An Ohio appellate court has reversed a lower court’s decision to certify a class action against an insurance company over allegations it underpaid claims for total loss vehicles, concluding that the insurer fulfilled its contractual obligations and that no live controversy remains between the parties.
The appeal was filed by Farmers Insurance of Columbus, Inc., following a Cuyahoga County Court of Common Pleas decision to grant class certification in a lawsuit brought by James Stewart. Stewart filed his complaint in June 2023, both individually and on behalf of other similarly situated policyholders, alleging that Farmers failed to pay the proper amount for vehicles declared total losses under its policies.
According to the appellate opinion released on April 23, 2026, Stewart purchased a car insurance policy from Farmers in 2022 covering his 2008 Honda Element. After an accident in December 2022 resulted in his vehicle being declared a total loss, Farmers paid Stewart $9,795 based on an adjusted valuation minus his deductible. Stewart did not initially dispute this payment or request an appraisal as allowed under the policy.
Stewart later filed a class-action complaint asserting breach of contract, unjust enrichment, fraud, and misrepresentation. He claimed that Farmers breached its contract with insureds by applying a ‘condition adjustment’—a deduction not disclosed in the policy—to reduce payments for total-loss vehicles. The complaint defined the proposed class as Ohio residents insured by Farmers who received similar payments reduced by such adjustments since June 16, 2017.
Farmers responded by invoking the policy’s appraisal provision and successfully moved to compel appraisal through the courts. In April 2024, two appraisers determined that Stewart’s vehicle had an actual cash value of $11,564.08—higher than what he was originally paid. Farmers issued Stewart a check for $1,393.29 representing the difference between this amount and their initial payment. Stewart declined to cash this check and continued pursuing litigation without amending his complaint.
Farmers argued before the trial court that because it had complied with both the contract and court order by paying out according to the binding appraisal award, Stewart’s individual claim—and thus any basis for representing a class—was moot. The insurer also contended that Stewart could not satisfy requirements for class certification due to individualized review needed for each claim file.
Stewart countered that accepting payment would have unfairly ended his ability to pursue broader relief on behalf of others affected by similar practices—a tactic sometimes referred to as ‘picking off’ named plaintiffs in class actions before certification is granted. The trial court agreed with Stewart’s position and certified the proposed class.
On appeal, however, Judge Kathleen Ann Keough wrote that unlike cases where defendants attempt to moot lawsuits through settlement offers before certification motions can be filed, here ‘the payment was issued as a result of a binding contractual provision in the policy that was previously enforced by a court order.’ The appellate panel found no evidence that Farmers’ actions were intended as settlement or as an attempt to avoid judicial review.
The opinion states: ‘Because the appraisal award was binding on both parties after being invoked and Farmers’ tendering payment to Stewart… there was no longer a live controversy between the parties.’ As such, dismissal of both individual and class claims was required since they were resolved prior to certification.
The ruling further notes that while issues about insurance valuation methods may arise again or be addressed elsewhere—including currently pending cases before higher courts—the specific circumstances here do not meet exceptions allowing moot cases to proceed based on public interest or likelihood of repetition evading review.
Attorneys listed for James Stewart include Patrick J. Perrotti (Dworken & Bernstein Co., LPA) and James A. DeRoche (Garson Johnson LLC). Representing Farmers Insurance are Karl A. Bekeny, Benjamin C. Sasse, Ariana E. Bernard (Tucker Ellis LLP), and Bryan T. West (Akerman LLP). The case ID is CV-23-981091.
Source: 2026Ohio1451_Stewart_v_Farmers_Insurance_of_Columbus_Inc_Opinion_Ohio_Court_of_Appeals.pdf
