Weiss v. United Fire and Cas. Co.
| Decision Date | 27 September 1994 |
| Docket Number | No. 93-3341,93-3341 |
| Citation | 188 Wis.2d 81,524 N.W.2d 648 |
| Parties | NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES. James WEISS, Plaintiff-Appellant-Cross Respondent, v. UNITED FIRE AND CASUALTY COMPANY, Defendant-Respondent-Cross Appellant. |
| Court | Wisconsin Court of Appeals |
Before CANE, P.J., LaROCQUE and MYSE, JJ.
James Weiss appeals the trial court's dismissal of his bad faith claim, contending that expert testimony was not required and that there was sufficient credible evidence to support a claim against United Fire and Casualty Company. Weiss also appeals the trial court's granting of a setoff against the verdict. Weiss invites this court to review our decision regarding the accumulation of interest pursuant to §§ 628.46(1) and 807.01(4), Stats. United Fire's cross-appeal challenges the form of the special verdict question inquiring into Weiss' consequential damages. Second, United Fire cross-appeals the trial court's determination that previous fire evidence was irrelevant, thus prohibiting introduction of such evidence. Because we conclude that the trial court did not err as to the dismissal of the bad faith claim, allowing the proper accumulation of interest under §§ 628.46(1) and 807.01(4), and that the objection to the consequential damages special verdict question was not preserved properly for appeal, we affirm the trial court on these issues. However, we conclude that the trial court did err by awarding a setoff to United Fire and reverse on that issue alone.
This action derives from United Fire's denial of coverage to Weiss regarding damages incurred due to a fire at Weiss' residence. United Fire denied coverage on the basis that the claimed loss was intentionally caused by the insured, Weiss. Weiss filed this action against United Fire alleging breach of contract and bad faith due to this denial of coverage. Prior to trial, Weiss filed a motion in limine requesting the prohibition of evidence regarding a previous fire, which the trial court granted on the basis of irrelevancy. A trial ensued, and at the end of Weiss' case-in-chief, United Fire moved to dismiss the bad faith claim based on Weiss' failure to present expert testimony in support of the bad faith allegations. Initially, the trial court granted United Fire's motion. Later, Weiss moved to reverse this ruling until after the jury returned its verdict. The trial court granted Weiss' request, so that evidence on the issue of punitive damages would not need to be retried in the event the trial court was reversed on appeal.
The jury returned the special verdict finding that Weiss did not intentionally cause the fire to his residence. In question No. 2 of the special verdict, the jury awarded Weiss $225,000 in damages, including consequential damages, for United Fire's breach of contract. Also, the jury answered special verdict question No. 3 "yes," that United Fire did exercise bad faith and consequently assessed punitive damages in the amount of $225,000 on question No. 4. After the jury was excused, the trial court entered a directed verdict on the bad faith cause of action by changing the answer to question No. 3 of the special verdict to "no" and eliminating the answer to question No. 4.
At Weiss' motion for judgment on the verdict, he requested the trial court to enter judgment on both the breach of contract and bad faith claims. The trial court denied Weiss' motion as to the bad faith claim on the basis that Weiss did not have an expert witness testify regarding the reasonableness of United Fire's conduct.
Also after hearing the motion for judgment on the verdict, the trial court awarded the plaintiff interest at the rate of 12% per annum on the amount of the insurance policy, $149,200, from April 3, 1991, through June 3, 1991, pursuant to § 628.46(1), Stats. From June 4, 1991, the trial court awarded an interest rate of 12% per annum on $189,371.45, the amount of the judgment after the setoff, pursuant to § 807.01(4), Stats. At the postverdict hearing, Weiss contended that the interest under § 628.46(1) should continue to accumulate after interest began under § 807.01. The trial court refused to award this overlap of interest.
Additionally, at the postverdict motions the trial court permitted United Fire's claim to a setoff against the verdict in the amount of $35,628.55. In accordance with the insurance contract, United Fire paid to Weiss' mortgagee, Security State Bank, their interest in the real estate at issue. The trial court concluded that the payment made by United Fire to Security Bank was within the rubric of § 885.285, Stats., providing for setoffs of payments made before final judgment.
Therefore, Weiss appeals the trial court's: (1) directed verdict on the bad faith charge; (2) granting of the setoff; and (3) refusal to overlap the 12% per annum interest award on the payment of insurance claims and then the judgment. United Fire cross-appeals: (1) the consequential damages question on the special verdict; and (2) the trial court's decision on the motion in limine precluding evidence of previous fires.
