Key Takeaways
- The Supreme Court of Ohio reaffirmed that binding appraisal provisions in insurance policies are exactly that: binding. Courts will set aside an appraisal award only in narrow circumstances involving fraud or manifest mistake, not mere errors in judgment.
- A party seeking to invalidate or reopen a binding appraisal based on alleged mistake must plead the claim with particularity under Civ.R. 9(B). General allegations that additional damage was later discovered are insufficient.
- The Court held that allegations of newly discovered or “hidden” property damage, standing alone, do not constitute a manifest mistake capable of setting aside a binding appraisal award.
In July 2026, the Ohio Supreme Court issued its decision in One Church v. Brotherhood Mutual Insurance Company, Slip Opinion No. 2026-Ohio-2764, providing important guidance regarding the finality of binding insurance appraisal awards and the pleading requirements for claims seeking to set those awards aside. The Court held that a policyholder’s allegation that additional hidden property damage was discovered after completion of a binding appraisal did not sufficiently plead a claim for “manifest mistake” under Ohio law. Accordingly, the Court reinstated the dismissal of the policyholder’s lawsuit.
The decision underscores that Ohio courts will enforce appraisal provisions as a final and binding method of resolving disputes over the amount of loss under insurance policies.
Background of the Dispute
One Church submitted a property-damage claim to its insurer, Brotherhood Mutual Insurance Company, following a February 2019 windstorm that allegedly damaged several church buildings. When the parties could not agree on the amount of the loss, One Church invoked the appraisal provision contained in the insurance policy.
Under the policy, each party selected an independent appraiser. After inspecting the property, the appraisers agreed on a loss amount of $313,271.98. Brotherhood paid the appraisal award, less the policy deductible, and One Church accepted the payment.
Several months later, One Church filed suit alleging that additional hidden damage had been discovered after the appraisal process concluded. The church claimed Brotherhood wrongfully refused to pay more than $206,000 in additional damages and asserted claims for declaratory judgment, breach of contract, and bad faith.
Brotherhood moved for judgment on the pleadings, arguing that the appraisal award was binding and that the complaint failed to allege fraud or mistake sufficient to justify reopening the appraisal. The trial court agreed and dismissed the action. The Tenth District Court of Appeals reversed, finding that the complaint sufficiently alleged mistake.
The Ohio Supreme Court’s Decision
The Ohio Supreme Court reversed the court of appeals and reinstated the trial court’s dismissal. The Court began by reaffirming Ohio law that appraisal awards are generally conclusive and binding on the parties. The Court held that courts may set aside an appraisal award only in exceptional circumstances, such as fraud, corruption or a gross or manifest mistake that undermines the integrity of the appraisal process. Mere “errors” in judgment are not enough.
The Court rejected One Church’s argument that it was merely seeking payment for additional damages rather than challenging the appraisal award itself. According to the Court, the complaint and litigation positions taken by the church demonstrated that it was effectively seeking to reopen the previously completed appraisal process. As a result, the church was required to plead facts establishing fraud or manifest mistake.
Focusing on the alleged mistake, the Court emphasized that Civ.R. 9(B) requires claims based on fraud or mistake to be pleaded with particularity. To satisfy that standard, a complaint must allege facts that establish the elements of the purported claim and place the defendant on notice of the specific misconduct alleged.
Applying that framework, the Court concluded that One Church’s complaint fell short. The complaint alleged only that “additional hidden damages were discovered” after the appraisal. It did not explain who discovered the damages, how they were discovered, why they were previously hidden, or how the alleged omission rose to the level of a manifest mistake that the appraisers would have corrected had it been brought to their attention. In the Court’s view, the complaint alleged at most that the award was incomplete, not that the appraisers made a manifest mistake.
Because the complaint failed to plead facts constituting a claim of manifest mistake with the particularity required by Civ.R. 9(B), dismissal was appropriate.
Takeaways
The One Church decision has significant implications for property insurance disputes. First, the decision reinforces the presumption of finality that accompanies binding appraisal awards. Parties that elect appraisal should expect courts to enforce the resulting valuation absent extraordinary circumstances. Second, because those seeking to challenge an appraisal award face a substantial pleading burden, insurers can and should insist that a policyholder seeking to set aside an appraisal award set forth specific facts supporting fraud or manifest mistake with particularity. Third, the decision highlights the importance of conducting thorough property inspections and damage assessments before completing the appraisal process. Once an appraisal award is issued and accepted, opportunities to revisit the amount of loss may be limited. If you have any questions about how this decision may impact your organization, please contact the authors of this article or your Dinsmore attorney.