 283 Cal.Rptr. 493, 500 (1991) (“[W]here the language is that of the Legislature, ... ‘the statute [and, hence, the insurance policy provision in conformity therewith] must be construed to implement the intent of the Legislature and should not be construed strictly against the insurer,’” quoting Prudential-LMI Com. Ins. v. Superior Court, 51 Cal.3d 674, 684, 274 Cal.Rptr. 387, 798 P.2d 1230 (1990), with interpolation by the court of appeals); Kennedy v. Allstate Ins. Co., 211 N.J.Super. 515, 511 A.2d 1301, 1303 (L.Div.1986) (“[W]here the language of the exclusionary clause in an insurance policy is identical to the corresponding statutory language, the rule of construction against the insurer is not necessarily applicable.... A specific provision integrated into an insurance contract pursuant to statutory authority is to be interpreted and given effect in accordance with legislative intent, as a matter of public policy____ Thus, the judicial function here is to effectuate the legislative goal to the extent permitted by the statutory scheme”; citations omitted), aff'd, 213 N.J.Super. 137, 516 A.2d 1117 (App.Div. 1986). One might say that in such circumstances, the policy is one of “adhesion” as to both the insurer and the insured. Cf. Cincinnati Ins. Co., 522 N.W.2d at 839 (justifying the contra proferentem rule on the ground that insurance contracts are adhesion contracts as to the insured). Consequently, it makes little sense to indulge in the fiction that the insurer offered the insured a contract of adhesion, and therefore the insurer should bear the burden of unfavorable interpretation when a provision is ambiguous. Nonetheless, as shall be seen below, whether or not the rule of contra proferentero does or does not apply to an insurance policy whose terms are dictated by Iowa statutory law has virtually no impact upon the court’s ultimate disposition of the pending motions. This is because the rule construing provisions of a policy against the insurer applies only when the terms of the policy are ambiguous or unclear. Morgan, 534 N.W.2d at 99 (“When the terms of an insurance policy are ambiguous, we will construe them against the insurer.”); Gracey, 518 N.W.2d at 373 (courts construe the terms of a policy against an insurer when the terms of an insurance policy are ambiguous); AMCO Ins. Co., 518 N.W.2d at 334 (applying the contra proferentem rule “[w]hen the meaning of terms of an insurance policy is susceptible to two interpretations”); Farm & City Ins. Co., 509 N.W.2d at 490-91 (rule applies only when the policy terms are ambiguous or unclear); Rich, 204 N.W.2d at 872 (“Where insurance contracts are ambiguous, require interpretation, or are susceptible to equally proper constructions, the court will adopt the construction most favorable to the insured.”); The Travelers, 434 N.W.2d at 134 (quoting Rich). As explained further herein, the court finds no ambiguity of the policy upon which this ruling turns. B. Preconditions To Suit The IRI defendants contend that Terra failed to fulfill three specific prerequisites or preconditions to the present lawsuit under the terms of the IRI Policy, and hence under the terms of Iowa Code § 515.138(6): Terra failed to make the required proof of loss; Terra failed make persons available for examinations under oath; and Terra failed to pursue the appraisal procedures outlined in the policy. To determine whether compliance with each of these provisions is a prerequisite or precondition to Terra’s suit, the court looks first to the terms of the IRI Policy itself, construing the policy as a whole. Morgan, 534 N.W.2d at 99. That policy includes the following provision concerning suit by the insured: Suit. No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within twelve months next after inception of the loss. IRI Policy, Pt. 1, p. 4 (emphasis added). This clause mirrors the “suit” clause in the Iowa Standard Fire Policy, Iowa Code § 515.138(6) (second page of standard fire policy). Hence, the “suit” clause conforms to the requirement of Iowa Code § 515.138(2) that it not contain terms “other or different from the standard form of fire insurance policy herein set forth.” § 515.138(2). The parties do not dispute that the deadline for commencement of suit has been extended in this case, so that Terra’s lawsuit is not late. Rather, the parties dispute whether Terra’s suit is premature pursuant to the terms of the policy, in light of whether all of the requirements of this policy had been complied with when Terra filed suit on April 11, 1997. What are “the requirements of this policy” that must be complied with before Terra may bring suit pursuant to the “suit” provision of its IRI Policy and Iowa Code § 515.138(6)? The IRI defendants point to two provisions in particular: Requirements in case loss occurs. The ■insured shall give immediate written notice to the Companies of any loss, protect the property from further damage, forthwith separate