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Anderson v. Cont'l Ins. Co.

Supreme Court of Wisconsin

October 2, 1978, Argued ; October 31, 1978, Decided

No. 76-242

Opinion

 [*680]  [**371]   We conclude that, ] upon the pleading of appropriate facts, an insured may assert a cause of action in tort against an insurer for the bad faith refusal to honor a claim of the insured.

The appeal is from an order of the circuit court, which dismissed the plaintiffs' complaint on defendants' motion grounded on the assertion that, in Wisconsin, no cause of action arises on behalf of a named insured, even where, under the pleadings, it is conceded that the insurer acted in bad faith in its refusal to honor the claim of the insured. The plaintiffs are Jacob R. Anderson and his wife, owners of a home in the City of Milwaukee.  [***2]  Effective October 1, 1973, they obtained a home owner's insurance policy from the Continental Insurance Company, which, among other things, provided coverage for loss occasioned by fire, lightning, explosion, or smoke. While the policy was in effect, the plaintiffs, Anderson and wife, returned to their home on November 30, 1975, to discover that the walls, carpeting, furniture, draperies, and clothing in the house were covered with an oil and smoke residue, which allegedly was the result of a fire or an explosion in the furnace. On the following day, Continental Insurance Company was given notice of the damage.

 [*681]  It is alleged by the plaintiffs that the Underwriters Adjusting Company was delegated by Continental Insurance Company to handle the claim on behalf of Continental. Underwriters called in cleaners, who attempted to renovate and clean the premises and its contents. It nevertheless was necessary, according to the complaint, for the plaintiffs to repaint, clean, and restore the premises, and to replace carpets which  [**372]  shrank due to excessive cleaning ordered by Underwriters Adjusting Company. A pecuniary loss of $ 4,611.77 was alleged by the plaintiffs.

 [***3]  The Andersons attempted to negotiate with Underwriters as the agent for Continental Insurance Company, but all said negotiations were "to no avail."

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85 Wis. 2d 675 *; 271 N.W.2d 368 **; 1978 Wisc. LEXIS 1276 ***

Anderson, and wife, Plaintiffs-Appellants, v. Continental Insurance Company, and others, Defendants-Respondents

Prior History:  [***1]  Appeal from an order of the Circuit Court for Milwaukee County: Harvey L. Neelen, Circuit Judge.

Disposition: By the Court. -- Order reversed and cause remanded for trial.

CORE TERMS

insurer, bad faith, damages, insurance company, cause of action, emotional distress, punitive damages, proof of loss, good faith, reasonable basis, circumstances, plaintiffs', Adjusting, pleaded, breach of contract, motion to dismiss, intentional infliction of emotional distress, insurance contract, intentional torts, negotiate, demurrer, tortious breach of contract, compensatory, maliciously, outrageous, reckless

Insurance Law, Liability & Performance Standards, Bad Faith & Extracontractual Liability, Payment Delays & Denials, Torts, Business Torts, Bad Faith Breach of Contract, General Overview, Bad Faith & Extracontractual Liability, Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Dismissal, Involuntary Dismissals, Failure to State Claims, Judgments, Pretrial Judgments, Judgment on Pleadings, Pleadings, Complaints, Requirements for Complaint, Pleading & Practice, Rule Application & Interpretation, Notice to Insurers, Contracts Law, Breach, Contract Interpretation, Good Faith & Fair Dealing, Good Faith & Fair Dealing, Business & Corporate Compliance, Contracts Law, Types of Contracts, Covenants, Elements, Intentional Torts, Intentional Infliction of Emotional Distress, Remedies, Damages, Defenses, Intent, Remedies, Types of Damages, Punitive Damages, Pain & Suffering, Emotional Distress, Emotional Distress Damages, Punitive Damages, Interest Awards, Penalties, Aggravating Circumstances