United States District Court, W.D. Wisconsin
OPINION AND ORDER
WILLIAM M. CONLEY DISTRICT JUDGE.
behalf of herself and others similarly situated, plaintiff
Darcee Thompson brings a claim against defendant Progressive
Universal Insurance Company for failing to pay the sales
taxes, title and registration fees on a replacement vehicle
under the terms of her automobile insurance policy. Before
the court is defendant's motion to dismiss
plaintiff's claim under Federal Rule of Civil Procedure
12(b)(6) (dkt. #13), which will be granted for the reasons
2015 Kia Optima LX was insured under the terms of her policy
with Progressive, which she attaches as Exhibit A to her
complaint. (Compl. (dkt. #1) ¶ 13 & Ex. A.)
Specifically, Progressive agreed to pay Thompson the
lesser of “the actual cash value of the stolen
or damaged property at the time of the loss reduced by the
applicable deductible” or “the amount
necessary to replace the stolen or damaged property reduced
by the applicable deductible.” (Compl., Ex. A (dkt.
#1-1) 19.) The policy further provides that “actual
cash value is determined by the market value, age, and
condition of the vehicle at the time the loss
occurred.” (Id. at 21.)
was involved in a collision on June 16, 2015 (Compl. (dkt.
#1) ¶ 19), which the parties agree rendered her new
Optima a total loss (id. ¶ 20). After
investigating, Progressive purported to pay Thompson the
actual cash value (“the ACV”) of the vehicle
under her policy as determined by its market value, age, and
condition at the time of the accident reduced by the
applicable deductible. (Id. ¶ 25.) As
calculated by Progressive, however, neither sales tax nor
title and registration fees imposed in purchasing a
replacement vehicle were incorporated into its definition of
market value. (Id. ¶ 23.)Thompson maintains
that the failure to include the tax and fees constitutes a
breach of the policy.
motion to dismiss under Rule 12(b)(6) is designed to test the
complaint's legal sufficiency. See Fed. R. Civ.
P. 12(b)(6). The court must “constru[e] the complaint
in the light most favorable to the plaintiff, accepting as
true all well-pleaded facts alleged, and drawing all possible
inferences in [the plaintiff's] favor.” Hecker
v. Deere & Co., 556 F.3d 575, 580 (7th Cir. 2009).
Dismissal is warranted only if no recourse could be granted
under any set of facts consistent with the allegations.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009);
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 563
survive a motion to dismiss, therefore, a plaintiff need only
allege sufficient facts to state a plausible claim for
relief. Spierer v. Rossman, 798 F.3d 502, 510 (7th
Cir. 2015) (citing Twombly, 550 U.S. at 570). Still,
“when it is ‘clear from the face of the
complaint, and matters of which the court may take judicial
notice, that the plaintiff's claims are barred as a
matter of law,' dismissal is appropriate.”
Parungao v. Cmty. Health Sys., Inc., 858
F.3d 452, 457 (7th Cir. 2017) (quoting Conopco, Inc. v.
Roll Int'l, 231 F.3d 82, 86 (2d Cir. 2000)).
Progressive argues that dismissal of plaintiff's claim is
compelled by the unambiguous definition of ACV in the policy,
which includes no reference to sales tax nor registration
fees. (Def.'s Br. (dkt. #14) 6.) In response, Thompson
argues that ACV is not defined by the policy,
“but rather only lists factors that are included in
calculating ACV, none of which eliminates
Progressive's liability for sales tax or vehicle title
and registration fees.” (Pl.'s Opp'n (dkt. #19)
1 (emphasis added).) If Progressive is right, then the
unambiguous definition in the insurance policy should control
and its motion to dismiss should be granted. On the other
hand, if the language in the insurance policy “is
susceptible to more than one reasonable interpretation,
” then Progressive's motion must be denied because:
“(1) evidence extrinsic to the contract itself may be
used to determine the parties' intent and (2) ambiguous
contracts are construed against the drafter” and
“in favor of the insured.” Coppins v.