the damaged and undamaged personal property, put it in the best possible order, furnish a complete inventory of the destroyed, damaged and undamaged property, showing in detail quantities, costs, actual cash value and amount of loss claimed; and within sixty days after the loss, unless such time is extended in writing by the Companies, the insured shall render to the Companies a proof of loss, signed and sworn to by the insured, stating the knowledge and belief of the insured as to the following: the time and origin of the loss, the interest of the insured and of all others in the property, the actual cash value of each item thereof and the amount of loss thereof, all encumbrances thereon, all other contracts of insurance, whether valid or not, covering any of said property, any changes in the title, use, occupation, location, possession or exposures of said property since the issuing of this policy, by whom and for what purpose any building herein described and the several parts thereof were occupied at the time of loss and whether or not it then stood on leased ground, and shall furnish a copy of all the descriptions and schedules in all policies and, if required, verified plans and specifications of any building, fixtures or machinery destroyed or damaged. The insured, as often as may be reasonably required, shall exhibit to any person designated by the Companies all that remains of any property herein described, and submit to examinations under oath by any person named by the Companies, and subscribe the same; and, as often as may be reasonably required, shall produce for examination all books of account, bills, invoices and other vouchers, or certified copies thereof if originals be lost, at such reasonable time and place as may be designated by the Companies or their representative, and shall permit extracts and copies thereof to be made. Appraisal. In case the insured and the Companies shall fail to agree as to the actual cash value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within twenty days of such demand. The appraisers shall first select a competent and disinterested umpire; and failing for fifteen days to agree upon such umpire, then, on request of the insured or the Companies, such umpire shall be selected by a judge of a court of record in the state in which the property covered is located. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with the Companies shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting him and the expenses of appraisal and umpire shall be paid by the parties equally. IRI Policy, Pt. 1, pp. 2-3 (bold in original, italics added). Again, these provisions mirror the statutory requirements for fire polices in Iowa Code § 515.138(6) (second page of standard fire policy). 1. Requirements in case loss occurs The actions listed in the “Requirements in case loss occurs” provisions are prefaced by a mandatory “shall.” IRI Policy, p. 2 (“Requirements in case loss occurs”); Iowa Code § 515.138(6) (second page of standard fire policy). Thus, unless these requirements have been waived or are somehow otherwise inapplicable, under the express and unambiguous terms of the IRI Policy, Morgan, 534 N.W.2d at 99, and Iowa Code § 515.138(6), Terra must provide appropriate proof of loss and submit to examinations under oath as preconditions to suit, because proof of loss and examinations under oath are “requirements of the policy.” 2. Appraisal However, whether Terra’s failure to engage in the policy’s appraisal process prior to filing this suit makes this suit “premature” is a more complicated question. It is undisputed that Terra did not engage in such a process prior to filing suit, but it is also undisputed that the IRI defendants made no demand for appraisal before Terra filed this lawsuit. The court and the parties have found no Iowa decisions directly addressing whether the appraisal procedure prescribed by statute in the Iowa Standard Fire Insurance Policy, Iowa Code § 515.138(6), is a “precondition” to suit on the policy. Terra has asserted that the appraisal process is not required until and unless someone demands it — it is not “self-executing” — so that it cannot be a precondition to suit if no demand for appraisal was made before suit is filed. The IRI defendants maintain that appraisal is a precondition to Terra’s suit. The court concludes that, on this issue, Terra has stated the proper rule for the appraisal term in question, although the court does not believe Terra is correct in its further assertion that the filing of its suit preempted and cutoff forever recourse to the appraisal process. In Massey v. Farmers Ins. Group, 837 P.2d 880 (Okla.1992), in a decision answering a certified question from the Tenth Circuit Court of Appeals concerning whether an umpire’s damage appraisal has any preclusive effect upon the party that was compelled to enter into the appraisal process by the other, the Supreme Court of Oklahoma examined