00-3037 Jones v. Secura Insurance Co.

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Rather, we conclude that because a bad faith claim is governed by a two-year statute of limitations, plaintiffs are entitled to pursue that claim notwithstanding the dismissal of their contract claim and may seek to recover “any damages which are the proximate result” of the defendant’s alleged bad faith, if bad faith is established at trial.

“While we find the language in DeChant controlling, we find it unnecessary to conclude that Poling and Heyden were overruled by DeChant. The language in Poling and Heyden, referring to bad faith damages as not attributable to breach of contract and a different species than contract damages, is similar to language in DeChant [v. Monarch Life Ins. 200 Wis. 2d 559 (1996)]that a bad faith claim gives rise to damages ‘unrelated’ to contract damages. 200 Wis. 2d at 569. Because this is the first time we directly address this issue, we now clarify any discrepancy among the cases by holding that an insurer is liable for any damages which are the proximate result of the insurer’s bad faith. In order to prevent further confusion or potential misapplication of language in DeChant, Poling, or Heyden, we now withdraw any language from those cases to the contrary. …

“Consequently, ‘any damages’ may include damages that could also be recoverable independently in a breach of insurance contract action. As recognized above, the tort of bad faith and breach of an insurance contract are two separate claims or causes of action, governed by two separate statutes of limitations. As two separate claims, they appropriately lead to recovery of separate, but not necessarily exclusive, damages. It would be inconsistent, therefore, to prohibit pursuit of some bad faith damages because of application of the statute of limitations for a breach of an insurance contract claim.”

Reversed and remanded.

On certification from the Court of Appeals, Crooks, J.

Attorneys:

For Appellant: Shane W. Falk, Wausau

For Respondent: Todd Joseph Koback, Wausau