Roehl Transp. Inc v. Liberty Mut. Ins. Co.
| Decision Date | 22 June 2010 |
| Docket Number | No. 2008AP1303.,2008AP1303. |
| Citation | 325 Wis.2d 56,2010 WI 49,784 N.W.2d 542 |
| Parties | ROEHL TRANSPORT, INC., Plaintiff-Appellant-Cross-Respondent,v.LIBERTY MUTUAL INSURANCE COMPANY, Defendant-Respondent-Cross-Appellant,Barbara Reilly, Brian Kaminski and Charles Kilander, Defendants. |
| Court | Wisconsin Supreme Court |
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
For the plaintiff-appellant-cross-respondent there were briefs by Lawrence R. King, Mark A. Solheim, and Larson-King, LLP, Saint Paul, Minn., and Matthew A. Biegert and Doar Drill & Skow, S.C., New Richmond, and oral argument by Lawrence R. King.
For the defendant-respondent-cross-appellant there were briefs by William J. Katt, Mark D. Malloy, and Leib & Katt, LLC, Milwaukee, and oral argument by William J. Katt.
An amicus curiae brief was filed by Lynn R. Laufenberg and the Laufenberg Law Group, S.C., Milwaukee, on behalf of the Wisconsin Association for Justice.
An amicus curiae brief was filed by Thomas R. Schrimpf, Melissa J. Lauritch, and Hinshaw & Culbertson LLP, Milwaukee, on behalf of the Wisconsin Insurance Alliance.
ON CERTIFICATION FROM THE COURT OF APPEALS
This is an appeal and cross appeal from a judgment and order of the Circuit Court for St. Croix County, Hon. Eric J. Lundell, Judge, on certification by the court of appeals pursuant to Wis. Stat. § 809.61 (2007-08).1
¶ 2 Roehl Transport, Inc., the plaintiff insured, brought an action against its insurance company, Liberty Mutual Insurance Company, for the tort of bad faith. A Truckers/Auto Insurance Policy issued by Liberty Mutual insured Roehl Transport, Inc. up to $2 million in liability coverage. The policy had a $500,000 deductible, meaning that Roehl Transport, Inc. agreed to pay the initial $500,000 on certain claims made against it under the policy. Liberty Mutual was responsible for paying any damages between the $500,000 deductible and the $2 million policy limit.
¶ 3 Roehl Transport's bad faith claim against Liberty Mutual stems from Liberty Mutual's handling of a personal injury claim brought against Roehl Transport by Arthur Groth. Groth's car was rear-ended by one of Roehl Transport's trucks. Groth was injured and sued Roehl Transport and Liberty Mutual for damages. The jury found Roehl Transport liable to Groth and awarded Groth $830,400 in damages. This verdict was well within the $2 million dollar limit of the insurance coverage but cost Roehl Transport all of its $500,000 deductible.
¶ 4 The facts and circumstances of Liberty Mutual's handling of Groth's personal injury claim against Roehl Transport provide the gravamen of Roehl Transport's complaint against Liberty Mutual for bad faith.
¶ 5 In the past, an insurance company's decision to settle within policy limits generally cost an insured little because the deductible was modest. Here the amount of the deductible is substantial. We have not previously addressed a bad faith claim when the judgment entered against the insured is within policy limits. With the increasing prevalence of high-deductible policies, cases such as the present one may become more common.
¶ 6 Five issues are presented on the appeal by Roehl Transport and the cross-appeal by Liberty Mutual:
¶ 7 We hold as follows:
¶ 8 Accordingly, we affirm the judgment and order of the circuit court awarding Roehl Transport damages on its bad faith claim and denying Roehl Transport's claim for punitive damages. We reverse the circuit court's denial of attorney fees to Roehl Transport and remand the matter of attorney fees to the circuit court for determination of the amount of attorney fees to be awarded Roehl Transport.
¶ 9 We shall address each issue of law in turn after first setting out the facts necessary to understand the case and the issues to be resolved.
¶ 10 The factual background necessary to decide the issues of law presented is neither complicated nor disputed. Additional facts relevant to the various legal issues are presented in the discussion of each issue.
¶ 11 Roehl Transport, Inc., operates a trucking company of about 1,500 trucks, headquartered in Marshfield, Wisconsin. Defendant Liberty Mutual Insurance Company is a national insurer. Roehl Transport purchased insurance from Liberty Mutual beginning in 1989 and renewed the policy annually through 2000. The policy covered liability for property damage and bodily injury up to $2 million. The policy included an endorsement specifically negotiated and agreed upon between Everett Roehl, then president of Roehl Transport, and Liberty Mutual, for a deductible of $500,000 per occurrence for automobile liability and general liability coverage.7
¶ 12 The policy at issue in this suit was effective from December 1, 1999 to December 1, 2000.