that state’s statutorily prescribed appraisal provision for fire insurance policies. That provision is essentially identical to the one in question here. The Oklahoma court noted that it had previously held that the appraisal clause “does not constitute a condition precedent for maintaining an action on the policy where the insurer, in making demand for an appraisal, reserves the right to litigate the question of liability.” Massey, 837 P.2d at 882 (citing Fidelity-Phenix Fire Ins. Co. of N.Y. v. Penick, 401 P.2d 514 (Okla.1965)). The court then noted the similar holding of the Oregon Supreme Court: In Molodyh v. Truck Ins. Exch., 304 Or. 290, 744 P.2d 992 (1987), the court held, as this Court did in Penick, supra, that a statutorily-mandated appraisal provision is not a condition precedent to litigation. Thus, the statute does not require complianee with the provision in order to litigate a claim. The court further held that once the appraisal process is demanded by one of the parties, the procedure of the statute and policy becomes mandatory. Hence, to the demanding party, the appraisal process is permissive because they have chosen to invoke it. However, once that party invokes it, the process becomes mandatory to the other party. Massey, 837 P.2d at 883. Older decisions, also concerning statutorily-prescribed appraisal provisions essentially identical to the one dictated by Iowa Code § 515.138(6), and therefore essentially identical to the one found in the IRI Policy, also conclude that the provision is not a precondition to suit. See, e.g., Davis v. Anchor Mut. Fire Ins. Co., 96 Iowa 70, 64 N.W. 687, 689 (1895) (upholding the district court’s conclusion that an appraisal provision requiring that one party demand appraisal in writing was not a condition precedent to suit, because “[i]f we eliminate the words, ‘at the written request of either party,’ we have, in terms, a provision for arbitration as a condition precedent to a right of action. If we restore the words, the provision is so modified that the arbitration is only to be had on request. Until there is a written request, neither party is compelled to arbitrate. ”); see also School Dist. No. 1 of Silver Bow County v. Globe & Republic Ins. Co. of Am., 146 Mont. 208, 404 P.2d 889, 892 (1965) (“While diversity of opinion exists on the point ..., we think it clear that under the above-quoted policy provisions the insured was not bound to comply with the appraisal clause prior to instituting this action on the policies, absent a demand for appraisal by the insurers. ”). This reading of the appraisal provision of the policy is in accord with the plain meaning of the appraisal provision, which requires one party or the other to make a demand for appraisal before appraisal procedures are activated. Morgan, 534 N.W.2d at 99 (interpreting insurance contracts-first according to their express and unambiguous terms). Thus, the court holds that, where appraisal is demanded by either party prior to suit, under a policy with the terms dictated by Iowa Code § 515.138(6), completion of the appraisal process is a precondition to a suit by either party. However, where no demand-for appraisal is made before suit is filed, the suit cannot be barred as premature, because appraisal is not then a precondition to suit. No party in this case made a demand for appraisal prior to the filing of Terra’s suit. Thus, appraisal was not a precondition to the present suit. This is not to say, however, that appraisal is now precluded, because the court finds that whether appraisal is a precondition to suit is a different question from whether the filing of suit preempts or cuts off any recourse to the appraisal procedures, as Terra contends. The court will return to the latter question, which directly implicates the court’s power to stay the litigation pending completion of the appraisal process, in section II. D.2, below. C. Fulfillment Of Preconditions To Suit The court turns next to the question of whether Terra has complied with the requirements of the IRI Policy that must be met prior to filing suit. Although Terra has plainly allowed the IRI defendants access to the site and has provided substantial documentation of loss, disputes remain over compliance with other requirements of the IRI Policy regarding proof of loss and submission to examinations under oath. I. Proof of loss It is undisputed that Terra did not submit a proof of loss form prior to filing this lawsuit. However, Terra contends that it nonetheless complied with the requirement to provide proof of loss not later than October 3, 1996, when it provided forty-seven boxes of documentation to the insurers. The IRI defendants counter that the forty-seven boxes, however detailed concerning Terra’s losses, do not comply with the requirement that the proof of loss be “signed and sworn to by the insured.” IRI Policy, Pt. 1, p. 2 (requirements in ease loss occurs). Terra’s reply to this argument