Background
One Church submitted a property-insurance claim to Brotherhood Mutual Insurance Company after several buildings allegedly sustained wind damage in February 2019. When the parties could not agree on the loss amount, One Church invoked the policy’s appraisal provision. Each side selected an appraiser, and the appraisers agreed on a binding loss amount of $313,271.98. Brotherhood paid that amount less a $900 deductible, and One Church cashed the check.
One Church later alleged that “additional hidden damages” had been discovered and sought another $206,663.09. After Brotherhood refused payment, One Church sued for declaratory relief, breach of contract, and breach of the covenant of good faith and fair dealing. The trial court granted Brotherhood judgment on the pleadings, but the Tenth District Court of Appeals reversed after concluding that One Church had pleaded mistake with sufficient particularity.
The Court’s Holding
The Supreme Court of Ohio reversed the appellate court and reinstated the trial court’s dismissal. It held that a binding appraisal award is conclusive unless fraud or manifest mistake is adequately alleged. A qualifying mistake must be so palpably wrong that it undermines the parties’ agreement—such as corruption or gross mistake—not merely an error of judgment.
Because Civ.R. 9(B) requires mistake to be pleaded with particularity, a complaint must allege facts satisfying each element of the asserted mistake. One Church’s bare allegation that additional hidden damage was discovered did not identify who discovered it, how or where it was found, why it had been hidden, or why its omission constituted a manifest mistake that the appraisers would have corrected. The court also rejected One Church’s attempt to characterize the request as a separate supplemental claim, concluding from its pleadings and arguments that it sought to augment or reopen the completed appraisal.
Key Takeaways
- A contractually binding property-insurance appraisal generally fixes the amount of the appraised loss and may be disturbed only for fraud or manifest mistake.
- Under Civ.R. 9(B), a party challenging an appraisal for mistake must plead particular facts establishing every element of that mistake.
- An allegation that previously hidden damage was discovered after payment, without facts explaining the discovery or showing gross mistake, does not state a claim sufficient to set aside or supplement the appraisal award.
Why It Matters
The decision reinforces the finality of binding appraisal provisions in Ohio insurance contracts and sets a demanding pleading threshold for insureds seeking additional recovery for damage allegedly discovered after an appraisal. Merely labeling damage “hidden” or asserting that the award was incomplete will not permit litigation to proceed.
The dissent viewed the case instead as a contract-interpretation dispute over whether the appraisal covered damage that was undiscoverable at the time. The majority’s characterization of the insured’s request as a challenge to the existing appraisal therefore proved decisive.