Wisconsin Supreme Court: When Subrogating Insurers Aren’t Required to Make Insureds Whole
Summary: Dufour, a motorcyclist insured by Dairyland Insurance Company, was seriously injured while riding his motorcycle, collected full policy limits from the tortfeasor for his bodily injuries and full property damage (PD) and underinsured (UIM) bodily injury (BI) limits from Dairyland, and then sued Dairyland for bad faith when it refused to pay him the property damage subrogation funds Dairyland collected from the tortfeasor’s insurer. The trial court granted summary judgment to Dufour on his breach of contract claim, but in favor of Dairyland on the bad faith claim finding it had not unreasonably withheld the funds from Dufour. The Court of Appeals affirmed the breach of contract award, but reversed on the bad faith claim holding Dairyland had acted in bad faith due to its made whole doctrine obligations and remanded to determine the bad faith damages. The Wisconsin Supreme Court reversed on both counts.