is that it elevates form over substance. The court need not resolve whether Terra’s submission on October 3,1996, constituted an adequate filing of proof of loss within the meaning of the IRI Policy, because the court finds that Terra did subsequently file a signed “Sworn Statement In Proof Of Loss” on April 17, 1997, six days after filing the present lawsuit. The defect in filing a proper proof of loss, if there was such a defect, was cured shortly after suit was filed. The court therefore turns to consideration of the other precondition to suit at issue here, whether Terra submitted to examinations under oath prior to filing suit. 2. Examinations under oath One of the requirements of the “Requirements in case loss occurs” provision of the IRI Policy that this court has determined is a prerequisite to Terra’s suit is that Terra “submit to examinations under oath by any person named by the Companies, and subscribe the same.” IRI Policy, p. 3. It is undisputed that examinations under oath had not occurred prior to the filing of Terra’s suit. However, in its resistance to the IRI defendants’ motion to stay and in its own motion for a protective order, Terra contended that this requirement had been waived by the IRI defendants, because they had had ample opportunity to obtain such examinations under oath during the two-and-one-half-year period of investigation of Terra’s claims. Terra also argued that such examinations are not “reasonably required,” and hence are not permitted under the terms of the IRI Policy. The court finds that dispute over examinations under oath was defused during oral arguments. At oral arguments, the IRI defendants dropped any contention that they should be permitted unilateral discovery pursuant to the “examination-under-oath” provision of the IRI Policy. Instead, they stated that a reasonable course was for all examinations and inspections pursuant to the IRI Policy to have the “dual purpose” of discovery pursuant to the Federal Rules of Civil Procedure in the present litigation and that all such “dual purpose” discovery be conducted in accordance with the Federal Rules of Civil Procedure. Terra agreed that such a course was appropriate. Therefore, the court concludes that any dispute concerning examinations under oath as a precondition to suit is now moot. The court will incorporate the parties’ agreement into this order by including the requirement that any production of documents or examinations under oath have the dual purpose of fulfilling the “Requirements in case loss occurs” provision of the IRI Policy and discovery in this litigation and that such disclosures of information be conducted according to the Federal Rules of Civil Procedure. D. Appraisal The “fighting issue” that remains unresolved, despite resolution of the disputes about preconditions to suit, is whether the IRI defendants may compel Terra to pursue the appraisal process provided in the IRI Policy despite the fact that no demand for such appraisal was made until after Terra filed this lawsuit. The court concluded above that appraisal was not a precondition to suit, but the IRI defendants nonetheless contend that their demand for appraisal is timely and thus the litigation of measurement disputes should be stayed until the appraisal process has been completed. Terra offers alternative arguments that appraisal was not demanded within the time required by the IRI Policy, that the appraisal process is entirely preempted by the filing of its lawsuit, and that the IRI defendants have waived appraisal by failing to make a demand for appraisal within a reasonable time of the parties reaching an impasse over the amount of Terra’s loss. 1. Untimely demand pursuant to the policy Terra’s first argument that appraisal cannot now be invoked is that the IRI defendants’ demand for appraisal is untimely pursuant to the terms of the IRI Policy. The basis for this argument is Terra’s contention that its submission of documents on October 3, 1996, was a filing of a proof of loss and that appraisal demands had to be made within thirty days of that date, relying on the paragraph of the IRI Policy and Iowa Code § 515.138(6) entitled “Companies’ options.” Alternatively, Terra contends that appraisal demands had to be made within sixty days of October 3,1996, because the provision of the IRI Policy and Iowa Code § 515.138(6) entitled “When loss payable” requires that the claim be paid within sixty days of the filing of the proof of loss. As a further alternative, Terra contends that, if the effective date of its proof of loss was April 17, 1997, when it actually filed a sworn proof of loss, the IRI defendants’ demand for appraisal, which was not made until July 23, 1997, when it was included in a reply brief filed in support of the motion for partial stay and opposition brief to Terra’s cross-motion for protective order, was still too late, because that demand was made more than thirty or sixty days after