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Ohio Supreme Court reinforces finality of binding appraisal awards

8/10/26

By: Spencer Sukel

May a policyholder set aside a binding appraisal award by alleging additional real property damage was discovered after the appraisal process was completed? As of July 23, 2026, the Supreme Court of Ohio says no, absent corruption or gross mistake—not a mere error of judgment—a policyholder may not. And when pleading mistake, a policyholder must do so with that degree of particularity as required by fraud under Civ.R. 9(B); i.e. plead the who, what, when, where, and how.

In February 2019, an Ohio-based real property owner (“Insured”) sustained alleged windstorm damage and submitted a claim under its insurance policy issued by an Indiana-based insurer (“Carrier”). After the parties disagreed about the value of the loss, Insured invoked the policy’s appraisal clause. Each side selected an appraiser, whom both agreed the value was $313,371.98. Carrier then paid Insured for that amount. Several months later, Insured alleged it discovered “additional hidden damages” and sought more than $206,000 in additional proceeds. When Carrier refused to pay, Insured sued for breach of contract, bad faith, and declaratory judgment.

After answering, Carrier moved for judgment on the pleadings. The trial court granted Carrier’s motion, noting the generally binding nature of appraisal awards and absence of indicia of fraud or mistake. Insured appealed and Ohio’s Tenth Appellate District reversed, concluding that—although appraisal awards are generally binding—Insured had pled mistake with sufficient particularity. Carrier then appealed the Tenth District, and the Supreme Court of Ohio reversed, reinstating the trial court’s dismissal.

The Court’s analysis rests on one clear principal:  Binding appraisal awards are meant to be just that—binding. Therefore, Ohio courts may not set aside an appraisal award unless a third party’s error was patent and egregious, such as in the case of corruption or gross mistake—but not a mere error of judgment. In turn, policyholders’ complaints challenging appraisal awards, such as Insured’s, will not survive early dismissal attempts absent claims of fraud or mistake. And as to the latter, the Court held that complaints alleging mistake must meet the same heightened standard as fraud; i.e. plead the who, what, when, where, and how. But Insured just pled the appraisal award was incomplete. As a result, Insured’s complaint failed to state a claim, requiring dismissal.

For insurers, the Court’s holding is significant primarily for two reasons. First, the Court confirmed that appraisal is a mechanism that insurers can confidently rely on to achieve finality in valuation disputes. Indeed, Courts may not disturb an award absent the aforementioned extraordinary circumstances, which a policyholder’s allegations of “additional discovered damage” do not automatically satisfy. Second, and relatedly, a policyholder seeking to set aside an award may only do so if they meet Civ.R. 9(B)’s heightened pleading standard. Practically, this means insurers may more ably seek early dismissal under Civ.R. 12(B)(6) or (C) where policyholders attempt to avoid appraisal awards through threadbare allegations.

For any questions or further clarification, please contact Spencer Sukel at spencer.sukel@fmglaw.com, or your local FMG attorney.

Insurer(s) Involved in the Case: Brotherhood Mutual Insurance Company

Case: One Church v. Bhd. Mut. Ins. Co., Slip Opinion No. 2026-Ohio-2764.

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