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Butler v. Electric Insurance Co.

United States District Court, E.D. Wisconsin

August 21, 2019

JOHN P. BUTLER and WENDY L. BUTLER, Plaintiffs,
v.
ELECTRIC INSURANCE COMPANY, Defendant.

          DECISION AND ORDER

          William E. Duffin U.S. Magistrate Judge.

         1. Facts and Procedural History

         The present action is before the court on a motion to dismiss filed by defendant Electric Insurance Company. Therefore, the court accepts as true the allegations contained in the amended complaint.

         According to that amended complaint, plaintiffs John and Wendy Butler suffered a fire at their home on December 13, 2017. The fire originated in the garage. (ECF No. 19, ¶ 3.) Their insurer, Electric, refused to allow the Butlers to remove anything from the garage until Electric completed its investigation (ECF No. 19, ¶ 7). However, Electric's adjuster promised John that he would be able to remove the property after Electric completed its investigation. (ECF No. 19, ¶ 7.)

         When it completed that investigation, Electric turned the property over to the contractors it had hired to repair the home. (ECF No. 19, ¶ 9.) Notwithstanding Electric's prior promise to John, the contractors disposed of the property in the garage, including $200, 000 of electronic equipment. (ECF No. 19, ¶¶ 7, 9.) The am ended c om plaint includes headings that the court understands to be the specific claims the Butlers are asserting: “Breach of Insurance Contract”; “Breach of Implied Duty of Good Faith”; “Promissory Estoppel”; and “Bad Faith.”

         Electric moves to dismiss under Fed.R.Civ.P. 12(b)(6). It argues that it has paid all that was required under the contract. Thus, there can be no claim for breach of contract or any claim that depends on that contract-including breach of the implied duty of good faith and bad faith. It further argues that the Butlers' promissory estoppel claim fails because promissory estoppel cannot be used to expand insurance coverage.

         2. Motion to Dismiss Standard

         To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim “has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the U.S. at 555-56. The court accepts “all well-pleaded facts as true and constru[es] all inferences in favor of the plaintiffs.” Gruber v. Creditors' Prot. Serv., 742 F.3d 271, 274 (7th Cir. 2014).

         3. Analysis

         a. Breach of Contract

         As the court reads the amended complaint and understands the Butlers' arguments, this dispute is limited to the electronic equipment in the garage. The Butlers do not dispute that this electronic equipment was excluded under a business property limitation in the policy. They do not allege that Electric failed to do anything it was required to do under the contract or did something it was prohibited from doing. Rather, they assert, “Under Wisconsin substantive insurance law, a breach of contract is not always a breach of the specific provisions of a contract.” (ECF No. 22 at 9.)

         In support of this contention, they point to Anderson v. Cont'l Ins. Co., 85 Wis.2d 675, 686, 271 N.W.2d 368, 374 (1978). In Anderson, the Wisconsin Supreme Court discussed what had been previously referred to as a “tortious breach of contract” claim, but noted that the phrase “is confusing and inappropriate, because it could lead one to believe that the wrong done is the breach of the contract.” Id., at 686, 271 N.W.2d at 374. The proper characterization of such a claim, Anderson said, is a claim for b ad faith . See Id. at 687, 271 N.W.2d at 374 (“[T]he tort of bad faith is not a tortious breach of contract. It is a separate intentional wrong, which results from a breach of duty imposed as a consequence of the relationship established by contract.”); see also Brethorst v. Allstate Prop. & Cas. Ins. Co., 2011 WI 41, ¶25, 334 Wis.2d 23, 798 N.W.2d 467.

         But the Butlers separately asserted a claim for bad faith. Therefore, the court will dismiss the Butlers' “breach of contract” claim. As pled and argued by the Butlers, the claim is simply a bad faith claim under the “confusing and inappropriate” title the Wisconsin Supreme Court disavowed over 40years ago.

         b. ...


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