Allstate Indem. Co., 2014 WI.App. 125, ¶ 24, 359
Wis.2d 179, 857 N.W.2d 896 (quoting Folkman v.
Quamme, 2003 WI 116, ¶¶ 12-13, 264 Wis.2d 617,
665 N.W.2d 857).
supports her reading of ACV, and more particularly
“market value, ” by pointing to case law, which
she claims demonstrates that market value must include
replacement cost. The cases plaintiff cites for support,
however, are distinguishable. First, plaintiff cites two
Seventh Circuit cases to demonstrate that ACV includes
replacement cost, but neither case concerns measuring ACV in
the insurance context. See United States v. Draves,
103 F.3d 1328 (7th Cir. 1997) (concerning a criminal case
litigating over credit card fraud); United States v.
Crown Equipment Corp., 86 F.3d 700 (7th Cir. 1996)
(determining actual damages by market value in the context of
commodities taken into government possession for price
plaintiff cites to several cases from Wisconsin, the Seventh
Circuit, and other jurisdictions that concern the
interpretation of insurance policies that, unlike the policy
at issue, did not define ACV whatsoever. For
example, plaintiff cites Wisconsin Screw Company v.
Firemen's Fund Insurance Company, 297 F.3d 697 (7th
Cir. 1962), a case in which the Seventh Circuit held under
Wisconsin law that ACV in an insurance policy could
be determined by considering replacement cost if ACV is not
defined. Id. at 700; see also Sos v. State Farm
Mut. Auto. Ins. Co., No. 6:17-cv-890-Orl-40KRS, slip op.
at *7 (M.D. Fla. Mar. 13, 2019) (analyzing policy that did
not define ACV); Doelger & Kirsten, Inc. v. Nat'l
Union Fire Ins. Co. of Pittsburgh, Pa., 42 Wis.2d 518,
521, 167 N.W.2d 198 (Wis. 1969) (same); Coppins,
2014 WI.App. 125 (same).
these cases, the policy here explicitly states that ACV is
“determined by the market value, age, and condition of
the vehicle at the time the loss occurred.” (Compl. Ex.
A (dkt. #1-1) 21.) While the above cases support the general
proposition that ACV may include replacement costs
in the absence of a definition, these cases do not support
the proposition that a policy that defines ACV must include
replacement costs, especially where the policy at issue
considers an alternative basis for recovery of replacement
costs at Progressive's election.
the fact that the Wisconsin Commissioner of Insurance in a
20-year-old market conduct report recommended to an insurance
company that sales tax should be included in an all-inclusive
settlement of a totaled vehicle holds little persuasive
weight in evaluating the specific policy language at issue,
which defines ACV in a manner that distinguishes it from
replacement costs. (Pl.'s Opp'n (dkt. #19) 8-9.)
Moreover, as defendant points out, the report does not even
describe the terms and conditions of the policy under
consideration by the Commissioner and, therefore, there is no
basis for finding that the policy language was at all similar
to the disputed language in the policy here.
the cases that plaintiff relies upon that do define
ACV, the definitions expressly include replacement
costs. For example, in Mills v. Foremost Insurance
Company, 511 F.3d 1300 (11th Cir. 2008), the Eleventh
Circuit considered a policy that defined ACV as
“‘the cost to repair or replace property with new
materials of like kind and quality' less certain
depreciation.” Id. at 1305; see also Roth
v. GEICO Gen. Ins. Co., no. 16-62942- Civ-DIMITROULEAS,
2018 WL 3412852, *3 (S.D. Fla. June 13, 2019) (discussing a
policy that defines ACV as “the replacement cost of the
auto or property less depreciation or betterment”);
Bastian v. United Serv. Auto. Ass'n., 150
F.Supp.3d 1284, 1289 (M.D. Fla. 2015) (discussing a policy
that defines ACV of a vehicle as “the amount it would
cost, at the time of loss, to buy a comparable
vehicle.”); Lukes v. Am. Family Mut. Ins. Co.,
455 F.Supp.2d 1010, 1015 (D. Ariz. ...