Appeals Court Clarifies Pleading Standard in Uninsured Motorist
By org jforward wisbar Joe Forward, Legal Writer,
State Bar of Wisconsin
Oct. 23, 2012 – Louis Ullerich was involved
in a car accident. His insurer denied a request for $250,000 under an
uninsured motorist policy. Recently, a state appeals court ruled the
insurer did not act in bad faith.
Ullerich asked Sentry to pay him the $250,000
limit under his uninsured motorist policy after the uninsured car in
which he was riding collided with another vehicle. Under the policy,
Sentry promised to pay Ullerich’s
damages for bodily injury suffered while riding passenger in an
uninsured car to the extent the driver was liable for the accident.
A jury later determined that the driver, Richard Goergen, was 50 percent liable for the
However, at the time of Ullerich’s
claim for coverage limits, Sentry denied the claim because Ullerich’s doctor said his shoulder
injuries may have been from recurrent snow shoveling and not the
accident. The doctor wasn’t completely sure. Sentry also
questioned Goergen’s liability for the accident.
Sentry offered to settle for nearly $23,000 but Ullerich rejected the
offer and filed claims for breach of contract and bad faith and a moved
for discovery. He argued that prior case law on the pleading
requirements necessary to pitch bad faith claims did not apply.
Specifically, Ullerich said the Wisconsin Supreme Court’s
pleading requirements in Brethorst v. Allstate Property and Casualty
Insurance Co., 2011 WI 41, 334 Wis. 2d 23, 798 N.W. 2d 467, were
not applicable because he asserted both breach of contract and bad faith
In Brethorst, the court held that plaintiff insureds claiming
bad faith must show the insurer lacked a reasonable basis for denying
benefits. The appeals court rejected Ullerich’s argument that
Brethorst applies only to cases alleging bad faith without a
breach of contract claim.
“So, contrary to Ullerich’s contentions,
Brethorst, although factually and procedurally different, is
applicable and instructive on the issue appealed here, namely, the
pleading requirements in a first-party bad faith/breach of contract
case,” wrote Judge Kitty Brennan wrote in Ullerich
v. Sentry Insurance, 2011AP2875 (Oct. 23, 2012).
Under Brethorst, Ullerich was required to allege facts to show
his insurance coverage claim was not fairly debatable and survive
Sentry’s rebuttal. This he could not do.
“The undisputed facts show that his UM claim was fairly debatable
because: (1) it was reasonable for Sentry to conclude that
Ullerich’s shoulder injury was not caused by the motor vehicle
accident but rather by recurrent snow shoveling; and (2) it was
reasonable to question the extent of Goergen’s liability for the
accident,” Judge Brennan explained.