the submission of the formal proof of loss. a. The thirty-day deadline Setting aside for the moment the issue of whether the clock started to run on a demand for appraisal on October 3, 1996, or April 17,1997, the court must decide if there was any deadline for appraisal demands stated in the IRI Policy. Terra bases its contention that there was a thirty-day deadline on the following provision of the IRI Policy (and Iowa Code § 515.138(6)): Companies’ options. It shall be optional with the Companies to take all', or any part, of the property at the agreed or appraised value, and also to repair, rebuild or replace the property destroyed or damaged with other of like kind and quality within a reasonable time, on giving notice of their intention to do so within thirty days after the receipt of the proof of loss herein required. IRI Policy, p. 3. However, construing the policy as a whole, and giving the words used their ordinary, not technical meaning to achieve a practical and fair interpretation, Morgan, 534 N.W.2d at 99, the court readily concludes that this provision sets no time limit on when an appraisal must be demanded. Instead, it sets a deadline on when the IRI defendants were required to give notice of intent to take the property or to rebuild or replace it, at an agreed or appraised value. This provision does not even reasonably suggest that the appraisal must be demanded or completed prior to the companies’ exercise of this option to take the property or rebuild or replace it. The provision simply does not provide any thirty-day deadline from the proof of loss for an appraisal demand. b. The sixty-day deadline Nor is Terra’s assertion of a sixty-day deadline satisfactory. That contention is based on another provision of the IRI Policy (and Iowa Code § 515.138(6)): When loss payable. The amount of loss for which the Companies may be hable shall be payable sixty days after proof of loss, as herein provided, is received by the companies and ascertainment of the loss is made either by agreement between the insured and the Companies expressed in writing or by the filing with the Companies of an award as herein provided. IRI Policy, p. 4 (emphasis added). Again, applying appropriate rules of construction, Morgan, 534 N.W.2d at 99, the sixty-day deadline established by this provision is for payment of the loss, not for a demand for appraisal. Indeed, the provision expressly and unambiguously provides that the sixty-day deadline for payment does not begin to run until two events have happened: (1) filing of proof of loss; and (2) ascertainment of the loss is made. IRI Policy, p. 4. The ascertainment of loss in turn depends upon conclusion of either of two processes: agreement or an appraisal award. Id. Thus, this provision establishes a sixty-day deadline for payment that begins to run only when appraisal, if properly demanded, has been concluded. Accord Meineke v. Twin City Fire Ins. Co., 181 Ariz. 576, 892 P.2d 1365, 1371-72 (Ct.App.1994) (also rejecting the contention that the sixty-day payment period following proof of loss governs the timeliness of an appraisal demand, because the provision requires payment after proof of loss and either an agreement as to amount of loss, a final judgment, or an appraisal award, but “[tjhis provision puts no limitation on when an appraisal demand is to be made. Its only relevance to appraisal is that the loss must be paid within 60 days after an appraisal award is filed if that means of settling the amount of loss is used.”). The provision clearly contemplates that the appraisal demand will be made after the proof of loss is filed, but does not set a deadline for that demand. Thus, Terra’s sixty-day “deadline” for an appraisal demand is as much a chimera as its thirty-day deadline. c. The policy requirement The court finds that the IRI Policy itself provides for an appraisal demand to be made when “the insured and the Companies shall fail to agree as to the actual cash value or the amount of loss.” IRI Policy, p. 3 (“Appraisal”). This provision establishes the circumstances under which recourse to appraisal is appropriate, but sets no specific deadline for the appraisal demand. Thus, according to the terms of the policy, an appraisal demand is timely if it is made when the parties cannot agree as to the actual cash value and amount of loss. Although the “appraisal” provision, read literally, would permit an appraisal demand to be made at any time after the parties reached impasse, decisions of various courts interpret an “appraisal” clause lacking a specific time for demand to be made to require that the demand be made within a “reasonable” time. See, e.g., Middlesex Mut. Assurance Co. v. Clinton, 38 Conn.App. 555, 662 A.2d 1319, 1327 n. 14 (1995) (where suit was filed before an appraisal demand was made, although the court held that appraisal was tantamount to arbitration, and hence was a precondition to suit, the court also considered