Travis Trucker, a truck driver for ABC, Inc. gets into anautomobile accident with Mary Motorist in Milwaukee, Wisconsin. Mary sustains severe injuries. Travis admits liability as he made an unsafe lane change, thus causing the accident.ABC has auto insurance with an insurance company called StaySafe. The policy has a liability coverage limit of $100,000,000 and ABC has a deductible of $250,000. Unfortunately, Mary’s medical bills alone run close to $300,000 and between that and her missed work and pain and suffering, she appears to have a strong case to recover significantly more than that.
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However, Mary is in no mood for litigation and therefore offers to settle the whole case for $300,000. ABC pleads with StaySafe to settle the case for the $300,000, as it knows that at trial, it will probably get hit with a verdict for more than that. However, StaySafe refuses, saying that it will not settle for more than $100,000. If that amount won’t be accepted, it will take its chances at trial.
The case goes to trial and Mary eventually wins a verdict of $350,000. StaySafe pays $100,000 above the deductible, and ABC is forced to use its entire deductible to pay the remaining $250,000. ABC sues StaySafe in Wisconsin civil court, claiming that under Wisconsin law, the insurance company had a duty to negotiate in good faith. ABC claims that it was obvious that Mary’s case was worth more than $100,000 and that StaySafe’s intransigence caused it to use up all of the deductible. ABC therefore asks that StaySafe be forced to pay the full $250,000 to ABC so that it does not have to. In addition, ABC asks that StaySafe pay the attorney’s fees.
Please read the following cases:
Roehl Transp., Inc. v. Liberty Mut. Ins. Co., 2010 WI 49 (Supreme Court of Wisconsin)
Lakeside Foods, Inc. v. Liberty Mut. Fire Ins. Co., 2010 Wisc. App. LEXIS 562 (Court of Appeals Wisconsin)