Motions challenging the sufficiency of the evidence are not granted unless the trial court is satisfied that there is no credible evidence to sustain a finding, once all credible evidence and reasonable inferences are considered. Section 805.14(1), Stats. Furthermore, the evidence must be viewed most favorably to the party against whom the verdict is sought. Thompson v. Howe, 77 Wis.2d 441, 448, 253 N.W.2d 59, 62 (Ct.App.1989). Even though the same standard applies to this court, we "must also give substantial deference to the trial court's better ability to assess the evidence." James v. Heintz, 165 Wis.2d 572, 577, 478 N.W.2d 31, 33(Ct.App.1991).
The preeminent case on the law of bad faith in relation to insurance contracts is Anderson v. Continental Ins. Co., 85 Wis.2d 675, 271 N.W.2d 368(1978). The Anderson court recognized bad faith claims as an intentional tort action, separate from breach of contract. Id. at 687, 271 N.W.2d at 374. "To show a claim for bad faith, a plaintiff must show the absence of a reasonable basis for denying benefits of the policy and the defendant's knowledge or reckless disregard of the lack of a reasonable basis for denying the claim." Id. at 691, 271 N.W.2d at 376. Also, insurers may contest claims that are fairly debatable; however, they will be found liable if they intentionally deny a claim without a reasonable basis. Id. at 693, 271 N.W.2d at 377.
The trier of fact should determine whether the insurer properly investigated the claim and whether the insurer analyzed the results of the investigation reasonably. See id. at 692, 85 Wis.2d 675, 271 N.W.2d at 377. Thus, the standard is what a reasonable insurer would have done under the particular facts and circumstances. Heyden v. Safeco Title Ins. Co., 175 Wis.2d 508, 522, 498 N.W.2d 905, 909(Ct.App.1993).
The trial court ruled that under the holding in Heyden, Weiss did not have sufficient evidence to sustain a verdict due to the lack of expert testimony regarding what a reasonable insurer would have done. Thus, the question is whether Weiss was required to introduce expert testimony on what a reasonable insurer would have done in this case.
The admission of expert evidence is usually a matter within the trial court's discretion. State v. Friedrich, 135 Wis.2d 1, 15, 398 N.W.2d 763, 769 (1987). Expert evidence may be mandatory in some situations. "The requirement of expert testimony is an extraordinary one, and is to [be] applied by the trial court only when unusually complex or esoteric issues are before the jury." White v. Leeder, 149 Wis.2d 948, 960, 440 N.W.2d 557, 562(1989).
It can be argued persuasively that determining whether an investigation of an insurance claim was neutral and fairly evaluated before insurance coverage was denied is not beyond the ken of the average juror and therefore does not command specialized knowledge or skills, requiring expert testimony. However, citing to Kujawski, the Heyden decision articulated that the applicable standard is a matter beyond the realm of the ordinary juror, requiring expert testimony. Heyden, 175 Wis.2d at 522, 498 N.W.2d at 909-10 (citing Kujawski, 139 Wis.2d at 463, 407 N.W.2d at 252). Heyden further enunciated that expert testimony is a predicate to the applicable jury instruction, Wis J I-Civil 2761. Heyden, 175 Wis.2d at 522, 498 N.W.2d at 910.
Weiss argues that the Heyden court's comments as to expert evidence are dicta because the issue in that case was whether the applicable Wisconsin Administrative Code section could be used to establish guidelines for unfair methods and practices in the insurance business. However, when an appellate court intentionally discusses a question germane, though perhaps not decisive of the controversy at issue, such a decision is not dictum, but rather is a judicial act that is recognized as a binding decision. Allstate Ins. Co. v. Konicki, 186 Wis.2d 140, 519 N.W.2d 723, 728(Ct.App.1994). Although the discussion of expert testimony in Heyden may not have been the decisive issue, it is an appropriate discussion relating to the standard of what constitutes bad faith, and therefore is not dictum.
Weiss asserts that the Heyden court's rationale based on the Kujawski decision is misplaced because Kujawski did not involve a bad faith claim, but involved rather the issue of expert testimony in relation to the standard of care applicable to a nursing home. In Kujawski, the Wisconsin Supreme Court concluded that expert testimony was not required to establish the standard of care if a nursing home patient requires nonmedical, administrative, ministerial or routine care. Id. at 463, 407 N.W.2d at 252. We agree that using the Kujawski case as a basis for requiring expert...
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Weiss v. United Fire and Cas. Co.
...the insured plaintiff, seeks review of an unpublished decision of the court of appeals, Weiss v. United Fire & Casualty Co., No. 93-3341, 188 Wis.2d 81, 524 N.W.2d 648 (Wis.Ct.App. Sept. 27, 1994), affirming a judgment of the Douglas County circuit court, Robert E. Eaton, judge. The judgmen......