whether the insurer had waived its right to appraisal because of an “unjustifiable delay” in demanding it), cert, denied, 235 Conn. 922, 666 A.2d 1186 (1995); Meineke v. Twin City Fire Ins. Co., 181 Ariz. 576, 892 P.2d 1365, 1371-72 (Ct. App.1994) (where an appraisal demand was not made until ten days after suit was filed, and the appraisal provision did not set a specific deadline for a demand, the court considered whether the insurer had waived appraisal by an “unreasonable” delay before making such a demand); Preferred Mut. Ins. Co. v. Martinez, 643 So.2d 1101, 1102-03 (Fla.Dist.Ct.App.1994) (considering whether the insurer “unreasonably” delayed making a demand for appraisal, and hence waived appraisal, on the insurer’s motion to dismiss the insured’s suit and to compel appraisal); Monroe Guaranty Ins. Co. v. Backstage, Inc., 537 N.E.2d 528, 529 (Ind.Ct.App.1989) (where suit was filed six weeks before an appraisal demand was made, and the policy stated no specific time within which a demand for appraisal must be made, the court considered whether the demand was made within a “reasonable” time); Keesling v. Western Fire Ins. Co. of Fort Scott, Kan., 10 Wash.App. 841, 520 P.2d 622, 626-27 (1974) (considering whether an appraisal demand had been made within a “reasonable” time or waived where the demand for appraisal was not made until after suit was filed); Hanby v. Maryland Cas. Co., 265 A.2d 28, 30 (Del. 1970) (“The policy does not state the time within which demand for appraisal must be made and it therefore must be made within a reasonable time,” and this test was applied even where appraisal was not demanded until after suit was filed); School Dish No. 1 of Silver Bow County v. Globe & Republic Ins. Co. of Am., 146 Mont. 208, 404 P.2d 889, 892 (1965) (to determine whether an insured was required to proceed to appraisal where the insurer demanded appraisal after suit was filed, the court held that “[w]hen a policy of insurance containing an appraisal clause does not expressly or impliedly limit the time within which a demand for appraisal must be made, it is inferred that the parties contemplated that such demand must be made within a reasonable time after disagreement has arisen as to the amount of loss.”). See also Bard’s Apparel Mfg., Inc. v. Bituminous Fire & Marine Ins. Co., 849 F.2d 245 (6th Cir.1988) (applying Tennessee law, the court considered whether an insurer who waited to demand appraisal until the insured gave notice of intent to file suit had unreasonably delayed and thus waived any demand for appraisal). Before considering whether the IRI defendants made their demand within a “reasonable” time, however, the court must first consider Terra’s contention that any demand for appraisal was preempted by the filing of its suit. 2. Preemption of appraisal by the ftling of the lawsuit Terra’s second argument is that its filing of the present lawsuit before any demand for appraisal was made preempted or cut off any recourse to the appraisal process. Terra asserts that the silence of the IRI Policy as to whether suit preempts appraisal must be construed against the IRI defendants under the rule of contra proferentem. The court can find little support for the proposition that the filing of a lawsuit necessarily cuts off recourse to the appraisal process, either in the language of the policy or in judicial decisions interpreting similar policies. Again, the rule of contra proferentem, if it remains viable under Iowa law for terms of insurance policies that are prescribed by statute, is only applicable when the policy terms are ambiguous. Morgan, 534 N.W.2d at 99 (“When the terms of an insurance policy are ambiguous, we will construe them against the insurer.”); Gracey, 518 N.W.2d at 373 (courts construe the terms of a policy against an insurer when the terms of an insurance policy are ambiguous); AMCO Ins. Co., 518 N.W.2d at 334 (applying the contra proferentem rule “[w]hen the meaning of terms of an insurance policy is susceptible to two interpretations”); Farm & City Ins. Co., 509 N.W.2d at 490-91 (rale applies only when the policy terms are ambiguous or unclear); Rich, 204 N.W.2d at 872 (“Where insurance contracts are ambiguous, require interpretation, or are susceptible to equally proper constructions, the court will adopt the construction most favorable to the insured.”); The Travelers, 434 N.W.2d at 134 (citing Rich). Although the policy is silent as to whether suit preempts appraisal, such silence does not necessarily amount to ambigúity. Rather, under the express terms of the policy, appraisal may be demanded when “the insured and the Companies shall fail to agree as to the actual cash value or the amount of loss.” IRI Policy, p. 3 (“Appraisal”). Thus, the policy contemplates a demand for appraisal at any time after an impasse has been reached. Such a condition may not occur until suit is filed. The proper question then becomes whether appraisal has been waived