¶ 13 The liability coverage in Roehl Transport's policy covered “all sums” that Roehl Transport was required to pay as damages for bodily injury or property damage, as follows:
We [Liberty] will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this insurance applies, caused by an “accident” and resulting from the ownership, maintenance or use of a covered “auto.”
¶ 14 Despite the large deductible, the policy also provided, as is customary in Liberty Mutual policies, that Liberty Mutual retained control over the claims process. Liberty Mutual had the right and duty to defend the insured against a suit asking for damages covered under the policy and could investigate and settle any claim or suit as Liberty Mutual considered appropriate. The policy's settlement provision reads as follows:
We [Liberty] have the right and duty to defend any “insured” against a “suit” asking for ... [covered] damages.... We may investigate and settle any claim or “suit” as we consider appropriate. Our duty to defend or settle ends when the Liability Coverage Limit of Insurance has been exhausted by payment of judgments or settlements.
¶ 15 Roehl Transport paid Liberty Mutual a fee for claim handling. Liberty Mutual provided Roehl Transport with a customer service representative whose sole function was to act as an ombudsman in the event Roehl Transport had concerns about a claim. Roehl Transport also negotiated “Special Handling Instructions” with Liberty Mutual, which were not part of the insurance policy, giving Roehl Transport input in settlement and handling of claims and promising to provide Roehl Transport with information during the claims handling procedure.8
¶ 16 The present dispute between Roehl Transport and Liberty Mutual arose from Liberty Mutual's handling of a personal injury claim against Roehl Transport brought by Arthur Groth, whose car was rear-ended by a Roehl Transport truck on January 20, 2000. Roehl Transport notified Liberty Mutual of the collision on the day it occurred, and Liberty Mutual took on the investigation and handling of Groth's claim. No settlement was reached with Groth. Groth sued and obtained a jury verdict of $830,400 against Roehl Transport, consuming Roehl Transport's full $500,000 deductible.9
¶ 17 Roehl Transport filed the suit that is the subject of this appeal against Liberty Mutual, alleging numerous claims. Only the action for bad faith was ultimately pursued; the jury was instructed only on the bad faith claim; and only the bad faith claim is at issue here.
¶ 18 In summary, Roehl Transport alleges that Liberty Mutual missed the opportunity to settle the Groth claim for less than the full amount of Roehl Transport's $500,000 deductible. Roehl Transport asserts that Liberty Mutual's handling of the Groth claim was replete with inadequate investigation, inexperienced and high-turnover staffing, and lack of good faith efforts in pursuing settlement, all of which Roehl Transport asserts resulted in Liberty Mutual's failure to settle the Groth claim for less than the ultimate jury verdict, resulting in damages to Roehl Transport.
¶ 19 Liberty Mutual moved for summary judgment on the bad faith claim, arguing that Roehl Transport's bad faith claim is not recognized in Wisconsin law because the judgment entered in the Groth lawsuit against...
To continue reading
Request your trial
-
State v. Abbott Labs.
...court with instructing the jury on the law, and it entrusts the jury with applying the law to the facts. See, e.g., Roehl Transp., Inc. v. Liberty Mut. Ins. Co., 2010 WI 49, ¶¶ 121–29, 325 Wis.2d 56, 784 N.W.2d 542. ¶ 96 In this case, the jury was sufficiently instructed on the relevant law......
-
Bauer v. Armslist, LLC
...and requires ‘unusual and extreme considerations.’ " Burton, 994 F.3d at 829 (quoting Roehl Transp., Inc. v. Liberty Mut. Ins. Co., 325 Wis. 2d 56, 110, 784 N.W.2d 542 (Wis. 2010) ). The Wisconsin Supreme Court has stated that "[a]s a matter of best practice," it will "refrain from a public......
-
Casper v. Am. Int'l South Ins. Co.
...of liability on judicial public policy grounds are infrequent and present unusual and extreme considerations.” Roehl Transp., Inc. v. Liberty Mut. Ins. Co., 2010 WI 49, ¶ 141, 325 Wis.2d 56, 784 N.W.2d 542; Butler v. Advanced Drainage Sys., 2006 WI 102, ¶ 19, 294 Wis.2d 397, 717 N.W.2d 760.......
-
Wosinski v. Advance Cast Stone Co.
...obligations," but rather is "the implicit duty to act in good faith in carrying out the insurance contract." Roehl Transp., Inc. v. Liberty Mut. Ins. Co. , 2010 WI 49, ¶ 43, 325 Wis.2d 56, 784 N.W.2d 542. ¶133 When this duty of good faith has not been fulfilled, the insured may have a cause......