An Ohio appeals court has handed insurers a notable win, ruling that a binding appraisal clause can shut down a total-loss class action.
The Eighth Appellate District in Cuyahoga County reversed a trial court's class certification order in a decision released on April 23, 2026. The ruling turned on a question that many in the insurance industry have been watching closely: can the appraisal process baked into an auto policy effectively end a policyholder's lawsuit – and a class action along with it?
The case began in 2022 when Farmers Insurance issued an auto policy to James Stewart covering his 2008 Honda Element. That December, Stewart was involved in an accident and Farmers declared the vehicle a total loss. The insurer elected to pay the claim in cash and sent Stewart $9,795 – the adjusted vehicle value of $10,295 plus fees, minus his $500 deductible. Stewart did not dispute the payment or invoke the policy's appraisal process at the time.
Several months later, Stewart filed a class-action complaint alleging that Farmers had breached its policies by using CCC Intelligent Solutions to apply an undisclosed "condition adjustment" when calculating payouts on total-loss vehicles. The adjustment, Stewart claimed, reduced payments by subtracting an arbitrary amount from the value of comparable vehicles used to determine what the insurer owed. He alleged this practice was never disclosed in the policy and amounted to breach of contract, unjust enrichment, and fraud.
After the lawsuit was filed, Farmers invoked the appraisal provision in the policy. That provision allowed either party to demand an appraisal, with each side appointing an appraiser. The appraisers would independently determine the actual cash value and the amount of loss, and a written award by any two of them would be binding on both parties.
The trial court granted Farmers' motion to compel the appraisal in December 2023, finding the policy language made the process mandatory. The court also rejected Stewart's argument that the appraisal clause could not be triggered once litigation had already begun.
The appraisal wrapped up in April 2024. The appraisers determined the actual cash value of Stewart's vehicle to be $11,564.08 – higher than what Farmers had originally paid. Farmers issued a check for $1,393.29 to cover the difference. Notably, that amount also exceeded the condition adjustment Stewart had complained about. Stewart, however, refused to cash the check and pressed ahead with the lawsuit.
In the meantime, Stewart had moved for class certification with a revised class definition that removed the original exclusion of appraisal-based claims and narrowed the class period to claims on or after June 16, 2017. The trial court sided with Stewart, finding that the appraisal did not moot his claims and certifying the class.
The appellate court saw it differently. Writing for the unanimous three-judge panel, Judge Kathleen Ann Keough drew a clear line between this case and the "pick-off" scenarios Stewart had relied on. In those earlier cases – including the Eighth District's own decision in Hoban v. National City Bank and the Sixth District's ruling in Wilson v. Directions Credit Union – defendants had unilaterally reversed charges or deposited funds into a plaintiff's account as a way to kill the lawsuit before class certification could be pursued. The courts in those cases refused to let that tactic work.
But what happened here, the appellate court concluded, was fundamentally different. Farmers did not make a strategic settlement offer or try to buy off the named plaintiff. It followed a binding contractual process that the trial court itself had ordered the parties to complete. Stewart never challenged the enforceability of the appraisal provision, nor did he move to set aside the appraisal award once it was issued. And because the appraisal determined the actual cash value of his vehicle – the very thing he claimed Farmers failed to pay – there was no longer a live dispute between the parties.
The court also declined to apply either of the recognized exceptions to the mootness doctrine. While it acknowledged that the underlying question about condition adjustments is capable of repetition, it found the procedural circumstances of this particular case were not the kind that would permanently evade judicial review. As for the public interest exception, the court noted that the broader legal question is already heading to the highest level – the Ohio Supreme Court accepted Davenport v. Progressive Direct Insurance for review in November 2025, a case that directly addresses whether a class can be certified when the dispute centers on a single adjustment within an insurer's valuation process.
The bottom line for the industry is straightforward. The appellate court held that because Stewart's individual claims were resolved through the binding appraisal before the class was certified, the entire action – including the class claims – had to be dismissed. The judgment was reversed and the case remanded.
The decision does not resolve the merits of whether condition adjustments violate Ohio insurance law. That question remains open and will likely be shaped by whatever the Ohio Supreme Court decides in Davenport. But for now, the Stewart ruling reinforces the appraisal clause as a meaningful tool in an insurer's litigation defense – one that, under the right circumstances, can neutralize class exposure before it takes hold.