by failure to make an appraisal demand before suit was filed, not whether filing suit has “preempted” appraisal. This conclusion is in accord with decisions from various jurisdictions, cited above, holding that, when appraisal is hot demanded until after suit is filed, the question is whether the demand for appraisal was waived or instead was made within a reasonable time after impasse was reached. See, e.g., Middlesex Mut. Assurance Co., 662 A.2d at 1327 n. 14; Meineke, 892 P.2d at 1371-72; Preferred Mut. Ins. Co., 643 So.2d at 1102-03; Monroe Guaranty Ins. Co., 537 N.E.2d at 529; Keesling, 520 P.2d at 626-27; Hanby, 265 A.2d at 30; School Dist. No. 1 of Silver Bow County, 404 P.2d at 892. See also Bard’s Apparel Mfg., Inc., 849 F.2d at 245. Terra cites two cases for the proposition that filing suit cuts off recourse to appraisal. The more recent of the two, a decision of the Wisconsin Court of Appeals, does not stand for so bald a proposition, because it includes the caveat that the insurer’s right to demand appraisal after suit is filed is foreclosed only if the insurer had the opportunity to exercise the right to demand appraisal, but did not do so. See Lynch v. American Family Mut. Ins. Co., 163 Wis.2d 1003, 473 N.W.2d 515 (App.1991) (holding that, “absent a policy provision to the contrary, an insurance company may not demand an appraisal of a loss after the commencement of an action by the insured on that loss when the insurance company failed to demand the appraisal prior to the lawsuit even though it had an opportunity to do so”; emphasis added). Thus, even under Lynch, the question remains whether the insurer had the opportunity to demand appraisal, or waived that opportunity through an unreasonable delay. In the older of the two decisions cited by Terra, the Seventh Circuit Court of Appeals held, in a decision applying Indiana law, that where the policy does not require appraisal as a precondition to suit, the trial court erred in staying the insured’s lawsuit. Hayes v. Allstate Ins. Co., 722 F.2d 1332, 1335 (7th Cir.1983). However, that decision is now out of step with the holding of the Indiana Court of Appeals in Monroe Guaranty Ins. Co. v. Backstage, Inc., 537 N.E.2d 528, 529 (Ind.Ct. App.1989), which holds that where a demand for appraisal is not made until after suit is filed, the question is whether the demand is unreasonably delayed, not whether the policy requires appraisal as a precondition to suit. This court agrees with the Montana Supreme Court and Washington Court of Appeals that [w]hile authority can be found for the proposition that institution of suit by the insured serves to cut off the insurer’s right to demand appraisal (Littrell v. Allemania Fire Ins. Co., 250 N.Y. 628, 166 N.E. 350; Davis v. Imperial Ins. Co., 16 Wash. 241, 47 P. 439(189)), we think that the better view is that the inconvenience of bringing suit is just one circumstance to be considered in determining whether a delay in demanding appraisal was unreasonable, that is, whether inconvenience suffered was sufficient to justify a refusal to proceed under the appraisal provision of the policy. Stephens v. Union Assur. Soc., 16 Utah 22, 50 P. 626 (1897). School Dist. No. 1 of Silver Bow County, 404 P.2d at 893; Keesling, 520 P.2d at 627-28 (quoting School Dist. No. 1 of Silver Bow County, and stating that “the election of the insured to file suit could not deprive the insurer of its right to appraisal under the policy”). Under Terra’s proffered rule — a rule that the filing of a lawsuit always preempts appraisal — an insured could always prevent appraisal by filing a proof of loss and immediately filing suit. Such a suit would be the insured’s unilateral declaration that impasse had been reached and might be the insurer’s first notice that negotiations had broken down. If this were the rule, the insurer’s only means to defeat the insured’s “preemptive strike” lawsuit and to ensure appraisal of losses would be a “preemptive strike” of its own: The insurer would have an incentive to hasten to declare an impasse and demand appraisal, perhaps even before final proof of loss is filed, to prevent the insured from filing suit first. Surely such “preemptive strike” lawsuits by one party and preemptive declarations of impasse and demands for appraisal by the other were not what either the legislature or the parties intended when the policy in question, as prescribed by statute, provides for appraisal as a means to resolve disputes when the parties “fail to agree as to the actual cash value or the amount of loss,” IRI Policy, p. 3 (“Appraisal”), and the policy further provides that loss is not payable until “sixty days after proof of loss ... is received by the companies and ascertainment of the loss is made either by agreement between the insured and the Companies expressed in writing or by the filing with the Companies of an [appraisal] award as herein provided.” IRI Policy, p. 4 (emphasis add