James Stewart sued Farmers Insurance of Columbus, Inc., alleging the insurer breached its auto policies by using a third-party valuation tool to apply an undisclosed “condition adjustment” that reduced total-loss payouts. Stewart sought class certification for Ohio residents who received similar payments based on the CCC One® Market Valuation Report.
Before Stewart moved for class certification, Farmers invoked a mandatory appraisal provision in his policy and the trial court ordered him to participate. The appraisers determined Stewart’s vehicle had an actual cash value of $11,564.08 and Farmers issued a check for the difference between that amount and its initial payment.
Stewart declined to cash the check but continued litigating, characterizing Farmers’ tender of payment as a “gambit” and citing case law regarding efforts to “pick off” claims of named plaintiffs before class certification. The trial court agreed, finding Stewart retained standing and certifying the class.
The Eighth District Court of Appeals reversed, holding that Farmers’ payment was not a settlement offer but the fulfillment of a court-ordered contractual obligation. Because the appraisal award was binding and resolved Stewart’s individual claim for actual cash value, his claims were moot.
The court rejected Stewart’s reliance on precedent regarding “pickoff” tactics, noting that those cases involved unilateral attempts to circumvent class claims rather than compliance with a binding appraisal process. Stewart also did not seek to set aside the award or challenge its enforceability.
Because Stewart’s individual claims were resolved prior to class certification, the appellate court held that dismissal of the entire action was required. The court noted that while the underlying legal issue regarding condition adjustments is pending before the Ohio Supreme Court, this specific case could not proceed.